Is FedEx’s declared value policy adequate for IT shipments?

FedEx’s declared value does not actually insure shipments, including IT hardware. Instead, FedEx uses the term “declared value”, which represents FedEx’s maximum liability in connection with the shipment of a package, including, but not limited to, any loss, damage, delay, or misdelivery relating to that shipment. By avoiding the word “insurance” and any implicit expectations associated with it, FedEx minimizes the risk of legal action customers can take against it. FedEx’s liability rules restrict how you:

• Allocate value across multiple packages

• Calculate depreciation

• Document your claims

Let’s examine three of these rules, why they matter, and how your organization can protect its high value shipments effectively.

Declared value is not insurance coverage

FedEx’s Service Guide (updated September 2024), states on p. 169:

Declared value for carriage and limits of liability (not insurance coverage)

A. The declared value for carriage of any package represents our [FedEx’s] maximum liability in connection with a shipment of that package, including, but not limited to, any loss, damage, delay, misdelivery, nondelivery, misinformation, any failure to provide information, or misdelivery of information relating to the shipment. It is the shipper’s responsibility to prove actual damages. Exposure to and risk of any loss in excess of the declared value is assumed by the shipper. You may transfer this risk to an insurance carrier of your choice through the purchase of an insurance policy. Contact an insurance agent or broker if you desire insurance coverage. WE [FedEx] DO NOT PROVIDE INSURANCE COVERAGE OF ANY KIND.

FedEx doesn’t provide insurance coverage when you specify a declared value of your shipment. If you want insurance, you may choose to purchase third-party insurance separately. For example, if you ship with FGX, you’ll have the option to purchase our unlimited, all-risks, global insurance policy with door-to-door coverage, specifically designed for IT hardware shipping, that we worked with Lloyd’s of London to underwrite.

If something goes wrong with your shipment, your coverage won’t be voided and you’ll get the full insurable value of your hardware back. FGX will also partner with you through the claims process, and provide the data and documentation you need (captured through the shipment life cycle) to help the insurers process the claim promptly.

However, if you were to make a claim with FedEx, this will all fall on you. It would be your responsibility as the shipper to prove any actual damages were caused by FedEx, and to adhere to FedEx’s additional rules for reimbursement:

• To be reimbursed, you must provide proof of loss or damage of goods.

• To be reimbursed, you must provide proof that FedEx is at fault.

• If you declare a value for items that are prohibited and they are lost or damaged, you will not be reimbursed.

• No matter the amount you declare, FedEx’s liability won’t exceed your shipment’s repair cost, its depreciated value, or its replacement cost—whichever is less.

• Any effort to declare a value more than the maximums allowed in the FedEx Service Guide is null and void. FedEx’s acceptance for carriage of any shipment with a declared value in excess of the allowed maximums doesn’t waive any provision in the service guide.

  • Maximum Liability if No Value is declared: US$100, US$9.07 per pound, or US$20.00 per kilo, whichever is greater

  • Express Shipments [all Boxes]: Maximum declared-value limit is US$50,000 to most international locations per shipment

  • Freight Shipments [all Pallets]: Maximum declared-value limit is US$100,000 to most international locations per shipment

  • On p. 131, FedEx states that for international package services and international express freight services, this will cost you $1.40 per $100 of value in excess of $100 or $9.07 per lb. 

• No reimbursements are made for the misdelivery of information.

• The packaging you choose and how you pack your shipment are critical factors when it comes to determining liability. If a shipment is improperly packaged and/or packed and is subsequently damaged, FedEx will not be deemed at fault. 

All of these stipulations require additional effort and documentation from you to make sure FedEx is held accountable for any damages or losses it is responsible for.

FedEx’s limited liability coverage with IT hardware

A single box of IT hardware—whether a high-end router, server, or switch—can be worth over tens of thousands of dollars. Consider some of these varying value densities (value divided by weight):

• A Dell HGX H100 AI system is worth $280,000 and weighs 113.3kg, with a value density of $2,471.32/kg

• An AMD Xilinx FPGA is worth $14,995.00 and weighs 4.8kg, with a value density of $3,123.96/kg.

• A data center optical backbone router is worth $100,000 and weighs just 30kg, with a value density of $3,333.33/kg.

Now consider FedEx's liability limits without declared value: $20 per kg. This means even if you can prove that FedEx lost your $100,000 router, they would pay out only $600 ($30kg * $20/kg) in compensation—just 0.6% of the replacement cost of your hardware.

FedEx’s rules also create another hidden risk: If you don’t specify values for individual boxes, FedEx will average the total value across all boxes in your shipment. Here’s what its Service Guide says (p. 170):

G. When the sender has not specified the declared value for carriage of each package on an air waybill, but has specified a total declared value for all packages, the declared value for each package will be determined by dividing the total declared value by the number of packages on the air waybill unless you provide verifiable evidence supporting a different allocation. The declared value of any package in a shipment cannot exceed the declared value of the total shipment.

If you shipped one backbone router (worth $100,000) and nine boxes of cables each worth ($100), and FedEx loses the backbone router, the maximum liability is $10,090 (($100,000 + 9*$100)/10). This means you recover barely 10% of your router's value. The stark difference between your equipment’s actual value and FedEx’s limited liability makes it clear that relying solely on FedEx’s declared value policy is an extremely risky financial decision.

FedEx’s stipulation for damages

The FedEx Service Guide contains detailed terms that gives it significant control over both the maximum value FedEx will cover per shipment and how it determines that value in practice. Here are its clauses on p. 170:

J. ANY EFFORT TO DECLARE A VALUE IN EXCESS OF THE MAXIMUMS ALLOWED IN THE FEDEX SERVICE GUIDE IS NULL AND VOID. OUR [FedEx’s] ACCEPTANCE FOR CARRIAGE OF ANY SHIPMENT BEARING A DECLARED VALUE IN EXCESS OF THE ALLOWED MAXIMUMS

K. REGARDLESS OF THE DECLARED VALUE OF A PACKAGE, OUR [FedEx’s] LIABILITY FOR LOSS, DAMAGE, DELAY, MISDELIVERY, NONDELIVERY, MISINFORMATION, ANY FAILURE TO PROVIDE INFORMATION, OR MISDELIVERY OF INFORMATION, WILL NOT EXCEED A SHIPMENT’S REPAIR COST, ITS DEPRECIATED VALUE OR ITS REPLACEMENT COST, WHICHEVER IS LESS.

L. The shipper is responsible for accurately completing the air waybill or other shipping documents, including completion of the declared-value section. We [FedEx] cannot honor requests to change the declared-value information on the air waybill after tender to FedEx. 

M. See the Liabilities Not Assumed section for other limitations and exclusions on our [FedEx’s] liability.

Consider this scenario: If that $100,000 router is damaged during transit—say, the ports don’t function properly—you'll need to navigate the claims process with FedEx. This means providing detailed documentation to justify repair or replacement costs, and working directly with FedEx’s claims department to reach a resolution. FedEx may contest the value of your router (and de-value it through a discounted listing), launch a lengthy inspection process, and recommend repair instead of replacement.

There’s a high probability your outcome will end with a denial, like other FedEx customers with high declared value shipments. In the scenario that FedEx does offer you compensation, the time it takes to complete the process means you will need to purchase the IT hardware before it’s done in order to make up for the lost or damaged shipment.

Don’t learn your lesson the hard way

While this article closely examined FedEx’s declared value policy, limiting liabilities is a common practice with all large logistics and transportation networks including UPS and DHL. UPS maintains a similar declared value policy in its terms and conditions that limits its liabilities (please see p. 121 of its service guide), while offering its InsureShield® shipping service. DHL Express states its Liability in section 6 of its Terms of Use, and offers a Shipment Value Protection program. These varying policies are structured differently from FedEx’s, and come with their own rules and constraints that similarly put high value IT shipments at risk.

When you ship value dense IT equipment internationally with FedEx, you need to understand its rules and system. To protect your valuable IT shipments:

• Always declare your shipment’s value accurately, with individual values declared for each package

• Consider purchasing separate shipping insurance from a third-party insurer for comprehensive coverage

• Keep detailed records of equipment value, condition, and packaging methods

• Understand that FedEx’s liability is limited to the lesser of repair cost, depreciated value, or replacement cost

While FedEx provides an essential shipping service, its liability rules protect its business—not your shipment. Taking proactive steps to either find a better solution, or working within FedEx’s rules and securing additional protection when you need it, is essential for safeguarding your company’s valuable IT assets during international transit.

The information provided in this article does not, and is not intended to, constitute legal advice.