How to protect your peak shipping season (and every season) with package insurance!
Do you really need to purchase small package insurance? It’s an important question to ask as a small-to-medium-sized business (SMB), particularly if you’re looking to optimize your shipping and cut costs wherever possible.
Parcel insurance does cost extra, and it can be difficult to determine when you need it and how much you should purchase. This is particularly important during peak shipping season, when parcel volumes are higher and there is an increase in lost, damaged or stolen shipments.
Many SMBs turn to a third-party logistics (3PL) provider like Worldwide Express for expertise on insurance and managing the holiday shipping season. We help SMBs tackle both like a pro and provide resources to help you make the best decisions for your small package shipping!
What does UPS offer with and without parcel insurance?
Worldwide Express is part of the largest non-retail authorized reseller of UPS® in the nation. We help SMBs just like you optimize the way they use UPS Capital® — the agency which provides small package insurance for Worldwide Express parcel customers. Below, we provide a breakdown of what is covered and how much it costs.
- Shipping without insurance — UPS covers up to $100 in declared value (the amount the shipper states the package is worth) automatically and free of charge in the case a small package is lost or damaged.
- Shipping with insurance — For items valued at more than $100, UPS Capital coverage is billed at 45 cents per $100 with a minimum charge of $1.80.
Worldwide Express tip — If you purchase UPS Capital insurance for packages with a declared value of more than $100, the insurance will cover the cost of the product at retail value (aka how much it would have sold for). For this reason, Worldwide Express recommends purchasing parcel insurance coverage for any shipment worth more than $100. However, you’re not mandated to purchase insurance. If your shipment is worth more than $100 and you don’t want insurance, you simply do not enter a value at all when preparing the shipment. But again, UPS is only obligated to pay and reimburse up to $100 for loss or damage.
What is the difference between package insurance and on-time delivery guarantee?
Throughout the year, but particularly during the holiday shipping season rush, shippers work hard to meet deadlines to ensure packages get to their destination on time (and make customers happy). That’s why it’s important to understand the difference between on-time delivery guarantees and shipping insurance — and what that means for you in the case of a lost or damaged package. Here are two key differences:
- Customers will be reimbursed by UPS for select services that do not meet on-time guaranteed deliveries. However, you will not be reimbursed for fuel charges, signature fees and other common small package accessorial fees that cover tasks that were actually performed by UPS.
- Insurance does not cover any of the expenses/costs for delivery services when a shipment is delayed. While there are actions you can take to avoid small package shipping delays, in most cases delayed shipments will eventually find their way to their destination in good shape.
Worldwide Express tip — For the reasons stated above, insurance should only be considered a strategy for covering the value of lost or damaged goods. On-time delivery guarantees do offer some protection, but not for services that UPS actually performed, even if the package is delayed or late.
Importance of Parcel Insurance During Peak Shipping Season
Insurance is a valuable option to incorporate year around, particularly if you’re shipping high volumes of items that are valued at more than $100 — the amount UPS will cover without additional insurance. However, peak season does create some unique challenges. Here are three important factors to consider as you prepare for peak shipping:
- The number of packages that are lost or damaged does increase during the holiday season simply because more packages are being shipped. However, that doesn’t mean the percentage of lost or damaged packages necessarily goes up. It simply means a higher volume will bring a larger number of lost or damaged parcels.
- Insurance allows you to receive reimbursement for packages and quickly resend new items so you can meet deadlines and deliver before the holidays.
- Insurance provides extra protection for high-priced items that, if lost or damaged, could completely spoil an otherwise smooth and profitable peak season.
Worldwide Express tip — Worldwide Express can analyze data related to your shipping volume, package values and deadlines and make recommendations regarding the appropriate amount of insurance — during peak shipping season and year around. And if you want to get ahead of the game, check out our tips on how to prevent parcel delays over the holidays.
How else can a 3PL like Worldwide Express help with parcel shipping insurance?
Worldwide Express leverages its partnership with UPS to help SMBs save money and increase efficiency in their shipping operations. That includes helping customers decide on and select insurance for their small package shipping. The insurance solutions we provide include:
- Dedicated customer service — Customers are assigned a dedicated account team that guides them through insurance selection by using SpeedShip™, our transportation management system (TMS).
- No upfront costs — Select your coverage options when you create your shipment, with no upfront charges or deposits. Charges will show up on your invoice.
- Integrated billing — Charges appear on your Worldwide Express invoice so you can easily cost-allocate for your shipments.
- Ease of use — Add coverage to your shipments without going through additional processes. Simply check the coverage box in SpeedShip.
- Multi-carrier capability — Coverage applies to your UPS small package shipments, as well as any freight carrier chosen through SpeedShip.
- File claims fast — Submit your claims documentation directly through SpeedShip, with the Worldwide Express claims team ready to answer questions and help you better understand shipping claims along the way.
Do you need help with your shipping insurance strategy?
At Worldwide Express, we use our expertise and decades of experience as an industry-leading 3PL to bring a consultative approach when working with parcel shipping customers. Talk to us today to get holiday shipping tips and learn how we can help your business with its small package shipping needs. Request a free parcel shipping consultation!