A new twist in guaranteed LTL services
By Ray Bohman -- Logistics Management, 10/1/2003
Over the past two to three years, more and more less-than-truckload (LTL) general commodity motor carriers have begun offering a guarantee to deliver shipments within a specified period of time or the shipper pays nothing. These special services have only been available for an added fee, usually about 20 percent or so. Now some motor carriers have taken guaranteed delivery programs to a new level, offering on-time guarantees at no additional charge.
On September 3, Con-Way Transportation Services, Inc., parent of four regional LTL carriers—Con-Way Central Express, Con-Way Southern Express, Con-Way Western Express, and Con-Way Canada Express—announced that beginning October 1, all of its LTL subsidiaries would inaugurate what the company says is a first-of-its-kind guaranteed LTL service.
"Con-Way Guaranteed" offers a money-back guarantee on all LTL shipments that are not delivered on the scheduled date of delivery. The program only applies on shipments that are subject to rates in Con-Way's CNWY-599 class tariff and are moving between all points served direct within the continental United States; between all points served direct within Canada; and to all points served direct by cross-border service between the continental United States and Canada.
Less than 24 hours later, both FedEx Freight and USF Corporation announced that they, too, would inaugurate similar guaranteed delivery programs for LTL shipments, effective Sept. 15—two weeks ahead of Con-Way. FedEx Freight's program is called "Absolutely, Positively" and applies to shipments made under its FXF-100 class tariff. USF's program is named "USF Guaranteed 4 Free." All five of the company's LTL subsidiaries—USF Bestway, USF Dugan, USF Holland, USF Reddaway, and USF Red Star—are offering the service for shipments that are subject to class tariff USF-502.
Each of these programs has its own unique features. Con-Way, for example, requires the debtor to file a claim, using a special form found on its Web site, within 7 calendar days after the scheduled delivery date. FedEx Freight will make refunds if applied for either online or by telephone within 15 days. USF's carriers, on the other hand, don't require customers to make a formal claim. They review every shipment and will automatically issue a refund for any that were not delivered on time.
The great thing about these new programs is that none of the 10 LTL carriers charge a premium for the guaranteed service. Of course, there are the usual exclusions from liability when a shipment cannot be delivered within its scheduled transit time. These include acts of God, enemies of the state, acts of nature, or actions of the shipper or consignee.
Many other LTL carriers offer guaranteed services with premium pricing. It's too soon to tell whether or not these new, no-charge programs will catch on. At this writing, nearly three weeks after the early September announcements, not a single additional motor carrier had jumped on the bandwagon.
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