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UPS to resume refund program for some late, missed deliveries–sources

After yearlong suspension, company will reinstate policy for next-day air services

UPS Inc. (NYSE:UPS) will partially reinstate its money-back guarantees for late or missed deliveries, effective April 5, according to people familiar with the matter.

For now, the Atlanta-based company will resume its “guaranteed service refunds” program for its three next-day air delivery products: Early A.M. deliveries by 8 a.m., next-day air by 10:30 a.m., and next day air saver by mid-afternoon, according to one of the people. The policy shift will not extend, at least for now, to UPS’ ground-parcel delivery services.

UPS declined comment.

The company suspended its money-back guarantees in March 2020, citing unprecedented market conditions due to the COVID-19 pandemic. Rival FedEx Corp. (NYSE:FDX), which also suspended its service guarantees, has not reinstated its program.

UPS and FedEx have sterling delivery performance records, hitting their targets roughly 98% to 99% of the time. Still, given the two carriers’ massive volumes — UPS delivers about 17 million daily packages — even a 1% to 2% blemish translates into big bucks should every shipper whose deliveries weren’t made on time file claims that the carriers couldn’t dispute.

The program also represents a fertile revenue source for parcel consultants that shippers retain to analyze carrier performance, identify problem shipments and collect a cut of any refunds granted to the shipper.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes FedEx (No. 1) and UPS (No. 2).

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.