FedEx’s recent updates to its Time-Definite Delivery (TDD) policies have service providers talking—and for good reason. These changes, which include transitioning to a weekly TDD Service Charge, instead of a Time-Definite Per Stop Charge, have
been introduced to streamline operations and incentivize high-quality performance.
If you're a FedEx service provider, staying informed and adjusting to these updates is crucial for understanding the impact to your settlement and meeting financial margin benchmarks. This guide will break down what the TDD changes mean, how they may impact your operations, and how you can leverage tools like the eTruckBiz OPTIX app to maximize performance and settlement under the new system.
What is the TDD Service Charge?
FedEx is replacing the TDD Stop Charge—the fee tied to each individual time-definite stop—with the new TDD Service Charge. Like its predecessor, this charge is paid weekly, but unlike its predecessor, it offers a fixed amount based on the projected weekly value of your previously negotiated TDD Stop Charge rate.
Key Points about the New Charge:
- Payment is structured as a weekly service fee, regardless of service results.
- The fixed charge allows for more predictable income for service providers.
- The TDD Service Charge will remain in effect until September 5, 2025, after which FedEx may extend the program, create a new incentive structure, or revert to the TDD Stop Charge model.
This change reflects FedEx’s goal of better recognizing the operational complexities of time-definite services while continuing to prioritize seamless customer experiences.
Watch the full webinar on the Time Definite Service Charge:
The Importance of Performance Standards
While the TDD Service Charge payment is not directly tied to service outcomes, maintaining FedEx's contractual service standards is non-negotiable. These
standards ensure reliable, on-time deliveries that meet customer expectations.
98.5% Is Your Contractual Service Standard For:
- First Overnight® Packages
- Priority Overnight® and FedEx 2Day® A.M. Packages
- Ground I/B Local Service
As you are aware, FedEx keeps a close eye on performance metrics and will engage service providers in business discussions (and possibly further performance reviews) should performance fall below expectations. Ensuring you're meeting these benchmarks not only helps avoid unwanted conversations but also builds trust with your customers and FedEx.
Why You Need the eTruckBiz OPTIX App
To thrive under the updated TDD structure, having insight into your operational performance is a must. That’s where the eTruckBiz OPTIX App comes in. This tool is designed to help you track your performance and stay ahead of service expectations.
How the OPTIX App Can Help:
Easily monitor the status of each stop in real time. This enables corrective action to be taken solving problem deliveries BEFORE they become late.
- Performance Metrics:
Track service results against FedEx’s 98.5% standard to identify areas for improvement.
- Operational Insights:
Gain valuable feedback on your dispatches, stop efficiency, and delivery timing to optimize your business results.
Service providers who effectively execute time-definite deliveries often rely on tools like OPTIX to maintain and exceed performance standards. It’s your roadmap to navigate complex delivery networks with ease.
What’s Next for Time-Definite Delivery Charges?
FedEx has outlined three potential outcomes for the TDD Service Charge once the September 2025 milestone is reached:
- Program Extension:
FedEx may choose to extend the weekly TDD Service Charge if it continues to align with company goals and service levels.
- New Incentive Structures:
Enhanced payment models or reward mechanisms for exceptional performance could be introduced to drive further improvement.
- Return to TDD Stop Charge:
A shift back to the per-stop charge model could be implemented, providing incentives for handling higher volumes of time-definite packages individually.
Start preparing now for any potential scenario. Monitor FedEx’s announcements closely and adjust your operations proactively to ensure long-term success.
Stay Prepared and Succeed
Adapting to FedEx’s Time-Definite Delivery changes may feel overwhelming at first, but with the right approach and tools like the eTruckBiz OPTIX App, you can maintain performance and even thrive under this new model. Here’s what you should do now:
- Understand the Changes: Familiarize yourself with the SSSC, payment timelines, and service standards.
- Monitor Performance: Use the OPTIX App to track, analyze, and optimize your service results.
- Stay Updated: Keep an eye out for updates from FedEx regarding the future of the TDD Service Charge.
These changes represent an opportunity to refine your operations and build a stronger partnership with FedEx, all while ensuring your business continues to flourish.
Want to stay on top of your performance metrics and easily meet your service standards?
Explore the eTruckBiz OPTIX App today and take charge of your Time-Definite Deliveries like never before.
Frequently Asked Questions about FedEx Time-Definite Delivery Service Charges
1. What is the FedEx Time-Definite Delivery (TDD) Service Charge?
The TDD Service Charge is an additional fee introduced by FedEx for specific time-sensitive deliveries. This charge helps ensure premium service levels are maintained for shipments that require guaranteed on-time delivery within a specific time frame.
2. How can I optimize my operations to manage the TDD Service Charge effectively?
Reviewing your delivery processes and leveraging tools like the eTruckBiz OPTIX App can help monitor your service metrics, improve delivery efficiency, and minimize additional charges. Collaborative communication with FedEx can also reveal cost-saving insights.
3. Is this a permanent change?
No, although it could become permanent if it is well-received among Service Providers.