If you’re looking for competitive shipping rates, look no further than the big three: the U.S. Postal Service (USPS), UPS and FedEx.
You can take your chances with a cheap courier or pricey dropshipping service, but your business depends on its ability to deliver on time and under budget. Other shipping services aren’t always the most reliable. In certain situations, UPS and FedEx guarantee delivery dates.
We’ll compare the shipping rates for the simplest package delivery: ground shipping. Next, we’ll take a look at shipping types and rate calculations. Then we’ll look at shipping options that make a big difference:
- Logistics: pickup, drop off and packaging
- Keeping tabs on your cargo: tracking your parcels and insurance
- Telling it where to go: shipping labels and how to use them
Shipping Rates: Best Shipping Options for Small Business
There can be some confusion over which service is the best. USPS often is considered the best choice overall because attractive shipping rates. Keep in mind, however, USPS raised its rates in January and June 2019.
Comparison shopping for rates is critical for small businesses that ship products regularly. Calculating shipping rates isn’t as easy as putting a stamp on an envelope and dropping it in the mail, however.
It’s important to note packages and letters follow different pricing structures. Postage for a letter may be the same depending on where you’re sending it and when you want it to arrive. With packages, the following factors determine what you pay at most couriers:
- Distance from mailing ZIP Code
- Weight of the parcel in pounds and ounces
- Volume of packages being mailed at once
- Dimensional weight (DIM weight): Based on the length, width and depth of your package.
Note: USPS announced new pricing in June 2019, new rates for FedEx begin in October 2019. UPS has special rates for the 2019 holiday shopping season to residential addresses. Double-check with your small business shipping service to ensure you’re using the right rate table.
FedEx vs. UPS vs. USPS Rates: Ground Shipping
Ground shipping is a low-cost, basic shipping service. While FedEx Ground and UPS Ground are pretty straightforward, USPS is a little more complicated.
USPS offers its Priority Mail service, which features a variety of options within it, including Flat Rate mailing in envelopes and boxes. E-commerce or other small businesses that meet specific requirements for Priority Mail or Priority Mail Express may qualify for Commercial Plus Pricing.
Instead of providing you with a bunch of complicated rate tables that may be outdated by the time you read this, we’ll focus on which service is the lowest price for common shipping scenarios.
Let’s take a look at a couple of situations and which shipper is best for each:
- Heavy packages in small boxes: If you’re shipping auto parts or raw materials for art projects made of metal, then consider USPS Priority Mail Flat Rate. You must use USPS packaging, but “if it fits, it ships” for one price, regardless of weight. International delivery also is available.
- Featherweight items with normal dimensions: As long as the item is less than 2 pounds and has a normal dimensional weight, FedEx or UPS is your best bet.
- Light items (less than 2 pounds) with large dimensional weights: Now that USPS factors dimensional weight into its pricing, there isn’t much difference between FedEx, USPS or UPS.
- Packages exceeding 2 pounds: If your customer can wait 5 days for a package, FedEx or UPS Ground guarantee their delivery dates. Unlike USPS, which uses FedEx to fly cargo around the world, both UPS and FedEx use a combination of their own planes and chartered flights to ensure accurate tracking. Be sure the dimensional weight is accurate or you will be unpleasantly surprised.
- International shipping: All three operations offer international shipping services. Priority Mail International Flat Rate makes it easy to calculate shipping costs anywhere in the world, but it isn’t cheap. Many small businesses prefer UPS because of its superior tracking services.
- Shipping potentially hazardous or restricted items: Some items are off-limits or have strict regulations on how and where they can ship. UPS and FedEx can handle the delivery of plants, alcohol and electronics with lithium batteries at a reasonable cost.
USPS vs. UPS vs. FedEx Costs: Express Shipping
This is where it gets complicated.
Because both UPS and FedEx guarantee delivery dates and times, rates may not be as important as reliability in this area. Even though USPS Priority Mail may have better rates, delivery times aren’t guaranteed. The same goes for overnight services.
Here are expedited services that don’t have an overnight component:
UPS vs. FedEx vs. USPS Price Comparison: Overnight Shipping
Even though rates with Priority Mail Express are often attractive, critical deliveries may be better handled by UPS or FedEx.
Here’s the rundown:
- USPS Priority Mail Express (not to be confused with Priority Mail)
- UPS Next Day Air Early
- UPS Next Day Air
- UPS Next Day Air Saver
- UPS Express Critical (urgent deliveries, sometimes same day depending on distance)
- FedEx Standard Overnight
- FedEx International First
- FedEx International Priority
Additional Shipping Service Options for Small Businesses
FedEx, UPS and USPS offer a variety of options and add-on services.
Pickup, Drop-Off and Packaging Options
The three shippers each pickup and drop-off from your home or business, as well as free packaging supplies. One catch with USPS pickup: You’ve got to have a mailbox to get the free service. Post office boxes don’t apply. Otherwise, you’re stuck waiting in line at the post office to drop off your packages.
A note about packaging: Although it’s provided to you free of charge, all three shipping operations are sticklers about package supplies. Make sure you’re using the right box and label before you send it.
Tracking and Insurance
Free tracking is available from all carriers. USPS Priority Mail provides free insurance for items valued $50 or less.
Commercial Shipping Discounts for Volume
The more you ship, the less you pay per unit. You don’t have to be a big business to get deep discounts, but to qualify for commercial rates you’ll need to ship a lot of packages. USPS Commercial Plus Pricing is a smart deal — and you only need to ship 50,000 units of Priority Mail annually to qualify.
All three carriers allow you to print or write address information on labels, which they provide for free.
Consider Shipping-Management Software
If you’re an online commerce company looking to ship every package as economically as possible, consider using shipping-management software such as Easyship or ShippingEasy. This way you can get the best rate for every package, no matter which carrier you use.