the e-commerce seller's guide to 2020 shipping …...annual carrier price increases have become...

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The E-CommerceSeller's Guide to2020 Shipping Rate Changes

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0 3 I N T R O D U C T I O N

Summary of Upcoming Changes

What the Changes Mean for You

Table of Contents

0 6 W H I C H C A R R I E R S H O U L D I U S E ?

Overnight delivery

2- to 3-Day Delivery

2- to 3-Day+ Delivery for Packages less than 1 lb.

Greater than 3-Day Delivery

Understanding Dimensional Pricing

1 6 C A S E S T U D I E S

Cosmetics Retailers

Apparel Retailers

Jewelry Retailers

Electronics Retailers

Automotive Parts Retailers

2 2 H O W S H I P P I N G E A S Y C A N H E L P

2 3 A P P E N D I X E S

Rate Comparison Table

Assumptions

3

IntroductionEvery year, we can rely on the holiday shopping season to bring two things: a massive

upswing in sales… and the announcement of upcoming shipping rate increases from

all the major carriers. This year is no exception. Our guide will help you optimize your

shipping operations to reduce the impact of these increases by helping you:

• Understand the coming changes

• Determine the best carrier based on your transit time requirements, package

weight, dimensions, and destination zone

• Put the changes into context using real-world case studies

I N T R O D U C T I O N

1. Does not apply to USPS.

Rates are Going Up

Residential Surcharge: +3.3% to 5.7%1

Rate Increase: +2.5% to 7.1%

2020$10.25 to $10.96

$12

$6

$9

$3 2019

$10.00

2020$10.25 to $10.96

Summary of Upcoming Changes1

Rate Changes

• Overall average of 3.5% across all shipping services2

• Priority Mail Express®: 3.5%

• Priority Mail®: 4.1%

• Parcel Select: 3.91%

• First-Class Package Service®: 2.4%2

Average of 4.9% across ground, air, and international services

Average of 4.9% across all domestic standard shipping rates

Effective Date

January 26, 2020 December 29, 2019 January 6, 2020

Surcharges & Other Charges

USPS® doesn’t charge surcharges • $0.15 (3.3%) increase in residential air services and $0.15 (3.8%) increase in residential ground services surcharge

• Increased Delivery and Extended Delivery Area Surcharges and new zip code tables defining the areas

• New accessorial charges for billing account changes ($17) and prohibited items ($150)

• $1.00 (6.25%) increase in address correction charge

• $5 increase in Large Package Surcharge for U.S. Domestic residential packages

• The weight threshold for applying an Additional Handling surcharge will be lowered from 70 pounds to 50 pounds actual weight for UPS Ground and UPS Air services

• $0.25 increase in Ground and Express residential surcharges

• $0.20 increase in Home Delivery residential surcharge

• $1.00 to $4.00 increase in domestic Additional Handling Surcharges

• $10 increase in Oversize Charge for FedEx U.S. Express Ground® package exceeding 96 inches in length or 130 inches in length plus girth

• $30 increase in Oversize Charge for FedEx Home Delivery

Reference bit.ly/USPS-pe Rates: bit.ly/upsrates

Non-fuel surcharges: bit.ly/UPS-surch

Fuel surcharges: bit.ly/UPSfuelsurcharges

Rates: bit.ly/fedexrate

Non-fuel surcharges: bit.ly/FedEx-surch

Fuel surcharges: bit.ly/fedexfuel

I N T R O D U C T I O N : Summary of Upcoming Changes 4

1. Note: This table is intended to convey key changes only; for comprehensive information, please refer to each carrier’s website.

2. Based on ShippingEasy analysis of carrier data. All rate increases are based on USPS Commercial Rates and do not reflect Retail Rates.

http://bit.ly/USPS-pe

http://bit.ly/upsrates

http://bit.ly/UPS-surch

http://bit.ly/UPSfuelsurcharges

http://bit.ly/fedexrate

http://bit.ly/FedEx-surch

http://bit.ly/fedexfuel

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What the Changes Mean for You: Key Considerations for E-Commerce

Annual carrier price increases have become a constant for e-commerce sellers.

However, there’s no need to panic: this guide is intended to help you mitigate the

impact of these changes on your business. First, consider these questions:

Are you getting the best rates?

This guide will help you compare USPS Commercial Rates — which ShippingEasy

customers gain access to — to published standard UPS and FedEx Rates — which can

be negotiated.

What kind of delivery guarantees do you need?

While all three carriers offer overnight service, only FedEx and UPS have guaranteed

second-day and third-day services. If you need to guarantee two-day or three-day

delivery, using FedEx or UPS will be less risky than using USPS.

Are you (overly) concerned with brand perception?

Some e-commerce sellers use UPS or FedEx because they believe these carriers

offer more brand cachet. These retailers might also consider the brand value USPS

Priority Mail® (PM) can offer by getting shipments into customers’ hands more

quickly (on average) and for a lower cost than FedEx or UPS ground services.

Are you using the right size packaging?

If you use USPS, switching from custom packaging to a flat-rate or regional-rate

package can often save you money on the shipping cost — not to mention the savings

on getting free boxes or envelopes delivered to your door!

Do you have special considerations?

While they are not covered in this guide, a number of special circumstances may

make one carrier a clear winner over the others. If, for example, you require

guaranteed early morning (or same day) delivery, ship hazardous materials, ship to

PO boxes, or ship to APO/FPO/DPO (Army Post Office/Fleet Post Office/Diplomatic

Post Office) addresses, we recommend you do additional research to determine the

best carrier.

Contact ShippingEasy at [email protected] to see how we can help you get the best shipping rates!

I N T R O D U C T I O N : What the Changes Mean for You

6

Which carrier should I use?Your choice of carrier is based on a complex mix of

criteria including:

• Desired delivery timeframe

• Package weight

• Package dimensions

• Delivery distance

• Discounts you may have negotiated (or may be

able to negotiate) with a carrier

The good news is we’ve done the analysis for you and

have narrowed down your choices for each standard

delivery timeframe. In this section of the guide, we’ll

examine each common delivery timeframe and provide

a summary table showing the lowest-cost carrier for

a given weight/destination zone combination.1 To use

these tables, simply find the row in the table with your

shipment weight and the column with your destination

zone; the code at their intersection will tell you which

carrier typically offers the lowest-cost service for that

scenario (based on USPS Commercial Rates pricing and

standard FedEx and UPS pricing, including residential

and fuel surcharges, according to our calculations). If

the cell is colored, check the accompanying key to find

out which USPS flat-rate or regional-rate service might

be an even better deal.

Zone Comparisons

While published USPS and FedEx

zone definitions are based on

relative distance a package travels

and are for our purposes identical,

UPS does not explicitly define zones

based on distance traveled. We have

therefore — in order to construct

the comparison tables — made some

assumptions about the way UPS

zones map to USPS and FedEx zones.

We use the same 1-digit zone

numbers used by FedEx and USPS,

and only include zones 1-8 which

represent shipments within the

contiguous 48 states. Alaska and

Hawaii pricing is determined

differently by each carrier and is

therefore harder to compare, but

in general USPS Commercial Rates

provide the lowest price for these

states at every service level when

compared to standard UPS and

FedEx rates.

W H I C H C A R R I E R S H O U L D I U S E ?

1. This guide is intended for use as a general guide, not an official pricing source for any carrier. Our analysis is based on several assumptions that may change over time and may not be valid for your business. Be sure to double check the actual rates available to you before making any shipping-related decisions.

7

Overnight Delivery

USPS (assuming Commercial Rates pricing) now dominates the Overnight Delivery

segment with its Priority Mail Express™ (PME) service, at least from a cost-

effectiveness perspective when compared to FedEx and UPS standard rates plus

surcharges. As shown in the table, for most weights/zones in which they compete,

USPS is the lowest-cost option. As an added benefit over UPS, USPS also offers

free Saturday delivery while the others charge extra (FedEx 1-day, 2-day, and 3-day

services also include Saturday delivery).

When it comes to on-time deliveries, the carriers' on-time deliveries changed

significantly from 2018; looking at performance data from the first three weeks of

the 2019 holiday season, we find on-time performance of 68.3% for FedEx, 80% for

UPS, and 86% for USPS.1

Areas where USPS can’t compete with its rivals in this segment include packages

that weigh more than 70 lb. and packages requiring guaranteed morning delivery.

If you are considering USPS, it is important to note that Priority Mail Express Flat

Rate™ envelopes2 are generally the best option for any shipment that will fit into

them (and weighs less than 70 lb.). Standard ($22.75) and padded ($23.25) flat-rate

envelopes measure 12.5" x 9.5", while legal ($22.95) flat-rate envelopes measure

15" x 9.5". These rates fall below the lowest 2020 undiscounted overnight prices

available from FedEx or UPS.

Only UPS and FedEx offer guaranteed morning delivery services.

W H I C H C A R R I E R S H O U L D I U S E : Overnight Delivery

Weight (Lb.) L, 1 & 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8

<=24 USPS USPS USPS USPS USPS USPS USPS

>24 to 70 USPS FedEx USPS USPS USPS USPS USPS

>70 to 1504 FedEx FedEx FedEx FedEx FedEx FedEx FedEx

Overnight Delivery: Typically Least Expensive Carrier3

Services:

• USPS: USPS Priority Mail

Express®

• FedEx: FedEx Standard

Overnight®

• UPS: UPS Next Day Air

Saver®5

For shaded cells, check these

options:

USPS Priority Mail Express

Flat Rate® Envelope

1. bit.ly/on-time-2019

2. bit.ly/pmexpress

3. When comparing USPS Commercial Rates pricing to FedEx and UPS standard pricing plus surcharges, according to our calculations. Always verify pricing for specific shipping parameters with each carrier.

4. UPS and FedEx offer freight services for packages weighing more than 150 lbs; see their respective web pages for more information. For dimensional weights of >150 lbs, see each carrier's respective webpage for more info.

5. Included in analysis but did not provide better rates for any scenario analyzed.

http://bit.ly/on-time-2019

http://bit.ly/pmexpress

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2-Day to 3-Day Delivery

W H I C H C A R R I E R S H O U L D I U S E : 2-Day to 3-Day Delivery

USPS offers no guaranteed 2-day service. However,

the USPS Priority Mail® "1-3 Business Day" service

will get your package to most destinations in two days,

and unlike the other carriers, it will get it to some

destinations within one day. Head online to usps.com/

priority-mail/map to calculate estimated delivery

times. If you need 100% guaranteed 2-day delivery, go

with FedEx or UPS.

If you do decide to go with USPS Priority Mail®,

consider Regional Rate® boxes.1 These boxes can

provide huge savings in some weight ranges and zones

as highlighted in the table, as long as your contents will

fit into them and meet the weight maximums. Regional

Rate® box parameters are:

• A1: 10" x 7" x 4-3/4" top load, maximum 15 lb.

• A2: 12-13/16" x 10-15/16" x 2-3/8" side load,

maximum 15 lb.

• B1: 12" x 10-1/4" x 5" top load, maximum 20 lb.

• B2: 15-7/8" x 14-3/8" x 2-7/8" side load, maximum

20 lb.

USPS also offers Priority Mail Flat Rate® envelopes and

boxes that ship any contents up to 70 lb. to any zone for

one rate.2 See the color code key to understand where

this might be the best deal.

While USPS has long been the best choice for 2-day to

3-day deliveries of items less than or equal to 70 lb., for

the >70-150 lb. weight range the difference between

2020 FedEx and UPS pricing can fluctuate significantly

based on fuel surcharges which can vary every week.

Since our price comparison is a snapshot taken at

the time of this writing, on any given week during

2020 UPS rates may beat FedEx for some weight/

zone combinations due to changing fuel surcharge

differences.

Services:

• USPS: USPS Priority Mail®

• FedEx: FedEx 2Day®

• UPS: UPS 2nd Day Air® 5


options:

USPS Priority Mail Flat

Rate® Envelope or Box

USPS Priority Mail Regional

Rate® or Flat Rate Box


Rate® Box

2-Day to 3-Day Delivery: Typically Least Expensive Carrier3



>2 to 20 USPS FedEx USPS USPS USPS USPS USPS

>20 to 70 USPS USPS USPS USPS USPS USPS USPS


1. bit.ly/pm-regional

2. bit.ly/shippriority




http://usps.com/priority-mail/map

http://usps.com/priority-mail/map

http://bit.ly/pm-regional

http://bit.ly/shippriority

http://bit.ly/shippriority

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2-Day to 3-Day+ Delivery for Packages Less Than 1 lb.

If delivery time is not a critical factor and your package weighs less than 1 lb., USPS

First-Class Package Service® (FCPS) is impossible to beat, even with the 2020

price increases. It’s important to note that while there are no delivery timeframe

guarantees with First-Class™, the USPS advertises it as a "1 - 3 Business Day"

service. For items that qualify, First-Class™ is on average as fast as the much more

expensive 2-day services. You can see delivery date estimates for specific origins and

destinations here: bit.ly/USPS-maps.

Weight L, 1 & 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8

USPS First-Class Package

<=4 oz. $2.74 $2.76 $2.78 $2.84 $2.93 $3.05 $3.18

>4 to 8 oz. $3.21 $3.23 $3.25 $3.31 $3.39 $3.52 $3.67

>8 to 12 oz. $3.93 $3.97 $4.00 $4.08 $4.18 $4.32 $4.46

>12 to 15.999 oz. $5.04 $5.08 $5.12 $5.27 $5.40 $5.54 $5.70

USPS Priority Mail Flat Rate® Envelope <=70 lb. $7.15 $7.15 $7.15 $7.15 $7.15 $7.15 $7.15

USPS Priority Mail Legal

Flat Rate® Envelope<=70 lb. $7.45 $7.45 $7.45 $7.45 $7.45 $7.45 $7.45

USPS Priority Mail Flat Rate®

padded Flat Rate Envelope<=70 lb. $7.75 $7.75 $7.75 $7.75 $7.75 $7.75 $7.75


Rate® Small Box<=70 lb. $7.65 $7.65 $7.65 $7.65 $7.65 $7.65 $7.65

USPS Priority Mail® <=16 oz. $7.02 $7.35 $7.56 $7.80 $7.98 $8.15 $8.42

FedEx 2Day® with surcharges <=16 oz. $25.42 $26.29 $27.20 $30.40 $35.93 $37.99 $38.67

UPS 2nd Day Air® with surcharges 8 oz. (Letter) $25.56 $26.44 $27.36 $30.45 $35.98 $38.04 $38.72

UPS 2nd Day Air® with surcharges <=16 oz. $25.68 $26.56 $27.48 $30.71 $36.29 $38.37 $39.06

Fedex Express Saver® (3-day) with

surcharges <=16 oz. $23.01 $23.37 $23.74 $25.96 $28.96 $29.95 $32.71

UPS 3-day Select® with surcharges <=16 oz. $17.52 $19.50 $20.52 $23.42 $27.80 $29.83 $31.92

FedEx® Ground with surcharges <=16 oz. $13.09 $13.46 $14.28 $14.72 $15.09 $15.22 $15.40

UPS® Ground with surcharges <=16 oz. $13.22 $13.67 $14.43 $14.86 $15.23 $15.36 $15.54

2-Day to 3-Day+ Delivery: Up-to-1 lb. Delivery Options1

W H I C H C A R R I E R S H O U L D I U S E : 2-Day to 3-Day Delivery


http://bit.ly/USPS-maps

1 0

Greater than 3-Day Delivery

This delivery timeframe is actually the most complicated due to the number of

different services that can be considered. We have attempted to simplify it by

including the services that are, in our view, most relevant:

• USPS Priority Mail® with Commercial Rates pricing is the least expensive option

for most packages under 9 lb. and has the huge bonus of almost certainly getting

your package to its destination faster than any other option listed here.

• FedEx Ground® offers the lowest-cost option for most combinations between 9

and 150 lb.

• USPS Priority Mail Flat Rate® (for packages up to 70 lb.) or Regional Rate® (up to

20 lb.) services can also provide a compelling value proposition for orders that

fit into their USPS-provided boxes; consider them for weight/zone combinations

as noted in the table key.

W H I C H C A R R I E R S H O U L D I U S E : Greater than 3-Day Delivery

Keep in mind that FedEx vs UPS comparisons often hinge on fuel surcharges which can vary from week to week.



>2 to 4 USPS USPS USPS USPS USPS USPS USPS

>4 to 5 USPS USPS USPS USPS USPS USPS FedEx

>5 to 6 USPS USPS USPS USPS USPS FedEx FedEx

>6 to 9 USPS USPS USPS USPS FedEx FedEx FedEx

>9 to 15 USPS USPS USPS FedEx FedEx FedEx FedEx

>15 to 20 USPS USPS FedEx FedEx FedEx FedEx FedEx

>20 to 24 USPS USPS FedEx FedEx FedEx FedEx FedEx

>24 to 26 USPS FedEx FedEx FedEx FedEx FedEx FedEx



Greater than 3-Day Delivery: Typically Least Expensive Carrier1

Services:

• USPS: USPS Priority Mail®

• FedEx: FedEx Ground®

• UPS: UPS Ground®3


options:


Rate® Envelope or Box

USPS Priority Mail Regional

Rate® or Flat Rate Box


Rate® Box




1 1


Dimensional weight is the "weight" used to calculate the shipping cost of large

lightweight packages. At some point, the cost of shipping such packages becomes

driven more by the amount of space they take up than by their weight; carriers

therefore use dimensional weight to more closely align the prices they charge for

large lightweight packages to the costs they incur for shipping such packages. USPS,

FedEx, and UPS have all used some form of dimensional pricing for packages that

meet certain criteria for several years. In this section we’ll help you understand

dimensional pricing and offer some examples of how it works.

The formulas for calculating dimensional weight are becoming increasingly uniform

across the major carriers, but some uniqueness remains. It’s worth pointing out that

— despite extending dimensional pricing to all of its major services in 2019 — USPS

is still by far the most flexible of the major carriers when it comes to dimensional

weight calculations. This is because of USPS's minimum cubic dimension threshold

and its higher-dimensional weight divisor in comparison to FedEx and UPS. The

table on the next page explains how to calculate dimensional weight and apply each

carrier's formula to determine their shipping price. ShippingEasy also offers a free,

easy-to-use dimensional weight calculator at bit.ly/SEDimWtCalc.

Think about the available space in a truck or on an airplane. If your package is taking up more space than a heavier package of a smaller size, you may be required to pay for the space rather than the weight — resulting in a steeper rate.

Therefore even though the 2 lb. box weighs less than the 10 lb. box, its greater dimensional weight means it will have a higher rate.

1 2

For packages shipping by these services:

Priority Mail, Priority Mail Express, and Parcel Select Non-lightweight packages larger than 1 cubic foot in volume and shipping to all zones

All services/all zones/all package sizes

All services/all zones/all package sizes

Determine volume in cubic inches:

Length x Width x Height Length x Width x Height Length x Width x Height

Calculate dimensional weight in lb.:

If volume exceeds 1,728 cubic inches, divide by 166 to get dimensional weight in lb.; if volume is 1,728 or less, use actual weight

Divide by 139 to compute dimensional weight in lbs. (no minimum cubic inch threshold — for all packages shipping price is based on whichever is greater, actual or dimensional weight)

Divide by 139 to compute dimensional weight in lbs. (no minimum cubic inch threshold — for all packages shipping price is based on whichever is greater, actual or dimensional weight)

To determine shipping cost:

Look up the greater of the actual weight or the calculated dimensional weight in the appropriate rate table



For more information: bit.ly/2019DIMwt bit.ly/upsdimweight bit.ly/fedexdimcalc

W H I C H C A R R I E R S H O U L D I U S E : Understanding Dimensional Pricing


http://bit.ly/2019DIMwt

http://bit.ly/upsdimweight

http://bit.ly/fedexdimcalc

1 3W H I C H C A R R I E R S H O U L D I U S E : Understanding Dimensional Pricing

Required Box Dimensions1 22" (Height) x 14" (Width) x 6" (Depth)

(Backpack can only be collapsed in depth dimension due to internal frame)

Box Volume 22 x 14 x 6 = 1848 cubic in.

Actual Weight 2 lb., 12 oz.

Destination Zone 5

USPS PM UPS2 FedEx3

Actual Weight Shipping Cost for 2-3 Day Service to Zone 53

$9.54 $24.18 $28.67

Dimensional Weight Calculations

1848 > 1728 so Dim Wt applies: 1848/166 = 11.1 lb.

1848/139 = 13.3 lb. 1848/139 = 13.3 lb.

Dimensional Weight Based Shipping Costs for 2-3 Day Service to Zone 53

$24.18 $52.17 $59.92

Dimensional Weight Cost Differential

+$14.64 +$27.99 +$31.25

Example 1: Backpack

Dimensions: 20" (Height) x 12'' (Width) x 5-10'' (Depth)

1. Box dimensions include extra space for packing materials

2. UPS 3 Day Select® standard rates plus residential and fuel surcharges quoted

3. FedEx Express Saver® standard rates plus residential and fuel surcharges quoted


Example 2: Hat

Dimensions: 5.5" (Height) x 10'' (Width) x 14'' (Depth)



Actual Weight 1 lb.

Destination Zone 3

USPS PM UPS2 FedEx3


$7.35 $19.50 $23.37


1152 < 1728 so Dim Wt does not apply

1152/139 = 8.3 lb. 1152/139 = 8.3 lb.


NA $30.16 $32.76


$0 +$10.66 +$9.39


2. UPS 3-day Select® standard rates plus residential and fuel surcharges quoted



Example 3: Record Player

Dimensions: 7" (Height) x 19" (Width) x 17" (Depth)



Actual Weight 8.5 lb.

Destination Zone 7

USPS PM UPS2 FedEx3


$28.84 $60.80 $64.29


3591/166 = 21.6 lb. 3591/139 = 25.8 lb. 3591/139 = 25.8 lb.


$55.88 $121.42 $133.57


+$27.04 +$60.62 +$69.28


2. UPS 3-day Select® standard rates plus residential and fuel surcharges quoted


1 6

Case StudiesNow let’s examine some real-world shipping scenarios derived from ShippingEasy

customer data (with all identifying characteristics removed). We’ll examine actual

shipping methods used in 2019 and learn which carrier and service combinations

make the most sense given the rate changes coming in 2020. Note that due to

occasionally incomplete customer data,1 we have indicated where we made

assumptions and/or where more than one potential option could be cost-effective.

The following overarching assumptions apply:

• These cases are drawn from primarily small and medium size e-commerce

businesses, shipping between 1,000 and 20,000 shipments per month

• We used available 2020 pricing data from each carrier:

– USPS Commercial Rates pricing

– FedEx Standard List Rates, including fuel and residential surcharges

– UPS Daily Rates, including fuel and residential surcharges

• Actual FedEx and UPS rates available to you may be significantly more attractive

based on:

– Discounts you may have negotiated or may be able to negotiate with these

carriers

– Variations in fuel surcharges which for both FedEx and UPS can change on a

weekly basis

• These case studies are provided for illustrative purposes only; you should

always consult with each carrier to get the official rate they can offer you for any

specific shipping parameters

C A S E S T U D I E S

1. E.g., no weight recorded when a seller used USPS Flat Rate or Regional Rate services.

1 7

Case Study: Cosmetic Retailers

Our first case is derived from a pair of small online cosmetics retailers that ship

high volumes of primarily small packages. It makes sense that these sellers are

already exclusively using USPS, since for the small packages typically shipped in this

category, USPS is impossible to beat.

One potential area for improvement is to find opportunities to reduce packaging on

16-17 oz. packages to allow them to qualify for FCPS.

C A S E S T U D I E S : Cosmetic Retailers

Package Contents Eye Liner Eye Liner Eye Liner Holiday Set Eye Shadow

Package Shipping Parameters

Dimensions Custom Custom Custom Custom Custom

Weight 1 oz. 8 oz. 64 oz. 14 oz. 16 oz.

Zone 7 5 1 7 7

2019 Shipping Actuals

Carrier & Service USPS First Class USPS First ClassUSPS Priority

MailUSPS First Class

USPS Priority Mail

Shipping Cost $2.96 $3.28 $7.71 $5.38 $7.99

Delivery Time 3-4 Days 3-4 Days 2-3 Days 2-3 Days 2-3 Days

2020 Forecast

2020 Best Carrier & Service USPS First Class USPS First ClassUSPS Priority

MailUSPS First Class

USPS Priority Mail1

2020 Best Pricing $3.05 $3.31 $7.94 $5.54 $8.15

2019-2020 Estimated Price Change $0.09 $0.03 $0.23 $0.16 $0.16

Carriers: Delivery Options:

Standard

2-3 Day

2-Day Guaranteed

Overnight Guaranteed

Delivery Costs:

Weight or value-based

Flat rate

Threshold-based free

Free shipping on every order

1. It's extremely likely this package weighed no more than 15.99 ounces, in which case the seller could use FCPS for this shipment at a 2020 cost of $5.54, resulting in an actual shipping cost reduction of $2.45.

1 8

Case Study: Apparel Retailers

Our second case is derived from a pair of small online apparel retailers that ship high

volumes of primarily smaller packages (clothing articles). USPS was generally their

most cost-effective option in 2019 and, despite price increases, will remain so in

2020.

In order to minimize the impact of price increases, these sellers should look more

carefully for opportunities to use USPS First Class for orders under a pound, and to

possibly take advantage of flat-rate or regional-rate boxes by making some minor

adjustments to the folding and packing of the garments.

C A S E S T U D I E S : Apparel Retailers

Package Contents Leggings Baseball Jersey

Multi Pack Leggings Shirt

Bomber Jackets


Dimensions 10" x 13" Polybag

28" x 16" x 8" 10" x 8" x 6" 14" x 12" x 4" 20" x 14" x 9"


Zone 5 4 5 6 3


Carrier & Service USPS First ClassFedEx Home

DeliveryUSPS Priority

USPS Priority Mail

UPS Ground

Shipping Cost $3.28 $40.62 $8.50 $13.75 $20.70

Delivery Time 3-4 Days 2-5 Days 2-3 days 2-3 Days 3-5 Days

2020 Forecast

2020 Best Carrier & Service USPS First Class USPS PM1 USPS PM USPS MFR Box2 USPS PM3

2020 Best Pricing $3.31 $25.10 $8.76 $13.20 $17.97

2019-2020 Estimated Price Change $0.03 -$15.52 $0.26 -$0.55 -$2.73


Standard

2-3 Day

2-Day Guaranteed


Delivery Costs:


Flat rate



1. This package size is subject to a dimensional weight of 22 lbs by the USPS calculation.

2. Assuming this will fit into a Priority Mail Medium Flat Rate Box-2 which measures 14" x 12" x 3.5".

3. This package size is subject to a dimensional weight of 16 lbs by the USPS calculation.

1 9

Case Study: Jewelry Retailers

Our third case is derived from a pair of online jewelry stores that ship high volumes

of relatively small, typically lightweight packages via a range of carriers.

For these types of packages, USPS First-Class Package Service® is generally the best

shipping option for packages under 16 ounces, and USPS Priority Mail® the best

option for packages of 16 ounces or more. Here we find opportunities to improve for

most of the examples — even over one of the sellers’ great negotiated FedEx 2Day®

and Overnight rates — where in both cases, the USPS guaranteed overnight Priority

Mail Express service offers equivalent or better delivery time for less cost.

C A S E S T U D I E S : Jewelry Retailers

Package Contents Necklace Set Earrings Earring Set Necklaces Charm

Bracelets


Dimensions 14" x 10" x 8" 7" x 5" x 4" Custom FR Envelope Custom

Weight 1.12 oz. 6.4 oz. 16 oz. FR Envelope 13 oz.

Zone 7 7 2 8 1


Carrier & Service FedEx 2Day® FedEx Overnight

UPS GroundUSPS Priority

MailUPS Ground

Shipping Cost $47.78 $32.48 $13.79 $6.95 $10.42

Delivery Time 2 Days 1 Day 4-5 Days 2-3 Days 4-5 Days

2020 Forecast

2020 Best Carrier & Service USPS PME1 USPS PME USPS PM2 USPS PM FRE USPS First Class

2020 Best Pricing $30.05 $30.05 $7.02 $7.15 $5.04

2019-2020 Estimated Price Change -$17.73 -$2.43 -$6.77 $0.20 -$5.38

1. While the promised delivery time for this was two days, by using USPS PME the package can arrive in one day for a significantly lower shipping cost. Also note this package has a dimensional weight of 9 lbs for FedEx, but does not trigger dimensional pricing on USPS.

2. If this package weighs 15.99 oz or less, using USPS First Class would lower the shipping cost even further — to $5.04, for a total potential savings of $8.75.


Standard

2-3 Day

2-Day Guaranteed


Delivery Costs:


Flat rate



2 0

Case Study: Electronics Retailers

Our fourth case is derived from a pair of online electronics retailers that ship a

broad range of package sizes and weights. For these sellers, USPS is generally the

best option, and since both of them use USPS exclusively, opportunities to reduce

shipping costs are limited to reducing the packaging of ~16 oz, standard delivery

shipments in order to allow them to qualify for the FCPS 15.99 oz rate.

C A S E S T U D I E S : Electronics Retailers

Package Contents Presto Sealing

Ring Camera Case

Lid for CookPro

Micro USB Cable

External Battery


Dimensions Custom 10" x 10" x 10" 8" x 8" x 2" 4" x 4" x 3" 6" x 4" x 2"


Zone 8 4 6 5 3


Carrier & Service USPS Priority Mail

USPS Priority Mail

USPS First ClassUSPS Priority

MailUSPS Priority

Mail

Shipping Cost $43.69 $11.62 $3.36 $7.65 $7.28

Delivery Time 2-3 Days 2-3 Days 3-4 Days 2-3 Days 2-3 Days

2020 Forecast

2020 Best Carrier & Service USPS PM USPS PM USPS First ClassUSPS Priority

Mail1

USPS Priority Mail2

2020 Best Pricing $46.31 $11.97 $3.39 $7.80 $7.56

2019-2020 Estimated Price Change $2.62 $0.35 $0.03 $0.15 $0.28


Standard

2-3 Day

2-Day Guaranteed


Delivery Costs:


Flat rate





2 1

Case Study: Automotive Parts Retailers

Our final case is derived from three small online automotive retailers that ship high volumes

of relatively dense, sometimes bulky packages and exclusively use FedEx and UPS, where they

have very attractive negotiated rates. However, this case illustrates that USPS Flat Rate and

Regional Rate products can be very competitive on these sorts of packages, even when up

against great negotiated private carrier rates.

Package Contents Jumper Cables Tune Up Kit Water Pump Timing Belt Kit Seat Covers


Dimensions 11" x 13" x 3" 13" x 16" x 9" 12" x 8" x 9" 10" x 10" x 8" 14" x 7" x 7"

Weight 96 oz.64 oz.; USPS

Dim Wt = 12 lb.192 oz. 224 oz. 16 oz.

Zone 3 4 5 3 3


Carrier & Service FedEx Overnight

FedEx GroundFedEx

OvernightUPS Ground UPS Ground

Shipping Cost $98.43 $22.71 $134.60 $16.84 $10.93

Delivery Time 1 Day 2-3 Days 1 Day 4-5 Days 4-5 Days

2020 Forecast

2020 Best Carrier & Service USPS PME USPS PM USPS PME USPS PM USPS PM

2020 Best Pricing $35.95 $16.89 $83.55 $16.06 $7.35

2019-2020 Estimated Price Change -$62.48 -$5.82 -$51.05 -$0.78 -$3.58

C A S E S T U D I E S : Automotive Parts Retailers


Standard

2-3 Day

2-Day Guaranteed


Delivery Costs:


Flat rate



2 2H O W S H I P P I N G E A S Y C A N H E L P

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2 3

Appendix2020 Overnight Rate Comparisons: Up to 5 lb.1

Weight Not Over (Lb.)

Carrier L, 1 & 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8

0.52 USPS 22.75 23.30 24.05 26.35 28.25 30.05 32.45

0.52 FedEx 31.57 36.95 44.80 47.74 48.60 52.33 54.50

0.52 UPS 31.80 37.21 45.25 48.24 49.09 52.87 55.05

1 USPS 23.00 25.20 27.45 31.20 33.65 35.65 38.05

1 FedEx 35.19 46.15 60.95 67.80 73.06 78.98 82.99

1 UPS 35.41 48.06 62.13 68.48 73.62 80.10 83.44

2 USPS 23.25 27.05 30.90 36.00 39.05 41.20 43.60

2 FedEx 36.88 48.60 68.11 74.49 81.86 86.55 92.03

2 UPS 37.11 49.01 69.43 75.25 82.50 87.21 92.52

3 USPS 23.50 28.95 34.30 40.85 44.40 46.80 49.20

3 FedEx 39.65 51.11 75.00 81.99 87.14 94.76 100.14

3 UPS 39.90 53.26 76.45 82.89 88.76 96.01 100.68

4 USPS 23.75 30.80 37.75 45.65 49.80 52.35 54.75

4 FedEx 42.38 53.90 80.83 89.38 98.10 102.68 109.17

4 UPS 42.63 55.65 82.40 90.29 98.84 103.84 109.76

5 USPS 24.00 32.70 41.15 50.50 55.20 57.95 60.35

5 FedEx 43.05 54.32 85.66 96.74 100.15 104.83 110.45

5 UPS 43.31 55.89 87.33 97.72 102.97 107.78 113.56

A P P E N D I X : 2020 Overnight Rate Comparisons: Up to 5 lb.

1. This guide is intended for use as a general guide, not an official pricing source for any carrier. Our analysis is based on several assumptions that may change over time and may not be valid for your business. Be sure to double check the rates available to you before making any shipping-related decisions. Rates shown are for USPS Priority Mail Express® Commercial Rates pricing, FedEx Standard Overnight® Standard Pricing with residential and fuel surcharges, and UPS Next Day Air® Daily Rates with residential and fuel surcharges.

2. Pricing shown in these rows represents the 0.5 lb. price for USPS; for FedEx and UPS, price shown is for a carrier-provided letter-size envelope, which can weigh up to 0.5 lb.

2 4



6 USPS 26.45 35.95 45.70 55.55 60.40 63.55 66.15

6 FedEx 45.15 61.18 94.74 102.81 112.60 116.52 123.65

6 UPS 46.43 61.81 96.59 105.64 113.45 119.93 124.88

7 USPS 28.90 39.20 50.30 60.60 65.60 69.15 71.95

7 FedEx 46.45 63.62 101.04 111.30 120.25 124.92 131.79

7 UPS 46.93 64.27 103.02 112.42 121.47 125.86 133.07

8 USPS 31.40 42.50 54.85 65.60 70.75 74.75 77.75

8 FedEx 48.63 65.31 106.42 118.17 128.01 133.42 139.72

8 UPS 48.91 65.86 109.43 119.37 128.97 134.42 140.46

9 USPS 33.85 45.75 59.45 70.65 75.95 80.35 83.55

9 FedEx 50.13 67.91 113.10 125.41 132.07 141.91 148.43

9 UPS 50.42 68.48 115.31 126.69 133.86 142.97 149.21

10 USPS 36.30 49.00 64.00 75.70 81.15 85.95 89.35

10 FedEx 50.35 70.43 115.06 127.32 133.05 143.67 150.20

10 UPS 50.63 71.13 118.31 130.91 136.82 147.75 154.44

2020 Overnight Rate Comparisons: 5 to 10lb.1

A P P E N D I X : 2020 Overnight Rate Comparisons: 5 to 10 lb.


2 5

2020 Second Day Rate Comparisons: Up to 5 lb.1



0.52 USPS 7.02 7.35 7.56 7.80 7.98 8.15 8.42

0.52 FedEx 25.42 26.29 27.20 30.40 35.93 37.99 38.67

0.52 UPS 25.56 26.44 27.36 30.45 35.98 38.04 38.72

1 USPS 7.02 7.35 7.56 7.80 7.98 8.15 8.42

1 FedEx 25.42 26.29 27.20 30.40 35.93 37.99 38.67

1 UPS 25.68 26.56 27.48 30.71 36.29 38.37 39.06

2 USPS 7.64 7.84 8.12 8.76 9.99 10.54 11.19

2 FedEx 26.25 27.34 28.07 32.59 39.87 43.71 45.74

2 UPS 26.31 27.50 28.37 32.70 40.21 44.06 46.08

3 USPS 7.84 8.23 8.59 9.54 12.15 13.49 15.74

3 FedEx 26.60 28.07 29.41 35.38 45.07 49.84 51.75

3 UPS 26.65 28.18 29.72 35.56 45.46 50.27 52.13

4 USPS 7.94 8.45 9.07 10.33 14.16 16.06 18.14

4 FedEx 27.25 28.86 31.43 40.48 51.31 56.21 58.20

4 UPS 27.31 28.99 31.76 40.61 51.66 56.57 58.53

5 USPS 8.04 8.50 9.39 10.64 16.14 18.46 21.01

5 FedEx 27.93 29.64 33.74 44.42 56.72 62.06 65.53

5 UPS 27.98 29.77 34.09 44.47 57.11 62.35 65.77

A P P E N D I X : 2020 Second Day Rate Comparisons: Up to 5 lb.



2 6

2020 Second Day Rate Comparisons: 5 to 10lb.



6 USPS 8.15 8.54 9.50 14.18 18.47 21.45 24.52

6 FedEx 28.92 30.59 36.32 48.04 62.50 68.41 71.29

6 UPS 28.99 30.76 36.69 48.10 62.81 68.72 71.54

7 USPS 8.39 9.69 9.74 15.89 20.46 24.18 27.55

7 FedEx 29.93 33.05 38.97 52.03 69.68 75.38 78.04

7 UPS 29.99 33.13 39.35 52.09 70.02 75.45 78.16

8 USPS 8.45 10.17 11.49 17.35 22.47 26.63 30.94

8 FedEx 30.93 35.60 41.34 56.31 76.56 82.54 85.35

8 UPS 30.99 35.66 41.74 56.37 76.80 82.60 85.50

9 USPS 9.28 10.56 11.97 18.60 24.45 28.84 34.40

9 FedEx 32.26 36.96 44.28 60.08 82.86 90.03 93.21

9 UPS 32.31 37.02 44.70 60.14 82.97 90.08 93.26

10 USPS 9.76 11.10 12.16 20.30 26.67 32.03 37.78

10 FedEx 32.49 39.08 47.29 63.85 88.11 97.50 100.41

10 UPS 32.54 39.14 47.74 63.91 88.54 97.55 100.56

A P P E N D I X : 2020 Second Day Rate Comparisons: 5 to 10 lb.



2 7

2020 Ground1 Rate Comparisons: Up to 5 lb.2



1 USPS 7.02 7.35 7.56 7.80 7.98 8.15 8.42

1 FedEx 13.09 13.46 14.28 14.72 15.09 15.22 15.40

1 UPS 13.22 13.67 14.43 14.86 15.23 15.36 15.54

2 USPS 7.64 7.84 8.12 8.76 9.99 10.54 11.19

2 FedEx 13.79 14.86 15.61 15.86 16.36 16.82 17.03

2 UPS 13.93 15.00 15.76 16.00 16.51 16.97 17.18

3 USPS 7.84 8.23 8.59 9.54 12.15 13.49 15.74

3 FedEx 14.18 15.32 16.22 16.71 17.22 17.66 18.31

3 UPS 14.32 15.47 16.37 16.86 17.36 17.80 18.46

4 USPS 7.94 8.45 9.07 10.33 14.16 16.06 18.14

4 FedEx 14.47 15.49 16.60 17.40 17.76 18.64 19.31

4 UPS 14.61 15.64 16.74 17.55 17.91 18.79 19.47

5 USPS 8.04 8.50 9.39 10.64 16.14 18.46 21.01

5 FedEx 14.84 16.01 17.15 18.10 18.70 19.44 20.30

5 UPS 14.98 16.15 17.30 18.25 18.85 19.59 20.45

A P P E N D I X : 2020 Ground Rate Comparisons: Up to 5 lb.

1. USPS Priority Mail Commercial Rates are used for comparison here since they are lower than USPS Retail Ground rates and provide generally faster delivery times for all weight/zone combinations.

2. This guide is intended for use as a general guide, not an official pricing source for any carrier. Our analysis is based on several assumptions that may change over time and may not be valid for your business. Be sure to double check the rates available to you before making any shipping-related decisions. Rates shown are for USPS Priority Mail® Commercial Rates pricing, FedEx Ground® Standard Pricing with residential and fuel surcharges, and UPS® Ground Daily Rates with residential and fuel surcharges.

2 8

2020 Ground Rate1 Comparisons: 5 to 10 lb.2



6 USPS 8.15 8.54 9.50 14.18 18.47 21.45 24.52

6 FedEx 15.18 16.33 17.46 18.51 19.04 19.84 20.60

6 UPS 15.33 16.47 17.61 18.66 19.19 19.99 20.75

7 USPS 8.39 9.69 9.74 15.89 20.46 24.18 27.55

7 FedEx 15.80 16.62 17.80 18.96 19.31 20.26 21.38

7 UPS 15.95 16.76 17.95 19.11 19.47 20.41 21.54

8 USPS 8.45 10.17 11.49 17.35 22.47 26.63 30.94

8 FedEx 16.03 16.95 18.16 19.24 19.76 20.74 21.96

8 UPS 16.17 17.10 18.31 19.39 19.92 20.89 22.11

9 USPS 9.28 10.56 11.97 18.60 24.45 28.84 34.40

9 FedEx 16.21 17.12 18.34 19.37 20.09 21.42 22.90

9 UPS 16.36 17.27 18.49 19.52 20.25 21.58 23.06

10 USPS 9.76 11.10 12.16 20.30 26.67 32.03 37.78

10 FedEx 16.49 17.25 18.48 19.78 20.43 22.42 24.13

10 UPS 16.63 17.40 18.63 19.94 20.58 22.58 24.29

A P P E N D I X : 2020 Ground Rate Comparisons: 5 to 10 lb.

1. USPS Priority Mail Commercial Rates are used for comparison here since they are lower than USPS Retail Ground rates and provide generally faster delivery times for all weight/zone combinations.

2. This guide is intended for use as a general guide, not an official pricing source for any carrier. Our analysis is based on several assumptions that may change over time and may not be valid for your business. Be sure to double check the rates available to you before making any shipping-related decisions. Rates shown are for USPS Priority Mail® Commercial Rates pricing, FedEx Ground® Standard Pricing with residential and fuel surcharges, and UPS® Ground Daily Rates with residential and fuel surcharges.

2 9

Assumptions

• This analysis focuses on shipping situations most often encountered by small-

and medium-sized businesses. Therefore, special situations such as international

shipping, hazardous materials shipping, and guaranteed morning delivery were

not analyzed.

• FedEx and UPS both offer delivery services in collaboration with USPS (UPS

SurePost® and FedEx SmartPost®, the latter of which will reportedly be

increasingly integrated into FedEx Ground for last-mile delivery in 2020).

Because these services have prerequisites that make them less attractive for

smaller sellers, we have omitted them from our analysis.

• Package dimension and weight limits:

— USPS only accepts packages with a combined length and girth of 108"

or smaller for its Priority Mail services; for other USPS size limits please

see bit.ly/USPSdom. Both FedEx Home Delivery and UPS services allow

packages up to 108" in length and up to 165" in combined length and girth.

This analysis assumes all packages comply with these limits.

— Only UPS and FedEx will handle packages weighing more than 70 lb.; USPS

will not. The UPS and FedEx services covered in this guide allow package

weights of up to 150 lb.; for packages heavier than 150 lb., UPS and FedEx

offer freight services. For more information on UPS freight services see

bit.ly/UPSfreight; for more information on FedEx freight services see

bit.ly/FedExfreight.

— If you are shipping multiple products with a total weight greater than 70

lb., you should look into the possibility of breaking the shipment into two or

more packages: shipping multiple packages of 70 or fewer lb. each via USPS

is generally less costly than shipping one package of the total weight by UPS

or FedEx.

• There are many ways to obtain USPS Commercial Rates — for example, all

ShippingEasy customers automatically receive it — so we’ve used this pricing

level for all USPS pricing in our models. For more information on USPS

Commercial Rates, please visit bit.ly/USPScommrates.

A P P E N D I X : Assumptions

http://bit.ly/USPSdom

http://bit.ly/UPSfreight

http://bit.ly/FedExfreight

http://bit.ly/USPScommrates

3 0

• FedEx and UPS typically negotiate specific pricing with each of their clients

based on a number of criteria. Since we can’t know what your negotiated rates

with these carriers may be, we have used their lowest published 2020 rates

(UPS Daily and FedEx Standard List) in our models. If you use one of these

carriers, be sure to double check your rates for the specific situations where we

show USPS as being a better deal. ShippingEasy users can easily access their

negotiated rates through the ShipppingEasy platform by entering their carrier

account information.

• FedEx and UPS both apply various surcharges; we considered the following to

be relevant to our analysis and included them:

— Residential surcharge: a flat fee per package applied to deliveries to

households. We used:

• The FedEx Express residential surcharge of $4.65, effective as

of January 6, 2020.

• The FedEx Home Delivery surcharge of $4, effective as of

January 6, 2020.

• The UPS residential surcharges of $4.10 (Ground) and $4.70

(air services), effective as of December 29, 2019.

— Fuel surcharge: a percentage upcharge applied to every package which

changes periodically based on a number of factors. We used:

• The FedEx Express fuel surcharge of 7.0% and Ground fuel

surcharge of 7.0%, which were in effect through December 8,

2019.

• The UPS Air fuel surcharge of 7.0% and Ground fuel surcharge

of 7.25%, which were in effect through December 8, 2019.

A P P E N D I X : Assumptions

3 1C O P Y R I G H T 2 0 2 0 , S H I P P I N G E A S Y.

F O R M O R E I N F O R M A T I O N , V I S I T S H I P P I N G E A S Y. C O M

http://SHIPPINGEASY.COM

the e-commerce seller's guide to 2020 shipping …...annual carrier price increases have become...

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