As an online seller or ecommerce business owner, choosing the right shipping carrier and service is crucial for managing costs and providing good customer service. The two most popular shipping options for many online retailers are UPS (United Parcel Service) and USPS (United States Postal Service) Priority Mail. But which one offers the best shipping rates? We’ll compare UPS and Priority Mail costs, services, and other factors to help you determine the more affordable shipping method for your business.
Overview of UPS and Priority Mail Shipping
UPS and USPS Priority Mail are the most popular package delivery services used by ecommerce businesses to ship online orders to customers. Here’s a quick overview of each service:
UPS
- Operated by UPS, a private company
- Offers ground, 2-day air, and next day air services
- Provides tracking, insurance, and signature confirmation services
- Serves all addresses in the U.S. and internationally
- Pickup services available for an added fee
USPS Priority Mail
- Operated by the United States Postal Service (USPS), a government agency
- 2-3 day delivery for most domestic addresses
- Free tracking, insurance up to $50, and delivery confirmation
- Serves all addresses in the U.S. only
- Daily pickup at no added cost if you schedule with USPS
Both carriers provide reliable, timely package delivery throughout the U.S. The main differences are that UPS offers more shipping options like next day air, while Priority Mail only has one service level. UPS serves international destinations while Priority Mail is U.S. only. And UPS pickup services cost extra unlike USPS.
Comparing UPS and Priority Mail Shipping Rates
The biggest factor for most ecommerce sellers when selecting a shipping carrier is the cost. UPS and Priority Mail determine shipping rates based on the:
- Package weight
- Package dimensions
- Distance it’s traveling (zone)
- Delivery speed
Some general observations when comparing their rate structures:
- UPS offers more speed options, like next day air
- UPS zone-based system may result in higher costs for long distances
- USPS Priority Mail provides one flat rate regardless of zone
- UPS discounts available for high volume shippers
- USPS Priority Mail offers commercial pricing discounts
To demonstrate how their pricing compares, we’ll look at sample shipping rates for sending a 5 lb, 12x10x5 inch package to Zone 5 destinations (1,000+ miles from origin) at UPS Ground, UPS 2nd Day Air, and USPS Priority Mail published retail rates as of November 2022.
| Carrier | Service Level | Zone 5 (1,000+ miles) Rate |
|---|---|---|
| UPS | UPS Ground | $18.10 |
| UPS | 2nd Day Air | $59.47 |
| USPS | Priority Mail | $16.10 |
Based on the sample rates above, USPS Priority Mail would be the cheapest option for shipping a 5 lb package to Zone 5. The Priority Mail flat rate of $16.10 is lower than UPS Ground rate of $18.10 to the same destination. And substantially less than 2nd Day Air service through UPS.
Of course, actual shipping rates depend on the package specifics like weight, distance, dimensions. And discounts like UPS volume pricing or USPS commercial rates can affect costs. But in general, Priority Mail tends to offer better baseline rates for lighter, smaller packages going to zones over 1,000 miles away.
Zone-Based Pricing Comparison
To give a better sense of the potential pricing differences and cost advantages of Priority Mail or UPS Ground depending on package destination zone, here is a detailed zone rate comparison:
| Zone | USPS Priority Mail Rate | UPS Ground Rate |
|---|---|---|
| Zone 1 (local) | $7.02 | $9.37 |
| Zone 2 (0-150 mi) | $7.77 | $9.97 |
| Zone 3 (151-300 mi) | $8.71 | $11.57 |
| Zone 4 (301-600 mi) | $10.59 | $14.46 |
| Zone 5 (601-1000 mi) | $13.75 | $16.10 |
| Zone 6 (1000+ mi) | $16.10 | $18.10 |
| Zone 7 (AK, HI) | $18.45 | $63.15 |
| Zone 8 (PR) | $17.95 | $31.85 |
A few key observations about the zone pricing comparison:
- In local zones 1-3, UPS Ground is more expensive than Priority Mail
- In zones 4-5, Priority Mail remains marginally cheaper than UPS Ground
- In zone 6 (1,000+ miles), UPS Ground and Priority Mail rates are similar
- For Alaska, Hawaii (zone 7), Priority Mail much cheaper – nearly $45 less for this sample
- For Puerto Rico (zone 8), Priority Mail around $14 cheaper
The pricing indicates Priority Mail tends to be more affordable for shorter distances up to 1,000 miles (zone 6), while UPS Ground is competitive for longer haul shipments. UPS Ground prices also escalate rapidly for zones 7 and 8 compared to Priority Mail.
Average Shipping Discounts
The rates above reflect the published list prices – but most businesses don’t pay full price. UPS and USPS offer average discounts off their retail rates:
- UPS: Around 30% average discount for high volume shippers
- USPS: Average 55% off Priority Mail rates through USPS Commercial Pricing program
Factoring for potential average discounts, here is how the sample zone rates above compare:
| Zone | Priority Mail (55% avg. discount) |
UPS Ground (30% avg. discount) |
|---|---|---|
| Zone 5 | $6.19 | $11.27 |
| Zone 6 | $7.25 | $12.67 |
| Zone 7 | $8.30 | $44.21 |
| Zone 8 | $8.08 | $22.30 |
With typical discounts applied, Priority Mail becomes an even more affordable shipping solution for zones 5-8 at an average distance over 1,000 miles from origin.
Dimensional Weight Pricing
Another important pricing factor is how UPS and USPS calculate dimensional (DIM) weights for packages. This affects how much you pay to ship bulky/lightweight packages.
Both carriers determine dimensional weight using a package’s length x width x height in inches divided by a dimensional factor:
- UPS DIM Factor: 166 (L x W x H / 166)
- USPS DIM Factor: 194 (L x W x H / 194)
If the dimensional weight exceeds the actual weight, the higher dimensional weight is used to calculate the rate. This often results in higher costs for bulky, low-density packages.
USPS uses a larger DIM divisor of 194 vs. 166 for UPS. This makes USPS pricing more favorable for many lightweight, bulky packages based on dimensional weight.
Average Rate Per Pound Shipped
Analyzing the average cost per pound shipped is another way to compare overall UPS and Priority Mail rate competitiveness. Against their published rates, USPS Priority Mail has a lower average cost per pound:
- UPS: $4.85 per pound average
- USPS Priority Mail: $3.18 per pound average
Factoring 55% average USPS discounts, the cost per pound shipped for each carrier would be:
- UPS: $4.85 per pound
- USPS Priority Mail: $1.43 per pound
Based on average cost per pound metrics, Priority Mail offers significantly cheaper base rates compared to UPS before discounts. And with Commercial Pricing discounts, the per pound rate for Priority Mail is around 70% lower than UPS.
Shipping Speed
Shipping rates are highest priority, but delivery speed is still an important consideration for many online sellers and buyes. Here is how UPS and Priority Mail shipping times compare:
UPS Ground
- 1-5 business days for contiguous U.S.
- Up to 6 business days for zones 7 and 8
USPS Priority Mail
- 1-3 business days
- 2 days for east coast destinations
- 3 days to zones 6-9
- 4-5 days for Alaska, Hawaii, Puerto Rico
UPS Ground and Priority Mail offer comparable shipping times across the contiguous U.S. USPS provides a wider 1-3 day time-in-transit range, while UPS specifies based on exact zones. For Alaska, Hawaii, and Puerto Rico, Priority Mail is generally 1-2 days faster.
Loss, Damage, and Insurance
The likelihood of a package being lost or damaged and insurance coverage are other factors when choosing a shipping provider. Here is how UPS and USPS compare:
Loss/Damage Rates
- UPS: Around 1% of packages affected
- USPS: 0.03% packages lost or damaged
USPS Priority mail has exceptionally low package loss and damage rates at a fraction of UPS.
Insurance
- UPS: Up to $100 coverage included, can increase with declared value
- USPS: $50 included, up to $5,000 with added insurance
Both carriers provide some base level of insurance, with options to buy added coverage. One advantage for USPS is that tracking and $50 insurance are included free for Priority Mail versus added costs with UPS.
Package Size and Weight Limits
Maximum package sizes and weights allowed also differ between UPS and USPS Priority Mail:
Size Limits
- UPS
- Max size: 165 inches length + girth
- Max length: 108 inches
- USPS Priority Mail
- Max size: 108 inches length + girth
- Max length: 60 inches
Weight Limits
- UPS
- Max weight: 150 lbs per package
- Max ground shipments: Unlimited
- USPS Priority Mail
- Max weight: 70 lbs per package
- Max ground shipments: Unlimited
UPS allows significantly larger and heavier packages than Priority Mail – up to 165 inch length/girth and 150 lbs. Priority Mail max is 108 inch length/girth and 70 lb packages. For heavy palletized shipments over 70 lbs, UPS Ground would likely be the better option.
Conclusion
For ecommerce businesses, choosing between UPS and USPS Priority Mail for order fulfillment shipping comes down to:
- Cost – Priority Mail offers better base rates pound for pound
- Speed – Both deliver in 1-3 days with USPS tending to be faster to distant zones
- Package size – UPS has higher limits for oversized packages
- Insurance – Both provide adequate coverage for most packages
- Loss/damage – Extremely low rate for USPS at .03%
Based on average cost per pound and loss rates, USPS Priority Mail generally provides more affordable and reliable shipping for lightweight ecommerce packages under 2 lbs.
For heavier packages over 2 lbs, or bulky oversized items, UPS Ground is often cheaper. Large volume shippers can also negotiate greater discounts with UPS to make their rates more cost-competitive with Priority Mail.
The best approach is to compare rates for your actual packages across zones you ship to the most. And leverage any discounts available to get the lowest shipping prices. Often using a mix of Priority Mail and UPS Ground will yield the most savings on fulfillment shipping costs. Having access to both shipping options gives online retailers and ecommerce sellers important flexibility to contain costs and keep customers satisfied with timely deliveries.
