When it comes to shipping small parcels, finding the most cost-effective option is crucial, especially for small businesses and individuals with limited budgets. With so many shipping carriers and services available, it can be difficult to determine the cheapest way to ship your small parcel.
In this blog post, we will explore the factors that affect the cost of small parcel shipping, provide tips to help you find the cheapest shipping, and compare two small parcel carriers, FedEx and USPS.
What Is the Cheapest Way to Ship a Small Parcel?
There is no cut-and-dry answer to this question since the ‘cheapest' way to ship a small package depends on many factors which we will discuss below. However, in general, the slowest and least specialized shipping service will be the cheapest. Most of the time the cheapest way to ship small parcels is either ground shipping or flat-rate shipping.
Let's look at what can make your shipping cost cheap or expensive.
Factors That Determine Your Small Parcel Shipping Cost
1. Type of packagingShipping companies offer various types of packaging including envelopes, padded mailers, tubes, boxes, and flat-rate boxes. Your choice of packaging can raise or lower your shipping cost. For example, shipping a document in a small box rather than an envelope will have you pay a higher shipping rate.
2. Package contentsThe contents of your small package play a big part in determining the shipping service you will use, and therefore the rates you will pay. For instance, if you have two boxes of the same weight, one containing a pair of shoes, and the other containing lab chemicals, they will be priced differently even though they weigh the same. This is because special packages like hazardous materials or fragile items require extra care and additional regulations.
3. Shipping distance
Generally, the further the destination of the package, the more you pay to ship it. Apart from the standard shipping rate, long distances can also attract surcharges like a fuel surcharge, which is an additional fee that the carrier charges to account for increased fuel costs.
4. Origin and time of shipping
Depending on your location and when you ship, you may have to pay a demand/peak surcharge on top of the standard shipping cost. For example, UPS can implement a demand surcharge that applies to express shipments sent from Mexico from December 25 until further notice.
5. Shipping carrier
Carriers reserve the right to set their own rates which is why you may find two carriers charging differently for a package of the same weight going to the same destination. Some carriers may also charge additional fees for special handling, insurance, or customs clearance. It’s advisable to compare different carriers in order to get the cheapest small package rates.
6. Additional services
Additional services such as insurance, signature confirmation, and package tracking can increase the cost of shipping your small parcel. Consider whether these services are necessary for your shipment or if you can do without them to save money.
7. Delivery time
The faster you need your package to be delivered, the more expensive it will be. For example, shipping a package overnight will cost more than shipping it with a standard delivery time frame of 2 to 5 days.
Tips To Help You Get the Cheapest Small Parcel Shipping Rates
Negotiate your shipping contract - If your business ships a high volume of shipments, you may be able to negotiate with your carrier for better rates and payment terms.
Package efficiently - Using the recommended packaging materials and optimizing the size and weight of your package can help you reduce your shipping costs. Avoid overpacking in order to avoid extra costs and surcharges.
- Use shipping software -
Shipping analysis software can help you analyze your shipping accounts and find the best cost-reduction opportunities. Shipping automation software helps you to automate the shipping process and generate shipping labels and documentation.
Compare and contrast - Before picking a carrier and shipping service, do some research and compare different companies. Don't focus on cost alone but also consider reliability, range of services, and customer service, among other factors.
- Use shipping calculators - Many carriers offer shipping calculators on their websites that can help you estimate the cost of shipping based on the package weight, dimensions, and destination. Use these calculators to find the most cost-effective shipping option, e.g., FedEx cost calculator, or UPS cost calculator.
Take advantage of discounts - Some carriers offer discounts for specific industries or organizations, such as non-profits or professional organizations. FedEx, for instance, has discount partnerships with American Express, the National Federation of Independent Business, American Institute of CPAs, among others.
Is FedEx or USPS Cheaper?
In general, USPS is often cheaper than FedEx for shipping small parcels. However, FedEx may be a better option for larger packages, as they often offer better rates for these types of shipments. Furthermore, FedEx is known to deliver packages faster than USPS.
To compare FedEx and USPS prices, let’s use an example.
Comparison: FedEx vs USPS Cost to Ship an Item to Zone 5
To find out which between FedEx and USPS is generally cheaper, we will compare the cost to ship a small package to Zone 5, which is any destination 601–1,000 miles away from where the package is shipped.
FedEx Ground Vs USPS Ground
These prices are accurate as of April 2023:
Shipping to Zone 5 using FedEx Ground – From $11.98 to $115.20.
Shipping to Zone 5 using USPS Ground – From $10.55 to $96.65.
From the above rates, we can say USPS ground shipping is generally cheaper than FedEx ground shipping.
FedEx Vs USPS Express Services (Next Day or 2nd Day Delivery)
These prices are accurate as of April 2023:
Shipping to Zone 5 using FedEx First Overnight – From $110.21 to $1,215.00.
Shipping to Zone 5 using FedEx Priority Overnight – From $79.21 to $1,168.50.
Shipping to Zone 5 using Standard Overnight – From $68.80 to $1,144.50.
Shipping to Zone 5 using FedEx 2Day A.M. – From $35.17 to $757.50.
Shipping to Zone 5 using FedEx 2Day – From $28.73 to $591.00.
Shipping to Zone 5 using Priority Mail Express – From $35.50 to $465.85.
As evidenced in the rates above, USPS Priority Mail Express is cheaper than most FedEx Express Services. FedEx 2Day A.M. is slightly more expensive and FedEx 2Day is comparable in cost to USPS Priority Mail Express.
FedEx Vs USPS Standard Shipping (1 to 3-Day Delivery)
These prices are accurate as of March 2023:
Shipping to Zone 5 using FedEx Express Saver– From$79.21 to $525.00.
Shipping to Zone 5 using USPS Priority Mail – From $10.65–$113.25.
From the rates above, we can conclude that USPS standard shipping is cheaper than FedEx standard shipping.
How ShipSigma Can Help
ShipSigma is here to help you get the cheapest rates, without changing your carrier or preferred service level. We combine our extensive shipping industry expertise with over $1 Billion in live market data to find you the best cost-saving opportunities.
Connect with us today and to see what parcel cost reduction and optimizations ShipSigma can find you.