If you are looking to save money on shipping, start with a call to your UPS or FedEx representative. Speak with her about UPS SurePost or FedEx SmartPost. These are consolidated delivery services, which utilize the extensive logistics of UPS and FedEx, while relying on the U.S. Postal Service to provide final delivery to your customer.
SurePost and SmartPost are available to businesses that ship at least 50 packages per week. In my ecommerce business, I found this volume requirement easy to meet by shifting from USPS Parcel Post and Priority Mail to UPS SurePost. As I explain in the “Pros” section below, shifting USPS packages to UPS or FedEx will increase your average spend with those companies and contribute to decreasing your negotiated rates.
Why would you want a consolidated delivery service? In my experience, here are the pros and cons.
- Reduced shipping costs. Pricing is lower than conventional ground service. The most expensive part of a delivery is when UPS and FedEx drive their big heavy trucks up to your customer’s front door. This is why UPS and FedEx will tack on delivery area and residential areas surcharges to your base ground rates. Consolidated services like SurePost and SmartPost eliminate these charges by delivering packages from many different vendors directly to the local USPS office branch that normally handles their mail delivery. UPS and FedEx get to make just one stop to deliver many packages, and the USPS letter carrier who is going to be driving by every house in a residential area on his daily route is not having to modify his route. The savings that these efficiencies bring is passed on to you, the merchant.
Unfortunately, I am not able to provide exact figures for FedEx SmartPost, because my company (Tastyworms.com, an ecommerce site specializing in nutritious food for birds, fish, and reptiles) uses UPS. But both services — UPS SurePost and FedEx SmartPost — function roughly the same and the savings should be similar. UPS SurePost shipping rates, in my experience, are equivalent to ground rates to a commercial address. Here are sample costs using UPS SurePost, based on UPS’s published shipping rates.
Florida to New York
UPS Ground Residential: $13.64
UPS SurePost Residential: $10.52
Florida to California
UPS Ground Residential: $15.04
UPS SurePost Residential: $11.92
- Saturday delivery included at no extra charge. UPS and FedEx charge a hefty surcharge to deliver packages on a Saturday. However, USPS has no such delivery surcharge. Thus, a package that UPS or FedEx would normally wait until Monday to deliver might actually show up earlier than expected and on a Saturday. USPS plans to discontinue Saturday delivery in August 2104. But this only affects letter delivery and not package delivery. In fact, all signs point to USPS expanding package delivery, perhaps to even Sundays in major metropolitan areas.
- Utilize normal UPS or FedEx pickup. No trips to the post office are required, SurePost and SmartPost are services of UPS and FedEx, respectively. You can mix the boxes in with your normal daily pickup.
- Unified package tracking is available via UPS and FedEx websites. While the shipping labels will actually contain two tracking numbers, one for the ground carrier and another for USPS, you only have to provide the UPS or FedEx tracking number to your customer. With this tracking number, the customer will be able to see the progress of the shipment, regardless if the package is in the possession of the ground carrier or USPS.
- SurePost and SmartPost shipments increase your weekly spend. UPS and FedEx determine your negotiated rates based upon your average weekly spending amount. If you increase your spending by moving services from other carriers — such as from USPS to UPS or FedEx — you could reduce all of your shipping rates.
- Integrated into most shipping software. SurePost and SmartPost services are available in many popular shipping software packages such as ShipStation, ECC by Webgility, and ShipWorks.
- Delivery time is slower than ground service. The delivery time of SurePost is typically one day slower than UPS Ground. This is because on the day UPS would normally be dropping the package off at your customer’s door, it is instead dropping it off at the USPS branch nearest to the customer. FedEx SmartPost works on a consolidation model, which involves collecting packages at various consolidation sites around the U.S. and delivering them to the USPS only when it has met an unpublished volume requirement. This can result in FedEx SmartPost delivery times being more inconsistent than UPS SurePost. [Editor’s note: This paragraph was updated May 21, 2014, 6:18 p.m. Eastern U.S. Time.]
- Cannot ship outside of lower 48 U.S. states. While you can technically use SurePost or SmartPost to ship to Alaska, Hawaii and Puerto Rico, the fees are simply too high to make it worthwhile. In these cases, it is always better to ship directly through USPS.
- Must use your own boxes. Even though you have the advantage of final delivery through USPS, it will not permit you to utilize the free boxes that it provides. While UPS will deliver any box, USPS will return a misused Priority Mail box to you in most cases.
- Unified tracking sometimes causes confusion for customers. Customers are sometimes confused when UPS or FedEx hand the package off to the USPS. In the tracking report, it will indicate that the package has been delivered, often to a zip code that is different from the customer’s. My business receives a slightly higher number of customer service inquiries from our SurePost shipments for this reason. We let the customers know that USPS will be responsible for final delivery and that within 24 hours, the tracking number will show as “Out for Delivery” in the proper zip code. As these services become more widespread, these inquiries should likely drop to normal levels.
- Limited shopping cart support. Both UPS SurePost and FedEx SmartPost are integrated into the respective shipping APIs from UPS and FedEx. However, the services are not integrated in the vast majority of shopping cart software by default. If you are an experienced programmer, or are willing to hire programmer, direct API integration into your cart can be added manually.
As a workaround for UPS customers, automatic calculation can be performed by adding an additional shipping method that uses UPS Ground for rate calculation to a business address but is renamed and has its delivery day range increased by one day. This works because UPS uses UPS Ground Business rates as the pricing for SurePost. Most shopping carts are able to handle integration in this manner.
Which Packages for SurePost and SmartPost?
Shift packages to SurePost and SmartPost that cannot be shipped via USPS First Class Mail or in a USPS Flat Rate Priority Mail envelope. These USPS services are a tremendous value when you factor in their low costs and fast delivery times. My rule is the shipment must weigh between 2 and 10 pounds, and it must not fit into a USPS Flat Rate Priority Mail envelope. From experience, I know that at the 11 pound mark ground services become the better value. Your experience may vary, however, so calculate your own break point in this regard.
UPS SurePost and FedEx SmartPost can provide significant shipping savings over traditional ground services by eliminating hefty delivery area, residential, and Saturday delivery surcharges. While these services are not the answer for shipping every package, they are compelling option for a customer who is price sensitive, but not time sensitive. When implementing this service into my own business, I added it as the lowest cost delivery option at a flat rate cost. Promoting a flat shipping rate avoids sticker shock at checkout. I find these services to be a good fit in this regard.