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UPS delivers guarantee?
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April 10, 1998: 6:49 a.m. ET
Package-delivery giant may roll out guarantee on next-day ground parcels
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NEW YORK (CNNfn) - FedEx may soon have a brown-shirted rival in the "absolutely, positively" fast lane of overnight package deliveries.
United Parcel Service will shortly offer money-back guarantees for on-time deliveries of overnight business-to-business shipments in its trucking system, the Wall Street Journal reported Friday.
The move is expected to ramp up competition in a domestic package-delivery market estimated at $70 billion and dominated by three giants - FDX Corp.'s Federal Express, UPS, and the U.S. Postal Service.
It comes at a time when UPS is still recovering from a debilitating two-week driver strike last summer. The strike eroded customer confidence and forced UPS to mount a campaign to win back customers in the strike's aftermath.
UPS will offer guarantees on next-day ground deliveries in its vast trucking system for the same price it now asks for such deliveries without a guarantee. The offer is expected to take effect in early May, the Journal said.
UPS is apparently hoping the move will blur the distinction between FedEx's popular overnight service - which offers a guarantee - and lower cost options such as the U.S. Postal Service's Priority Mail or, until now, UPS's own service, which offered no guarantee.
Nicholas Barranca, a post office vice president, told the Journal the Postal Service is experimenting with guarantees on two-day deliveries on the East Coast. Barranca said he hopes to offer guaranteed Priority Mail service nationwide within the next two years.
A FedEx spokesman quoted by the Journal minimized the threat the UPS move would pose to his company, which offers a range of next-day express delivery options, along with second and third-day service.
"Our customers select our services based on the speed, the reliability, the connectivity, as opposed to the guarantee," said Greg Rossiter of FedEx. "What they are offering is a pretty insignificant development…There's only so far you can take a truck."
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UPS
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