UPS to Roll Out Money-Back Guarantees
United Parcel Service Inc. (UPS), in a move that will heighten the competition for ground deliveries, is rolling out money-back guarantees for all U.S. residential shipments through its far-flung trucking system, The Wall Street Journal learned Wednesday.
The new UPS guarantees, taking effect Thursday, are the biggest enhancement to service commitments of the world’s largest package carrier since it began guaranteeing all U.S. business-to-business shipments in 1998.
The residential-shipment guarantee could help UPS blunt a growing ground attack from FedEx Corp. (FDX), which already offers a money-back guarantee on ground-based home deliveries and has seen its ground-delivery volume grow at a much faster rate than UPS during the past five quarters. FedEx’s home-delivery operation reaches 90% of the U.S. population, according to a company spokeswoman, but is accelerating its expansion to the rest of the country.
The move also turns up the pressure on UPS’s biggest rival for residential package deliveries, the U.S. Postal Service. The post office’s Priority Mail service promises delivery in an average of two or three days, but doesn’t guarantee it.
“This is part of our ongoing refinements and improvements” in service, said UPS spokeswoman Susan Rosenberg. She said the company expects little difficulty fulfilling its new commitments because “our service reliability has never been higher.”
Satish Jindel, a transportation consultant at SJ Consulting Group Inc. in Pittsburgh, said the move should help catalog operators and other companies that ship merchandise to residential areas smooth their deliveries. “The consumer is the winner here,” he said. “Now, if they know when they can expect it, it tells them when to be ready.”
