How to Choose a Shipping Carrier (USPS, UPS, FedEx)

Assuming you ship physical goods to your end customer, at some point you’ll need to figure out how you will be getting your products to their destinations. There are a multitude of different ways to ship packages and it can get quite confusing deciding what the best option is for your online store.

I’ll provide a breakdown of the 3 biggest shipping carriers and when or why you should ever use them. I will rate these 3 services based on following criteria: price and reliability.

United States Postal Service (USPS)

Price
USPS is by far the cheapest shipping option if your parcel weighs less than 2 pounds. Parcels weighing 13 ounces or less that qualify for first class postage are even cheaper to ship. At the present time, USPS offers 3 main shipping services

  • First Class Mail – Arrives within 2-5 business days
  • Priority Mail – Arrives within 2-3 business days
  • Express Mail – 1 – 2 business days depending on location

If you are on a shipping budget and you typically ship items weighing less than 2 pounds, choosing USPS is a no brainer. If your parcel weighs over 2 pounds and it can fit in a priority mail flat rate box, USPS is a fantastic deal.

The Express mail option is by far the most inexpensive next day delivery service offered in the US. The only problem with Express Mail is that USPS only offers 2nd day delivery to remote locations. So if your customer lives in Podunk, Wyoming, it will definitely take 2 days for your parcel to arrive there.

Reliability
The low price of choosing USPS to ship your parcels comes at the expense of reliability. Besides Express Mail, USPS does not guarantee the delivery date of any of your parcels. What this means is that you can never predict exactly when a parcel will arrive.

I’ve even had a few cases where a package took over 3 weeks to arrive at the destination. This can be unacceptable to the customer so you have to take into account the risks.

The other problem with USPS is that they provide inaccurate tracking. Sometimes, the tracking only kicks in once your parcel has reached its destination which makes it pretty useless.

UPS

You can always negotiate with UPS for lower rates if you ship a large volume of packages. For the purposes of my analysis, I’m going to assume out of the box pricing.
Price
UPS shipping costs tend to be on the higher side. I’m not sure exactly why the non-negotiated prices are so high but I suspect its because UPS is unionized. It really only becomes economical to ship UPS if your package exceeds 3 pounds. In addition to ground shipping, UPS also offers 3 day, 2 day and next day shipping depending on your needs.
Reliability
UPS is one of the most reliable shipping carriers available. At any time, you can track your package to find out exactly where it is. In my experience, they are almost always on time.

Fed Ex

Price
Fed Ex used to only be known for their next day delivery service. For a while now, they’ve been offering a ground service as well at really low prices. Fed Ex is cheaper than UPS and USPS for packages exceeding 3 pounds. If you sign up for an account, you get an additional 15% off shipping right off the bat as well.
Reliability
As far as I can tell, Fed Ex is just as reliable as UPS if not more so. They also offer detailed tracking of your package every step of the way.

Choosing The Right Shipping Carrier

If price is your main concern, then go with USPS for packages up to 2 pounds. If your package is really heavy, consider using the Priority Mail flat rate boxes if your item will fit in the box.

You can also further reduce your shipping costs by going with a USPS provider called Stamps.com. For almost all of the services that the United States Postal Service provides, Stamps.com can provide you with significant discounts on shipping. Check them out.

Otherwise, Fed Ex is your next economical option. I really don’t see a reason to use UPS at all unless you can negotiate down the prices. I’ve heard that for large businesses, UPS can get very aggressive on pricing.

Since this blog is about small businesses, Fed Ex will most likely be the cheaper option. Make sure you negotiate!

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19 thoughts on “How to Choose a Shipping Carrier (USPS, UPS, FedEx)”

  1. Yuji says:

    How about DHL? I did a quick check on prices, an DHL was cheaper than UPS Ground.

  2. We actually haven’t checked recently. I’ll check DHL and see how it compares to FedEx and update this post.

  3. So I did a few price comparisons of DHL and FedEx and FedEx is slightly cheaper. If you tack on the automatic 15% off you get for signing up for an account, fedex becomes a no brainer. There aren’t as many DHL locations as well which makes it more difficult to do a drop off.

  4. Dan says:

    Thanks for this valuable information! I’m going with Fed Ex.

  5. Jacqui says:

    Thanks so much for this blog – at least now I know I made the right choice with Fedex.

    Do you happen to know of any economical ways to ship large packages overseas?

  6. Sonny says:

    Thanks for this! Fed Ex looks like the one to go with. Thank you so much

  7. Téa says:

    The USPS regular mail “tracking” function actually hurts more than it helps because it frequently shows that packages have been delivered when they haven’t been (this happens to me more than I care to think about). The packages almost always get delivered within the next 48 hours, but my good friend, who runs a small custom stationery business, says that she often spends that interim dealing with customers who think she’s trying to pull a fast one, or who want a re-ship via FedEx. First she just stopped providing customers with tracking numbers for non-Express Mail packages, and now she does most of her business via FedEx anyway; she said it was more expensive but worth the decrease in headaches, as even with Express Mail packages sometimes didn’t show up for a week and trying to get the USPS to do something about it was like going through the looking glass.

  8. I can totally relate to your stories especially with Express Mail. I’ve had packages marked as delivered when they haven’t been just so USPS doesn’t have to payout their “Money back guarantee”. USPS is by far the least reliable but their prices are hard to beat.

    We’ve pretty much switched over to Fedex for all large orders but still use USPS for small and light packages.

  9. Bob says:

    Great review. I have a small e-bay store where I buy, sell and ship large and expensive high end guitars. While my products would usually qualify for USPS Parcel Service, I wouldn’t even think of using this method for shipping anything larger than a shoe box or worth more than a couple hundred bucks. Anytime I receive notice something large and expensive I have purchased has been shipped parcel post, I loose all color and my palms begin to sweat. USPS tracking amounts to no more than a perverse joke. Why even bother. No wonder they are going broke. On the other hand, FedEX, UPS and DHL to name a few have sophisticated tracking software that can follow your shipment portal to portal. They also provide advanced services such as hold for pickup or redirecting a shipment. I agree for small flat rate, express or priority mail USPS is fine but for large and expensive products, leave the transportation to the shipping pros.

    1. I never use USPS Parcel Service. The only time that I did the package took over 3 weeks to arrive. I prefer UPS or Fedex ground for heavier stuff.

  10. Lisette says:

    Hi, I’m wondering if you can tell me where to get the grayish color plastic self sealing bags ?
    I’vereceived a number of items in these bags & they seem great for light weight none breakable items. Thank you
    Lisette. :)

    1. Andrea says:

      You can order the silver plastic shipping bags on eBay or Amazon.

  11. Dana says:

    I’m trying to ship a bunch of tshirts to Denmark and when I look up shipping on the USPS site it’s like $80 a box. But I keep seeing other online stores offering international shipping for like $20. How are they doing it so cheap? With delivery times still generally less than two weeks – I’m guessing they are not using Cargo Freight.

    1. Hi Dana,

      I just did a search on the USPS website and I’m seeing $24 first class international for a 2lb package which should be more than enough for a few t shirts.

  12. Dana says:

    Thanks! I actually have more than 100 but at least I know I’m looking in the right place. I’m guessing the $19.95 price are not for bulk orders. That would make more sense. Thanks. By the way – LOVE your blog and will be ordering your class soon. Thanks for all the great info.

  13. Pete says:

    I run shipping for a large distributor with many locations. I have found your article to be accurate for the most part but perhaps I can add a few tips to help someone decide. True, USPS is cheaper but the tracking is useless. Having a customer call and ask about an order and having no information simply cant occur so I am ruling USPS out. Of the two biggies UPS and Fed Ex I would say the technology edge goes to UPS. If your a volume shipper both will negotiate but in the end UPS will usually come in cheaper on Domestic services while Fed Ex will come in cheaper on the International side. One thing to remember is both guarrantee their delivery times and if you have a 3PL watching for GSRs you can reduce your overall shipping costs by 2% annually.

  14. Brad says:

    What is the best shipping carrier to use if I want my package tracked from the US to Indonesia, 8 ounce package, and how do I purchase the tracking. Because I shipped something there last week and the tracking stopped in Chicago how do I now it was delivered.

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