FedEx suspends some money-back guarantees for peak periods

fedex corp announced it would suspend money-back guarantees on most peak-season domestic and export air express shipments effective December 13.

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

The suspension applies to six overnight delivery services in the United States and four international services, including the company’s expedited deliveries that support freight deliveries.

This is the third consecutive year that FedEx has suspended certain Air Express shipments during what is believed to be the peak demand of the holiday cycle.

Transport companies have traditionally offered money-back guarantees for late or missed deliveries, as long as the affected carrier was able to provide sufficient evidence of the original service obligation and the late or missed delivery. However, FedEx and competitor UPS Inc. (NYSE: UPS) suspended all money-back guarantees in spring 2020 as pandemic-related changes in consumer buying behavior swamped carriers with massive shipment volumes that made it difficult to maintain service guarantees.

The airlines have never restored their guarantees, except for next-day air deliveries. Judging by the recent public pronouncements of UPS CEO Carol Tomé, who said in an interview with Bloomberg in late October, “If you deliver at 98% effectiveness, service guarantees are not required,” it seems unlikely that the company will complete the program will reintroduce.

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

FedEx said in its note announcing its peak-season suspension that the status of full money-back guarantees “is being continuously evaluated and we remain focused on continuing to provide the best possible service to our customers during this time of uncertainty.” . ”

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