Recent small parcel contract changes are meant to cut out third-party package tracking services. Carriers are adding language to contracts and enforcing longstanding prohibitions against the use of these services.
Parcel shippers take note – if you use of third-party parcel tracking and refund services to recoup overcharges on delayed package deliveries, you may soon need a backup plan.
Carriers Zeroing in on Carrier Refund Services
A recent article by Freightwaves reported that “UPS Inc. said it will not agree to provide money-bank guarantees on late or missed deliveries if customers use a third party to track UPS shipments. Freightwaves further noted that, “according to Mike Erickson, president of parcel consultancy AFMS LLC, FedEx has a similar policy and that the language is becoming more commonplace in both carriers’ contracts.”¹
The carriers are adding language to contracts and enforcing longstanding prohibitions to essentially cut out the use of third-party service to track shipments and provide carrier refund services. Without access to this data, the third-party tracking consultants lose the revenue foundation by which they uncover refunds for their shipping customers.
Package tracking services have played an important role in service improvements by the carriers.
Third party tracking services have been available to shippers for many years, and I’m sure it’s been both a blessing and a curse for FedEx and UPS.
Back in the late 1990’s and early 2000’s, right after UPS matched FedEx Ground’s delivery guarantee, non-peak on-time parcel delivery was running somewhere between 90.5% and 95.5% – far below what it is today.
Since then, both carriers have worked hard to improve services, reduce linehaul, rail and time-in-transit, and extended hub sort times. All of these measures are efforts to provide greater load processing, improve and extend on-time delivery, and reduce overall delivery time to many zip codes.
In combination, they’ve yielded in an increase in on-time deliveries to between 99.0% and 99.9% during non-peak periods.
Beyond carrier refunds – The bigger benefits behind third-party tracking services
My concern with the carriers issuing this prohibition is that shippers will stop tracking without the refund offset to pay for the tracking. Yet this valuable tracking data is the “real gold” for most customers today. With just 1% to 2% of packages qualifying for refunds, the average shipper is getting back very little refund money.
More important is the intelligence you gain from tracking the data – to learn of the Zip Codes that consistently are delivered late by carrier/services, what packages are being damaged in transit (in my experience FedEx handles fragile packages far better than UPS), address correction data, and post-delivery accessorial information.
If this data is collected and used properly, the savings from the corrected shipping information can/will be far more valuable than the refunds.
Install Parcel Tracking Software
If your main interest is still in collecting financial refunds, many tracking companies have anticipated these changes and can provide you with a locally installed version of their parcel tracking software, and in doing so, return the functionality and claim filing requirements to you the customer.
For example, with InfoShip®/Vx, our multi-carrier shipping software platform, we can provide following functionality that can be configured to automate carrier delivery tracking, refund discovery and claims:
- Package tracking data
- Email notifications on undelivered packages
If you as the shipper are actually tracking delivery to file claims, the recent news of the UPS and FedEx tracking changes should not be an issue. While taking these services back in-house may come at a cost to your company, it offers an alternative to being frozen out from getting the tracking data and refunds you have come to expect and deserve.
Contact us if you’d like to discuss this topic and how you can use tracking data to enhance decision making in your shipping operations.
Rick Williams is a transportation management expert with 40 years of experience in shipping and supply chain operations and technology. CLS has worked with many companies to streamline workflow and improve productivity in the warehouse through the combination of streamlined workflows integrated with multi-carrier shipping software, integrated pack/ship stations, data collection solutions and more.
CLS has worked with many companies to streamline workflow and improve productivity in the warehouse through the combination of streamlined workflows integrated with multi-carrier shipping software, integrated pack/ship stations, data collection solutions and more.