Service Level Agreement Fedex

Like the rest of its pricing structure, FedEx will split its additional discounts and custom dimension dividers between its express and land agreements. For express agreements without international prices, this section will appear at the end of the agreement. For express agreements with international pricing, this section is placed according to international discounts (and express minimum discounts on new formats), but before the tables of minimum international export/import fees. For Ground, it will be found at the end of the agreement after SmartPost discounts and minimum discounts. As we mentioned in the UPS article, all transportation services are subject to a minimum fee, namely the Zone 2 fare for shipments by letter, pak or one pound on domestic flights. The minimum discounts make discounts for lighter shipments more meaningful, and your FedEx agreement includes minimum discounts for domestic express shipments. Depending on the contract format, you will find them with the basic discounts for older contracts and at the end of the Express section for newer contracts. Although UPS sometimes creates separate surcharges for specific price lines, such as discounts, they typically issue wholesale proposals for the shipper`s entire volume, with each new agreement completely replacing the previous ones. However, FedEx is different; The basic rule is that all current prices that are not explicitly mentioned in a new proposal will remain in force even after the new proposal is signed. For example, if your FedEx employee issues you a new ground pricing-only agreement, all of your current express prices will not be affected if you sign them.

Last but not least, we need to check the MBG/GSR terms of your agreement. While UPS generally does not include guaranteed service refund (GSR) language, unless there is a specific waiver, each separate FedEx agreement contains its own money back guarantee (MBG) specific wording. This means that there is a clause in your express contract, another clause in your basic agreement and additional clauses for your export or import agreements if you have separate agreements for these services. Each MBG clause may vary, so it may be possible for you to be eligible for MBGs on your land and import services, but waive the right to submit them for Domestic Express and Export. The MBG/GSR language of each chord can be found at the end of the accessory. If a contract does not include an accessory, it will be found after the discounts. A major difference in the fare structures between the two airlines for international air cargo shipments is that UPS uses the letter or 1 lb. FedEx sets its minimum requirements for each zone in one or more separate tables at the end of the Express section of the Contract for any additional express discounts. These minimum rates are already reduced compared to the letter, pak, or 1-pound rate, so the default discounts that come with a standard proposal are less common, although FedEx may include more aggressive discounts if you ask for it. Note that the wording attached to these tables indicates that they may change with each increase in list rates, which means that any minimum table you have in your agreement will become obsolete the following year after the general rate increase. Last month, we looked at the UPS contract and how you should interpret your current UPS agreement or a new proposal. For the month of September, we will review the fedex standard agreement on small packages.

FedEx agreements are less labyrinthine in some ways than UPS agreements, but more complex in other ways. The advantage of services like SmartPost is that in exchange for an extra day or two of transit time, a private shipper will be able to take advantage of lower discounts and higher minimum discounts on light shipments and avoid paying extra delivery for residential or home deliveries (currently $3.45 for FedEx). However, it should be noted that SmartPost shippers are not immune to delivery area surcharges, although at $1.20 for standard and $1.70 for extended shipments, they are lower than those of ground or home delivery DAS. However, these fees are negotiable, and with the right strategy, you can get discounts, which are reflected in the next section. Some home shippers may opt for FedEx`s SmartPost service, which works with the USPS for last-mile delivery. Although service levels vary between different regional networks and even individual drivers, it is generally recognized in the industry that SurePost is rated as a superior service by UPS over SmartPost. To do this, FedEx typically offers more aggressive discounts and minimal discounts on its SmartPost prices, typically found after the Floor and Home Delivery sections, with separate weight and revenue discounts for shipments valued in ounces and pounds. While UPS SurePost discounts typically have their basic discounts above 9 lbs. FedEx sometimes expands its weight-based discounts up to 70 lbs. (Note that the SmartPost network does not accept shipments over 70 lbs. Some specialty shippers receive separate prices for SmartPost returns or for printed and bound goods.

Similar to the explicit agreement, in older agreements you will find all minimum definitions or discounts for Ground, Home Delivery or SmartPost under their earned discounts and in some more recent agreements in a section at the end of the field agreement (before ancillary contracts). For shippers looking for service comparable to UPS`s standard service to Canada, FedEx Ground to Canada prices are usually found in the basic agreement: towards the beginning via Continental US Ground weight discounts for older formats, and at the end in a separate section for newer formats. We hope this article helps you better understand how to read and interpret a FedEx agreement, whether it`s your current price or a new quote that your FedEx representative sends you. In addition, we hope this series will help you understand how each airline presents its prices in different ways that are unique to UPS and FedEx. As the two carriers get closer and closer in terms of fares, accessories (the latest decision is for FedEx to bring its fuel surcharges closer to UPS requirements) and oversized requirements, each carrier will continue to provide its own brand of complexity to a transportation or logistics manager. With some older agreements, you can find an automation bonus discount that rewards you with an additional discount for using an approved device to automate shipments. This reduction has become scarcer as more and more companies move away from manual processes. Assuming you have a full agreement, Interior Express prices will be shown first, with basic discounts guaranteed to you regardless of volume, followed by volume-based discounts. Unlike UPS, FedEx has traditionally offered basic discounts on its domestic flights, but the recent deals we`ve seen indicate a trend that all of a shipper`s domestic air discounts depend on volume. Like UPS, FedEx calculates its volume requirements, called vested discounts, based on aggregate (undiscounted) gross transportation costs over the previous 52 weeks. Unlike UPS, which reflects this as a weekly average, FedEx uses a mobile annual sum.

Similar to UPS`s portfolio level increase, FedEx offers you a grace period discount with each new agreement, typically between 4 and 12 weeks, that you get regardless of your volume. It`s worth noting that we sometimes find that FedEx grace period discount lists are actually less than a shipper`s volume that they would actually be eligible for, especially if they change carriers, so make sure your grace period discounts match your actual volume. For affected customers, FedEx will offer a section with basic and soil gained multi-weight discounts. Like UPS`s Hundredweight program, this price per pound is intended for multiple parcel shipments with a total volume of more than 200 lbs. As with UPS, FedEx assigns a shipper a level of merchandise (1-8, 8 being the most expensive) that is theoretically based on a customer`s product type, with denser goods such as bricks or books meeting Level 1 requirements. In practice, these product levels are negotiable with the specified average minimum weight and the minimum total weights described in this section. You will find the basic part of your contract according to the express price pages and the international minimum tables, if applicable. As with Domestic Express prices, FedEx first presents your basic discounts by weight range (which will be called weight discounts in the future), followed by the discounts earned. Sometimes floor discounts and home delivery are presented separately, but new deals tend to gravitate around weight and earnings discounts that are combined and streamlined for both services.