|UPS vs. USPS - Choosing The Best|
I'm embarrassed to ask about this since I've actually been in the mail order business for about 20 years, but I'm just lost as to when UPS would be a better choice than UPS. We've always shipped by US Mail because it was simple to deal with and our town is so small that I'm on a first name basis with the branch manager and most of the clerks. By the same token, another business we operate means we receive UPS deliveries several times a week. In terms of quality of service, I don't see enough difference to tilt the balance. I'm in a business that sells items that range from teensy items that weigh less than an ounce to bulky items that can weigh 20 or 30 pounds. My impression has always been that UPS held a price advantage in shipping larger or heavier parcels using their ground service, but I'm not seeing that in practice. I'm currently in the process of shipping our entire inventory halfway across the country due to a pending move and as a test, I shipped a couple of large and heavy packages by dropping them off at the local UPS retail location and it cost much more than I expected. I just checked the rates for a couple of large packages I'm shipping today, and according to the respective websites, UPS Ground will be about 20% more expensive than UPS Priority Mail w/Registered Mail service. Am I paying that much more for UPS because I don't have an account with them? I'd be interested in any advice or comments. Thanks.
You may be able to negotiate more favorable shipping rates with UPS - depending on volume. UPS does charge a premium for oversized or overweight articles. If memory serves me correct, that is anything larger than 18x18x18, or over 25 lbs.
On the other hand, USPS priority mail is usually a pretty good deal, especially for stuff that fits into their standardized shipping containers.
You have pretty much answered your own question.
If you have an account for pick ups from UPS the rates are a bit lower.
If the shipment is 1 LB or less, USPS is cheaper and faster as long as the package doesn't have to be insured.
Over a pound and in need of insurance UPS is a better price or the same price when you add in the packaging you have to buy.
I'm not sure what rates you are looking at, but a quick comparison of a package going from zip code 90210 (CA) to a residential address in 10010 (NY) shows the following rack rates (no discounts and assumes not over sized, and no extra services like insurance or registered):
10 pounds. USPS = $25.05, UPS=$15.91 (about 37% savings)
20 pounds. USPS = $34.40, UPS=$26.42 (about 23% savings)
Generally speaking we find that if it's more than 2 pounds and does not fit in a flat rate box, UPS is cheaper.
Play around with some rates:
Your small town where you know the postmaster is not representative of the postal service's lack of quality nationally.
In my urban neighborhood, the postal service simply doesn't try to deliver most parcels addressed to what they believe is a "residential" location (such as my business). The postal person on foot, sometime around 5:00 PM, just puts a slip of paper with a number on it through my mail slot. This gives me the ability to take the slip of paper to the post office during its skimpy business hours the following day and stand in line for an hour to deal with the hopeless losers who usually can't find the parcel anyway. Their explanation for this policy is that people aren't home during the day, so there's no reason to load down the postbags with parcels. Every so often (I think when they believe my address is a business, perhaps from the address) they vary this with a truck delivery, made by some faceless person who puts the parcel on the front steps and leaves without ringng the bell or making a sound. This is very convenient for the folks who follow along behind, collecting any interesting-looking parcels.
Contrast this with my UPS driver, named "K.C." He knows me, he knows my schedule, he knows when he can always find me in. He has NEVER left a parcel on the step, whether a signature is "required" or not, he always hands it to me. It's never too much trouble for him to come back if I've stepped out. I get notifications of parcels arriving, so I know what to expect. (The previous route driver, Steve, once when he knew I was expecting a vital delivery which was late, delivered it to me in a Thai restaurant around the corner, having noticed that I often eat dinner there on Wednesday nights.) UPS route drivers produce extremely high customer satisfaction. Most merchants now send shipping email with the UPS tracking number, and Gmail is obliging enough to pull these out and offer a link to the tracking information.
One of my friends at a leading high-volume internet commerce site tells me that their policy is basically NEVER to use the postal service to ship to "any state touching on water" (the three coasts and the great lakes). The customer service cost of using the postal service to most of the country is just too high. The difference in costs of dealing with unhappy customers is much larger than the difference in shipping rates.
The rates at your "UPS retail location" are higher than the actual UPS rates. You'd be better off printing your own labels. Here's a simple "shipping funnel", we use FedEx but it's the same principle with UPS.
1) Commercial Address (any weight) - UPS (no residential surcharge)
2) 2 lbs and under (Residential) - USPS
3) Over 2 lbs UPS
a) unless it fits in a flat rate box
b) is in a rural area (delivery area surcharge). The USPS may cost more but they won't lose package in "the sticks".
As mentioned, if you ship a lot of volume you can negotiate rates with UPS, then it may become better to simply use them for all packages.
We use USPS when Saturday send/receive is needed. USPS is vastly cheaper to Alaska and Pacific. Otherwise we use UPS. We don't ship outside of the US, btw.
for packages that are equal to or less than 84" length + girth, you will pay the actual weight via ups. over 84" they now have a "dimensional weight" calculation that replaces the old oversize 1/2/3.
you need to contact a ups sales rep. as a newer, smaller business, be prepared for this to be a pain. they are overworked, understaffed, and suffer a high turnover rate. their drivers are the best, but their back office systems are a horror.
once you do have contact with a ups sales rep, they can analyze your business, and will most certainly give you a rate schedule that will be very close to, equal, or beat USPS.
comparing the two, there is no question that ups is the superior choice when it comes to providing customer service for your end users. USPS cannot provide the same tracking information, and nothing USPS offers can come close to matching the current version of the worldship software.
the $15/week daily pickup service fee is worth it with ups if you are doing any volume at all. our ups rep sent out a tech guy to devise an interface with our ecommerce platform to auto-export out ecommerce orders into worldship, which then prints the labels (they supplied us a thermal label printer and free labels), notifies the end customers via quantum view notify (with the tracking #'s), and we can re-import the data into our ecommerce system that marks all orders as shipped and records for the tracking # for customer service purposes.
as much a pain as ups can be, it's by far the best choice available when compared to USPS.
Best of Luck,
For anyone looking at rate discounts, it is well worth it to talk to FedEx, UPS and DHL all at the same time. Your discounts will be bigger if they know they have to compete. Even go so far as to get an account with one of them and then switch to another for "special" rates.
I currently use DHL, UPS and USPS. DHL gets most of our 2day to major cities in the US, UPS gets our next day, 2day to rural areas and ground packages (heavy boxes where it is cheaper to go ground than priority) plus anything valuable (much easier to get credit through UPS than either DHL or USPS) and USPS gets all of our lightweight packages and things that qualify as media mail. All three get international - USPS is slightly cheaper, but we won't use them going anywhere other than parts of western europe, Canada, Australia and New Zealand because of reliability. APO and FPO addresses definitely get USPS.
As a sidenote - we also are in a small town (next door to post office) and used to carry our packages over but as our volume grew, they eventually refused to take our business at the counter (not a problem with the local postmaster, but the regional office wouldn't pay for the staffing necessary to handle our packages - something about a town our size - only 1200 people - shouldn't be doing that many packages). We ended up getting certified for manifesting our own packages. It is annoying to deal with the USPS certifications, but we have a post office truck pull up to the truck dock each night to do a pick up and no longer have to wait in line at the post office.
Weight the cost of convenience as well. Not having to go to the post office or call for a pick up has to be worth something. If you have UPS show up everyday for pickup, there is a 9.00/week charge. But the payoff is that the rates are far less than what you pay when going to a Mailboxes Etc. Depending on the amount of volume you do, you can actually negotiate the UPS pricing structure to save even more. We do quite a bit and we save an additional 5-20% on top of the discounted rate.
ridgway, the 84" metric is no longer used. Now, UPS looks at the package volume, regardless of length + girth. If the package is greater than 5,184 cu in, divide it by 194 to get your dimensional weight.
UPS will charge the greater of the physical weight or dimensional weight.
They also hit you for an additional Handling Charge if the longest side exceeds 60", or the second-longest side exceeds 30".
USPS is even more restrictive. Their dimensional weight begins at 1,728 cu in. (a 12x12x12 cube), for delivery in zones 5-8.