Follow On TwitterWhat Is The Cheapest Shipping Option – USPS, FedEx Or UPS?
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It has been a while since I’ve done a competitive analysis of the various shipping carriers so I thought I’d do a quick update. With the United States Postal Service jacking up their rates every 4-6 months, what used to be the most economical shipping method is now priced inline or even more expensive than some of the more reliable carriers like UPS or FedEx.
Photo By Atibens
Because there are so many different shipping variables and options to choose from, it’s difficult to make an apples to apples comparison without locking down some of the basic parameters. For the purposes of this article, I am going to assume the following.
- A 14in X 12in X 3in package is being shipped cross country from California to a residence on the east coast. Incidentally, this is the same size as a USPS Medium Priority Mail Flat Rate Box.
- Out of the box pricing for all shipping carriers which means that lower negotiated rates based on volume are not taken into account.
- Labels are being printed online which means all associated USPS internet discounts apply.
At the end, I’ll also discuss the trade offs between price, shipping time and reliability and give my take on the best shipping strategy.
If You Are Shipping Something 2 Lbs Or Heavier With A 5 Day Delivery Window…
FedEx Ground or UPS Ground will almost always be cheaper than USPS Priority Mail. Between FedEx and UPS, FedEx will be cheaper than UPS out of the box because they provide you with an instant 15% off all shipments just for creating an online account.
The only exception to the above rule is that USPS offers 3 flat rate box shipping options, small, medium and large. If you can manage to shove merchandise that is heavier than 2lbs into a small flat rate box (unlikely), you can save about 4 dollars.
However more realistically, you will need a medium flat rate box to ship something weighing 2lbs or more. The break even point between FedEx or UPS Ground and a Priority Mail flat rate medium box is about 4 lbs. The break even point for a large Priority Mail flat rate box is about 7 lbs. So if your item is heavier than 4lbs, use a USPS flat rate medium box. If you need a large flat rate Priority Mail box, make sure it’s heavier than 7 lbs. Otherwise, FedEx or UPS Ground will always be cheaper.
If You Are Shipping Items Under 2 Pounds…
USPS will always be cheaper than FedEx or UPS hands down. However as the weight creeps closer to 2 pounds, USPS pretty much reaches pricing parity with UPS and FedEx Ground. USPS really shines when your package weighs less than 13 oz and can be mailed via First Class mail. If you don’t care about reliability, USPS is by far the cheapest shipping option for light items.
If You Need Next Day Service…
USPS Express is once again the cheapest solution by far and it is guaranteed. The only problem with USPS Express mail is that sometimes the delivery window is 2 days and you won’t know unless you check online. USPS also doesn’t offer a morning delivery time so if your client needs something at the beginning of the business day, they are out of luck.
I’ve also discovered that USPS Express Mail is less reliable than FedEx or UPS Next Day Service. While they “guarantee” their delivery times, what this really means is that they’ll refund your money if the package is delivered late. This has happened to me several times already and a shipping refund doesn’t make up for having an angry customer.
If You Need a 2-3 Day Delivery Window…
It is unclear which delivery service is better if you need 2-3 day delivery because USPS doesn’t guarantee their delivery times for Priority or First Class Mail. So while USPS Priority Mail cites a 2-3 day typical delivery time, it could be slower or faster depending on various unknown factors. In my experience, I’ve had some Priority Mail packages delivered within a single day and I’ve seen delivery times as long as 1.5 weeks. While the latter tends to be an anomaly, overall the delivery speed is somewhat random.
FedEx and UPS however, always guarantee their delivery times but are significantly more expensive. In some cases, FedEx and UPS will cost you will over 2X the cost of USPS.
My Take On The 3 Carriers
While USPS is the cheapest shipping carrier in most cases, their reliability is easily the worst among the 3 carriers. Our online store primarily uses USPS because most of our orders are under 2 pounds. But we routinely get packages delayed or lost in the mail. This past few months alone, we have had 3 customers email us wondering where the hell their order was. Given our volumes, 3 customers is probably statistically insignificant but having to deal with any unhappy customers is a pain in the neck.
While we don’t check on the status of all of our orders, I can tell you from experience that the quoted delivery times from USPS for both First Class and Priority Mail are completely hit or miss. If you are sending a package to some podunk, middle of no where town, it’s more likely to get delayed. Meanwhile, I’ve yet to ever have a FedEx or UPS package delayed or lost.
In the end, it comes down to reliability vs cost. For light items, USPS is the cheapest if that is your goal. For heavier items >2lbs in which delivery time is not a factor, FedEx or UPS Ground is the cheapest.
It’s the 2-3 day delivery window where you have to weigh the trade offs. Do you value reliability? Is actual transit time a concern? If you need a package to be delivered on time, use FedEx or UPS. If you are trying to save money, use USPS.
Our online store offers a mix of both. By default, we use USPS shipping to keep the shipping costs low (our items are typically under 2 lbs). However, if a customer has a tight deadline, we use FedEx. Speaking from experience, the savings of using USPS is not worth the hassle of pissing off a customer if there’s a deadline. But it’s tough decision to make because customers are typically turned off by high shipping costs. Of course, the other option is always to raise your prices and lose money on shipping. You have to make the call.
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Great to know about shipping from experience. So it seems like it basically comes down to what you are shipping.
Wonder if you could make some safe assumptions on the size of what most people/small businesses ship and then make some accurate predictions of what’s the best overall. That’s what I was trying to do anyway! USPS = cheap and semi unreliable to remote locations. Others = more expensive, more reliable anywhere.
Thanks for the post!
It would help to know when the main article was written. Like Dec., 2011?
My thoughts exactly Mike. There are no dates anywhere on the article or in the responses. This could have been written in 2003 for all we know.
The article was written late last year and updated in the middle of this year. The information is up to date
This is interesting because I never had a problem with USPS before. It could be because I only do ground shipping at this time. I switch between FedEx and USPS depending on where I’m delivering and the cost. The cost of shipping is the one thing that eats me alive due to the fact that most of my products/orders are not high value.
Another consideration is which of the three are more convenient for your customers to receive. For shipments to a residential address, USPS may be better because if the recipient is not home, they need only go to their local PO to pick it up. For FedEx and UPS, they may have to go well out of their way to a location in some industrial district, with hours not any better than those at the PO. And if they prefer packages go to a PO box, the USPS is the only way.
Thanks for this. I was debating about using the USPS Priority Service but you have made my decision clear. I currently ship everything Fedex Overnight or 2nd Day because I sell perishable items. However shipping prices are a turn off for some customers as the shipping sometimes costs more than the item…
I have a question for you relating to shipping, how do you currently process your orders and print out shipping labels? Do you manually copy/paste customers info into the USPS or FedEx site or is there a way to export it to them?
Hi Phil,
I use the Paypal API to automatically send the customer’s address directly to Paypal when an order is placed. Then I use the Paypal multi-shipping tool to print out labels. It’s really easy and fast. Pretty much the only thing that I have to do is to weigh each package.
Both Fedex and UPS offer a similar API as well. You can tie your shopping cart directly to your FedEx or UPS account and then print labels en masse. I believe Fedex also has a way to read in a specially formatted text file as well. You can have your shopping cart output this file which is then read in to the Fedex website. Doing everything manually is extremely tedious and I don’t recommend it as it’s error prone as well.
Thanks for the reply Steve. When you say Paypal API, are you using PayPal Payments Pro to accept credit cards on your site? This is currently what I am doing (Paypal is my merchant account) but I was unaware that I could ship through the same API?
Currently I have a custom cart that connects to PayPal for CC verification and then connects to Fedex for shipping and creating custom labels. If I can do it with one step through Paypal that would be so much better.
Hi Phil,
That is correct. We are using Paypal Website Payments Pro. However, just using the API itself doesn’t mean that you are passing all of the necessary information to do shipping. Make sure you are sending all of the address info along with the payment and then a “Print Shipping Label” button will appear next to each customer. If you click “Multi-shipping tool”, you can batch all of your shipping labels in one fell swoop.
Thanks for the info, I am going to try it out and see how it works…
[...] Another online business blog has an in-depth analysis of the issue here! View This Pollonline survey Posted by ccdca710 Filed in general Leave a Comment [...]
The postal service has always been very reliable for me. Plus, it’s on my way to work. UPS on the other hand can’t leave most the packages I get so I have to drive 3 towns over to pick them up. Can’t say anything about Fedex since the only deliverys I receive with Fedex on the label comes from the usps. I did ask the clerk at the counter why that was and she said they deliver the unprofitable points for ups and fedex. I then asked why express is 2 day to most points rather than overnight, like it used to be. She told me it was because Fedex transports their express for them. It was the deal USPS made with Fedex to allow them to have FEDEX drop boxes in front of the post office. I think the usps gets a bad rap probably because everyone deals with them every single day. Kinda like someone you spend too much time with, you get sick of em after awhile.
I have never had an issue with usps either…I would say the person writing this has a “personal” issue with the usps…. on the other hand…ups has crushed and misdelievered more than once for me personally…just my 2 cents
Pretty good information here. We shared an infographic with our readers on our blog. It gives a great comparison of UPS vs. FedEx
http://packagefox.com/blog/fedex-vs-ups-infographic/
Hey, thanks for your article, but I’m a bit confused. I thought the USPS Priority Flat Rate Option was “if it fits, it ships” like the TV commercial says. Anything and everything that fits in the box, if under 70lbs, ships for the rate associated with the size box needed. (envelopes, too)
I wished this option had been available when I ordered a set of silverware on ebay from a Uruguay seller, and it literally weighs a ton. (well, not literally, but you’d need a dolly to truck it up to my front door up my steep driveway) As it turned out (and this was a few years ago) it was delivered for around $60 to my front door by FedEx, by a van not a huge truck, late in day. Now these same South American sellers are offering cheaper shipping, presumably to attract buyers to the higher priced item. Some offer free shipping. Of course the items are higher priced reflecting the recent changes in the economy, so I’m sure “it all comes out in the wash” as granny used to say.
I think it’s worthwhile to comparison shop between USPS Parcel Post vs Flat Rate Option (smallish boxes only), and compare those with UPS and FedEx. I almost bid on an ebay item that was $35 opening bid or $45 buy it now, and luckily I noticed the shipping was $50!!! I realize some sellers profit on shipping by calling it Postage and “Handling”. I wished him luck.
Hey thanks so much for this review it was super helpful!
I have long been wondering about this and now I know.
Thanks for the analysis. A factor not mentioned is your location. Years ago, I did business from the Rockridge neighhborhood in Oakland California. We shipped almost exclusively by UPS by customer request (stores universally believed it to be the most economical method, which it actually wasn’t). Our local facility was hideous to deal with. They never, under any circumstances, made good on claims. They twice lost very large boxes, valued at about $1000.00 each, and which were time sensitive, for six months, and then returned them with floor sweepings, including rocks qnd broken glass in them. When I asked for the supervisor’s name, I was told ” Jesus Christ”. we did not have many problems on the recieving end, and some customers told us their UPS facilities were well run. However, during that period I had a friend whose father did an efficiency analysis on UPS (the company paid him) and reported that he’s never studied a company that was more poorly run, nor one thwt wqs more hostile to its own employees ( which explains our problems with them – customers get the trickle down from angry employees). One of the things they did was begin to harrass employees when they got within five years of retirement. Our regular driver ( who was not the cause of our problems) was one of these, and told us yes, it was true and was happening to him. One of the tihings expected of him was to work faster than was safe.
The problems were so regular and so devastating to our business that we closed up shop and moved across country. Now we’re in a hilly suburb north of Atlanta. Our neighhbors warned us about the UPS truck zipping down our hill ( working faster than is safe?) and said they had killed two dogs there. That problem wqs solved in a unique way. We don’t see UPS at all in this neighborhood ever since the USPS changed our zipcodes and gave us two zipcodes ( we have a 3/4 acre plot) Now UPS can’t find us and turnns deliveries to sender. When I tried to get this rectified, the USPS manager laughed at me, and told me to ship USPS. We no longer run a regular business, but if we did we’d again have the problem of dealing with a UPS facility that doesn’t function well emough to use.
About ording postage online. I did this for a while, but every single time, the PO weighed it ( my facility always does this) and in every case, they said I overpaid and you can’t get a refund. I recommend you run some boxes in, have them weighed at the Po and then go home and calculate postage and see which is higher.
Though on paper most of the time it looks like UPS or Fedex will have the advantage, the farther the package has to travel sort of exposes the problems with those carriers.
USPS Priority would be ranked lower in terms of a 5 day window, on paper. But, at longest, (in the history of my ebay business, though might just be with my area) USPS priority has taken 3 or less days. That said, most of the time the prices of UPS and FedEx are similar to, yet they almost ALWAYS take the max 5 days.
There’s more to shipping than just costs. In fact, I tend to value predictability more. While USPS Priority mail is advertised as 2-3 days and maybe gets there within that time frame 75% of the time, the other 25% is where you get killed. I’ve had priority mail packages take 3 weeks to arrive and when it comes to an ecommerce business, that can kill you reputation. Fedex and UPS tend to be on time. If they say 5 days, it will arrive in 5 days.
USPS is in my experience more reliable than FedEx and UPS combined. Of the few packages that I’ve ever gotten with UPS, more than once it has gotten delivered to the wrong address. Most of the packages that are supposed to be delivered with FedEx end up getting sent with USPS to me, and the ones that FedEx does deliver is simply dropped on my doorstep without so much as a knock, door bell ring, or a slip. Out of the hundreds (if not thousands) of packages that I’ve ever sent and/or received with USPS, only ONCE was something “lost” but for all I know the buyer might have lied since I didn’t put delivery confirmation on it. I trust USPS more than the other two because, even though it’s cheaper, it is far more reliable in my experience. The mailman in my neighborhood has a good idea of who lives where, so I never have to worry about my packages getting delivered to the wrong address. One time a seller wrote the incorrect address on a package and I STILL ended up getting it because my mailman caught the error
People tend to associate “cheap” with “unreliable” without actually having the solid evidence to prove it.
Hi Cindy,
I don’t think your sample size is large enough to make a conclusion about reliability. Arguably, my data is not enough either. But we ship hundreds of packages every week and USPS is easily less reliable than FedEx. The best part about FedEx is that they can track down exactly where your package is at all times. With USPS, once it’s lost or late, you have no clue where it is and no one is there to help. We usually just eat the cost and ship the customer another order.
I agree that 4 lbs is the breakpoint for USPS. They don’t want the mail service to deliver packages larger than that. However, I am found that your analysis of shipping costs matches ours when shipping from coast to coast. However, it is not so simple when shipping to a closer site. Usually to ship to a state within 300 miles is much cheaper with USPS. And to make matters more complicated, shipping by FedEx or UPS to a commercial address costs less than to a residential address. Just last week, it was cheaper for us to ship by ground a package, 4 lbs by Fed Ex from Michigan to Ohio than USPS or UPS and it was delivered overnight.
There is just no one size fits all when it comes to shipping if the package is over 13 ounces. We offer flat rate shipping so that it leaves the final decision to us.
Hey wow thank you for your original write up it was very helpful and informative!!! I have been an ebay seller for 15 years (yep a veteran
And over the years, postage just keeps creeping up to my dismay 
When I started, tyvek envelopes ran about $3 to ship almost anywhere….now, anything I list is the $10.50 medium flate rate and UP! Plus their boxes for mailing have gotten smaller. you wouldnt believe the volume of goods I have literally STUFFED into a regular flat rate envelope or a legal flat rate envelope lol. Sadly, they used to offer that priority industrial strength tape but now they no longer do….but I do still have a few rolls left from when they did, so tape those STUFFED envelopes up well 
I know a lot of buyers are dismayed by shipping costs on ebay and elsewhere, they must not realize what the services are charging for shipping now….the good news is flat rate shipping leaves the guesswork out of thing much of the time. But what do you recommend for larger very light items? Like 24″x18″x15″? I have an item I will need to ship in a few days….first dilemma is finding a darn box. Second is which shipping method is best for a 4 lb larger item….
I just did a comparison on shipping three boxes. These are Home Depot boxes, one small, two medium. The weights were 9, 12, and 15 pounds.
UPS ground on-line was $86.89.
UPS Store ground was $101.xx (They did help me carry the boxes back to the car.)
USPS Parcel Post was 53.04
All three included the same amount of insurance.
It pays to check.
usps is definately the worse I have always had problems with their service but the prices for ups and fed ex are too high so I agree with the article it depends on the person or situation!