When it comes to sending packages and freight, FedEx and UPS are two of the biggest names in the delivery industry. Both companies provide domestic and international shipping services for businesses and residential customers. However, when looking at the bottom line, who really offers the more affordable rates?
Key Factors That Impact Shipping Costs
There are several variables that influence how much it will cost to ship with FedEx vs. UPS:
Package weight
Heavier packages that take up more space in the truck or plane will be more expensive to ship. Rates are calculated by dimensional weight, which takes into account package dimensions as well as actual weight.
Delivery speed
The faster you need your package delivered, the more it will cost. Express/overnight options are pricier than standard ground shipping that takes 2-5 business days.
Fuel surcharges
As gas prices fluctuate, FedEx and UPS may tack on fuel surcharges that raise rates. These change over time based on market conditions.
Residential vs. commercial delivery
Business pickups and deliveries to commercial addresses are cheaper than residential shipments to a home, which require more individualized service.
Shipping discounts
Discounts can be offered for customers who frequently ship high volumes or have a contract. This reduces rates compared to published list prices.
Extra services
Additional fees apply for add-ons like package insurance, signature confirmation, or hazardous material handling. The more services requested, the higher the final rate will be.
Zone-based pricing
How far a package is traveling from origin to destination will impact the base rate. Prices are typically broken down into zones based on mileage bands.
Package size
A large, oversized item that takes up significant space in a truck will cost more to ship than a small envelope package.
Time of year
Rates may fluctuate based on seasonal demand around major holidays when package volumes surge.
FedEx vs. UPS Ground Shipping Cost Comparison
To get an “apples to apples” cost comparison between FedEx and UPS, we’ll look at published list rates for FedEx Ground and UPS Ground shipping within the 48 contiguous United States. These are the companies’ standard ground parcel delivery options for packages under 150 lbs.
Here are sample rates for shipping a 10 lb package going to Zone 5 (601-1,000 miles from origin) with no additional services or discounts applied:
| Carrier | 10 lb Package Rate |
|---|---|
| FedEx Ground | $22.16 |
| UPS Ground | $21.43 |
For this scenario, UPS Ground is about 3% cheaper than FedEx Ground. However, actual savings would depend on the ship date, specific origin and destination zip codes, and other factors that influence final pricing.
Some key differences between FedEx Ground and UPS Ground:
– FedEx bases pricing on distance between origin and destination plus package weight. UPS uses a more zone-based structure for weights up to 150 lbs.
– FedEx Ground offers date-certain delivery for an additional fee, guaranteeing the package arrives by a specified day. UPS Ground does not have a date-certain option.
– UPS has a larger network of ground hubs and terminals than FedEx, which can translate to shorter transit times in some cases.
– Maximum package weight is 150 lbs for FedEx Ground and UPS Ground. Over 150 lbs moves to a freight pricing structure.
– UPS Ground has more variability in rates based on exact origin and destination. FedEx Ground pricing tends to be a bit more consistent.
Analysis of Average Rate Differences
Analyzing published shipping rates over a variety of package weights and shipping distances reveals some general trends:
– For lighter packages under 10 lbs, FedEx Ground is moderately cheaper than UPS Ground. The rates gap is more significant for shipments going to zones over 600 miles.
– As package weights increase up to around 30 lbs, FedEx Ground and UPS Ground cost about the same on average. There are times UPS has slightly lower rates, but it’s competitive.
– For heavier packages from 30-150 lbs, UPS Ground becomes noticeably cheaper especially going to more distant zones. The rate difference averages 10-20% lower than FedEx Ground for heavier shipments.
What does this indicate? FedEx Ground offers better value than UPS Ground for lighter packages under 10 lbs, particularly going long distances over 600 miles. But for heavier items from 30-150 lbs, UPS Ground emerges as the lower cost option on average.
Other Shipping Options Comparison
Besides standard ground parcel delivery, FedEx and UPS offer a wide range of domestic and international shipping services. Here is an overview comparing rates and features:
Overnight/Express Shipping
– FedEx First Overnight – Delivers next business day by 8:30 or 9 AM for earliest time available in each area. Most expensive overnight option.
– UPS Next Day Air Early – Comparable to FedEx First Overnight with delivery by 8:30 or 9 AM next day. Highest rates for urgent overnight service.
– FedEx Priority Overnight – Delivery next day by 10:30 AM or noon to most areas. Lower cost overnight service.
– UPS Next Day Air – Next day delivery by end of day. Same level of service as FedEx Priority Overnight.
Overall, FedEx and UPS next morning delivery services are very similar in transit times and rates. UPS sometimes has marginally lower prices, but they are competitive.
2 Day Expedited Shipping
– FedEx 2Day – Package delivered in 2 business days by end of day. Available to most zip codes.
– UPS 2nd Day Air – Comparable 2 day service by end of day. Covers more zip codes than FedEx 2Day.
For medium-urgency shipments, FedEx and UPS 2 day expedited options are virtually identical in terms of cost and time-in-transit. UPS just slightly edges out FedEx for broader geographic coverage.
International Shipping
– FedEx International First – Fastest overseas delivery typically in 1-3 business days door-to-door. Most expensive option.
– UPS Worldwide Express Plus – Similar urgent international delivery in 1-3 days. Slightly lower rates than FedEx on some routes.
– FedEx International Priority – Slower transit times of 2-5 days for decent cost savings. Good balance of speed and price.
– UPS Worldwide Expedited – Comparable service to FedEx International Priority. UPS has lower rates on many international shipping lanes.
UPS competes closely with FedEx for fast overseas shipping but frequently offers cheaper rates for slower economy service to many countries.
Factors that Impact Individual Rates
While we can extract some high-level rate differences between FedEx and UPS, actual shipping costs will be influenced by many customer-specific factors:
Negotiated account discounts
Larger shippers with frequent volume can negotiate custom discounts off the list rates. This brings down effective shipping costs. Each company has different criteria and thresholds for discounts.
Actual origin/destination
Pricing varies based on exact zip codes and if it’s a commercial or residential address. Certain shipping lanes can have more competitive pricing.
Pickup/drop-off locations
Having drivers pickup at a FedEx or UPS facility lowers residential surcharges. Dropping off at a staffed counter rather than a drop box can also save money.
Package dimensions
Irregularly shaped items incur dimensional weight charges that exceed the actual weight rate, raising costs.
Fuel surcharges
These fluctuating fees added to base rates can range between 3-15% and impact the final price.
Time of year
Peak season around Christmas drives rates higher. Off-peak periods typically have lower pricing.
Zone uncertainty
Cross-country rates skipping zones due to indirect routing can result in lower pricing.
Recommendations to Find the Lowest Shipping Rates
To get the best shipping prices with FedEx or UPS, here are some tips that can help reduce costs:
– Get rates for FedEx Ground and UPS Ground to compare, then negotiate discounts off the list price.
– Pack items tightly and use your own packaging to avoid dimensional weight upcharges.
– See if drop-off at a staffed location like a FedEx Office can save money over drop boxes.
– Compare FedEx Home Delivery and UPS SurePost for residential delivery savings. USPS provides last mile service.
– Use FedEx One Rate or UPS Simple Rate plans to get flat rates and skip dimensional billing.
– Avoid peak seasonal surcharges by shipping in fall and other off-peak months.
– Sign up for a FedEx or UPS account to save on residential fees and get access to discounts.
– Take advantage of UPS’s extensive Access Point network for reduced rates to secure pickup locations.
– Use freight or LTL (less than truckload) for very large or heavy shipments that exceed 150 lbs per package.
Conclusion
To summarize the comparison:
– FedEx Ground is cheaper for smaller packages under 10 lbs, especially long distances.
– UPS Ground is more affordable on average for heavier packages from 30-150 lbs.
– Overnight and 2 day express services are very close between both companies.
– UPS holds a slight edge in cost for slower international shipments.
– Many customer-specific circumstances like discounts and package dimensions affect final pricing.
– Shop rates, look at all service options, and leverage shipping discounts to get the best value. Cost differences vary case by case.
While FedEx and UPS compete closely on rates, there is no universal winner across the board. Evaluate all available shipping options with both carriers while taking into account individual factors to find the most affordable solution for your situation.
