How to Discount FedEx and UPS Shipping Costs

Author: Jared Fisher
September 11, 2011

Shipping with FedEx and UPS can be very costly. Over the last year, prices have risen substantially. However, there are some simple things that budget-conscious customers can do to discount FedEx and UPS shipping costs without sacrificing delivery speed.

Use Third Party Insurance

FedEx and UPS Shipping charge $.0.70 for each $100 of Declared Value that they insure. Third party insurance offers the same level of protection at lower rates, such as $0.30. That 'insignificant' forty cents adds up.

Consider a shipment that costs $3000, if it is insured with the carrier, the shipper would pay $20.30 (insurance for the initial $100 is usually free). If the shipment was covered by third party insurance, it would only cost the shipper $9.00, over a $10 discount on FedEx or UPS insurance costs.

Use the Correct Packaging

Carriers charge different rates for different envelopes, packages and boxes. Posting a letter in an envelope, will be cheaper than using a Pak.

FedEx charges $48.35 to send a Pak cross-country but only $29.70 for an envelope. When sending documents, shippers can get a significant discount by using a plain envelope.

Use 'Next Day Air' Shipping Selectively

Next Day Air shipping is two-to-three times more expensive than ground shipping. However, it may not be any faster. If the package is only going 150 miles or less, it is unlikely that it will arrive any faster if sent by Next Day Air. In fact, it is likely that if two letters were sent to the same destination that close by, one by regular ground shipping, the second by air-mail, they would travel in the same truck, arriving simultaneously.

Pay Online

Paying online for shipping with FedEx results in automatic discounts of 10%. Paying with American Express raises the discount to 15%.

Frequently check the Promotion center for additional FedEx discounts.

Ask For Discounts & Refunds

Customers who frequently ship over seas or use next-day delivery services in bulk can call customer relations and ask for a negotiated discount.

Even small and medium enterprises have the opportunity to try and negotiate a discount with FedEx or UPS. However, to effectively negotiate with these major carriers businesses need to know the details of their shipping needs, as well as what industry standards are. Businesses that don't have this expertise in-house should consider making use of a consulting and auditing firm, like Lojsitic, that specializes in shipping efficiency.

A consulting and auditing firm can help businesses save even more on shipping by performing audits of shipping charges. Freight carriers often charge customers incorrectly for 'services' like 'correcting' addresses, by changing 'Apt #' to 'Unit ', or incorrectly classifying a building as residential instead of commercial. These fees can and should be refunded.

Roughly 3% of FedEx deliveries are late. However, refunds are only given if the customer asks for them. A consulting firm can make sure that businesses only pay for the service they receive.

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