When three of the nation's biggest less-than-truckload (LTL) carriers come out with nearly identical, guaranteed-delivery programs within a day or two of each other, it's no coincidence—it's clearly a trend.

At the beginning of September, FedEx Freight, Con-Way Transportation Services, and USF Corporation all announced their intentions to offer simplified, guaranteed on-time-or-it's-free delivery services. USF and FedEx Freight rolled out their programs beginning Sept. 15; Con-Way's started Oct. 1.

Although all three carriers have been offering guaranteed on-time service, shippers had to pay a premium of up to 20 percent for it. The new services, by contrast, guarantee on-time delivery at no additional charge for users of USF's "USF Premier" service and for shipments made under Con-Way's current version Tariff CNWY-599. FedEx Freight says its guarantee will apply to shipments under its FXF-100 tariff. Con-Way and USF, meanwhile, have also streamlined their claims filing procedures. Con-Way's customers must file for refunds on the company's Web site within seven days after the scheduled date of delivery. USF requires no additional effort; if the delivery's not on time, the shipper automatically gets a refund.

It's about time that level of service became available to transportation buyers, says Douglas R. Waggoner, director of strategic marketing at USF. "What can you buy today that's not guaranteed?" he asks. "If you go to the grocery store...or if you're buying services as a consumer, there's a de facto expectation that it's going to work, that it's going to be what you expected when you bought it. Transportation has been one of the few areas where that hasn't been the case."

That does the customer a disservice, says Douglas G. Duncan, president of FedEx Freight. "I was never comfortable with the up-charge to begin with," he explains. "How do I tell a customer, 'I'm going to give you next-day service, but if you really want next-day service, it's going to cost more'? I'm going to move this freight just as fast every night whether I have the up-charge or not," he says."

All three carriers report a very positive, pre-launch response from their customers. "I don't think customers are going to do this because they're trying to make money on freight or get cheaper shipping," Waggoner says. "What makes this attractive is the assurance that it's going to get there when they think it's supposed to."

Duncan says the carriers' move toward money-back guarantees and easier refunds stems from a need to respond to their customers' internal demands. "It has everything to do with what's going on in American businesses," he says. "More and more companies are executing fast-cycle logistics where they're taking inventory out of the supply chain and replacing it with more rapid, reliable transportation."

As customers become more service-driven—and carriers respond with guaranteed service programs—it's likely that the rest of the LTL world will follow suit says Con-Way President Gerald Detter. "I believe it's established a standard that most other carriers will try to emulate in some way, shape, or form."

Waggoner agrees that the stakes have been raised for all the major LTLs. "As we perform better and improve our processes, the bar rises and customers' expectations rise," he says. He predicts the new guarantees will bring more business to carriers that offer them at the expense of those that don't. "This will create a pressure on everybody. If you can get something for the same price from two different carriers and one's guaranteed, all things being equal, I'd go for the guarantee."

Editor's Note: For another perspective on the new guaranteed LTL services, see this month's "Bohman on Pricing" column on Page 23.