Finding the cheapest way to ship a package doesn’t mean using the slowest service. Shipping discounts are everywhere if you know where to look. If you run an ecommerce business, you should not be paying retail shipping rates. Through incentive programs, carrier negotiations, and shipping software, there are many ways to get discounts with major carriers and we’ll show you how to save money on shipping costs.
Cheapest Way to Ship Based on Package Size
The size of a parcel is going to greatly determine your shipping rate. The more space a package takes in the back of a truck, the fewer parcels the carrier can transport at once. One way to maintain steady shipping costs is to opt for Flat Rate packages. But since this will not always offer you the lowest rate, let’s explore some more packaging options.
Best Way to Ship Envelopes or Flats
If First Class Mail is an option, First Class Mail envelopes and flat rate envelopes will offer the lowest rate. Beyond that, USPS Priority Mail will be the way to go. Remember, First Class Envelopes don’t offer tracking.
Best Way to Ship Small Packages
Generally, the USPS will offer the best rates for small packages regardless of if you’re shipping First Class Mail, Media Mail, Priority Mail Package or Flat Rate.
Best Cubic Pricing
USPS Priority Mail offers the best rates on cubic pricing. This is a special service that allows you to ship small, heavy items at a lower shipping rate through the USPS. For items weighing less than 20 lbs, this is the formula for how to find their cubic feet:
How Cubic rates are determined
| Length x Width x Height / 1728 = Cubic Feet |
Best Dimensional Weight Pricing
The inverse of cubic, dimensional pricing increases the shipping rate if a parcel is deemed too large in relation to its weight. Since packages take up space in cargo vehicles and airplanes, etc., their shipping rate increases with their size. The way it works is you multiply the parcel’s dimensions (LxWxH) by a divisor.
The larger the divisor, the cheaper the parcel. USPS and UPS from ShipStation have the lowest rates when it comes to dimensional weight pricing. See the table below
| Carrier | Domestic Dimensional Formula |
|---|---|
| UPS from ShipStation | (L x W x H)/ 166* |
| USPS | (L x W x H)/ 166 |
| FedEx | (L x W x H)/ 139 |
Cheapest Way to Ship Based on Weight
The weight of a parcel can greatly impact its rate. Since we’ve already discussed cubic and dimensional weight pricing, let’s take a look at what the most cost-effective shipping service is based on different weight groups.
Best Way to Ship Packages Under 1 LB.
USPS First Class Mail is the most affordable shipping option for parcels weighing under 16 oz. If you are shipping physical media, USPS Media Mail can be even more affordable.
Best Shipping Services for Parcels Under 5 LBs.
For parcels between 1-5 lbs, USPS Priority Mail is usually the most affordable option. Anything under 16 oz works best with USPS First Class mail
Best Way to Ship Heavy Packages
UPS Ground typically offers the best option for domestic parcels over 5 lbs. As weight, dimensions, and destination increase, other services may become more affordable.
Way to Ship Based On Delivery Speed
Different services ensure delivery within specific timeframes. We’ve made a list of preferred services for some of the common delivery timeframes. These rates are suggestions. Many factors can change which carrier service offers the best rates.
Best 2–3 day Shipping Options
2-3 day shipping typically works best with USPS Priority Mail. While FedEx and UPS Ground services offer similar delivery times, USPS typically offers the lowest rates. If a package weighs over 7 lbs or so, though, UPS and FedEx start offering more competitive rates.
BEST 2-Day Shipping Options
It is important to note that USPS offers no services with guaranteed 2-day delivery. So any parcels that require a hard 2-day delivery work best through FedEx 2 Day or UPS 2nd Day as they do offer this timeframe.
Best Next Day Shipping Options
Next Day/Overnight delivery is where FedEx and UPS start offering competitive rates to USPS. With strategic hubs located throughout the world, FedEx and UPS are frequently the carrier of choice for expedited shipping.
- UPS Next Day Air Saver®
- FedEx Standard Overnight®
Best Next Day AM Shipping Options
Similar to standard Next Day Shipping options, UPS and FedEx offer guarantee delivery by noon the following day. Rates between UPS and FedEx don’t vary too differently between the 2 carriers. The best services are:
- FedEx Priority Overnight® (by noon)
- FedEx First Overnight® (by 10:00 am)
- UPS Next Day Air® (by noon)
- UPS Next Day Air® Early (by 10:00 am)
Best International Shipping Options
Standard International Delivery Options
For parcels weighing 4 lbs and under, First Class Mail International will be the most economical way to ship internationally. However, keep in mind that there are no requirements for estimated delivery time on this, so it may take weeks to arrive at its final destination. For parcels weighing 4 lbs and over, USPS Priority Mail International typically offers the best rates.
Affordable Fast International Shipping Options
For fast delivery, USPS Priority Mail Express International will typically offer the best rates. Beyond that, FedEx may offer comparable rates and delivery timeframes with their Economy International service.
Best Expedited International Delivery Options
For Expedited services, FedEx International Priority® offers a slight edge over UPS Worldwide Express®.
Best Carrier Discounts Available
USPS Discounts
New Accounts: USPS is a great place to start for shipping discounts. For many packages, they will offer the lowest rate. And if you’re a ShipStation user, you’ll receive a free PC Postage account (ShipStation Pro Plan) through Stamps.com simply by having a ShipStation account (A $15.99 value). There’s no contract, you’ll receive this deal for as long as you have an active ShipStation account. Take advantage of rate discounted up to:
- 84% off Priority Mail
- 18% off First Class Mail Package
- 13% off Priority Mail Express
- 5% off International First Class, Priority Mail, and Priority Mail Express
- 40% off USPS Package Insurance Rate
ShipStation offers discounted USPS rates that you can take advantage of simply by signing up.
Existing Accounts: ShipStation allows you to connect your existing USPS postage provider account (Stamps.com and Endicia) to your ShipStation account. If you don’t currently take advantage of any USPS discounts on your existing Stamps.com account, you can convert it to the free Pro Plan take advantage of the above rates. Simply go through the setup process within ShipStation, and we’ll convert your account automatically!
UPS Discounts
ShipStation + UPS Digital Access Program
UPS announced an adjustment to its UPS® Digital Access Program rates. Effective January 1, 2022, customers who sign up for a UPS account on ShipStation will now enjoy discounts of up to 88% off Daily Rates, 77% off UPS® Ground shipments, and up to 72% for UPS 2nd Day Air® and UPS Next Day Air® services on eligible packages.
Discover the best rates for UPS® Ground Shipping labels when you use ShipStation.
ShipStation + UPS® Advantages
- UPS® discounts up to 88% off Daily Rates (international services)
- No minimum shipping volume requirements
- Avoid certain surcharges such as residential surcharges, saving you even more money
- Guaranteed delivery services
- Updated UPS® tracking and delivery alerts
- Domestic and international delivery services
START PRINTING DISCOUNTED UPS® LABELS
Do I Pay UPS Surcharges like Residential Surcharges and Fuel Surcharges?
One thing to keep in mind is that residential surcharges can apply to residential addresses when you ship with FedEx and UPS. This adds about $3-4 to every shipment. Sometimes, these addresses are not validated as residential in the carrier’s platform and you won’t know you’re paying this much extra until you get your invoice.
While USPS does not apply these charges to their shipments since the postal service by default anticipates delivering to each and every domestic address. This commitment, though, is why heavier parcels start becoming more expensive than with UPS or FedEx.
The good news is UPS From ShipStation gives you discounts and can eliminate residential surcharges altogether, saving you even more money!
Sign up for a ShipStation Trial today and start saving up to 88% on UPS label fees!
DHL Express Discounts
ShipStation customers can save up to 75% on DHL Express postage with ShipStation Carrier Services. DHL Express lets you make economical international shipments, and is a breeze to set up in ShipStation. Similar to the USPS, It’s a single postage purchase payment method that is tied to the same bank card on file with Stamps.com.
Other Ways to Save with ShipStation
Whether you want to use shipping insurance or even find alternative shipping services, there are a lot of options out there to create a more fine-tuned shipping strategy while also saving money!
How to Offer Shipping for Cheaper
An advantage of offering free shipping through USPS is that it’s the only domestic carrier that can ship to PO Boxes or mailboxes. Because of this, home deliveries do not accrue delivery surcharges the way FedEx or UPS do. This can add almost $4 to a package’s delivery fees.
In-Cart Delivery Options
One way to capitalize on the affordable rates available in ShipStation is to use In-Cart Delivery Options. This exposes live rates to your customers in checkout. Fears of overcharging or undercharging can be a huge pain point for many ecommerce merchants. Luckily, ShipStation lets Shopify, Wix, Magento, and BigCommerce merchants provide live-rate shipping options to their customers during checkout. These can be adjusted to include or decrease based on dollar amounts or percentages.
UPS and FedEx Hybrid Services
An advantage to using FedEx and UPS is being able to access hybrid services. If you’re unfamiliar, hybrid services are services where either FedEx or UPS pick up the parcels, but USPS makes final delivery. These are cost effective services that allow you to get around added costs such as the residential/delivery surcharge. This also allows delivery to mailboxes/P.O boxes. These services are are comparable in rates and estimated delivery time to standard USPS Priority services.
FedEx and UPS Hybrid Services to Use
FedEx Ground Economy is a contract-based service that combines FedEx Ground with USPS.
UPS Mail Innovations is a contract-based service that combines UPS Ground with USPS. Works best for small parcels under 1 lb.
UPS SurePost is an economical combination of UPS Ground and USPS services, typically for larger parcels weighing up to 20 lbs.
FedEx Discounts
If you’ve already negotiated rates with FedEx, there is required action to add them to ShipStation. Once configured, you can start saving on your FedEx shipments!
Shipping Insurance Discounts
Regardless of circumstance, insurance is the main extra cost that you don’t want to pay for until you have to. But even still, there’s no need to pay more for it than needed. Remember, many services offer a default coverage for insured values under a certain price. And third party insurance can be a significantly more affordable option.
Default Coverage By Service
| Service | Not Included | $50 | $100 | $200 |
| USPS Priority Mail | √ | |||
| USPS Priority Mail Express | √ | |||
| USPS Priority Mail international | √ | |||
| USPS First Class | √ | |||
| USPS Media Mail | √ | |||
| USPS Parcel Select | √ | |||
| FedEx | √ | |||
| UPS | √ |
Third-Party Insurance
A major way to pay less for insurance is to use a third-party insurance provider, such as Shipsurance. When adding insurance to a shipment you pay the additional fees in increments of $100 insured value. Typically, carriers charge between $0.75-0.85 per $100 value, with a minimum cost of roughly $2.50. Shipsurance, however, only charges $0.55 per $100, and with no minimum cost. So you can save big by using this third party insurance. Applying Shipsurance to a parcel and filing a claim is very streamlined through ShipStation.
To start saving on shipping, sign up for your free trial of ShipStation!
