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FedEx has once again forged a path of uncertainty as the apex of peak season draws closer. FedEx has announced a suspension of their money-back service guarantee across multiple services to begin within the next week. This comes on the heels of a series of announcements regarding peak season surcharges and growing uncertainty over trucking capacity at peak. Furthermore, shippers are now faced with little recourse when packages do not arrive on time, putting more pressure on the industry to extend lead times and avoid negative customer experiences. This complicates an already complex series of surcharges, including residential delivery surcharges and peak season surcharges. Regardless, shippers need to know the details of what's happening with the FedEx Purple Promise and how it will affect operations through this above-average shipping season.
FedEx has decided to suspend money-back service guarantees for air deliveries throughout the holiday shipping season for all customers, not just those in the US. Starting November 1, money-back service guarantees are suspended until January 16, 2022, for the following services:
These services are airfreight focused, but FedEx has also reiterated the continued suspension of its ground-based money-back guarantees: "in order to balance our focus on service and safety, the FedEx money-back guarantee for all other FedEx Express®, FedEx Ground®, FedEx Freight®, and FedEx Office® services will remain suspended until further notice."
Such suspensions imply an immediately forecasted increase in landed costs as shippers will lack recourse for late deliveries. And paired with e-commerce's higher risk of returns, late deliveries inevitably mean higher overhead. Still, there are ways shippers can turn to data to keep costs in check while such suspensions are in effect. For example, freight auditing will also catch any over billings, incorrectly billed accessorials, manifested but not shipped, and many other issues based on your contractual terms with each carrier.
Using data, shippers gain a greater view into current and projected shipping costs across all modes, including parcels. That is of particular interest in peak season where e-commerce contributes a lion's share of small packages for the transportation industry. Tracking data across all modes provides intelligence into which carriers have the lowest landed cost, which lanes may be eligible for zone-skipping, recognizing when to leverage hub ingestion to speed transport, and analyze where carriers are failing. More actionable insights will allow shippers to scenario-plan and make smarter, data-driven decisions to better manage transportation spend. For example, if a specific zip code or region has higher late percentages, does it make sense to downgrade services to incur lower costs and have the package arrive close the the same time as it would have been with the late shipments? Data will enable you to make the informed decision needed to survive this peak season.The process is data-rich from inception but data lacks value in its raw form.
Thus shippers need a proven resource to aggregate and ingest data from all systems, normalize it to ensure it's comparable to datasets from other resources, correct anomalies and derive actionable insights such as those mentioned previously. It's through the combined process of transforming raw data into insightful metrics that shippers are able to reduce total transportation spend. Of course, part of that process includes making data insights intuitive and easy to identify with industry-leading KPIs and automated notifications to track opportunities for improvement. Those are core value points brought to the table by Intelligent Audit, and they can be further maximized by installing an expert consultant from Intelligent Audit to act as an extension of your team and help you stay informed of the latest changes affecting holiday shipping schedules, surcharges and dynamics.
While the suspension of money-back guarantees can feel drastic, it's yet an indicator of continued market instability and tightening capacity in the run up to the holidays. Shippers need to recognize that their services will inevitably be impacted by increasing demand as the holidays draw closer, and those that do not start paying attention to their spend now will be doomed to endure higher transportation costs. Request a consultation with Intelligent Audit to learn more about how your enterprise can help alleviate cost increases through peak season and beyond.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
