A Carrier Rate Comparison Can Uncover Hidden Saving Opportunities Author: Rich Harkey
March 09, 2016

When it comes to small parcel shipping, most shippers face the choice of choosing to ship with FedEx or UPS. Many shippers feel pretty strongly (usually based on a prior negative experience) that the service of one carrier is better than the other.  On the other hand, some shippers remain relatively neutral in comparing UPS and FedEx service levels. These shippers can typically approach a carrier rate negotiation largely based upon price, which the carriers hate, and in turn can give the shipper a significant upper hand.

When comparing UPS and FedEx rates it is not accurate to just evaluate each carrier’s incentives and discounts side-by-side.  A 50% discount from one carrier may result in a different net charge than a 50% discount from the other since the carrier’s tariff and fee schedules can vary. To be sure you accurately determine the difference between UPS and FedEx rates it’s super important to compare actual net costs after applicable discounts, incentives, and/or rebates.

Here are a few best practice suggestions to take to heart:

  • When conducting a UPS vs. FedEx rate comparison it is important to evaluate net costs NOT discount percentages. Make sure you are using the correct tariff.
  • When negotiating with FedEx and UPS do not rely solely upon their own summary assessment of their pricing proposal. Use your own analytic tools or bring in an unbiased third party to help quantify and validate their numbers.
  • For general transportation rate comparisons there are free online tools like the FedEx & UPS Rate Comparison Tool.
  • Reach out to a third party professional for a highly detailed, in-depth analyses of UPS and FedEx rates, fees, discounts/incentives, and overall contract structure specific to your business.

An in-depth analysis of your current carrier rates and discounts no doubt has the ability to uncover the potential for savings. Carrier surcharges and indices are ever-changing, so keeping abreast of these changes and constantly checking and double checking what the other carrier offers can prove to be a worthwhile endeavor.

Since we’re pretty awesome, we offer a free online FedEx & UPS Rate Comparison Tool that provides businesses with a useful resource to evaluate carrier rates (gross and net) and run “what if” scenarios.  Our radical team of experts can also help conduct a more comprehensive rate comparison that takes into account surcharges, accessorial fees, and any other variable. Pricing dynamics in the world of small parcel shipping are constantly changing. We’ve helped hundreds of companies increase profitability through solutions that reduce shipping costs. Give us a call to learn more.

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