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USPS vs. UPS vs. FedEx: Which Is Best for Your Business?

August 24, 2021 15:49

USPS vs. UPS vs. FedEx: Which Is Best for Your Business?

Last Updated: 10/15/2021

 

As a small-business owner, it can be difficult to understand shipping costs and know which service to choose. And the answer can vary, depending on the size of the package you need to ship and how fast you want it to get to its destination.

 

There have been plenty of complaints about the United States Postal Service, especially during the COVID-19 pandemic. But a 2020 survey by the Pew Research Center found that 91% of respondents had a favorable view of the USPS, a higher percentage than for any other federal agency — so the U.S. Mail is obviously doing something right.

 

UPS and FedEx both are, too: In a 2020 survey, they ranked third and 12th, respectively, on a list of America’s 50 most-loved brands. What ranked No. 1? The U.S. Postal Service. 

 

Each of these entities does several things well, but some more so than others. We evaluate which shipping options are best for your needs. You may be surprised that even after USPS’s 6.8%+ price increase, they’re still the most economical for light packages and flat-rate options.

 

Table of Contents

 

USPS vs. UPS vs. FedEx Pros and Cons

If you’re a small-business owner shipping light products like jewelry or apparel, USPS is probably the way to go. It’s also the carrier of choice for heavier items that can fit in flat-rate boxes. Since USPS handles such a large volume of mail, there’s a chance that packages will be delayed (especially during crises such as COVID-19 or during high-volume periods like holidays), so keep that in mind for shipments that must be received by a certain time.

 

For heavy items that do not fit in a flat rate box or items that must be delivered quickly, you should explore UPS and FedEx options. UPS has a high insurance maximum — $50,000 — making it the top choice for valuable pieces. FedEx is, perhaps not surprisingly, best for time-sensitive packages that need to be delivered the same day or via overnight delivery. 

 

The contents of FedEx packages are also a little less likely to be damaged in transit: According to one study, 11% of UPS packages were damaged by the carrier, compared with 10% of USPS packages and just 7% of FedEx parcels.

 

Weighted Shipping Cost Comparison

Rather than speaking in generalizations, let’s look at the cost of packages being shipped from Los Angeles (90001) to New York City (10001). These prices are accurate as of October 14, 2021.

 

In this example, UPS Ground takes four business days; FedEx Ground takes four business days; USPS First-Class Package Service-Retail takes two to three business days for packages under 13 ounces and USPS Retail Ground takes four to five business days for packages over 13 ounces. 

 

While FedEx Ground is cheaper than USPS for packages that weigh four pounds or more, if you can fit items in USPS flat-rate boxes, USPS will likely still be more economical. If your package weighs a pound or more, calculate if flat-rate shipping is cheaper.

 

Weight (lbs)

Packaging dimensions (inches)

USPS First-Class and Retail Ground

UPS Ground

FedEx Ground

0.125

6 x 9 x 1

$4.75

$12.56

$12.18

0.25

6 x 9 x 1

$4.75

$12.56

$12.18

0.50

10 x 13 x 1

$5.50

$12.56

$12.18

1

10 x 13 x 1

$10.30

$12.56

$12.18

2

4 x 4 x 2

$14.55

$14.84

$14.39

4

9 x 6 x 4

$21.70

$19.90

$19.30

8

10 x 7 x 5

$35.90

$25.10

$24.34

16

12 x 10 x 8

$59.25

$45.14

$43.78

50

32 x 32 x 32

Too large to mail

$420.96

$480.66

 

 

Flat-Rate Shipping Cost Comparison

In these examples, we used the Priority Mail Rate for USPS, 3-Day Select for UPS, and 3rd Day Shipping for FedEx being shipped 151-600 miles.

 

USPS 

The maximum weight for a USPS package is 70 pounds.

 

USPS offers six different flat-rate envelopes of varying sizes, plus padded envelopes. Most flat rate envelopes cost $8.70 to ship with legal-size ($9.00) and padded ($9.30) envelopes costing a little more. 

 

Small boxes cost $9.20 to ship; top- and side-loading medium boxes cost $16.25; and large boxes cost $22.65. (The packages themselves are free and can be picked up at any post office; the cost lies in the shipping.)

 

For faster shipping, you can choose Priority Mail Express® next-day or two-day shipping with a money-back guarantee starting at $26.60 for a flat-rate envelope. You get free shipping insurance of up to $50 on Priority Mail and up to $100 on Priority Mail Express.

 

UPS

Flat-rate packages are measured in cubic inches, and you can use your own boxes. This is beneficial if you ship awkwardly shaped items that don’t easily fit in USPS flat-rate boxes. You can also make larger shipments when you ship with UPS than with USPS: Packages can weigh up to 150 pounds and measure as much as 165 inches in length and girth combined.

 

When it comes to delivery time, you can choose from four shipping speeds: ground, next-day air, second-day air, and 3-day select. UPS provides five flat-rate options that start at $8.80 for an extra-small box (good for sunglasses, an iPhone, or a ceramic mug), and start at $22.85 for the largest option, which could fit a tennis racket or a small appliance.

 

As with Priority Mail Express, UPS insures the contents of what it ships up to $100 on packages with no declared value. You can pay for additional insurance by declaring a value of up to $50,000 per package.

 

UPS flat rate is typically more expensive than USPS flat rate, though you may want to consider it if you need more insurance, you’re shipping internationally, you need more flexibility with box size, or you need items to arrive quickly.

 

FedEx

You can send a package that weighs up to 50 pounds with FedEx, which offers a dozen free packaging options and shipping prices that range from $8.90 for an envelope to $32.35 for an extra-large box.

 

FedEx provides up to $100 declared value for no extra charge, and you can increase declared value for a fee. However, declared value is not insurance. It is FedEx’s maximum liability if a package is damaged or lost. 

 

FedEx offers multiple overnight flat rate options, so you may want to consider it if you need something delivered by a certain time, but think about whether flat rate or non-flat rate options would be cheaper. 

 

When it comes to size, extra-large FedEx boxes are available at 15¾ by 14⅛ by 6 (or 1,334.8 cubic inches), or 11⅞ by 10¾ by 11 (or 1,404.2 cubic inches). That compares with 1,728 cubic inches for UPS. These options are not included in the tables below.

 

Envelope

Carrier

Dimensions (inches)

Rate

USPS

12½  x 9½ 

$8.70

UPS

100 in3

Common package sizes

8 x 6 x 2

6 x 4 x 4

11 x 9 x 1

4 x 4 x 4

$14.65

FedEx

12½  x 9½ 

$9.50


 

Padded Envelope

Carrier

Dimensions (inches)

Rate

USPS

12½  x 9½ 

$9.30

UPS

100 in3

Common package sizes

8 x 6 x 2

6 x 4 x 4

11 x 9 x 1

4 x 4 x 4

$14.65

FedEx

14¾ x 11¾

$10.10

 

Small Box

Carrier

Dimensions (inches)

Rate

USPS

811/16 x 57/16 x 1¾ 

$9.20

UPS

100 in3

Common package sizes

8 x 6 x 2

6 x 4 x 4

11 x 9 x 1

4 x 4 x 4

$14.65

FedEx

123/8 x 107/8 x 1½  

$11.45

 

Medium Box

Carrier

Dimensions (inches)

Rate

USPS

11¼ x 8¾ x 6

$16.25

UPS

650 in3

Common package sizes

13 x 11 x 2

12 x 9 x 6

13 x 12 x 4

8 x 8 x 8

$25.50

FedEx

13¼ x 11½ x 23/

$15.60

 

Large Box

Carrier

Dimensions (inches)

Rate

USPS

12¼  x 12¼ x 6

$22.65

UPS

1050 in3

Common package sizes

12 x 12 x 7

15 x 11 x 6

14 x 10 x 7

10 x 10 x 10

$33.75

FedEx

17½ x 123/8 x 3 

$21.65

 

 

USPS

USPS may include as much as $50 worth of insurance for Priority Mail and up to $100 for Priority Express Mail in the price of service. In addition, you can purchase insurance of up to $5,000 in indemnity; if a package is insured for more than $500, the recipient may be required to show primary ID before being allowed to take possession of the package. 


USPS is the only carrier on this list that offers free pickup. You can schedule a pickup at its website online, and enter a tracking number online to determine the status of your delivery, as well. Shipping receipts contain these tracking numbers, as do email confirmations.   

 

How Are USPS Shipping Costs Calculated?

Postal Service parcels are priced in a variety of ways, based on the size, the weight, and the shape of the package you’re mailing, as well as how fast you need it to get there. USPS rose shipping prices on August 29, 2021.

  • A Balloon Price applies to parcels that are large but lightweight (like a balloon) and are being delivered by USPS Retail Ground service or Parcel Return Service.
  • Dimensional Weight pricing may be applied if a parcel exceeds 1 cubic foot in volume.
  • An Oversized Price may apply to parcels in some mail classes that are between 108 and 130 inches in girth, regardless of weight (as long as it’s not more than the 70-pound limit).

Speed is also a factor (see below). To determine your shipping costs, link to the USPS calculator.

 

USPS Services

Depending on how fast you want a package to arrive, you can mail it by:

  • Retail Ground for less-than-urgent deliveries — 2-8 business days, starting at $7.95.
  • Media Mail for books, printed music, manuscripts, reference charts, etc. — 2-8 business days, starting at $3.19.
  • First-Class Mail for standard envelopes and small package up to 3.5 ounces — 1-3 business days, starting at $0.58 cents.
  • USPS Priority Mail — 1-3 business days for domestic delivery, starting at $7.95.
  • Priority Express — Next-day to two-day guarantee by 6 p.m., starting at $27.00.
  • Priority Mail International — 6-10 business days, starting at $45.95; may include free package pickup service at home or office.

USPS also offers PO boxes in various sizes.

 

USPS for Business

The Postal Service provides shipping solutions for businesses, as well. Services include direct-mail advertising, ways to stock up on shipping supplies (such as boxes and labels), and scheduling a pickup from your home or office. The Click-N-Ship program allows users to pay for postage and print shipping labels from a free online account.

 

You can also add delivery instructions and save the shipping information you’ve already used for future reference, in case you want to ship something to the same destination again.

 

UPS Overview

UPS provides ways to track your package and schedule a pickup by entering information online. It offers free insurance up to $100, as mentioned, but you can purchase more if you so choose.

 

How Are UPS Shipping Costs Calculated?

UPS calculates shipping costs based on factors like the origin, destination, and weight of your shipment, which you can plug into the company’s online calculator

 

UPS Services

UPS has a number of services from which to choose, amounting to 18 different options in all. A few of the basic ones are listed below, including information on each of them.

  • Next Day Air is a “time-definite service — or your money back.” It’s good for ensuring your package arrives the next day by 10:30 a.m. or noon. Next Day Air Early will get it there by 8 a.m. or 9:30 a.m.
  • 2nd Day Air is a more economical option than Next Day Air for those who don’t need overnight shipping. Two-day delivery is guaranteed anywhere within the continental United States and Puerto Rico. There’s also a 2nd Day Air A.M. option for delivery at or before noon.
  • 3 Day Select guarantees delivery within three business days in the contiguous 48 states.
  • Standard Delivery is designed for less-urgent shipments to and from the U.S., except Alaska and Hawaii.
  • Ground Shipping gives you a guaranteed delivery date in one to five days.
  • Worldwide Economy DDP is a five- to 10-day delivery option for lower-priced items to more than 210 countries around the world.

UPS rents mailboxes at its UPS stores.

 

UPS for Business

United Parcel Service offers numerous drop-off and pickup locations, or they can come to you. UPS also provides ways to reach e-commerce business clients around the world. 

 

You can track your shipments on one dashboard and reroute them if necessary through the UPS My Choice® for Business program online, via desktop, tablet, or mobile. You can track both inbound and outbound packages, and set up a custom tracking page with a policy page that can help you learn why customers are returning a product.

 

You can also manage multiple online storefronts using its services. 

 

FedEx Overview

FedEx provides an online site that allows you to track your shipment using a tracking number, or up to three different shipments at once. Additionally, you can track by Transportation Control Number or reference number, and obtain proof of delivery. You can also schedule a pickup, but there’s an additional fee for one-time pickups.

 

According to the FedEx website, “FedEx does not supply shipping insurance of any kind, but you can reach out to an insurer of your choice.”

 

How Are FedEx Shipping Costs Calculated?

FedEx provides a shipping calculator that takes into account various factors in determining how shipping costs are calculated. Among them are a package’s origin and destination by ZIP code, whether it’s going to a residence, the kind of package you’re using, weight and dimensions, when it’s being sent, and whether you’re sending more than one package.

 

FedEx Services

FedEx supplies seven kinds of domestic shipping services for packages and envelopes, six domestic freight shipping services, and five international services each for envelopes and packages, and for freight. 

  • Overnight service is offered in three different options, each of which is available in all 50 states:
    • FedEx First Overnight gets your package to most domestic destinations by 8, 8:30, or 9 a.m. the next business day.
    • FedEx Priority Overnight provides next-business-day delivery by noon to most residences and by 10:30 a.m. to most businesses.
    • FedEx Standard Overnight parcels arrive by 4:30 p.m. to businesses and 8 p.m. to residences the next day (Hawaii is outbound only).
  • 2 Day deliveries are complete by two business days, reaching their destination by 4:30 p.m. for businesses and 8 p.m. for residences; 2 Day A.M. deliveries get there in two business days, but by 10:30 a.m. to businesses and noon to residences.
  • Express Saver is a three-day afternoon and evening delivery option to anyone in the contiguous 48 states.
  • Ground delivers packages in 1-5 days everywhere except Hawaii and Alaska, where the timeline is 3-7 days.
  • Freight options are overnight, one-day, two-day, and three-day; as well as priority and economy for LTL (less than load) freight.
  • International: FedEx delivers on the next available flight (most often 24 hours a day); within 1-3 business days as early as 10 a.m. via First service or 1-3 business days by close of business for Priority; within 2-5 business days by International Economy; and within 2-7 business days via Ground service.

 

FedEx for Business

Among the things FedEx offers are custom-branded boxes and printed inserts to reinforce branding and visibility for businesses.

 

You can order supplies, create shipping labels, schedule pickups, and find dropoff locations. Available supplies include standard and specialty boxes, packing peanuts, mailers, and tape. These items are all available through the FedEx website.

 

Software integration to connect e-commerce sites to FedEx is also available.

 

Small-Business Owners’ Advice on Reducing Shipping Costs

We spoke with three small-business owners who offered advice on what’s worked for them in reducing shipping costs. Teresa Madrigal of Shop Restyled, Emilie Dulles of Dulles Designs, and Patrick Connelly of Stellar Villa all shared their thoughts.

 

Negotiate shipping rates

Negotiating shipping rates may be an option, and it’s one that can save you money, according to Patrick Connelly. He’s the co-founder of Stellar Villa Pet Portraits, which creates, sells, and ships custom portraits of furry companions.

 

“To obtain cheaper rates, you may be able to negotiate your rates depending on the shipping service you use,” he said. “If you are using UPS or FedEx, call your carrier, and if you don’t have one already, request a dedicated sales representative. The higher the volume of shipments you do, the better position you will be in to negotiate.”

 

Use Shopify shipping

Teresa Madrigal of Shop Restyled, which sells and ships vintage women’s clothing, says Shopify offers a good deal.

 

“Etsy offers great discounts, but our best prices come through Shopify,” she said, adding that she can save over 50% to 80% by using the company. “They offer up to 80% off regular USPS prices. For example, if you stop by USPS and try to ship something that’s 1 pound, they’ll quote you between $7.49 and $14.00. 

 

By using Shopify shipping, you can be a lot more specific and range your pricing based on inches, weight, and type of package. Prices will reduce to $2.49 on average (through $4.50 max) for 1 pound.”

 

She adds that Shopify also provides her with more options.

 

“If I ship a package that weighs 4 pounds (three jackets and two candles) I would be looking at around $24 through USPS. If I choose UPS based on weight, I'm looking at $9. If I prefer USPS, I'm looking at a flat rate fee minus the Shopify discount, so it's around $11.”

 

Risk insurance

Emilie Dulles runs Dulles Designs, which offers stationery, business cards, invitations, notepads, and other products using bespoke engraving, letterpress, and digital printing. 

 

She’s found that one good secret to saving on shipping costs is to use the exact amount of risk insurance required. 

 

“Some business owners pay too much in shipping costs because they are paying too much in shipping insurance,” she said. “We ship very expensive engraved and letterpress printing which is also very time-sensitive — usually for a wedding, a baby announcement, or a 50th anniversary — and we must insure each package for its full replacement value. 

 

One year we audited our shipping costs and learned we were paying too much, for too much insurance coverage.”

 

Shipping Software

 

PirateShip

PirateShip allows you to purchase USPS shipping and qualify for commercial rates, which are the most discounted rates offered by the Postal Service. You can get up to 89% off for small packages. 

 

This site is especially useful for cubic shipping, which is calculated using the dimensions of the box plus the distance you’re shipping the item. For instance, a box measuring 6 x 6 x 9 inches would have a cubic volume of 0.188 and would qualify for Tier 0.2 under the site's formula. If you were sending that box 250 miles, you could consult a table on the website to determine it would cost $8.46. 

 

Boxes can’t be larger than Cubic Tier 0.5, and there’s a weight limitation of 20 pounds.

 

ShippingEasy

ShippingEasy can provide USPS commercial rates, exclusive discounts, and insurance savings to create discounts of up to 46%. UPS shipping discounts of up to 62% on daily rates are also offered, as well as discounts on insurance. You can even email the company to ask for a rate comparison.

 

Integrations are offered with companies like eBay, Amazon, Etsy, Walmart, and more.

 

Stamps.com

Stamps.com promises you’ll “never pay full price for stamps again” via discounts you can’t get at the post office. They offer many USPS and UPS shipping options and help you determine what Mail class is best for you. Plus, they integrate with popular e-commerce platforms.

 

You can try it free for four weeks, and you’ll get $5 worth of free postage to start out, but there’s a monthly fee of $17.99 that kicks in after that, plus taxes.

 

ShipStation

ShipStation has been around since 2011 as a way to help online merchants integrate shipping with their websites. Automated shipping options are available, and the platform offers recipients updates about the status of items they’ve ordered.

 

Business owners can print labels, either individually or in groups of up to 500. ShipStation provides software that lets companies automatically apply shipping to orders they’ve imported from more than 100 selling channels and marketplaces. Automation can also be used to manage and fulfill orders quickly, with the help of bulk updates and scan-based workflows.

 

Packages, packing slips, and other forms of interaction can be branded. There’s a fee based on the number of shipments you plan to make per month. Fifty shipments cost $9, or you can pay $29 for 500 shipments, up through six different tiers to the top-of-the-line “Enterprise” package that gives you 10,000 shipments a month and allows 10 users for $159.

 

The top four tiers each allow more than one user. The most popular is the gold tier, which gives you 3,000 shipments a month for $69 and allows three users.

 

Shipping Through E-Commerce Platforms

When it comes to shipping labels, you don’t necessarily have to rely on shipping companies to provide them. Some online retail platforms allow you mechanisms to print shipping labels through their sites.

 

Shopify

Shopify integrates with a variety of shipping carriers worldwide, including USPS, UPS, FedEx, and DHL in the United States; FedEx, UPS, and Canada Post in Canada; and UPS and FedEx globally.

 

Shopify merchants can qualify for reduced rates from some carriers. Discounts vary depending on the plan you choose: Basic Shopify ($29 a month), Shopify ($79), or Advanced Shopify ($299). For example, with a Basic plan you can receive up to 64.5% off USPS rates. With an Advanced plan you can get up to 88.5% off.

 

EBay

EBay partners with FedEx, UPS, and USPS. It offers pre-negotiated discounts on shipping labels and free shipping supplies through each of its partners. 

 

For example, you can get discounts of:

  • Up to 37% on FedEx shipments
  • As much as 50% on UPS Ground shipments
  • Up to 65% on UPS Next Day Air and 66% on 2nd Day Air service
  • Up to 30% off retail USPS rates with eBay labels

 

Etsy

Are you launching your own online boutique? Selling crafts or candles, or maybe artwork? 

 

You can ship orders from your Etsy shop via USPS, FedEx, or Canada Post. Using Etsy shipping labels can result in savings of up to 30% on the cost of shipping via FedEx, USPS, and Canada Post. The labels come with tracking, so your buyers can stay informed about where their orders stand.

 

Negotiating Your Own Rates

 

You can also negotiate your own shipping rates by comparing rates offered by different carriers so you have leverage going in. If you know one carrier can give a better rate, you can use that information to negotiate a better rate with a competitor. It’s especially important to get the best rates if you’re just starting out on a limited budget or working as a wholesaler with a narrow profit margin.

 

The more business you do with a company, the better your chances are of negotiating a good rate, because they’ll appreciate your business and want to retain your loyalty. Personal relationships matter, too, so if you establish a rapport with an account manager at one of the companies, this can help.

 

This will also help you understand how the carrier operates. Discounts may be tricky, and the more you understand about how they work, the better off you’ll be. Do your research and figure out how the carrier’s program works so you can compare it to what other carriers have to offer and look for the best deal.

 

Even if you can’t get a break right away, you can ask for a deal that will save you money in the longer run by asking for a rate freeze. You’ll keep working with the carrier as long as they don’t raise your rates (even though they might for other customers). 

 

Again, they may be willing to give you a break in exchange for your loyalty, especially if you give them all your business. And if you do a lot of business, you may be able to negotiate volume discounts for the best rates.

 

Conclusion

Choice is the name of the game when it comes to shipping. In fact, there are so many choices that it can seem overwhelming. Here are some questions to ask yourself:

  • Are you an individual shipping in small volume?
  • Are you a business shipping frequently and to a wide area? If so, you might want to offer your customers free shipping as an incentive, so you’ll be looking for volume discounts from your carrier. 
  • Do you plan to ship large packages? (Heavier packages can cost more.)
  • How soon do you need your packages to arrive? Do you need express delivery?
  • Will you be shipping domestically, or is international shipping involved?

Once you answer these questions, you can begin doing research on shipping companies and the various delivery services they offer. Then you can find shippers that will save you money depending on your timeframe, the time and place of your package delivery, and how big or heavy your packages are.

 

Whether you’re shipping a birthday present to Mom, selling wholesale jewelry, or sending out some time-sensitive documents for a business deal, you can come up with plans that work for you or your business. 

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