Holy Rate Increases, Batman

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Posted By: Tom Boblitt

as someone stated earlier, UPS is self-insured in the damage/loss department. The excess value insurance is collected and any damages or claims for loss are paid from the amount collected. It is typically into the high 10's of millions of dollars (claims that is). I would suspect that Fedex and DHL/Airborne run roughly the same type of operation (at a higher cost--50 cents versus 35 cents per $100 valuation).

As for the UPS stores, again, they are independently owned and operated and I believe that their insurance is bought in some type of system OUTSIDE of the normal 35 cents per $100 valuation--although I'm sure that their cost is somewhere near that amount. I don't believe UPS pays claims on Mailboxes Etc/UPS Store shipments. I think it's paid from some other system.

For the person who ships low value shipments ($100 or below), which constitutes probably 75-80% or more of the UPS Store's volume, the $100 insurance included in the transportation charges is probably more than sufficient, so they are only paying a small premium (5-15%) to ship at that store--which is likely more convenient than dropping off at an actual UPS facility.

If you have to have have higher value shipments, use UPS.com or Fedex.com to generate your shipment--you'll save more on insurance that way. But be sure to check out service guides.