FedEx suspends some money-back guarantees for peak season

FedEx Corp. said it will suspend money-back guarantees for most peak-season deliveries of domestic and export air express shipments, effective Dec. 13.

The suspension will run until Jan. 2, FedEx (NYSE: FDX) said in a recent note published on its online service guide.

The suspension applies to six overnight delivery services in the U.S. and four international services, including the company’s expedited deliveries supporting freight deliveries.

This marks the third consecutive year that FedEx has suspended certain air express shipments during what is considered the heaviest demand period of the holiday cycle.

Delivery carriers have traditionally offered money-back guarantees for late or missed deliveries as long as the affected shipper could provide sufficient proof of the original service commitment and the late or missed delivery. However, FedEx and rival UPS Inc. (NYSE: UPS) suspended all money-back guarantees during spring 2020 as pandemic-related changes in consumer buying behavior inundated the carriers with massive delivery volumes that made it difficult to maintain service guarantees.

UPS said late last week that it has no plans to change its money-back guarantee policy for its peak season.

FedEx said in its note announcing its peak-season suspension that the status of full money-back guarantees is “being evaluated on an ongoing basis, and our focus remains on continuing to provide the best possible service to our customers during this period of uncertainty.”

The carriers never restored their guarantees, with the exception of next-day air deliveries. Judging by recent public comments by UPS CEO Carol Tomé, who said in a late October interview with Bloomberg that “when you deliver at 98% effectiveness, service guarantees aren’t necessary,” it seems unlikely that the company will fully reinstate the program.

Source: FreightWaves