Selecting the best shipping option is not an easy task for retailers already facing intense pressure to ship faster, cheaper, and more efficiently. Yet retailers know that striking the right balance between speed and cost is key to meeting customer expectations and driving down shipping costs.
FedEx and UPS have created solutions, including SmartPost and SurePost, respectively, to address this challenge. The shipping options work similarly, which leave many shippers asking, “What is the difference between the two?” Most of the differences are minor – yet understanding them can assist with selecting the right option and have a serious impact on your bottom line. But how do the services work, and what are the differences to consider when selecting the right one for your business?
SurePost and SmartPost: Understanding the Basics
Cost is a major consideration when sending packages. FedEx and UPS created SmartPost and SurePost to focus on the most expensive part of the journey: the last mile. The last mile isn’t literally the last mile of a journey but can encompass several city blocks or hundreds of rural miles. Either way, it’s the most expensive leg of shipping. A driver might not have many packages going to a specific area, and if so, this drives up the overall cost of shipping.
SurePost and SmartPost were designed to make this last leg of shipping more cost-effective by joining forces with a major competitor. A package is dropped with the regular carrier, such as FedEx or UPS, but once that package gets to that last mile, it’s passed off to the United States Postal Service.
The United States Postal Service visits every address on a daily basis, which provides an opportunity to streamline last mile logistics. As a result, SmartPost and SurePost partner with the USPS to complete the final mile of delivery for the majority of deliveries.
These services are fairly similar in their cost-saving model, which involves partnering with the USPS to maximize efficiency and minimize cost. There are some differences, and we’ll highlight those shortly. But first, it’s helpful to understand the general benefits of these services, which include:
- Cost Reduction: One of the most appealing benefits of SurePost and SmartPost is that using these services lowers shipping costs. Targeting the most expensive part of the shipping journey allows retailers to drive down the total cost of shipping.
- Saturday Delivery: Since SurePost and SmartPost both use the USPS for the last leg of delivery, customers benefit from Saturday delivery.
- No Residential Surcharge: UPS and FedEx charge a residential surcharge for regular delivery services; however, this surcharge is waived for SurePost and SmartPost deliveries. Since large UPS or FedEx trucks aren’t used to complete the final mile of shipping, there is no need to assess this fee.
- Delivery to P.O. Boxes: FedEx and UPS do not typically deliver to P.O. boxes, but when partnering with the USPS, retailers can deliver to these addresses. Some recipients prefer to receive shipments at P.O. boxes, and partnering with the USPS provides additional flexibility for customers.
- Drop-off is Easy: No special drop-off is required when using SurePost or SmartPost. Instead, retailers can simply mix these packages in with their normal shipments without the need for a special trip to the post office.
- Tracking is Still Available: Having the ability to track packages is key to the customer experience. Most recipients want to know where their package is in the shipping process at all times. SurePost and SmartPost allow tracking throughout the entire delivery process. However, some users note that with UPS, there is a brief period of time when the package is marked as “delivered” during the transfer from UPS to USPS. The status is updated once the package is in the system, and the shipping process continues.
The largest drawback to using SurePost and SmartPost is slower delivery times. A slow delivery time, however, may be acceptable if customers expect it upfront. This is especially true in cases of free shipping. When considering these services, it’s also important to consider the differences.
Drop Locations Vary From SurePost to SmartPost
Retailers have a large opportunity to save by using SurePost and SmartPost and targeting that last mile of delivery. In fact, the last leg of delivery accounts for up to 28 percent of a shipment’s total cost, so allowing USPS to handle it offers decent savings. UPS and FedEx, however, handle the handoff from carrier to USPS slightly differently.
UPS SurePost packages are dropped at the USPS location closest to the package’s final destination. In most cases, this is the recipient’s local post office. As a result, the package is fairly close to its final destination, which may save time in the shipping process.
In contrast, FedEx SmartPost delivers the package to the nearest USPS regional hub, which is not the local post office. For example, the regional hub might be in a major city and the recipient’s address might be in a suburb 30 miles away. The reason why FedEx uses this strategy is that it creates efficiencies for package processing, yet some speculate that it may impact delivery times. Delivery times will be discussed in more detail shortly, but this is one key difference to note.
Determining the Last Mile of Delivery
UPS and FedEx use a similar strategy to drive down costs by targeting the last mile of delivery, but with UPS, the carrier does not always use USPS for that final leg of delivery. Why?
UPS workers are in the Teamsters union, so concerns were present that “outsourcing” a portion of the delivery process may jeopardize job security. As a result, UPS handles the handoff slightly differently by using sophisticated software. This software determines whether it’s truly more efficient for UPS or USPS to complete the final leg of delivery for each individual package and schedules it accordingly. And in some cases, it’s more efficient for UPS to handle the last mile of delivery.
For example, a UPS driver might already be visiting the delivery area and have multiple packages to deliver. If so, package delivery by UPS is still efficient. In contrast, FedEx uses a more general approach for that last leg of delivery. As a result, up to 60 percent of UPS SurePost deliveries are still delivered by UPS – not USPS.
Using UPS might be more likely to keep the package with the carrier and less likely it will arrive at the destination via USPS. Whether this affects delivery speed is speculative, but it’s one key difference to consider when evaluating options. But what about delivery times? How long does a package spend in transit with each of these services? Here is a quick comparison of SurePost and SmartPost.
- FedEx SmartPost. According to FedEx, delivery time is typically two to seven business days based on the distance to the destination. There is a longer transit time outside the contiguous 48 states. Service days are Monday through Saturday, and the delivery area includes 100 percent U.S. coverage, including service to Alaska and Hawaii; Puerto Rico; Guam; U.S. Virgin Islands; all U.S. territories; P.O. boxes; and military APO, FPO and DPO destinations.
- UPS SurePost: Delivery time isn’t published on the company’s website, but users report it’s typically around one day slower than using UPS ground. This is because on the day UPS typically would drop the package at the customer’s door, it’s dropping it off at the nearest USPS location instead.
Shipping Fees – How They Are Charged
It’s estimated that the savings using SurePost and SmartPost are significant – as much as 20 percent when compared to using standard FedEx or UPS. And while savings are significant with each, let’s take a look at some of the potential savings and fees for each service.
- SurePost and SmartPost do not charge a residential surcharge: When shipping packages to a residential address, there is typically a surcharge for delivery, which increases the total cost to ship a package. Neither company charges this fee for these services.
- UPS charges about 3 percent more: UPS charges about 3 percent more for SurePost compared to standard UPS; however, still no residential surcharge is charged. When looking at the potential for slightly faster speed, this additional cost might not be a serious consideration, especially since the overall cost of shipping is lower than UPS’ standard services.
When evaluating these services, it’s also helpful to consider the exact details of what you’re shipping, such as weight and dimensions. Understanding the rules and requirements for SurePost and SmartPost is a good starting point for figuring out which one is best for a specific package.
Dimension Differences and Considerations
SurePost and SmartPost have rules about package dimensions that may influence your ability to use these services. How much does your package weigh? Are the dimensions too large? Here is a quick comparison to consider for each carrier.
This service can accept a package weight of up to 70 pounds and a size of 130 inches in length plus girth. In addition, it’s important to note a few FedEx special features that are not available, including:
- Collect on delivery
- Money-back guarantee
- Declared value
- Signature proof of delivery
- Evening or by-appointment delivery
- Hazardous materials service
In addition, FedEx SmartPost won’t pick up packages that originate outside the contiguous United States.
A few different UPS SurePost services are available, including:
- SurePost Less than 1 pound, with a maximum weight of 450.76 grams
- SurePost 1 pound or more, with a maximum weight of 70 pounds
- SurePost Bound printed matter, with a maximum weight of 15 pounds
- SurePost Media, with a maximum weight of 70 pounds
The total dimensions of the package cannot exceed 130 inches and must be less than 1 pound if you select SurePost; it can be 1 pound or heavier and up to 108 inches in size if you select SurePost Bound Printed Matter or SurePost Media in the UPS service box.
Moving Forward to Maximize Cost Savings and Efficiency
Selecting the right shipping option isn’t always an easy choice, especially when attempting to balance cost with speed. SurePost and SmartPost provide good alternatives to help retailers operate with greater efficiency. Package delivery may be slower when compared to traditional options, but if you communicate that clearly to customers, it might not be an issue.
Striking the right balance between efficiency, cost savings, and customer needs and expectations is the key to minimizing costs and maximizing savings. As a result, a unique synergy is achieved – one that has the potential to impact your bottom line and contribute to the future success of your company.
Shipware delivers volume parcel and less-than-truckload shippers intelligent and innovative distribution solutions and strategies. Whether you ship with FedEx, UPS, USPS or regional carriers, our contract audit and negotiation services are guaranteed to reduce your parcel and LTL shipping costs by 10 to 30 percent, with no disruption of current operations. Our team of experts has over 200 years of carrier pricing experience. We have negotiated thousands of FedEx, UPS and LTL contracts and saved our clients an average of 19 percent.