Is USPS Delivering a Better Deal for Small Parcel?

Spend Matters welcomes another guest post from Jon Winsett of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom, and shipping.

Will 2014 be the year the United States Postal Service makes a comeback? Quite possibly. Revenues from 2013 show a significant improvement with a heavy focus on small parcel shipments. While first-class mail volume continues to decline, shipping and packaging volume grew by 8 percent. Recent pricing changes indicate the USPS is taking bold action to shift commercial volume away from FedEx and UPS – especially for expedited residential deliveries.

Here are a few things to consider, according to a recent study conducted by

  • For 1-5 lb. packages, the average cost to ship via FedEx/UPS (Ground and Home Delivery, respectively) is up 7.52 percent. USPS, on the other hand, has lowered the cost to ship similarly weighted packages by 0.87 percent.
  • For 6-10 lb. packages, FedEx and UPS have raised rates by an average of 7.06 percent. USPS once again comes out the winner here, with a 2.22 percent decrease in costs.
  • For 11-25 lb. packages, USPS Priority Mail rates have increased by 0.9 percent. That’s still far less than FedEx and UPS’s average increases, which range from 5.05 to 6.72 percent.

According to the study, which involved 144 identical packages shipped to Zones 1 to 8 on Monday and Thursday, USPS Priority Mail also outperformed UPS Ground and FedEx Home Delivery on package delivery speed. The average total days to delivery came in at 2.75 days for UPS, 2.21 days for FedEx, and 1.79 days for USPS.

In addition to offering 1, 2, or 3 business day delivery based on origin and destination, Priority Mail now offers several free services – including tracking, package pickup, shipping supplies, and Saturday and residential delivery. Another point to remember is that the USPS doesn’t add surcharges to base rates. The rate you see is the rate you pay.

If you’re not using the USPS for expedited shipping, now is a good time to reconsider. USPS Priority Mail is an excellent option for businesses shipping to residential addresses at an economical price and improved service. At a time when UPS and FedEx customers are paying historically high shipping rates, USPS’s gamble is well positioned to pay off.

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Voices (6)

  1. Mike:

    I have always told my people to use USPS. The cost savings even for packages weighing 35 # plus, is a lot cheaper than Fed-Ex and UPS.

  2. Aaron:

    The real winner is in the USPS Regional Rate boxes. It is hard to beat the rates when shipping within region 1 or 2. In some cases it even works out cheaper than the flat rate boxes. An added bonus is that our office no longer needs to buy/scrounge boxes.

  3. Frank:

    USPS Priority Mail is a fantastic service and they have done a nice job of managing resources into the product to make it better for the consumer, including improved tracking. We use it all the time in helping clients cut costs while increasing shipping efficiency.

  4. Eric:

    Hi Torry, The USPS is actually cheaper than UPS/FedEx for smaller packages (under 5 lbs) going to a residence. Fuel surcharges (7.00%) and residential fees ($2.90) increase the final cost. Earned discounts are usually much smaller in the 1 to 10 lb. range, so it is hard to get the UPS/FedEx shipping cost to be effective.

  5. Torry:

    Article misses the big point.! The $ price for USPS is about 30% of UPS/FedEx for the same service

  6. Don:

    Amen, could not have said it better myself.
    The Post Office is the best option for light weight package shipping, especially to residential addresses.

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