Logistics can be a pain point for many small businesses, and it can be challenging to decide which shipping company would best suit your business needs.
Logistics can be a pain point for many small businesses, and it can be challenging to decide which shipping company would best suit your business needs. There is a wide array of genuinely good choices as competition increases daily in the logistics industry. Therefore, 3PL's (Third Party Logistics) providers must be chosen wisely, considering that it has direct impact on your Cost of Goods Sold, and thereby Gross Profit, in addition to your customer's experience.
Before selecting the shipping company, it is essential to know the volume of your shipments and where you ship to. This can significantly impact your choice, choosing between a delivery company that is more locally focused (national) to something more widespread, even global (international).
A fixed budget will help in mitigating costs. If the products shipped have small profit margins, it has to be ensured that shipping doesn't cut all the profits. On the other hand, if the profit margins are high, one can consider offering different levels of services according to the customer base with competitive pricing. This can include perks like weekend delivery and same-Day delivery. These can help attain new customers from different domains with varying expectations.
A match should be made between what budget the business has with the customer required delivery. This balance will help to choose the correct services for business.
We will be comparing DHL, UPS, FedEx and USPS services in this article to help you decide the best shipping option suited for your small business.
Note: This is an in depth comparison and analysis of the big four shipping companies and the services they offer.
The factors we considered included:
- Packaging and Dimensional Weight
- Discounts Offered
- Insurance
- Value Added Services & Convenience
- Speed & Reliability
- International Shipping
Overview
DHL
DHL Parcel is a division of the German logistics company Deutsche Post DHL. Deutsche Post DHL is the world's largest logistics company. It is currently present in over 220 countries worldwide with courier, parcel, and express mail services.
DHL Parcel provides both domestic and international pick-up, delivery, and returns solutions for business customers in the United States.
DHL Express offers both domestic and international shipping, but it is more predominant in global operations. Their network consists of active teams that ensure fast delivery with a convenient end to end tracking available along with customs clearance. This focuses on critical, timely delivery and hence is trusted for its efficiency.
UPS
UPS was originally a messenger company in the United States in 1907. It is now a multi-billion-dollar corporation, with a focus on enabling global commerce.
UPS is one of the most recognized and admired brands around the world. It's the world's largest package delivery company and a leading global provider of specialized transportation and logistics services.
FedEx
Federal Express is the world's largest express transportation company, providing fast, secure and reliable delivery to more than 220 countries and territories. The firm is known for its overnight shipping service and is a pioneer in tracking packages and provide real-time updates on package location. Most other carrier services have now implemented this feature. FedEx is also one of the top contractors of the U.S. government.
USPS
The U.S. Postal Service is the only service that reaches every address in the USA: 160 million residences, businesses and Post Office Boxes. The Postal Service does not receive any tax dollars for operating expenses and relies on the sale of postage, services, and products to bankroll their operations.
With 34,000 retail locations and one of the most popular websites in the federal government, usps.com, the Postal Service has an annual operating revenue of more than $71 billion. It delivers 48 percent of the world's Mail. With more than 630,000 employees, they are one of the nation's largest employers.
Let us take a look at the various factors and how you could consider them as you decide the best logistics/shipping option for your parcel or document.
1. Packaging and Dimensional Weight
The shipping rate depends on the size of the parcel, as the space occupied by a given package in the transport vehicle will affect the number of packages that can be carried alongside it.
To ensure the small business is in track with the actual costs, they should actively measure the weight as well as calculate the dimensions. This way, the prices can be checked against the pricing received by the logistics company.
“The small business must be able to break its products into groups and focus on getting weights and dimensions for the heaviest or largest 20% and the smallest or lightest 20%”
Types of Pricing
a)Cubic Pricing,
b)Dimensional Pricing
USPS Cubic Pricing is a method for high volume shipping customers to receive relatively economical shipping rates on volumetric-ally small but heavy(weight) packages.
For the customers to qualify for this affordable shipping option, they must ship a minimum of 50,000 packages a year, and containers should weigh less than 20 Lbs. and measure no more than 0.5 cu ft.
Formula: Length x Width x Height / 1728 = Cubic Feet
(the longest dimension may not exceed 18", or the package will be disqualified from Cubic Pricing rates)
With the methodology of Cubic Pricing, the customers only pay for the shipping distance and dimensions of a departing shipment. Since weight is not a part of the shipping rates calculation for USPS Cubic Pricing, it's an invaluable way for small businesses to lower their shipping costs on heavier packages.
Since all major carriers — including USPS, FedEx, UPS, and DHL — base their shipping rates on weight, Cubic Pricing provides small businesses the opportunities to reduce their shipping rates on their heavier packages.
Dimensional Pricing:
DHL, UPS and FedEx charge for what is called "dimensional weight." It means that if your package is large or oversized, then the shipping charges will be drastically increased.
Formula:
The dimensional weight calculation is:
L*W*H/139
For example, if the package is 20X20X20 and weighs 10 pounds, you would be charged for a package with dimensions
20(Length)*20(Breadth)*20(Height)/139 = 57.55 lbs. instead of 10 lbs. (Exception for DHL the divisor is 138).
So if you are looking for price differentiation, here is a quick cheat sheet to help you:
| Low Weight- High Volume USPS or DHL |
High Weight - High Volume UPS Ground |
| Low Weight - Low Volume USPS |
High Weight - High Volume UPS or FedEx |
2.Discounts for Small Business
UPS: Small Business Shipping Discounts
UPS does provide a range of services when it comes to helping small businesses save on their shipping costs. They offer discounts which are exclusive to small businesses, and it is calculated based on how many packages are shipped per week.
UPS also has a service where they will pick up your packages no matter how often you need this. They can make themselves flexible in your small business's requirements. There are flexible payment options that come with this, so your business can adjust their payment structure.
| Volume | Ground Deliveries | Air/International Deliveries |
|---|---|---|
| 0 to 4 Packages | 10% | 20% |
| 5 to 24 Packages | 15% | 25% |
| 25 plus packages | 18% | 28% |
FedEx: Save Now Program
Another service that you can look into is the program offered by FedEx. The plan had been established to help small businesses afford their shipping needs.
FedEx wants to help you grow your business, and if you sign up for this service, you will receive benefits as well as discounted shipping.
By enrolling for this program, you could be looking at 16% off on select FedEx Express services like FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx Express Saver, FedEx International Priority and FedEx International Economy.
USPS: USPS Through eBay Labels
The use of eBay labels will provide you with a fast way to print discounted USPS shipping labels. It is convenient as all you have to do is print, ship, and everything else is taken care of.By only using this method, you could avail up to 25% off the usual USPS retail rates; below is a detailed breakdown of how these discounts work.
| USPS Service | Discount |
|---|---|
| First-Class Package Service | 22% |
| Priority Mail | 13% |
| Priority Mail Express | 14% |
| First-Class Package International Service | 14% |
| Priority Mail International | 16% |
| Priority Mail Express International | 24% |
DHL: DHL Discounts
There is a rewards program in DHL, which is based on how much you ship with them, the more the chances of receiving genuinely good benefits.
The company offers dependable services and has a range of promotions to help avail the best price for the shipping requirements.
They currently offer up to 35% off shipments, and this will be based on a variety of factors in the shipping profile. All that is required for this discount is enrollment in DHL with an account with a customer number.
Even without an account, DHL will offer up to 30% discount on international shipping while using a credit card. The discount is unique to those who don't have an account with the company.
Also, if you are a small business that completes a fair amount of shipping, DHL can offer you exclusive discounts and specialty services so that you can get the most from your shipping.
Conclusion: Discounts
4. Value added Services
DHL
DHL will offer its customers express delivery at DHL Service Points. There are certified stores where DHL customers can choose to receive the goods. The service allows the customer to pick up the package when it suits them.
DHL offers specific services for distinct industries, which especially helps the small business to tend to their requirements.
- DHL Express for Fashion provides solutions for the fashion industry, such as ad hoc packaging, and so much more.
- DHL Medical Express manages the transportation of temperature and time-sensitive consignments for the Medical sector.
- For non-perishable food products, an exclusive section called DHL Express Food & Beverage package takes care of these specific products and places these items in suitable packaging.
FedEx
FedEx is aware of the needs of the industrial sector and therefore offers a variety of support services to improve satisfaction and customer loyalty.
- FedEx Office offers auxiliary services to businesses, which includes computer rental, internet access, and printing.
- FedEx has a deposit service at certified stores, called Pick-up and Drop off. With this service, the customers can send and receive packages from selected stores, purchase supplies to be received at the allocated point of sale, and manage withdrawals.
UPS
UPS offers an extensive list of useful auxiliary services to its customers.
- The physical UPS stores offer customers shipping materials as well as business services.
- The most popular additional service is the UPS Access Point. A UPS Access Point is a convenient location that allows customers to collect and send their parcels. It is straightforward to deposit parcels being returned and choose the preferred time to pick up the package. Once a time is chosen, then the package will arrive at the access point, with the customer receiving an email or SMS message notifying them when their package will be ready to be picked up— or to be picked up at their convenience. (Only a valid I.D. card is required for withdrawal)
5. Insurance
FedEx
FedEx will, upon request, either credit or refund the transportation charges resulting from a service failure (which means delivery of the package a minute or more after committing time for the selected destination and service, except as otherwise described in terms and conditions).
The money-back-guarantee is in the event of a service failure for the recovery of any or all portions of what FedEx would charge for shipping.
If the money-back guarantee is deferred, there is no recovery of charges if a service failure occurs and no delivery commitments for shipments.
- There are around fifty FedEx carrier errors that are eligible for refunds. Some of these errors are service-level exceptions such as lost packages, damaged shipments, delivery delays, and Invoice errors like Dimensional weight pricing errors, incorrect address correction charges, etc.
- According to the conditions declared in the FedEx money-back guarantee: "All requests for credit or refund of shipping charges must be submitted within 15 calendar days of the invoice date."
- Once the claim is approved, the refunds will appear as adjustments on your FedEx invoice in 7-10 business days.
- Here is the FedEx Packing Pledge
DHL:
If the service makes a delivery later than their committed time, then DHL will credit or refund your DHL account with the transportation charges.
However, DHL does not make the process of claims easy; it is riddled with intricacies making it complex. Moreover, if you submit the wrong application, then DHL will penalize the customer. The fee for all errors can be refunded with the subsequent invoice.
- The service failure committed by DHL, such as lost packages, delays, etc. and billing mistakes such as incorrect fuel surcharges, dimensional weight pricing error, and inaccurate delivery area surcharge are eligible for refunds.
- According to the conditions declared by DHL for their money-back guarantee: The claims must be contested within fifteen days from the shipping date of the package.
- DHL claims are added to your account after 7 - 10 days from the time of claim submission.
UPS:
UPS will offer a GSR (Guaranteed Service Refund) on the packages which are delivered late. UPS will credit/refund the UPS account with the shipping charges even if the shipment is later than a minute of the promised delivery time.
Although the terms look straightforward, the UPS refund recovery process is quite complicated. The 3-fold method comprises identifying the service failures, segregating the delivery exceptions that are eligible for refunds, and finally disputing valid UPS claims.
- There are more than fifty UPS delivery errors that are eligible for refunds. Some of these errors are service-level exceptions such as lost packages, damaged shipments, delivery delays, and Invoice errors like Dimensional weight pricing errors, incorrect address correction charges, Dimensional weight pricing errors, etc.
- UPS claims must be disputed within fifteen days from the shipping date of the package.
- UPS usually takes 7-10 business days after the dispute to add credits to your shipping invoice.
USPS:
USPS has a variety of insurance options available.
Standard Shipping Insurance
You can purchase insurance coverage for your mailpieces for up to $5,000 in indemnity to protect against loss or damage. Insurance fees are based on the item’s declared value. There are limitations for insuring some products and certain items.
Mail Insured for more than $500
The recipient may be required to show an acceptable primary ID before USPS will deliver the mailpiece.
Pricing
Insurance coverage only covers the actual value of mail contents. You may purchase up to $5,000 indemnity coverage in person at a Post Office or online.
The price is based on declared value, starting at $2.25.
Priority Mail Express & Priority Mail
With some exceptions, Priority Mail Express® may include up to $100 of insurance and Priority Mail® may include up to $50 in the price of service. For more valuable shipments, additional coverage is usually available.
6. Speed & Reliability of Shipping
DHL:
| Service | Delivery Time |
|---|---|
| DHL SmartMail Parcel | By end of 2-3 business days |
| DHL SmartMail Parcel Plus | By end of 2-3 business days |
| DHL SmartMail Parcel Return | By end of 1-3 business days |
| DHL Smart Mail Flats | By end of 2-5 business days |
| DHL SmartMail Bundle Printed Matter | By end of 2-5 business days |
DHL's US domestic services can be broken into three categories based on delivery time.
DHL SmartMail Parcel and DHL Smartmail Parcel Plus both guarantee delivery between 2-3 days. The only difference between the two is DHL Smartmail Parcel Plus has a maximum weight of 25lbs while DHL SmartMail Parcel only has a maximum weight of 1lb.
Subsequently, DHL Smartmail Parcel Plus costs a bit more.
DHL Smartmail Bundle Printed Matter and DHL SmartMail Flats both guarantee delivery in 2-5 days. The only difference between the two is DHL Smartmail Bundle Printed Matter has a maximum weight of 15lbs while DHL SmartMail Flats only has a maximum weight of 1lb.
As a result, DHL Smartmail Bundle Printed Matter costs slightly more than DHL SmartMail Flats.
There is also DHL SmartMail Parcel Return that easily handles return packages within 1-3 days.
USPS:
| Priority Mail Express® | Overnight Guaranteed |
|---|---|
| Priority Mail® | 1-3 days |
| Service | Ship Time |
| Priority Mail Express® | Overnight Guaranteed |
| Priority Mail® | 1-3 days |
| First-Class Mail® | 1-3 days |
| USPS Retail Ground® | 2-8 days |
| Media Mail® | 2-8 days |
Priority Mail Express: This option guarantees overnight shipping and delivery throughout the United States, and it doesn't require any weighing or calculation for a package up to 70 pounds. It also includes USPS tracking standards and built-in insurance of $100.This is the priciest of the US options.
Priority Mail: Priority Mail ships and delivers to any location domestically within 1-3 business days and has similar features to Priority Mail express barring this delivery date. However, it only has an included insurance of $50.USPS Retail Ground (formerly Standard Post): This is the most standard option and delivers between 2 and 8 operating business days to any location in the United States. There is no included insurance, but the choice is available should you wish to pay more.
UPS:
| Services | Delivery Time |
|---|---|
| UPS Express Critical | Best available time, provided when order is placed |
| UPS Next Day Air Early | Next business day delivery by 8:00 a.m. |
| UPS Next Day Air | Next business day delivery by 10:30 a.m. |
| UPS Next Day Air Saver | Next business day delivery by 3:00 a.m. |
| UPS 2nd Day Air a.m. | Delivery by second business day by 10:30 a.m. |
| UPS 3 Day Air Select | Delivery by the third business day by EOD |
| UPS Ground | Delivery between 1 to 5 business days |
UPS' services mainly fall into four categories: Same day, next day, two days, and three or more-day delivery.
Same Day Delivery is for those critical packages that must arrive on the same day, no matter what day of the year.
Next Day Delivery guarantees delivery of your packages the next business day with options of by 8:00 am, 10:30 am, or 3:00 pm.
Two Day Delivery delivers your packages in two business days with 10:00 am or by the end of the day.
Three or More Day Delivery provides economical options with guaranteed delivery by the end of the third business day. Or for the cheapest option of delivery between one and five business days.
FedEx:
| Services | Delivery Time |
|---|---|
| FedEx First Overnight | Next business day by 8:00am |
| FedEx First Priority Overnight | Next business day by 10:00am |
| FedEx Standard Overnight | Next business day by 3:00pm |
| FedEx 2Day | Second business day between 4:30 pm and 7:00 pm |
| FedEx Express Saver | Third business day delivery by 4:30 pm |
| FedEx Ground | By end of 1-5 business days |
| FedEx 1Day Freight | Next business day by 10:30am |
| FedEx 2Day Freight | Second business day by 12:00 pm |
| FedEx 3Day Freight | Third business day by 3:00 pm |
FedEx offers a large variety of options but they can tend to lean on the more expensive side. Therefore, to justify the rates, always try to enable discounts with the FedEx account or contact them directly to avail it if a large number of shipments would be transported through the company.
7. International Shipments
DHL:
DHL offers a large variety of services internationally with different shipping times and costs. Its services include some as expensive as the Same-Day service available both by road and by air.
- Worldwide Express is the most popular service, which comes at a lower cost but with slightly longer delivery times.
- The exclusive DHL Envelope service is reserved only for documents, and it enables the swift delivery of documents in approximately 220 countries around the world.
FedEx:
The International Priority service would be the fastest choice for FedEx international shipments. Depending on the destination, FedEx can deliver the shipment the next morning in Europe, in a single business day in the U.S. and Canada, and two working days for Latin America.
- The same service can be purchased at a cheaper cost if you are willing to extend the delivery time.
- The International Economy offer allows shipments to arrive at the destination within four working days.
- FedEx Same Day service, attributed to the widespread distribution network and resources in the U.S., grants the company to carry out shipments on the same day the goods are picked up.
- The Ground service is an economical service designed for shipments throughout North America.
UPS:
UPS offers various international delivery services; some of these are the same for European Shipments.
- Express Saver and the Expedited Service are the most economical solutions which guarantee reasonable delivery times and safe delivery. These are door-to-door services that come with custom services included and a delivery timeline of five business days.
- The Worldwide Express Saver is the fastest international solution UPS has to offer. The delivery period ranges from 1 to 3 days, depending on the destination location (time slots are preset). Three free delivery attempts are included.
Finally, free packaging is included in the service at a slightly lower price point if you choose the Worldwide Express Saver option.
USPS:
First-Class Package International Service is the lowest cost shipping option among all carriers to over 180 countries. The maximum allowable package weight is 4 lbs. Packages are delivered between 11 and 20 days, depending on the destination. This is a great option to use for small shipments that aren’t time-sensitive.
Conclusions for International Shipping:
1. The best delivery option for lightweight and less-urgent packages going to another country
- For smaller and lightweight items—like postcards, envelopes, and flats—USPS First-Class Package International Service is a good option. The shipment can contain a maximum weight of 4lbs and cannot have a value more than 400$ (can be shipped to over 180 countries)
- FedEx's International Ground delivery is available for Canada and supports packages up to 150 lbs., so it is an option for heavier packages.
- UPS Standard is an economical ground delivery service for less-urgent shipments. UPS Standard only ships to the U.S., Mexico, and Canada, but does not ship to Hawaii or Alaska.
- DHL Express Worldwide is an economical service, plus the end delivers it for the next possible business day
2. The best delivery option for less-urgent packages irrespective of weight going to other countries
- USPS First-Class Package International Service is still mixed for small, lightweight packages traveling the world. If the containers are more substantial than 4lbs or if you want the package to arrive faster, you can use USPS Priority Mail International, with a standard delivery time of 6 to 8 days.
- FedEx International Economy is a door-to-door economy day-definite and customs-cleared service for packages up to 150 lbs. Delivery time is generally five business days, which is backed up by FedEx money-back guarantee.
- Shipping with UPS Worldwide Expedited would provide an economical, guaranteed service for less-urgent international packages.
- DHL Express Worldwide is a choice for delivery to other countries, as well.
3. The best delivery option for international shipments that will arrive in 3-5 days
- If you have time sensitivities, it is better to choose the express or expedited services for each carrier.
- One option is USPS Priority Mail Express International, which ships in 3-5 business days. DHL Express Worldwide continues to be in the mix since it delivers by the end of the next possible day. UPS Worldwide Expedited ships in 2-5 business days. And, FedEx International Priority typically ships in 3 business days.
4. Which is the best delivery option for international packages that will arrive ASAP
- Each carrier does support delivery in the shortest time possible. The pricing is dependent on the package dimensions, weight, destination, and time of day, and it can be picked up or dropped off with the carrier. You will want to reach out to your hauler directly to get a quote.
- But if you had to choose one, it would have to be DHL as it has deep roots in Asia, Europe, Latin America, and Africa. DHL provides many services, some as expensive as the Same Day service available both by air and by road. Worldwide Express is the most frequently used service, with slightly longer times but at a lower cost.
- The exclusive DHL Envelope service reserved only for documents enables the rapid delivery of documentation in approximately 220 countries around the world.
Comparison Summary: USPS vs UPS vs FedEx vs DHL
So that brings us to an end of this comparison journey. We hope you have more information and resources to make an informed decision while choosing your 3rd party logistics provider. Make sure that you are automating your order and pick-pack-ship process with an online accounting and inventory software like Deskera Books for an accurate and faster processing & tracking of your shipments.
