UPS question regarding the declared value of package

[MudHog]

To be honest, from an insurance perspective, your package is their responsibility when you are paying them a fee for them to transport it.

Exactly.

Just like when I contract a trucking company to haul a $625k oilfield package from LA to ND. The trucking company has to have enough insurance to cover the load in the event something happens. Now, I find freight companies handle things much differently than parcel shipping companies though. With a freight company, I don't get charged extra just because the load is valued at $625k. They charge me based on the equipment needed and the mileage from A to B. I don't see why this couldn't be done with Parcel shipping, but you would need to declare value on every parcel. Maybe that is why they have the standard $100 declared value? I still don't see why if you declare more than $100 you get charged more.

[levi127]

Insurance is a fine line also when shipping. Like art work or personal items that can not be replaced. UPS will not cover these items unless they are a duplicate or you follow their guidelines to a T. Its in the fine print when shipping items.
So you ship a 150yr old item. You dont declare its an original or non replaceable. Regardless of damage they will not cover. Now if you claim it, it has to be packaged exactly how they state it has to be in order for them to be liable for it. Which shipping how they say to do it is nuts!
if you over insure a package they will only pay actual value of the item depending on condition, not what you say its worth. Also depending on value take the item from you when you are paid. Then they sell it online to recoup some of the money on it. Yes they all have ebay account!

[kb7722]

To be honest, from an insurance perspective, your package is their responsibility when you are paying them a fee for them to transport it.

Exactly.

Just like when I contract a trucking company to haul a $625k oilfield package from LA to ND. The trucking company has to have enough insurance to cover the load in the event something happens. Now, I find freight companies handle things much differently than parcel shipping companies though. With a freight company, I don't get charged extra just because the load is valued at $625k. They charge me based on the equipment needed and the mileage from A to B. I don't see why this couldn't be done with Parcel shipping, but you would need to declare value on every parcel. Maybe that is why they have the standard $100 declared value? I still don't see why if you declare more than $100 you get charged more.

It's different because regardless of what the trucking company is hauling they probably have a couple million in insurance on the rig and load. UPS is not filling an insurance claim every time they loose a package due to mishandling. They are paying those claims out of pocket as an operating expense. Now if a UPS truck gets hit by a train and all packages are lost that is a different story. UPS's insurance maybe involved at that point.

So all those you say UPS should not charge more if the package is valued at $100 or more, at what value should they start to charge more. Lets say $10,000 is the cut off. All package are assumed to cost no more than $10,000 unless declared at a higher value. I mail a pack of bubble gum to MudHog and UPS loses it they are liable for $10,000 because they have no way of know what the actual value of the package was and per their new policy they have to cover up to $10,000. So when they are looking at their operating cost and they know kb7722's pack of gum will cost them $10,000 vs the $100 per the old policy, they will have to charge more across the board on every package so that they operate in the positive. This new cost will involve looking at statics on # of lost or damaged packages over a given period and calculating the probability that any given package may be lost or damaged. This information will give them estimate of how much they will pay each year for lost and damaged packages. This cost will divided over the estimated number of packages they will ship each year. This liability cost along with other operating cost like paying the driver and buying fuel will be added up to determine the shipping cost of a package. And we will all pay more for shipping because new package liability value so that UPS can pay for kb7722's $10,000 of Big League Chew. So if you are only shipping some $20 Quack Stacker stickers to deltadukman part of your shipping cost will go towards paying for kb7722's Big League Chew and you fell like you have been screwed. Now if you are shipping a $10,000 DU gun of the year to rasco33 your cost will be less b/c everybody shipping a $5 trinket is helping pay for the $10,000 of liability on your $10,000 package.

And they all lived happily ever after (with a UPS undeclared package value of $100). The End.

[MudHog]

To be honest, from an insurance perspective, your package is their responsibility when you are paying them a fee for them to transport it.

Exactly.

Just like when I contract a trucking company to haul a $625k oilfield package from LA to ND. The trucking company has to have enough insurance to cover the load in the event something happens. Now, I find freight companies handle things much differently than parcel shipping companies though. With a freight company, I don't get charged extra just because the load is valued at $625k. They charge me based on the equipment needed and the mileage from A to B. I don't see why this couldn't be done with Parcel shipping, but you would need to declare value on every parcel. Maybe that is why they have the standard $100 declared value? I still don't see why if you declare more than $100 you get charged more.

It's different because regardless of what the trucking company is hauling they probably have a couple million in insurance on the rig and load. UPS is not filling an insurance claim every time they loose a package due to mishandling. They are paying those claims out of pocket as an operating expense. Now if a UPS truck gets hit by a train and all packages are lost that is a different story. UPS's insurance maybe involved at that point.

So all those you say UPS should not charge more if the package is valued at $100 or more, at what value should they start to charge more. Lets say $10,000 is the cut off. All package are assumed to cost no more than $10,000 unless declared at a higher value. I mail a pack of bubble gum to MudHog and UPS loses it they are liable for $10,000 because they have no way of know what the actual value of the package was and per their new policy they have to cover up to $10,000. So when they are looking at their operating cost and they know kb7722's pack of gum will cost them $10,000 vs the $100 per the old policy, they will have to charge more across the board on every package so that they operate in the positive. This new cost will involve looking at statics on # of lost or damaged packages over a given period and calculating the probability that any given package may be lost or damaged. This information will give them estimate of how much they will pay each year for lost and damaged packages. This cost will divided over the estimated number of packages they will ship each year. This liability cost along with other operating cost like paying the driver and buying fuel will be added up to determine the shipping cost of a package. And we will all pay more for shipping because new package liability value so that UPS can pay for kb7722's $10,000 of Big League Chew. So if you are only shipping some $20 Quack Stacker stickers to deltadukman part of your shipping cost will go towards paying for kb7722's Big League Chew and you fell like you have been screwed. Now if you are shipping a $10,000 DU gun of the year to rasco33 your cost will be less b/c everybody shipping a $5 trinket is helping pay for the $10,000 of liability on your $10,000 package.

And they all lived happily ever after (with a UPS undeclared package value of $100). The End.

That's why I stated the point about declaring value of each package. Even still, as levi has brought up, UPS still gets an out as the package will likely not be packaged to their requirements to be covered.

From the angle of operating cost, operating cost is still shifted to the consumer by way of the fee for the service rendered. So the more packages UPS damages in handling, the more "operating cost" they absorb, the higher the cost of their service becomes. If a company's operating cost is $10, they surely will not charge $8 for the service as they have not covered their operating cost.