Shipping School is in session!

Before we dive into the differences between top shipping carriers, a little background on myself: I had the idea for Shipping School after working at various ecommerce startups back in the day, where, to be honest, I made a lot of mistakes. 

To speak candidly, staying on top of the ecommerce fulfillment game can be complicated, especially with something as ever-evolving as the shipping and logistics industry. Sometimes, navigating it feels a bit like trying to solve a Rubik’s cube made up of colors that continuously change. 

So, I thought I’d channel my experience into a free, easy-to-digest resource where new shippers can go for the info they need, when they need it.

Speaking of new shippers: whenever an ecommerce business gets going, entrepreneurs always come to what I call the “ship-searching” stage. When it’s time to fulfill orders, they’re faced with two critical questions: 

• How much are these packages going to cost to ship? 
• Which carrier will give us the best rates? 

There are three major shipping carriers to choose from in the United States: USPS, UPS, and FedEx. All three of them offer great services for both individuals and small businesses. Depending on what you and your business needs, one may be the best choice compared to the others.

Let’s get into it.

• UPS shipping breakdown
• USPS shipping breakdown
• FedEx shipping breakdown
• Shipping carrier costs [2023]
• 5 ways to cut shipping carrier costs
• USPS, UPS, & FedEx: Which is best for different use cases
• Having flexibility in carrier options is key
• USPS vs. UPS vs. FedEx FAQs

While USPS used to be the premier carrier for ecommerce packages, UPS has caught up fast in recent years. When stacking up with the other two carriers, UPS offers the best overall mix of fast delivery, affordable rates, and reliable service.

UPS is also the go-to carrier for large, heavy packages. Think products like televisions, pre-assembled furniture, and more. While USPS only allows for a maximum weight of 70 pounds per package, UPS has a maximum weight threshold of 150. 

UPS offers an abundance of express services at affordable rates for ecommerce packages, though they’re typically at slightly higher price points than USPS.

They’ve also got an emergency delivery service called UPS Express Critical, which is the premier service for emergency deliveries in under 24 hours around the world.

Pros of UPS 

Reliability is where UPS shines. With their guaranteed delivery services and quick responses to customer service inquiries, UPS makes a great carrier to partner with for your ecommerce business.

Another area that UPS specializes in is the shipment and delivery of high-value items. With UPS, shippers can insure packages up to a whopping maximum value of $50,000.

This, in turn, makes UPS the choice carrier for sending luxury consumer products such as high-end watches, necklaces, and rarities. We’re looking at you, Pokémon card collectors.

Lastly, UPS Ground is the best ground delivery service in the industry, with the lowest rates and fastest delivery times. If you’re sending packages with hazardous materials that need to be sent via ground transport, UPS Ground will be the perfect service for you.

Cons of UPS

One con of UPS is that they impose a large number of surcharges on packages compared to USPS and FedEx. While prices might seem comparable to USPS at first glance, you may be surprised to find added line charges when it’s time to purchase your label.

Depending on what you’re shipping and how large or heavy your box is, you may see different types of Additional Handling surcharges that make the total cost of your label much higher than you initially thought it would be.

UPS also charges extra for shipping to (and picking up from) destinations they deem to be rural or remote, while USPS does not. 

USPS is the shipping carrier built for the people. Literally. When it was founded in 1775, USPS built itself on the promise of universal service for all Americans and affordable rates. 

USPS is the only carrier legally allowed to touch every mailbox in the country, and it has developed an unparalleled network to deliver mail to every household in America. It leverages this same network to also offer package delivery services at the lowest rates of all three carriers. 

Generally speaking, USPS specializes in handling small, lightweight packages under 20 pounds—think packages containing items like t-shirts, candles, and coffee. 

Pros of USPS

On top of its affordability, the biggest pro of shipping with USPS is the accessibility. Remember: USPS is built to service every American, and that kind of infrastructure and availability is incomparable.

No matter whether you live in a huge metropolis or a small town with a few hundred people, USPS will be there to pick up and deliver your packages with the same service standards across the board.   

Also, one of the best things about USPS is that it offers specially-discounted services such as Priority Mail Cubic, where rates are based on a package’s outer dimensions, and not its total weight. 

Individuals and businesses can access these special “cubic” rates when they use online shipping software to buy discounted postage online, but we’ll get into that more a bit later. 

Cons of USPS

Reliability is something to consider shipping with USPS. While the majority of USPS packages get delivered without a hitch, it’s not unheard of for packages to go missing in the Postal Service’s network for weeks–or even months–at a time with no tracking updates.

This is especially true when shipping internationally (USPS partners with other countries’ public postal services to carry out international deliveries…and postal services in other countries may not be as reliable as ours is here in the States). 

Also, if you run into any issues with your USPS shipment, you may have a difficult time contacting any customer support representatives. It is the United States Postal Service, after all…and it has over 330 million customers to serve.

As such, don’t expect to receive a whole lot of help if you run into an issue like tracking down a missing package (3PLs such as ShipBob, on the other hand, are known for having great customer service!).

If USPS is the “purified spring water” and UPS is the “Coca Cola” of the shipping industry, then FedEx is the “Lacroix”—classy, but much more niche. 

FedEx specializes in express and overnight shipping, when you need to send something fast, but it’s not quite an emergency. Their standard overnight delivery services are typically marginally less expensive than UPS. FedEx is also the premier carrier for business-to-business deliveries. 

Pros of FedEx

FedEx is the premier carrier for business deliveries and offers the most extensive emergency services for time-sensitive shipments such as important documents. 

Another pro of FedEx is that it’s the best carrier for shipping specialty items, such as perishable food products or temperature-controlled goods. 

In fact, FedEx offers specific boxes such as their proprietary cold packaging, which can keep shipments between 35°F-46°F for 48 or 96 hours without having to use dry ice or gel packs. This makes FedEx the go-to carrier for ecommerce food startups in the pre-packaged meal space. 

Cons of FedEx

The biggest con of FedEx is the cost of shipping. Compared to UPS and USPS, FedEx is far and away the most expensive major carrier in the United States. 

Another con is that FedEx doesn’t have as strong of a partnership with third-party shipping software companies like ShipBob as UPS and USPS do.

Therefore, the discounts FedEx offers to shipping software customers aren’t as deep as the discounts you’ll see from UPS or USPS when you partner with a company like ShipBob.

Lastly, FedEx also imposes surcharges the same way UPS does. One common one you’ll see is a $5.15 surcharge for residential deliveries (as of 2023). 

Below is a visual comparison of the different shipping carriers and the primary shipping options: ground, express, and overnight.

Note: These starting costs are calculated based on handheld packages under 1 lb traveling to local zones. For UPS and FedEx, shipments going to residential addresses will incur surcharges of $3.70 and $5.15, respectively. 

What USPS costs include:

• Scheduled pickups: USPS offers free package pickup services that you can schedule on their website. Pickups take place based on availability, but you can also request a specific time slot for a fee.
• Free tracking: All USPS shipping services offer door-to-door tracking, with real-time updates every time packages get scanned during their journey to their final destination.
• Free insurance: Priority Mail and Priority Mail Express packages come with $50 of insurance if you purchase postage at the post office or on the USPS website. If you use shipping software to buy USPS postage at commercial pricing rates, the free insurance increases to $100 per package. Note: other USPS mail type services such as First Class Package, Media Mail, and Retail Ground do not come with free insurance.
• Volume discounts: USPS offers cheaper rates to shippers who use shipping software to access commercial pricing rates, and/or who partner with fulfillment providers like ShipBob that are given discounts due to a high volume of shipments (since they ship packages for thousands of ecommerce brands). 

What UPS costs include:

• Free tracking: All UPS services offer free door-to-door tracking.
• Free insurance for anything under $100: Per the UPS Store Pack and Ship Guarantee, UPS will cover the cost of postage and package contents for up to $100 in the event of a missing or damaged shipment.
• Commercial discounts: Though not published publicly, UPS discounts are available to high-volume shippers on a case-by-case negotiated basis, or shippers who partner with a 3PLs to take advantage of economies of scale.

What FedEx costs include:

• Free tracking: All FedEx services come with door-to-door tracking.
• Free insurance for anything under $100: Per the FedEx Packing Pledge, FedEx will cover the cost of postage and contents of packages for up to $100 in the event of a lost or damaged shipment.
• Commercial discounts: Though not published publicly, FedEx discounts are available to high-volume shippers on a case-by-case negotiated basis, or shippers who partner with 3PL’s to take advantage of economies of scale.

Optimizing your shipping strategy, including costs, can help you improve your bottom line. Here are five useful tips on how you can lower shipping costs, no matter which carrier you’re using.

1. Optimize your packaging size (the smaller, the better)

Shipping is an industry where size matters; don’t let anyone tell you otherwise. No matter which carrier you decide to go with, making sure your packaging is as small as you can get it is the most effective way to keep shipping costs down. 

If you use packaging that’s too large for your items, you may be charged for the dimensional weightof your package, instead of its actual weight. In a nutshell, dimensional weight (or “DIM,” for short) refers to the amount of space your package takes up on a carrier’s truck. Shipping companies will charge you whichever “weight” that will make them more money: your package’s actual weight or its dimensional weight. 

Spoiler alert: DIM weight is always much more expensive than you want it to be, and like Vegas, the house always wins.

When it comes to a package’s dimensional weight, none of the carriers will hesitate to charge you these extra fees. It means more money for them, after all!

As such, new shippers often find themselves in one of those “don’t hate the player, hate the game” situations. However, you can rig the game in your favor by optimizing your packaging size to avoid dimensional weight charges in the first place.

“Pillows are not small items, which makes them difficult to store and expensive to ship because of dimensional weight. Even though they are lightweight, they are big, so you pay for the space they take up on a delivery truck. And the farther away the shipping destination is, the more expensive it is to ship them.

I knew I needed a cost-effective way to help me ship pillows at launch, and it turns out ShipBob was it.”

Tracey Wallace, Founder of Doris Sleep

2. Ask for discounted shipping rates

Saving the most money on shipping is all about taking advantage of “economies of scale.” In other words, the more packages you ship, the more leverage you have to negotiate discounted rates with the carriers. 

However, entering into these kinds of negotiations isn’t as straightforward as walking into your local post office or UPS store with a briefcase full of cash. You need to go through the proper channels. That’s why it makes more sense to work with a third-party logistics (AKA a “3PL”) company like ShipBob.

When you partner with ShipBob, you not only work with logistics pros who handle all your order fulfillment needs for you.

Since ShipBob fulfills orders for thousands of online brands from fulfillment centers across the globe, you get access to discounted shipping rates from all of the major carriers that ShipBob partners with. 

Think of working with a leading 3PL kind of like throwing on a jersey and stepping onto the court with the 1990s Chicago Bulls, featuring Michael Jordan in his prime. By joining up with an all-star team like that, you’ve just given your business the best shot at success when it comes to servicing your customers.

“Working with ShipBob has been great. Being able to take advantage of USPS’s Media Mail shipping rates through ShipBob has helped out a ton.”

Lee Nania, Founder of SubSubmarine 

3. Ship from closer shipping zones

When most ecommerce businesses start out, they often keep inventory on-hand and fulfill their own orders. However, this can present a problem when you factor distance into the shipping equation. 

On top of how much your package weighs and how big it is, the total distance it has to travel to reach its final destination matters.

Shipping carriers use shipping zones to measure the distance a package travels – not in miles but rather groupings of zip codes – from the point of origin to the destination.

There are eight shipping zones in total in the US. The location from which an order is shipped is the point of origin and located in Zone 1. The address it’s shipped to is the destination zone. 

If you’re in California and you’re sending a package to New York, it’s going to cost you. That’s why it’s not uncommon for growing online brands to outsource fulfillment to a 3PL like ShipBob, so they can easily split inventory across multiple fulfillment locations.

When an order is placed, it is automatically routed to closest fulfillment center to its destination. 

ShipBob has fulfillment centers in major cities all over the US, so we can spread out our inventory across the country to reduce the shipping zones and costs associated with shipping orders to destinations that are far away.”

Founder of My Calm Blanket

4. Switch to poly mailers

Poly mailerstake up less space than boxes on trucks and weigh less, and as a result, each of three carriers price them lower than three-dimensional parcels.

Obviously, this isn’t the best option for sending fragile items, but if you can get away with putting your products in poly mailers rather than boxes, this is an easy hack to reduce shipping costs right off the bat.

5. Select standard shipping

Opting for a slower shipping speed automatically reduces costs. Standard shipping is always cheaper than expedited shipping, and ground shipping is always cheaper than standard (UPS Ground, FedEx Ground, USPS Retail Ground). 

However, standard is obviously slower than expedited, and ground service can sometimes take longer than expected. So, you’ll need to decide which shipping speed is right for you.

If what you’re sending doesn’t require time-sensitive delivery, there’s no reason to take on additional costs if it means your products may reach your customers only a day or two sooner. 

USPS, UPS, and FedEx all provide similar shipping options for ecommerce businesses, but there are some variations, especially when it comes to cost. Below is a breakdown of the best shipping carrier based on different use cases.

Examples of use case scenarios with answers (Updated on May 2023)

Example 1

You need to deliver a small box, let’s say 5 in x 5 in x 5 in and weighing 2 lbs, containing cosmetics within the next 5 business days to a customer who lives in a different state.

With this example let’s push the limits of the contiguous United States. Seattle to Miami. 

In this situation, FedEx reigns, but it is costly. It would take almost $50 to get your package delivered to a residential address in time. 

USPS is vastly cheaper with a less than $15 delivery fee, but your package would arrive a couple days late. 

Example 2

You need to deliver 5 print books, all the same size, within the next 10 business days to a customer who lives in a different country. 

Maybe they own a bookstore in Denmark. So from New York to a Danish bookshop would cost via FedEx at minimum $250. 

In this Situation, UPS, and USPS actually reign supreme. With cheaper shipping, however, there is less guarantee of arrival dates.  

Nearly every successful business grows to the point when it’s time to optimize their ecommerce shipping strategy. If you’re a growing brand, it might be time to partner with a 3PL like ShipBob. 

If you’re sending a variety of packages to locations around the country (or even global shipping), a 3PL like ShipBob allows you to best service your customers by fulfilling customer orders from the most optimal locations, so you can meet customer expectations while keeping logistics costs low.

In addition, sometimes the “best” carrier for you might change, depending on what kind of package you’re sending, how far it needs to travel, and a slew of other factors.

For instance, it may be more cost-effective to overnight a heavier package with UPS instead of USPS. In this case, you don’t want to stay locked in with just one carrier. ShipBob automates this multi-carrier selection process for all of their customers, no matter the size. 

Due to the amount of packages it’s responsible for fulfilling, ShipBob is able to pass along heavily discounted rates from all three shipping carriers (among others) to their customers. In turn, this kind of flexibility can even give your customers more choices when they place their orders, which ultimately leads to a better experience with your brand.

At the end of the day, partnering with a 3PL like ShipBob takes all the headache out of warehousing, shipping, and fulfillment, so that you can focus on doing what you do best: growing your business.

Here are answers to three of the most common questions about the differences between USPS, UPS, and FedEx.