A Comprehensive Comparison of Small Parcel Carriers for Product-Based Companies in 2023

As a product-based company, choosing the right small parcel carrier is crucial for streamlining your shipping operations and ensuring customer satisfaction. In 2023, with various carrier options available, it's essential to weigh the pros and cons of each service provider.

For startups especially, affordability often weighs heavier than other carrier considerations. In fact, many companies set their shipping rules for each possible order configuration, shipping zone, and package weight almost exclusively based on cost and discount rate access.

At the same time, shippers tend to conflate “best” rates with cheapest rates, and it is typical for 3pls to defer to the lowest numbers in default ship method programming. There’s nothing necessarily wrong with this approach. If anything it's good practice, especially for new brands with no order history of customer demographic data on which to base decisions about carriers.

But there are also plenty of exceptions - companies whose shipping method and carrier decisions are largely dependent on the specific nature of the business and its relationships with customers. These companies care deeply about customer experience and prioritize customer retention and brand loyalty as core tenets of their brand narrative. For these brands, the postage decision is a catch-22. By the time startups are ready to make a ground carrier decision, they’ve likely just upgraded from a bootstrapped operation to one outsourced across multiple key functions. But with a ton of new operational expenses, comes a tremendous lack of liquidity

Faced with similar circumstances, many brands are turning to fin-tech solutions like Ampla for streamlined access to working capital. Ampla is an all-in-one platform where brands can access a range of high-powered financial tools to help bridge critical funding gaps. As the economy limps on, institutional support remains a massive barrier to entry, and companies are forced to compromise. For eCommerce startups, this often means conceding to low carrier standards.

And, when every eCommerce startup is seeking the lowest rate card, it is nearly impossible to leverage shipping as a value add. Conversely, Ampla brands equipped with a small financial buffer are able to enter the carrier marketplace at a tier above economy shipping where there is more to consider than just price.

In this article, we help you make sense of your options and finalize a short list of carriers and service levels for your fulfillment process. Included in the following analysis are comparisons between the three major carriers  - USPS, UPS, and FedEx. Specifically, we look at price, coverage, delivery speed, service level options, tracking functionality, and other factors that may prove consequential.

‍United States Postal Service (USPS)

The USPS has long been a trusted name in small parcel shipping. Here are some key pros and cons to consider:

‍Pros

• Cost-effective: USPS offers competitive rates, especially for lightweight packages and residential deliveries.
• Extensive coverage: They deliver to every address in the United States, including P.O. boxes and military addresses.
• Sunday and holiday delivery: USPS is the only carrier that offers regular deliveries on Sundays and certain holidays, giving your customers more flexibility.
• Flat-rate options: USPS offers flat-rate boxes and envelopes, allowing you to ship items of various weights at a fixed price.

‍Cons

• Limited tracking features: USPS tracking updates may not be as frequent or detailed as other carriers, leading to potential customer service challenges.
• Delivery speed: While USPS provides reliable service, their delivery times can be slower compared to UPS and FedEx, particularly for long-distance shipments.
• Size and weight restrictions: USPS has limitations on the size and weight of packages, which may not be suitable for larger or heavier items.

United Parcel Service (UPS)

UPS is known for its comprehensive logistics network and a broad range of services.

Let's explore the advantages and disadvantages of using UPS

‍Pros

• Fast and reliable: UPS excels in time-definite delivery, making it a suitable choice for time-sensitive shipments.
• Extensive tracking capabilities: UPS provides detailed tracking information, allowing you and your customers to monitor shipments at every stage.
• Access to UPS My Choice: This free service lets customers modify delivery options, such as redirecting packages or scheduling deliveries for specific times.
• Worldwide reach: UPS offers extensive international shipping options and has a strong presence in many countries.

Cons

• Higher costs: Compared to USPS, UPS shipping rates can be higher, especially for heavier or oversized packages.
• Additional fees: UPS may charge extra fees for services such as residential deliveries or address corrections, which can impact your overall shipping costs.
• Limited Saturday delivery: UPS only offers Saturday delivery for specific services and at an additional cost, which may limit weekend delivery options for some customers.

FedEx

• FedEx is a global logistics leader, known for its expedited delivery services and advanced tracking capabilities.

Consider the following pros and cons of using FedEx

Pros

• Wide range of services: FedEx provides a comprehensive suite of shipping options, including express, ground, and international services, accommodating various shipping needs.
• Timely and reliable deliveries: FedEx offers fast and on-time deliveries, ensuring that your products reach customers promptly.
• Advanced tracking: FedEx provides detailed tracking updates, giving you and your customers real-time visibility into shipment progress.
• Extensive retail network: FedEx operates numerous drop-off locations and retail outlets, making it convenient for customers to pick up or drop off packages.

Cons

• Higher costs: Like UPS, FedEx rates can be higher than USPS, particularly for heavier or oversized packages.
• Limited residential delivery options: FedEx may charge additional fees for residential deliveries, potentially impacting your shipping expenses.
• Limited Sunday and holiday delivery: FedEx does not offer regular Sunday or holiday delivery services, which might limit delivery options for your customers.

Choosing the right small parcel carrier for your product-based company in 2023 requires careful consideration of your shipping needs, cost constraints, and customer expectations. USPS, UPS, and FedEx each have their strengths and weaknesses. USPS is cost-effective and offers extensive coverage, while UPS excels in speed and reliability, and FedEx provides a wide range of services with advanced tracking capabilities.

By analyzing the pros and cons of each carrier, you can make an informed decision that aligns with your business goals. Remember to evaluate shipping rates, delivery speed, tracking features, and additional services to select the carrier that best suits your requirements.