Retailers face intense pressure in the contemporary economy. to compete on a global scale, they must offer products to customers anywhere and everywhere. shipping networks have expanded dramatically to support sellers and buyers around the world.
It’s amazing to think about it. but shipping has become so ubiquitous that customers don’t see it that way anymore.
Customers want items fast, often in as little as two business days, regardless of origin. they want to be able to track their packages at every step of the shipping process. and they want to pay as little as possible for this service. ideally, they want free shipping.
This level of demand puts pressure on carriers, who need to move packages farther and faster than ever before, especially priority mail. it also puts pressure on shippers, who pay them for that service. both parties want to do everything possible to reduce costs.
so fedex and ups have turned to the oldest shipping company in the us. uu., the united states postal service, for help.
how does fedex smartpost work?
fedex now offers a level of service called fedex smartpost. With SmartPost, FedEx transports packages through its network of warehouses and trucking platforms. But instead of leaving packages on customers’ porches, FedEx simply drops them off at the local post office. USPS transports smartpost packages for the final leg of their journey, known as the “last mile.”
cheaper than standard ground shipping, smartpost offers shippers a cost-saving option and reduces fedex’s workload. it’s also slower, and while it offers unified tracking, customers may find it confusing.
Is fedex smartpost right for your business? let’s find out.
what is fedex smartpost?
fedex smartpost is a shipping service that uses the fedex and us ground shipping network. uu. Postal Service. In this hybrid model, shippers deliver packages to FedEx the way they normally would. fedex transports that shipment through its trucks, warehouses and logistics centers.
Typically, the final leg of this journey is from the final fedex warehouse to the customer’s doorstep. but this is the most expensive and inefficient part of the trip for fedex. instead of transporting dozens or hundreds of packages at a time, drivers have to drop them off one by one.
United States however, the postal service handles those house-to-house routes every day. their mail carriers deliver to all addresses in the us. uu.
So why shouldn’t FedEx pay USPS to complete the final leg of deliveries on their behalf?
with smartpost, fedex delivers packages to the post office closest to their final destination. then, usually the next day, usps delivers them to customers.
For carriers, smartpost should look a lot like fedex ground, the company says. the tracking capabilities of senders and customers do not change. packet pickup works the same way. SmartPost even offers a couple of benefits: Senders now have access to all addresses served by USPS, some of which may not have been served by FedEx; and there are no residential surcharges.
However, there are some sacrifices. smartpost delivery time is slower than standard ground shipping by at least one day. the unified tracking offering is reliable, but can be confusing for some customers who don’t realize their sender is using smartpost. and once you leave a zip code in the lower 48 states, the rates are high.
how much does fedex smartpost save?
fedex smartpost fees include:
- for a one pound package, rates range from $8.23 in zone 2 to $9.96 in zone 8
- for a 10 pound package, rates range from $15.19 in zone 2 and $21.25 in zone 8
- for a 30 pound package, rates range from $25.30 in zone 2 to $56.38 in zone 8
Fedex SmartPost is estimated to be 20 percent cheaper than standard fedex ground shipping costs. that may not sound like much in one package. but multiplied by hundreds and hundreds of packages, a 20 percent savings can really add up.
Most standard surcharges still apply, including additional handling fees and peak season surcharges. Beginning in 2018, FedEx applied dimensional pricing to SmartPost shipments as well as ground shipments. Package minimums apply, although they differ from other FedEx services. however, residential surcharges do not apply.
it is important for shippers to note that smartpost rates increase in line with other fedex rates. traditionally, base rates have risen about 4.9 percent each year; surcharges can add up much faster than that. shippers can save money the year they switch some parcels from ground to smartpost, but very soon, costs will start to rise again.
who should use fedex smartpost?
The more volume a retailer ships, the more the business can benefit from the savings fedex smartpost offers. It’s also a good option for businesses that ship a large number of packages to residential addresses, as it eliminates residential surcharges.
fedex smartpost in front of fedex ground
fedex smartpost is cheaper than fedex ground, but there are some pros and cons.
how long does fedex smartpost take?
first, delivery times are slower. shippers should plan on two to five days longer than standard ground shipping, which in some cases could double transit times. (It’s worth noting that this is a longer delay than UPS SurePost, a similar hybrid service from FedEx’s main competitor.)
However, slower transit times are not necessarily bad. As long as customers know what to expect, they may not mind waiting a few extra days for a non-urgent package. And since SmartPost offers unified tracking with FedEx, customers can track their packages at every stage of the journey.
does fedex deliver with usps?
smartpost normally uses the usps service for the last mile of deliveries, but not always. In some cases, when FedEx is already close to a package’s destination and delivery would be easy and efficient, FedEx drivers deliver packages themselves. but most smartpost packages move via usps truck.
Is fedex smartpost right for my business?
fedex smartpost is a simple service. it does not save time or offer new benefits to shippers or customers. in fact, customers may not even know the difference between ground and smartpost service. but it saves money (potentially a significant amount) for both shippers and customers.
many competitors in the shipping space are implementing new options at the lower end of their rate sheets, which could force fedex to keep smartpost rates competitive. dhl package meter seeks to solve the inefficiency problem of the last mile, but instead of giving packages to the us. uu. postal service, delivers them to external couriers who take them to their destinations. shipping with amazon is also a third party courier service.
ups surepost is a direct competitor of fedex smartpost and works in the same way, allowing usps to cover the last mile with existing routes and vehicles.
smartpost (and surepost, for that matter) are also good for usps. The century-old public agency has been losing business for years to UPS and FedEx. And unlike those private companies, the USPS can’t decide that they just won’t serve addresses that are too hard to reach: they’re required to be delivered to everyone. these offerings return some of that responsibility, and the funding for it, to usps.
However, in 2018, President Donald Trump ordered a review of USPS policies. the commission he appointed recommended reconsidering the mandate to deliver every package to every US address. Specifically, he suggested, the USPS should consider promising universal delivery only to individual customers, not business shippers like Amazon and other e-commerce retailers.
If that change were made, it would mean the end of fedex smartpost and ups surepost. but that certainly shouldn’t stop carriers from taking advantage of smartpost now. it’s an opportunity to save money on shipping fees, and opportunities like that don’t come around often.
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