US Shipping 101, Part 1: A basic comparison between FedEx, UPS, and USPS

May 5

Choosing the right shipping carrier for your business is essential for timely and cost-effective deliveries. In the United States, the three major shipping carriers are FedEx, UPS, and the United States Postal Service (USPS).

For the US market, we’ll focus on these three carriers in this post and in most of our content. However, we will cover unique offerings from providers such as DHL Ecommerce, Pitney Bowes, OnTrac / Laser, etc. as we go. In future posts, we will also touch on other shipping carriers around the world, especially in Canada, Europe, United Kingdom, Asia, and Australia.

Each carrier offers its own unique set of services, pricing, and benefits. This particular post will provide a comprehensive comparison of FedEx, UPS, and USPS to help you understand the key differences and start the process of making an informed decision for your shipping needs.

FedEx

FedEx is a global shipping and logistics company headquartered in Memphis, Tennessee. Founded as a result of a university term paper in 1971, FedEx has grown to become one of the world's largest transportation companies, offering a wide range of domestic and international shipping services.

FedEx Key Services:

FedEx Express: Offers time-sensitive domestic and international shipping, with delivery as fast as overnight.
FedEx International: Part of its Express business, international parcels can be delivered practically anywhere in the world within days. International Priority is the fastest solution, delivering within 1 - 3 days typically. International Economy is a bit cheaper and adds about 1 day in transit. FedEx International Connect Plus is a relatively new offering that adds another day or two to International Economy shipments in trade for additional savings.
FedEx Ground: Provides cost-effective ground shipping within the United States and Canada, with delivery typically in 1-5 business days.
FedEx Freight: Handles larger shipments and freight services, usually moving material on pallets, within the US, Canada, and Mexico.

FedEx advantages:

Extensive global network and presence
Wide range of delivery options and speeds
Advanced tracking and visibility
Strong focus on e-commerce and business solutions

FedEx disadvantages:

No deliveries to PO Boxes
The FedEx Ground network is operated by independent contractors who have become upset at the company for creating undesirable economic conditions for what are essentially their franchise businesses. This has created some relatively minor disruptions and/or inconsistencies in service levels over the years.
Pricier than USPS and other niche players like Pitney Bowes and DHL Ecommerce for lightweight parcels in the 0 - 3 pound range.

UPS

United Parcel Service (UPS) is a multinational shipping and logistics company based in Atlanta, Georgia.

Founded in 1907, UPS has grown to become one of the world's largest package delivery companies, providing a comprehensive array of services for businesses and consumers. In the US and Europe, we find UPS to be comparable to FedEx in terms of price and service levels. In fact, retail rates published by UPS and FedEx are typically within pennies of each other, and both carriers tend to announce annual price increases in lock step with each other.

UPS Key Services:

UPS Air and International: Offers time-sensitive shipping options for domestic and international shipments, including next-day, 2-day, and 3-day delivery services.
UPS Ground: Provides reliable and economical ground shipping within the United States, with delivery typically in 1-5 business days.
UPS SurePost: A cost-effective option for low-weight residential shipments, utilizing USPS for final-mile delivery about 60% of the time, as of this writing in early 2023 (i.e. the brown UPS trucks deliver the last mile about 40% of the time).
UPS Freight: Handles larger shipments and LTL freight services within the US, Canada, and Mexico.
UPS My Choice: A service that allows recipients to manage their deliveries, with options for delivery notifications, package rerouting, and more.

UPS advantages:

Broad range of delivery services and options
Advanced tracking and logistics technology
Strong focus on customer service and support
Robust e-commerce solutions and tools for businesses

UPS disadvantages:

No deliveries to PO Boxes, with the exception of UPS SurePost
Labor union talks with drivers have disrupted operations on rare occasions over the years.
Pricier than USPS and other niche players like Pitney Bowes and DHL Ecommerce for lightweight parcels in the 0 - 3 pound range.

United States Postal Service (USPS)

The United States Postal Service is an independent agency of the US federal government, responsible for providing postal services across the country. Established in 1775, USPS has a long history and a vast network of post offices and mail processing facilities.

USPS Key Services:

First-Class Mail: Offers cost-effective shipping for letters, postcards, and small packages, with delivery typically in 1-5 business days.
Priority Mail: Provides faster shipping for packages, with delivery typically in 1-3 business days and flat-rate pricing options.

Priority Mail Express: Offers the fastest domestic shipping service from USPS, with overnight or 2-day delivery and a money-back guarantee.
Media Mail: A cost-effective option for shipping books, CDs, DVDs, and other media items, with delivery typically in 2-8 business days.
USPS Retail Ground and Parcel Select: Economical shipping options for slightly larger packages that are not time-sensitive, with delivery typically in 2-8 business days.

USPS Advantages:

Nationwide coverage, including delivery to PO boxes and rural areas
Cost-effective shipping options for small and lightweight packages
Flat-rate pricing for Priority Mail services
No surcharges for residential deliveries or fuel

USPS disadvantages:

Not as cost effective for packages over 2 - 3 pounds.
Tracking of parcels in transit is not quite as detailed or accurate as FedEx or UPS (excluding UPS SurePost).
Customer perception of the USPS brand has suffered over the years, although the service is generally very reliable.

FedEx, UPS, USPS Comparison Summary

When deciding which carrier to use for your shipping needs, the choice in the US usually comes down to FedEx or UPS versus USPS. When comparing these carriers, consider the following factors to make the best choice for your business:

Desired Traceability in Transit: FedEx and UPS are well-known for their advanced tracking systems that provide real-time, comprehensive information on the status of shipments. Their tracking systems are powered by sophisticated technology, allowing shippers and customers to access detailed information about the location of their packages, estimated delivery dates, and any possible delays. USPS offers tracking services for their shipments, but their system is generally considered less sophisticated and comprehensive than FedEx and UPS. Although USPS provides updates on the status of packages, the level of detail and real-time information is not as extensive as with the other two carriers. However, USPS has been continuously improving its tracking system to provide better visibility and more accurate information for customers.
Package Size and Weight: FedEx and UPS use dimensional weight pricing, which can result in higher costs for large or bulky packages. However, even then, FedEx and UPS are typically the go-to solution for parcels weighing over a couple pounds. USPS may be more cost-effective for small or lightweight packages, especially with their flat-rate Priority Mail services.
Shipping Volume: The shipping volume you handle may impact your choice of carrier. FedEx and UPS often offer discounted rates for high-volume shippers, while USPS has more competitive rates for smaller shipments or occasional shippers. USPS generally does not negotiate rates, but working with a 3PL like Rush Order or signing up online for a solution such as stamps.com or Shipstation can yield lower USPS rates, which are called “Commercial” rates. These rates are slightly cheaper than just walking into the post office and paying full retail. These online platforms claim to offer discounted FedEx and UPS rates as well, which they do, but those discounts won’t be as steep as those offered by Rush Order and other 3PLs.
Hazmat Shipping: USPS almost entirely excludes products containing lithium batteries. If your product ships with a UN 3981 or UN 3890 warning label, you can forget about shipping with USPS. USPS shipments often move in the cargo holds of commercial airliners. That’s right, if you’re flying commercial in the US or internationally, there’s a high probability USPS packages are stored beneath your feet. So, if you are shipping lithium batteries or other common hazardous materials, you’ll likely have to go FedEx or UPS because they operate their own dedicated fleet of trucks and aircraft.
Delivery Speed: FedEx and UPS offer a variety of express shipping options for time-sensitive shipments, while USPS provides relatively fast delivery times for First-Class Mail and Priority Mail services. Consider the required delivery speed when choosing a carrier.
Destination: FedEx and UPS have extensive international networks, making them ideal choices for businesses that ship globally. USPS is an excellent option for domestic shipments, especially to PO boxes or rural areas.
Additional Services: Each carrier offers unique value-added services, such as FedEx Home Delivery's evening and weekend delivery options, UPS My Choice's package management features, and USPS's flat-rate pricing. Consider the specific needs of your customers when evaluating these services.

This comparison table below dives a little deeper into the decision-making process we take our US clients through at Rush Order. Specifically, this table is geared towards helping our clients select their “free” or “cheapest” or “standard ground” shipping options for customers to select.

You’re welcome to download this table for your own use. We’re also be happy to have one of our shipping experts walk you through this during a complimentary consultation or email exchange.

Download this Comparison

In conclusion, understanding the key differences between FedEx, UPS, and USPS is crucial for making an informed decision on which carrier best suits your business's needs. By considering factors such as shipping volume, package size and weight, delivery speed, destination, additional services, cost, reliability, e-commerce integration, environmental considerations, and flexibility, you can select the carrier that will provide the best overall value.

For additional help or to discuss a potential fit with Rush Order’s shipping solutions, please schedule a time to speak with us. We keep your information confidential and there’s no libation and no pressure.

In our next post, we’ll dive a little deeper into the specifics of The Different Service Levels of FedEx, UPS, and USPS.