UPS vs. USPS vs. FedEx: Battle of the Shipping Carriers

ecommmerceAs the holidays quickly approach, one question on the minds of many business and company owners is “Which shipping carrier should I use for my business?” This may be a difficult choice for some, as there are a lot of carrier options available. The three major carriers in the United States are UPS, FedEx and the United States Postal Services (USPS). Each of these brands are most familiar among Americans and are associated with reliable shipping to consumer residences.

Each carrier has specific strengths, however their differences are not as stark as they once were. They each have strategies to serve the eCommerce market and continue to improve their service and delivery options, while also meeting online sellers’ (and buyers’) needs. Consequently, USPS now has exceptional 1-3 day Priority Mail capabilities, FedEx and UPS offer competitively priced ground solutions, and services like FedEx SmartPost and UPS SurePost leverage USPS for final package delivery to residences buying online. With each carrier being so similar, choosing one that is best for your business may be difficult. This article will discuss how these 3 major carriers compare to better help you make your choice.

United States Postal Service (USPS)

There is a common misconception among many that USPS is not appropriate for a business, as it is associated with holiday cards, junk mail and bills. This is not always true though. In reality, all of USPS delivery and eCommerce services have been improved and they are focused on starting with low prices on the lighter weight items which are most often ordered online.

Price

For packages under 2 pounds, USPS is the cheapest shipping solution. And if the package is less than 13oz, there is literally no comparison. (The majority of other carrier rates start from 1 lb. or 16 oz.) First Class Mail is a service offered by USPS which is for shipping packages up to 13oz, starting at .93, if you are using an online shipping solution. The main focus of USPS is on being the low-cost provider, and most of the time they succeed. In late 2014, their Priority Mail service improved its delivery times, provided delivery date estimates based on zone and further reduced their rates. Flat rate boxes and unique regional rate boxes for heavier packages are also extremely competitive.

Extra Fees

All too commonly shipping carriers, such as UPS and FedEx, tack on the surcharges for residential delivery and fuel. USPS doesn’t tack on these surcharges though. Free package pickup and Saturday delivery are also offered at no extra charge with USPS. When comparing carriers, it important to look at the “total cost to deliver” with all surcharges. Many times sellers just look at the base cost.

Reliability

The reputation of USPS for reliability was tarnished long ago, and despite many improvements made in the past 3 years, trust takes awhile to rebuild. Since 2012, USPS has worked with thousands of sellers and improved point-to-point tracking that seems to be popular with online sellers. Although USPS doesn’t always guarantee delivery time, they refund postage if the package doesn’t arrive on time. A private carrier should be used for time-sensitive packages if items need to absolutely arrive overnight and you are not interested in a claims process.

Federal Express (FedEx)

FedEx has a reputation and brand name that just might impress your customers. If a trusted brand is crucial to your customers who are ordering time-sensitive or high-value items, then this might be the carrier for you.

Price

Compared to USPS, FedEx can be extremely competitive on rates when it comes to ground shipping, but they can be more expensive than UPS on their expedited services like overnight and 2-day shipping.

Discounted Rates

Using online specials, FedEx has started initiating discounted rates on some services. With other shipping carriers, such as UPS, rates have to be negotiated in person. Access to discounted rates with FedEx is as simple as signing up for an online account.

Extra Fees

Residential deliver fees will be tacked on with FedEx which can be costly for online sellers. Fuel surcharges, Saturday delivery and package pickup will also be tacked on unless you are a large shipper with daily pick up.

Reliability

Delivery time is extremely important to FedEx. The only exception in rare circumstances is when there is extreme weather and holidays.

Tracking

Tracking individual packages with FedEx can be done with numerous scans that keep track of packages throughout the process and useful information is available at every checkpoint.

United Parcel Service (UPS)

UPS delivers more online ordered packages than any other carrier. They are considered the market leader when compared to USPS and FedEx.

Price

If you have a lot of packages that weigh in at the 21lb+ mark, then you should consider UPS for your business. Ultimately, negotiated rates will determine what is cheaper though. Negotiated rates should be compared to rates from other carriers to determine which is actually cheaper — fully loaded with the applicable surcharges.

Discounted Rates

UPS rates are up to you to negotiate directly with an Account Manager based on your delivery volume. When comparing to other carriers, it is important to make sure you get a clear explanation of all surcharges and then add these to establish a “total cost”.

Extra Fees

Similar to FedEx, UPS tacks on extra fees, but it doesn’t have any free package pickup service.

Reliability

Delivery time is extremely important to UPS, just like FedEx. Delays are rare.

Tracking

Innovative tracking features such as package update text messages are available to customers.

Deciding on a Shipping Carrier

Choosing a carrier that is best for your shipments will depend on your shipping profile. Average order weight; minimum and maximum weight of orders; and types of boxes, envelopes or poly mailers you use are all things that need to be considered.

Shipping costs for both you and your carrier are driven by weight, dimensions and distance. If you are shipping items that are lightweight, USPS First Class shipping might be the best option for you. Ground services offered by all three carriers should be explored and compared if you are shipping packages that start to hit the 2 lb. mark. FedEx and UPS’ low-cost shipping solutions SmartPost and SurePost should be considered for items that are inexpensive and not time-sensitive.

 

These are just a few of the pros and cons of each shipping carrier service. If you have any questions or concerns, don’t hesitate to contact Centennial Arts with the link below!

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