FedEx and United Parcel Service are stepping up efforts to address fraud, theft and other delivery risks with new security services designed to give businesses, particularly e-commerce merchants, greater control over shipments and post-purchase incidents.
Last month, both carriers unveiled new tools aimed at protecting parcels and reducing the financial and operational consequences of fraud, theft, misdelivery and claims.
UPS (NYSE: UPS) announced the launch of UPS Secure Commerce, a risk-management suite that brings together several of the company’s existing insurance, shipment-visibility and technology services, while adding agentic AI capabilities.
The move comes as global e-commerce continues to expand. Emarketer expects worldwide e-commerce sales to reach $6.88 trillion this year, accounting for 21% of total retail sales. At the same time, the Merchant Risk Council estimates that 3.2% of those sales will be lost to fraud.
For merchants, the costs extend well beyond the original transaction. Fraud-related disputes can lead to refunds, reshipments, claims processing, returns, customer recovery efforts and additional reputational damage.
UPS says Secure Commerce is designed to give merchants more operational control by identifying fraud risks during the checkout process and helping manage threats after a purchase has been made. By combining information from across the supply chain, businesses can also identify broader and actionable trends instead of dealing with individual incidents one at a time.
The Secure Commerce offering brings together several UPS services. These include InsureShield shipping insurance from UPS Capital; Parcel Pro, which supports domestic and international shipment management, shipping and return label creation, carrier pickup scheduling and paperless invoicing with additional security features; and CommerceShield, which screens for fraud during online checkout while also assessing other risks that may arise while a shipment is in transit, with the goal of reducing delivery exceptions and chargebacks.
UPS Capital provided insurance coverage for 62 million packages last year, according to UPS. The company said it paid $132 million in claims and processed 97% of those claims within five days.
Delivery delays can create a chain reaction for merchants, generating customer-service tickets, replacement expenses and pressure to issue refunds. They can also leave customers dissatisfied enough to consider switching to another seller.
Lost shipments present an even greater threat. Beyond the immediate financial impact, a missing package can undermine customer confidence, reduce repeat purchases and damage a brand through negative word-of-mouth.
Shipping insurance can help merchants manage those situations by compensating customers and reducing disputes between the buyer and the seller over how the incident should be resolved.
Parcel Pro adds several security-oriented capabilities. Customers can remove sensitive wording from shipping labels, helping reduce the likelihood of theft. The platform can also validate shipping addresses to limit delivery errors, use advanced data models to assess the probability of a successful delivery to a particular destination, and redirect packages to alternative locations such as a UPS Store when shipments are headed to areas where theft risks are higher.
UPS also says merchants using CommerceShield together with UPS shipping insurance can successfully challenge significantly more chargebacks with carriers. The combination can reduce manual claims-related work and help merchants make better-informed decisions about whether to issue a refund or send a replacement.
FedEx adds authenticated delivery
FedEx (NYSE: FDX) is taking a different approach to shipment protection with a premium delivery option built around QR-code authentication.
FedEx Authenticated Delivery is designed to ensure that a package is handed over only to an authorized recipient. The service adds a digital verification layer to FedEx’s existing proof-of-delivery capabilities and is intended to reduce the risks of fraud, theft and misdelivery.
According to FedEx, the service is particularly appropriate for high-value or sensitive shipments, including luxury goods, electronics, healthcare products, aerospace items and collectibles, where stronger delivery controls may be required.
“The future of delivery isn’t just moving packages quickly. It’s about building greater trust throughout the delivery process,” said Neil Gibson, senior vice president, global customer experience, in a news release.
Under the new process, shippers selecting FedEx Authenticated Delivery for an eligible shipment trigger the delivery of a unique QR code and accompanying instructions to the recipient through FedEx notifications.
The QR code becomes a mandatory verification step at the door. The recipient must be physically present, provide the code to the FedEx driver, and have it scanned and validated before the package can be released. Unlike a traditional secure delivery process, no physical signature is required.
FedEx notifications keep recipients updated throughout the shipment’s journey. When necessary, vacation holds may also be available through FedEx Delivery Manager.
To preserve the additional security provided by authenticated delivery, several other delivery-change options are restricted. These include Hold at Location, Redirect to Hold and address corrections.
Together, the initiatives from UPS and FedEx reflect a broader shift in parcel logistics toward combining insurance, data, fraud detection and digital authentication to protect shipments while limiting the operational burden that comes with delivery-related risk.
