Cheapest Shipping: FedEx, UPS, or the Post Office?
For many consumers, Santa's sleigh takes the form of a white or brown truck, and gifts arrive by way of the doorstep rather than the chimney. FedEx, UPS, and the U.S. Postal Service all promise to whisk a package shipped today across the country in time to go under a tree tomorrow. But can they do it without blowing your holiday budget? Cheapism obtained rate quotes for a variety of services from all three providers and, in almost every case, the Postal Service proved the cheapest option.
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Take, for example, a 5-pound package going to San Francisco from New York. In its search for cheap shipping, Cheapism found that overnight service would cost more than $80 for delivery by 3 p.m. and more than $90 for delivery by 10:30 a.m. with either FedEx or UPS. In contrast, the Post Office will ship the same package with guaranteed overnight delivery for $39.95-$56, depending whether a flat-rate box is used or not.
Cheapism's full shipping comparison includes price quotes from each courier for 5- and 10-pound packages sent to Chicago and San Francisco from New York City. In general, UPS and FedEx offer more options for expedited shipping, with guaranteed delivery times, but charge much higher prices.
Although FedEx and UPS closely matched each others' services, UPS was more expensive across the board. It's worth looking at the transit times for these services before springing for an express option. UPS and FedEx quoted the same guaranteed delivery date for ground shipping to Chicago as they did for two-day services that cost more than twice as much.
Media Mail from the Postal Service emerged as the absolute cheapest option overall, costing only $4.33 for a 5-pound package and $6.52 for a 10-pound package to either city. However, the service applies only to "educational materials" such as books and DVDs. For other items, the Postal Service's Standard Post costs about the same as UPS Ground and FedEx Home Delivery. The estimated transit times are six days to Chicago and eight days to San Francisco, compared with guaranteed delivery in two days to Chicago and five days to San Francisco with UPS or FedEx.
Cheapism saw substantial savings with flat-rate boxes from the Postal Service, however. These ship for the same price regardless of weight or destination, as long as the contents fit in one of several sizes the Postal Service provides. For instance, shipping a 10-pound flat-rate package overnight to San Francisco costs $39.95 vs. $83.25 for Priority Mail Express at the Post Office and $114.57 or $118.62 at FedEx or UPS, respectively. The heavier the package (up to 70 pounds), the greater the savings. Flat-rate shipping is often the cheapest method for expedited delivery, but not always. Be sure to price out both regular and flat-rate shipping at the Postal Service for Priority Mail, a one-to-three-day service, or overnight Priority Mail Express, the only USPS option with a money-back guarantee.
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All the FedEx and UPS services Cheapism researched include a money-back guarantee, although consumers may not be able to claim a refund if a late delivery can be blamed on a fine-print problem such as inclement weather or an incomplete shipping label -- or if a package is mailed too close to Christmas. FedEx Home Delivery ground shipments are guaranteed to arrive on the day specified, while Express packages must arrive by an exact time.
Beyond Price.As perks such as money-back guarantees suggest, there is more to consider than just price when determining the best cheap shipping provider. Cheapism also considered factors including convenience, reliability, and customer satisfaction. The American Customer Satisfaction Index historically favors FedEx, which outscored UPS by one point and the Postal Service by eight points in 2013 (earning 85 out of 100).
As for convenience, the Postal Service far outnumbers UPS and FedEx with more than 32,000 retail offices. However, the private companies compete by operating about 40,000 drop boxes apiece, accepting packages 24/7 at a time when the Postal Service has cut business hours at thousands of locations. All three couriers provide free pickup service for packages with print-at-home shipping labels. The Postal Service offers free Saturday delivery for all shipments while Saturday delivery costs an additional $15 with either UPS or FedEx, with the exception of FedEx Home Delivery. The schedule for that service is Tuesday through Saturday, instead of Monday through Friday.
Specific on-time-delivery numbers proved difficult to nail down. Data compiled by shipment tracker PackageFox in 2011 show that 91 percent of UPS express packages arrived on time compared with 88 percent for FedEx. The Postal Service tracks its own Package Services category, which includes Media Mail and Standard Post but not Priority Mail Express or Priority Mail. The most recent quarterly performance results: 91 percent on-time delivery, down from 92.6 percent in the same quarter last year but higher than the 2012 rate of 87.2 percent overall. However, these packages must merely arrive by the end of the appointed day, whereas an express delivery might be delayed by a single minute and still be considered late.
The only sure conclusion here is it's best to send out holiday gifts as soon as possible, regardless of the carrier.
For more details check out Cheapism's complete guide to cheap shipping, which includes a look at ecommerce and the various ways to secure free shipping online.