According to the Pitney Bowes shipping index released in 2018, the average shipping price of a parcel is $8.95 in the US, compared to $1.83 in China and $2.64 in Japan. Add to that, an average YOY increase of 4.9% in FedEx and UPS shipping rates.
As a retailer you have to be in the know of FedEx and UPS rate fluctuations that directly impacts your shipping strategy. In fact, a majority of your pricing strategy also depends on the shipping methods and associated prices. It is worthwhile to deep dive into various shipping options when you ship through FedEx or UPS.
The shipping modes offered by FedEx and UPS can be broadly divided into:
- Ground shipping: By definition, ground shipments are shipped via road in a truck and it is a reasonable option if you have time for the delivery of your item.
- Express shipping: On the other hand, air services are especially advantageous for shorter delivery times.
While FedEx is known for its global air express, UPS is prominent for its domestic ground package delivery.
Key factors to consider when choosing between ground and express mode.
Size of the shipment
This is a key factor in deciding your mode of transportation. If you are shipping large packages, UPS or FedEx ground is a great option. According to both UPS and FedEx, there is no weight restriction for a package to qualify to be shipped through ground
UPS sets the weight specification for shipments to be delivered without any Over Maximum Limits charge
- Packages can be up to 150 lbs.
- Packages can be up to 165 inches in length and girth combined.
- Packages can be up to 108 inches in length.
- Packages with a large size-to-weight ratio require special pricing and dimensional weight calculations.
However, an additional handling charge will be applied for shipments weighing over 70lbs.
While according to FedEx package guidelines:
With FedEx Ground® services, you can ship packages up to 150 lbs.; up to 108″ in length and 165″ in length plus girth.
On the other hand, With FedEx Express® U.S. services, you can ship packages up to 150 lbs.; up to 119″ in length and 165″ in length and girth.
Also, a point worth noting is that all goods categorized as hazardous by UPS and FedEx have a greater chance of being shipped via ground.
Urgency and destination of the shipment
This indeed is the most crucial factor. Delivery timing plays a very important role in deciding if you have to send your parcels through the ground or air. As eCommerce booms, faster delivery times have become the norm.
Retail giants such as Amazon, Target, and Walmart are shortening the delivery times to the next day and the same day. Online buyers increasingly use the last-mile delivery capability as the yardstick when deciding the store they should purchase from.
Luckily, both UPS and FedEx offer plenty of express delivery options.
Here are a few FedEx delivery options:
| FedEx Service | Delivery Schedule |
| FedEx Express Saver | 1-3 days |
| FedEx 2 day | 2 days |
| FedEx Standard Overnight | Next Business Day |
| FedEx Priority Overnight | Next Day Mid Morning |
| FedEx First Overnight | Next Day Early Morning |
UPS also offers express delivery options almost identical to FedEx:
| UPS Service | Delivery Schedule |
| UPS 3 day select | 3 Days |
| UPS 2nd day air | 2 days |
| UPS next day air | Next Business day |
Recently both FedEx and UPS rolled out same-day delivery options to cater to the growing eCommerce market. Same day delivery options work the best for local deliveries. Read more about the same-day delivery option here.
Consignment destination also plays a crucial role when deciding the right shipping mode. Depending on the destination, ground, as well as air, may reach your customer at the same time. A complete analysis of your shipping trend along with the service performances of FedEx and UPS is necessary before investing in the right shipping strategy.
Cost of shipping
Shipping costs make up to 40% of total expenses. Hence striking a balance between the right service and cost is important. Hands down ground shipments are the most economical options. FedEx ground starts at as low as $7.85 whereas UPS ground charges for package start from $8.12.
The ground services for FedEx also includes FedEx home delivery as well. This is a special delivery option catering to deliveries to residences.UPS ground services include UPS standard as well as UPS ground. Both UPS and FedEx ground service get your packages delivered in 1 – 5 business days.
Predictably the express shipping options cost higher. It is common for retailers to allow online shoppers to pick their choice of delivery. This helps in crafting a transparent shipping strategy with no fee embedded within the order price.
Here are the UPS and FedEx Express shipping charges:
| UPS Service | Cost |
| UPS 3 day select | Starts at $11.23 |
| UPS 2nd day air | Starts at $18.40 |
| UPS next day air | Starts at $24.70 |
| FedEx Service | Cost |
| FedEx 2 day | Starts at $18.22 |
| FedEx standard overnight | Starts at $27.18 |
| FedEx priority overnight | Starts at $29.18 |
Both the services offer package tracking insights that inform you of your order location at all times. FedEx tracking and UPS tracking feature are available for ground as well as express shipments.
Save on your FedEx and UPS shipping costs
Although the duopoly of FedEx and UPS shipping carriers ensure higher shipping prices, they offer guaranteed service refund also known as GSR.
Now, What is GSR? According to the Guaranteed Service Refund policy mandated by FedEx and UPS, if the packages are not delivered on time, they are eligible for refunds. The best part is that Express, as well as ground shipments, are covered under the Guaranteed Service Refund scheme. You can read more about the FedEx carrier and UPS carrier that are eligible for refunds.
The downside is that FedEx and UPS do not make the refund recovery process easy. First off, the document that spells the GSR rule and the exceptions is long and complex. On top of that, the process for applying for FedEx or UPS refunds is clunky and is a drain on your productivity.
That is why you need an automated invoice audit service like AuditShipment.com. AuditShipment’s advanced algorithms systematically identify all the service failures on your FedEx and UPS invoice and recover refunds on your behalf. This means every eligible refund will be credited to your invoice at zero effort from you. Save big on your shipping costs with AuditShipment.com.
