Know Your Parcel “Rights”
With so much being said about the importance of your parcel carrier agreement and how best to negotiate it in your favor, it’s important that parcel shippers ask themselves this critical question: Do you know your “rights” as they relate to your parcel carrier agreement?
In talking to our customers, we’ve discovered a couple persistent and pervasive myths that could have a negative impact on a shipper’s overall parcel spend—and they’re myths that need busting.
As it turns out, many shippers are misled into thinking they are required to sign a Guaranteed Service Refund Waiver, or GSR Waiver as commonly referenced, presented to them by carriers like UPS® and FedEx®. However, this prohibits their ability to hire an independent parcel auditor to recover money owed to them via the use of the Money Back Guarantee or Guaranteed Service Refund (GSR) provision. Often, these waivers are presented by the carrier as the concession necessary for shippers to achieve deeper discounts on shipping rates, or simply to maintain a favorable relationship with the carrier.
These parcel myths are exactly that—myths. And they couldn’t be further from the truth. It is critical, then, that shippers remember two truths about such waivers:
- You don’t have to sign/agree to them.
- You have a right to hire a third party auditor.
Why would you want to avoid signing these waivers? Simply put, these waivers prevent you from holding your parcel carrier accountable to the commitments outlined in your carrier agreement. Working with a third party auditor is an effective way to ensure that accountability, both in terms of securing necessary refunds on late deliveries and in delivering on your promise, as the shipper, of on-time delivery to your customers.
Equally important to note are the rebate incentives some carriers may offer in order to limit the potential for future refunds. These incentives, when combined with the waivers described above, may deny you the opportunity to audit and request refunds for service failures and numerous other erroneous fees consistently found on weekly carrier invoices.
In the short term, this may seem lucrative (or at least sensible). It’s important, however, to play the long game—you must retain the power to audit your spend to ensure on-time delivery to your customers and the expected applicable shipping charges, or you will likely lose much more down the line than you will gain by accepting the rebate today.
For example, prior to engaging in our parcel accountability audit, a current customer had a GSR waiver in place that, not only eliminated their ability to secure refunds on late deliveries, but also mistakenly created a sense that any other audit activity was unnecessary. However, the $1.2M shipper received refunds exceeding $63,900 in the first year.
Accepting the addition of a GSR waiver within your carrier contract is, in essence, giving the carrier permission to deliver your shipment late. The carrier’s commitment is no longer aligned to your priority to your customer. I will choose to ensure customer satisfaction by maintaining my right to guarantee my customer’s on-time delivery, rather than relinquish the right to Guaranteed Service Refunds in exchange for a nominal rebate or phantom pricing discount.
The ability to hold carriers accountable to their contractual promises is vital for any shipper working to optimize their parcel spend. And doing so is much easier with the help of third party auditors.
The takeaway? Parcel shippers need to know their “rights,” especially when it comes to their ability to work with third party auditors and others with expertise in the industry—and in this case, it’s the right to not remain silent.