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Cheapest shipping: FedEx, UPS, or the Post Office?

The holidays bring the cost of shipping into sharp relief, as shoppers splurge on gifts for far-away family and friends and scramble to meet that Dec. 24 deadline. But consumers crave reliable, convenient, and cheap shipping options year-round. We've evaluated the three major carriers -- FedEx, United Parcel Service (UPS), and the U.S. Postal Service -- with the goal of identifying the best cheap shipping provider. We compared factors including cost, reliability, selection of services, and overall customer satisfaction.

Guide to Cheap Shipping

Overall we found there is no contest when it comes to price. In our shipping cost comparison, the Postal Service offered the cheapest rates almost across the board, from ground shipping to speedier options. It also stands out with free Saturday delivery and generally keeps up with its private-sector counterparts in areas such as on-time delivery and tracking. However, consumers who need same-day delivery or overnight shipments delivered first thing in the morning must turn to FedEx or UPS. The Postal Service has also fallen farther behind the private sector in customer satisfaction.

All three couriers offer a range of shipping options, some cheap and others not so much. You can send books across the country for less than $5 with U.S. Postal Service Media Mail or pay more than $150 to have FedEx or UPS rush a 10-pound package across the country with guaranteed delivery at the start of the next business day. In between these extremes are options for regular ground shipping, two- or three-day service, and less urgent overnight delivery, all priced according to size, weight, origin, and destination.

Our research into cheap shipping options drew on several sources of information. We read dozens of online customer reviews, many harshly critical, but weighed these comments against the knowledge that the three providers handle billions of packages every year, and the vast majority arrive undamaged and on time. We also factored in customer satisfaction and reliability surveys, retail presence, and perks such as complimentary supplies and free Saturday delivery.

The U.S. Postal Service is the oldest and biggest of the group, dating back to colonial times. It processed 160 billion pieces in 2012 and would be a Fortune 100 company if it were private. Package deliveries decreased about 4.75 percent since 2012 and the agency continually threatens to end Saturday delivery in the face of budget shortfalls. Currently the Postal Service has about 31,250 retail offices. UPS claims more than 18,700 facilities, as well as 40,000 drop boxes. The 106-year-old company delivered more than 4.1 billion packages and documents worldwide in 2012. FedEx, formed in 1971, handles an average of more than 10 million shipments every day and provides a little more than 45,000 drop-off locations, most of which are drop boxes.

We focused primarily on cheap shipping within the continental United States but also took a brief look at international shipping, as well as options for overweight packages. E-commerce accounts for much of the volume these carriers handle, so we put together a bonus guide to free and cheap shipping for online shoppers, including an in-depth look at Amazon's Prime service.

Prices

Winner: U.S. POSTAL SERVICE

Why: Flat-rate boxes and online discounts helped the Postal Service generate the lowest prices in nearly every scenario we tried.

U.S. POSTAL SERVICE
Cheapest across the board, with the notable exception of Standard Post ground shipping

FEDEX
Slightly cheaper than UPS and the post office's Standard Post but still higher than flat-rate boxes from the Postal Service

UPS
Slightly higher than FedEx and much higher than the Postal Service

Delivery Options

Winner: FEDEX

Why: FedEx and UPS provide far more options for urgent shipping than the Postal Service. They offer basically identical services and quoted us the same delivery dates and times.

Winner: UPS

Why: FedEx and UPS provide far more options for urgent shipping than the Postal Service. They offer basically identical services and quoted us the same delivery dates and times.

FEDEX
Same day, next business day (3 guaranteed times), 2 business days, 3 business days, 1-7 business days

UPS
Same day, next business day (3 guaranteed times), 2 business days, 3 business days, 1-5 business days

U.S. POSTAL SERVICE
Overnight to most locations, 2-3 days, 2-8 days

Reliability

Winner: FEDEX

Why: We couldn't make an apples-to-apples comparison -- the Postal Service number is more recent, for instance, and doesn't include expedited deliveries -- so we gave this one to the private-sector carriers based on their money-back guarantees.

Winner: UPS

Why: We couldn't make an apples-to-apples comparison -- the Postal Service number is more recent, for instance, and doesn't include expedited deliveries -- so we gave this one to the private-sector carriers based on their money-back guarantees.

FEDEX
88% on-time delivery of express packages; money-back guarantee

UPS
91% on-time delivery of express packages; money-back guarantee

U.S. POSTAL SERVICE
87.2% on-time delivery of shipments including Standard Post and Media Mail; money-back guarantee for Priority Mail Express only.

Customer Service

Winner: FEDEX

Why: Historically FedEx has scored slightly higher than UPS and much higher than the Postal Service.

FEDEX
85 out of 100 in American Customer Satisfaction Index; highest average over 15 years

UPS
84 out of 100 in American Customer Satisfaction Index; second-highest average over 15 years

U.S. POSTAL SERVICE
77 out of 100 in American Customer Satisfaction Index, down 5 percent from last year; lowest average over 15 years

Convenience

Winner: U.S. POSTAL SERVICE

Why: Drop boxes let UPS and FedEx cover a lot of ground and accept packages 24/7 at a time when many post offices have closed or cut hours. However, the Postal Service claims thousands more retail locations, even in rural areas, and impressed us with its online services.

U.S. POSTAL SERVICE
31,250 locations, 2,500 self-service kiosks; online shipping services, free package pickup


FEDEX

8,700 locations, 36,500 drop boxes; online shipping services, free package pickup

UPS

18,700 locations, 40,000 drop boxes; online shipping services, free package pickup

Free Services

Winner: U.S. POSTAL SERVICE

Why: The Postal Service charges fewer extra fees and now offers tracking for most shipping methods.

U.S. POSTAL SERVICE
Priority Mail Express and Priority Mail boxes and labels; Saturday pickup and delivery; tracking for most services; no fuel surcharge or residential/commercial delivery fees

FEDEX
FedEx Express boxes and labels; Saturday (but no Monday) delivery with FedEx Home Delivery; Date Certain, Evening, or Appointment Home Delivery; tracking

UPS

Packaging for select air services only; tracking

Cheapest International Service

Winner: U.S. POSTAL SERVICE

Why: Service is slower, but senders can save a bundle with flat-rate boxes for international shipments up to 20 pounds.

U.S. POSTAL SERVICE
Priority Mail International Flat Rate: 6-10 postal business days to virtually every country

FEDEX

FedEx International Economy: time-definite delivery in 2-5 business days to more than 215 countries and territories

UPS

UPS Worldwide Expedited: 2-5 business days to more than 60 countries and territories

Large/Heavy Items

Winner: FEDEX

Why: FedEx and UPS accommodate oversize and overweight packages. The Postal Service promises huge savings for shipments that weigh up to 70 pounds, provided they fit in a flat-rate box.

Winner: UPS

Why: FedEx and UPS accommodate oversize and overweight packages. The Postal Service promises huge savings for shipments that weigh up to 70 pounds, provided they fit in a flat-rate box.

Winner: U.S. POSTAL SERVICE

Why: FedEx and UPS accommodate oversize and overweight packages. The Postal Service promises huge savings for shipments that weigh up to 70 pounds, provided they fit in a flat-rate box.

FEDEX
Up to 150 pounds (70 pounds for Home Delivery) and 165 inches; surcharges apply; freight service available for overweight parcels

UPS
Up to 150 pounds and 165 inches; surcharges apply; freight service available for overweight parcels

U.S. POSTAL SERVICE
Up to 70 pounds and 130 inches for Standard Post, 108 inches for Priority Mail and Priority Mail Express; flat-rate boxes ship for the same price regardless of weight

Louis DeNicola

Louis DeNicola is a freelance personal finance writer who specializes in credit, debt, and practical money-saving tips. He loves stacking savings opportunities to get amazing deals, traveling for free using credit card rewards, and teaching others how to do the same. Connect with Louis by visiting louisdenicola.com.

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