Frequent (and sometimes confusing) rate adjustments have become the norm for small parcel shippers. Even excluding the annual General Rate Increases, UPS and FedEx have made it common to change prices on services, fuel surcharges, and accessorials at any time of year.
A good example of this is the adjustments both carriers have recently made to their ground deferred services that are popular with e-commerce sellers: FedEx Ground Economy and UPS SurePost. The big problem from the shipper’s perspective is the timing and way the rate changes get announced, making it hard to compare the new rates.
So, it’s understandable if shippers are confused by the many headlines and unsure how the two services compare. Add to that the other service ground residential options available to shippers, and the rate landscape becomes even murkier.
The goal of this article is to help bring clarity to the complicated decisions residential shippers make every day. Here, we’ll compare UPS SurePost prices with FedEx Ground Economy prices, based on service, cost, and surcharges (specifically Delivery Area Surcharges).
We’ll also compare UPS SurePost with UPS Ground Residential and FedEx Ground Economy with FedEx Home Delivery.
Who has the better deferred ground prices?
Deferred ground services (in the past also referred to as “postal-hybrid”) are an important option for online retailers that make a lot of residential deliveries of lighter-weight shipments.
Factoring in current rates, including the $1.10 “Delivery and Returns” fee for FedEx Ground Economy, the following illustration details the per-package cost for each zone. Note that UPS is slightly cheaper at all zones, excluding a tie at Zone 6.
| Price for Packages Weighing Less than 1 lb. | |||||||
| Zone | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| UPS SurePost | $ 12.18 | $ 12.66 | $ 13.75 | $ 14.35 | $ 14.82 | $ 14.99 | $ 15.24 |
| FedEx Ground Economy | $ 12.42 | $ 12.75 | $ 13.79 | $ 14.37 | $ 14.82 | $ 15.03 | $ 15.27 |
The comparison becomes more complicated for packages weighing more than 1 pound:
- UPS is, on average, 1.2% more expensive than FedEx at 1 to 9 lbs. and zones 2 to 8
- UPS is, on average, 3.7% more expensive than FedEx at 10 lbs. and above and zones 2 to 8
- UPS is, on average, 2.9% cheaper than FedEx at 1 to 9 lbs. for Alaska, Hawaii, and Puerto Rico destinations
- UPS is, on average, 17.5% cheaper than FedEx at 1 to 9 lbs. for military destinations
Delivery Area Surcharges (DAS) for Deferred Ground Services
FedEx raised its Ground Economy DAS in February, making the surcharge equal for both carriers. DAS has been an area of focus for driving incremental revenue of late by FedEx and UPS. To illustrate, the most recent price increase for SurePost DAS raised the fee to $3.80 for Standard and $4.90 for Extended… a 62% and 69% increase, respectively!
How Do the Carriers’ Ground Deferred Services Compare to the Respective Ground Services?
Keep in mind that while the list prices below may appear higher, SurePost and Ground Economy packages do not incur a Residential surcharge, making them an attractive service depending on your negotiated rates with the carriers. Although these services are marketed as a slower AND cheaper alternative to their regular Ground Residential services, shippers must carefully evaluate their SurePost/Ground Economy prices compared to their ground prices.
TransImpact is an expert at this. Contact sales-info@transimpact.com for a no-obligation analysis of your costs and to be sure you are using the most cost-effective solution for your company.
Here is how the rates compare:
UPS SurePost is 7.8% more expensive than UPS Ground Residential at 1 to 9 lbs. and 36% more expensive at 10 to 70 lbs.
FedEx Ground Economy is 6.8% more expensive than FedEx Home Delivery at 1 to 9 lbs. and 31% more expensive at 10 to 70 lbs.
Lastly, for reference, the following is a timeline of relevant events and changes to the UPS and FedEx deferred ground services and rates:
In 2021, FedEx brought all “SmartPost” package delivery operations in-house and rebranded the service to “Ground Economy,” while UPS continued to use the USPS for final mile delivery via “SurePost.”
Jumping Forward:
September 11, 2024: USPS announces it would no longer offer discounted rates for packages dropped off at Postal “Destination Delivery Units” or DDUs. UPS relies on these discounts for SurePost, altering their cost structure.
September 13, 2024: FedEx announces its 2025 GRI, including higher 2025 Ground Economy prices.
October 21, 2024: UPS announces its 2025 GRI but does not include higher 2025 SurePost prices.
December 14, 2024: With its USPS agreement expiring soon and no resolution in sight, UPS announces higher SurePost prices for 2025 (including a 9.9% increase at 1 to 9 lbs. and a 62-70% increase on DAS.)
January 1, 2025: The UPS agreement with USPS expired. All Mail Innovations and SurePost volume is set to move in-house with a potential rebrand coming from “SurePost” to “Ground Saver.”
January 10, 2025: FedEx announces an adjustment to the Ground Economy DAS, increasing prices to match UPS.
We hope you find this information helpful. Contact sales-info@transimpact.com for additional tips on optimizing the costs and service performance of your small parcel shipping operation and making 2025 your supply chain’s best year yet!