With Peak Season top of mind for many supply chain stakeholders this time of year, it comes as no surprise that a lot of attention gets paid to how the parcel duopoly of UPS and FedEx approaches things. And that comes with good reason, considering how interconnected they each are to the many moving parts of the holiday-, or peak-focused holiday season rush.
To be sure, that statement comes with little surprise. What’s more, it is interesting, how, more often than not, these companies are aligned on certain fronts such as transit times, rates, and service guarantees, among other things.
That is basically what I am getting at, or trying to anyhow. The reason for that is I recently heard from a UPS official whom contacted me to show a comparison of guarantee terms between UPS and FedEx in November, as it gets prepared for Peak Season.
In short, the UPS contact offered up extracts from the respective terms of UPS and FedEx websites, which showed that UPS is offering guaranteed Ground service 23 more days in November than FedEx.
“As we go into Peak Season, UPS’s network is running well,” the UPS spokesman said. “We have more than 400,000 pieces per hour of additional sort capacity versus last year at this time…and we have 11 new aircraft in the fleet.”
In the UPS website extract, for UPS Ground and UPS Standard 2019 Year-End Holiday Season Service Guarantee Modifications, it reads as follows: “The UPS Service Guarantee is suspended for all UPS Ground shipments to and from AK, HI, and PR, picked up or scheduled for delivery Dec. 2-Dec. 24. From Nov. 25-Dec. 27, a limited number of UPS Ground and UPS Standard packages, with transit times of three or more days and with certain origins and destinations will require additional time in transit. The most up-to-date transit time details will be available at ups.com/ctc at the time of shipping.
As for FedEx, its 2019 Holiday Money-Back Guarantee Policy for FedEx Ground stated the following: “Packages tendered to FedEx Ground for delivery on the day after Thanksgiving will be scheduled for delivery on that day if the recipient business is open, but in any event, the delivery commitment will be extended to the next business day for application of the money back guarantee. The money back guarantee for FedEx Ground and FedEx Home Delivery will be suspended temporarily for packages picked up on Sunday, November 3 through Tuesday, December 24, 2019.”
A parcel industry stakeholder dismissed these holiday guarantees, calling them a form of self-promotion.
“Just because a carrier does not have a published guarantee does not mean the carrier has any lesser service,” he said. “As a matter of fact FedEx delivers one or more days earlier than UPS on about 25 % of the lanes. So the guarantee is really just an economic issue, not a performance issue. Every carrier will be expected to execute at prior levels as we approach the holidays less they see their volume shifted to a competitor the following peak. This is a case of a carrier self promoting not a service upgrade or enhancement, just a nuanced different rule for obtaining a refund in the event the carrier fails to provide the expected service level between two points.”
And another parcel expert explained that UPS presented very valid points with material differences-for those customers that can actually get their money back for service failures-unfortunately many large shippers have waived their right to file for service failures with both UPS and FedEx.
“I would note that UPS started several of their Peak Season surcharges earlier than FedEx and that creates a cost differential in FedEx’s favor,” he said. “For example, UPS began charging Peak Season surcharges for Large Package Surcharges and Over-Maximum weight limits on October 1, 2019. FedEx did not implement peak season Surcharges for those areas until October 21st. The Peak Season charges for FedEx are higher than those for UPS, which will offset some of the cost differential during the remainder of peak.”
When I asked FedEx for comment on what UPS sent, regarding the differences in holiday season service guarantees, a FedEx spokesman told me that things have changed, with the Money Back Guarantee for FedEx Ground and FedEx Home Delivery being suspended temporarily for packages picked up on Monday, Dec. 2 through Tuesday, Dec. 24.
“For FedEx Express shipments, it will be suspended temporarily from Dec. 18 to Dec. 24,” he said. “A different timeframe for FedEx Ground and FedEx Home Delivery had been previously communicated, but we have now shortened it by 4 weeks and look forward to delivering the holidays with outstanding service for our customers.”
So, at the end of day, as it often is with UPS and FedEx, it looks to be another case of “all things even,” as it relates to holiday season money-back guarantees. These companies compete head-to-head every day everywhere. Over the holiday season, things clearly can take on additional importance, and based on these recent announcements and subsequent changes, this year will be no different.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman