Restrictions may apply

By Ray Bohman -- Logistics Management, 7/1/2000

More and more for-hire carriers-less-than-truckload, package, and truckload-are setting up services that provide for money-back guarantees if they fail to deliver within a specified period of time. But if you've ever read their rules governing such guarantees, you'll readily see that carriers attach a number of conditions that allow them to get off the hook.

One example of the types of conditions carriers establish to absolve themselves of any liability can be found in FedEx Ground's Tariff 200-L, Vol. 3, which took effect on June 1, 2000. Item X covers the service's Money-Back Guarantee Policy.

Section 1 of Item X sets forth the conditions shippers must meet in order to qualify for the carrier's money-back guarantee. Under the terms spelled out in that section, shippers are responsible for meeting detailed requirements in the following areas: package labeling, data transmission, pickup, receipt, and notification.

Not only do shippers forfeit their eligibility for the money-back guarantee if they fail to meet these conditions, but Section II of the rules sets forth other situations where the guarantee does not apply. That section is reproduced below:

Section II-In all events, the Money-Back Guarantee does not apply when there is a failure or delay of service in the following situations:

1. When the service failure is caused by events beyond FedEx Ground's control, including those described under the "Service Interruptions" section, or when shipper fails to prepare shipments and shipment information properly;

2. When packages are picked up during the week in which Thanksgiving occurs and the following week, as well as the week prior to and the week of Christmas;

3. When the shipment contains special instructions, such as FedEx Ground Call Tag Service, Auto P.O.D., Drop Shipments, Laydown Shipments, etc.; or

4. When there is an unexpected, large release of packages from any shipping location.

The rule also states that the guarantee will not be honored at FedEx Ground's discretion when the request for guarantee credit is made by a third party other than the payer of the charges, or when the information used to determine the status of the package comes from such a third party. Additional exclusions and limitations on the acceptance of money-back guarantee requests apply. Any changes in the above terms, conditions, and exceptions may be found on FedEx's Web site, www.fedex.com.

By the way, FedEx Ground gives shippers 15 calendar days after actual delivery to notify it of a service failure or delay. Shippers must also supply the package's tracking ID number within that period.

Clearly, it would be prudent on your part to thoroughly familiarize yourself with your carriers' money-back guarantee rules so you'll know their limitations on any future guaranteed shipments you may make.

Ray Bohman is a well-known consultant and author. Mr. Bohman is editor of several highly successful newsletters on transportation and is a consultant to a number of national trade associations. He is president of The Bohman Group, consultants and publishers in the freight-transportation field. His offices are located at 27 Bay Lane, Chatham, MA 02633. Phone: (508) 945-2272.