What Is The Cheapest Shipping Option - USPS, FedEx Or UPS? (2024)

If you want to know the cheapest way to ship packages or if you run an ecommerce business and want to keep your shipping costs down, this article will teach you all of the cheap shipping methods I use for my 7 figure online store.

Because ecommerce is booming and there’s a nationwide shortage of manpower, all of the major shipping carriers have increased their prices.

For example, the United States Postal Service has been jacking up their shipping rate every 4-6 months. As a result, what used to be the most economical shipping method is now priced inline or even more expensive than some of the more reliable carriers like UPS or FedEx.

Here’s a competitive analysis of the various shipping carriers for 2022 from the perspective of a small business owner who ships thousands of packages per month.

Because there are so many variables and shipping options to choose from when deciding the cheapest way to ship a package, it’s difficult to make an apples to apples comparison without locking down some of the basic parameters. For the purposes of this article, I am going to compare shipping rates based on the following assumptions.

• A 14in X 12in X 3in package is being shipped cross country from California to a residence on the east coast. Incidentally, this is the same size as a USPS Medium Priority Mail Flat Rate Box. Only domestic shipping rates will be compared.
• Out of the box pricing for all shipping carriers which means that a lower negotiated shipping rate based on volume is not taken into account.
• Labels are being printed online which means all associated internet only USPS discounts apply.

At the end, I’ll also discuss the trade offs between shipping costs, delivery timeframes, reliability and give my take on the cheapest way to ship a package with a reasonable delivery time.

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The Cheapest Way To Ship A Package 2 Lbs Or Heavier With A 5 Day Delivery Window

FedEx Ground or UPS Ground shipping will almost always give you a cheaper shipping rate than USPS Priority Mail. Between FedEx and UPS, FedEx will be cheaper than UPS out of the box because they provide you with an instant 15% off all shipments just for creating an online account(Note: The level of discount will vary but there’s always a discount program).

Editor’s Note: Both UPS and FedEx charge for what is called “dimensional weight”. Basically what this means is that if your package is large or oversized, then the shipping rate will be drastically increased.

The dimensional weight calculation for UPS is currently L*W*H/139 and remains unchanged for 2022. So for example, if your package is 20X20X20 and weighs 10 pounds, then you would be charged for a package weighing 20*20*20/139 = 57.55 lbs instead of 10 lbs.

Using the box example of 14in X 12in X 3in, the dimensional weight for this package is 4 lbs which means you’ll get charged for 4 lbs no matter what. Otherwise, packages below 5184 cubic feet will be cheaper than USPS in this category.

The only exception to the above rule is that USPS offers 3 flat rate shipping options, small, medium and large. If you can manage to shove merchandise that is heavier than 2lbs into a small flat rate box (unlikely), you can save about 10 dollars.

However more realistically, you will need a medium flat rate box to ship something weighing 2lbs or more. Assuming that you aren’t getting hit by dimensional weight, the break even point between FedEx or UPS Ground and a Priority Mail flat rate medium box is approximately 3 lbs.

At exactly 2 lbs, FedEx/UPS is slightly cheaper. Above 2 lbs, the USPS medium flat rate box is slightly cheaper than FedEx or UPS Ground.

The break even point compared to FedEx and UPS for a large USPS Priority Mail flat rate box is about 5 lbs.

If you need a large flat rate USPS Priority Mail box, make sure it’s heavier than 5 lbs. Otherwise, FedEx or UPS Ground will always be cheaper.

Let’s sum it all up.

• If your item is heavier than 2 lbs, try to fit everything into a USPS priority mail flat rate medium box.
• If your item is heavier than 5 lbs, try to fit everything into a USPS priority mail flat rate large box.
• Otherwise, Fedex and UPS will be cheaper for heavier packages.

Note: You can receive significant shipping discounts on USPS shipping by signing up for a ShippingEasy account. ShippingEasy also works with FedEx and UPS so you can easily compare shipping prices. Plus it’s free for up to 50 shipments per month!

The Cheapest Way To Ship A Package Under 2 Pounds

USPS will always be the cheapest way to ship compared to FedEx or UPS hands down. However as the weight creeps closer to 2 pounds, USPS shipping costs achieve pricing parity with UPS and FedEx Ground.

For packages between 1-2 lbs in weight, on paper FedEx and UPS seem to be slightly cheaper than USPS but it all depends on the dimensional weight calculations.

If you can somehow avoid getting hit by the dimensional weight penalty for FedEx/UPS, then FedEx/UPS will cost slightly less in the 1-2 lb category. But otherwise, USPS will be cheaper across the board up to 2 lbs.

USPS shipping costs are the lowest when your package weighs less than 16 oz and can be mailed via USPS First Class mail. If you don’t care about reliability, USPS First Class Mail is by far the cheapest shipping option for light items.

The Cheapest Way To Ship A Package For Overnight Delivery

USPS Express is once again the cheapest way to ship and overnight delivery is guaranteed…except when it isn’t:) The main problem with USPS Express mail is that sometimes the delivery window is 2 days and you won’t know unless you check online.

USPS also doesn’t offer a morning delivery time so if your client needs a package at the beginning of the business day, they are out of luck.

I’ve also discovered that USPS Express Mail is less reliable for overnight delivery than FedEx or UPS Next Day Service. While they “guarantee” their delivery times, what this really means is that they’ll refund your money if the package is delivered late.

This has happened to me several times already and a shipping refund doesn’t make up for having an angry customer.

Overall, despite being the cheapest way to ship packages overnight, you should avoid USPS Express Mail. After all, if you are paying a high shipping cost for overnight delivery, delivery speed is more important than cheap shipping.

The Cheapest Way To Ship A Package With A 2-3 Day Delivery Window

It is unclear which delivery service is better if you need 2-3 day delivery because USPS doesn’t guarantee their delivery speed for USPS Priority Mail or USPS First Class Mail.

So while USPS Priority Mail cites a 2-3 day typical delivery time, it could be slower or faster depending on various unknown factors.

In my experience, I’ve had some USPS Priority Mail packages delivered overnight and I’ve seen delivery times as long as 1.5 weeks. While the latter tends to be an anomaly, overall the delivery speed is somewhat random.

Other shipping carriers like FedEx and UPS however, always guarantee their delivery times but are significantly more expensive. In some cases, FedEx and UPS will cost you will over 2X the shipping cost of USPS.

My Take On The 3 Shipping Carriers

While USPS is the cheapest shipping carrier in most cases, their reliability is easily the worst among the 3 shipping carriers. Our online store primarily uses USPS because most of our orders are under 2 pounds. But we routinely get packages delayed or lost in the mail.

This past few months alone, we have had 3 customers email us wondering where the hell their order was. Given our shipping volume, 3 customers is probably statistically insignificant but having to deal with any unhappy customers is a pain in the neck.

While we don’t check on the status of all of our orders, I can tell you from experience that the quoted delivery times for both USPS First Class Mail and USPS Priority Mail are completely hit or miss.

If you are sending a package to some podunk, middle of no where town, it’s more likely to get delayed. Meanwhile, it’s rare to ever have a FedEx or UPS package delayed or lost.

In the end, it comes down to reliability vs shipping cost. For light items, USPS is the cheapest way to ship if that is your goal. For heavier items greater than 2lbs in which delivery time is not a factor, FedEx or UPS Ground is the cheapest way to ship.

It’s the 2-3 day delivery window where you have to weigh the trade offs. Do you want the cheapest shipping cost? Do you value reliability? Is actual transit time a concern? If you need a package to be delivered on time, use FedEx or UPS. If you are looking for the cheapest way to ship, use USPS.

Our online store offers a mix of both. By default, we use USPS shipping to keep the shipping costs low (our items are typically under 2 lbs). However, if a customer has a tight deadline, we use FedEx or UPS.

Speaking from experience, the savings in shipping costs from using USPS is not worth the hassle of pissing off a customer if there’s a deadline.

But it’s a tough decision to make because customers are typically turned off by high shipping costs. Of course, the other option is to raise your prices or lose money on shipping. You have to make the call.

Cheapest Way To Ship A Package Via USPS

If you decide to use USPS as your primary shipping carrier, the cheapest way to ship is to use shipping software like ShippingEasy.com.

ShippingEasy.com lets you print “USPS First Class Mail” postage from your printer (the USPS website does not allow this) and offers significant shipping discounts on practically every service that the US Postal Service offers.

In fact, using shipping software is the ONLY way to get USPS shipping discounts online. Overall, you’ll experience the most savings if you ship a lot of USPS Priority Mail or USPS Express Mail orders. The best part is that ShippingEasy is completely free for up to 50 shipments per month.

In addition, shipping with FedEx, UPS and DHL is all nicely integrated into ShippingEasy.com so you only need a single shipping service to ship across all carriers.

Check them out as we use them as our primary shipping software.

Also, don’t forget to request free shipping labels and boxes from USPS via the US Postal Service website.

Cheapest Way To Ship A Package Via FedEx Or UPS

The only way to get shipping discounts with FedEx or UPS is to negotiate. Of course, you’ll need to demonstrate that you can and will ship in volume but that shouldn’t be too hard if you run an online store.

Ideally, you should pick one carrier and focus on them. In my experience, UPS seems to be a bit hungrier than FedEx for your business so they may be more willing to negotiate. But your mileage may vary. Don’t be too shy to pick up a phone and speak to a sales rep.

If you ship enough volume to negotiate your shipping cost with FedEx and UPS, I highly recommend that you look at FedEx One Rate. As long as you use a special FedEx shipping box, you can stuff as many items as you can in the box for 1 flat shipping rate which is extremely inexpensive.

For our ecommerce business, we almost exclusively use FedEx One Rate to ship packages over 1 pound instead of USPS Priority Mail because we’ve negotiated such a low shipping rate with FedEx. Your mileage will vary depending on volume but FedEx One Rate is easily the cheapest way to ship packages over 16oz with a 2-3 day delivery speed for domestic shipping.

UPS also has a similar program called UPS Simple Rate that is essentially the same as FedEx. At least once per year, you should reach out to both your FedEx and UPS representative and ask for a lower shipping rate.

We often switch carriers every other year to get the best price.

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About Steve Chou