Cheapest Way to Ship a Package in 2021

by
April 26, 2021
Cheapest Way to Ship logo on a blue and green background

Finding the cheapest way to ship a package doesn’t have to mean using the slowest service. Shipping discounts are everywhere. If you have 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 carrier and we’ll show you how to save money on shipping costs.


Cheapest Shipping 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. Keep in mind that these services are in reference to parcels around 10 lbs and lighter. For anything higher, it’s recommended you check carriers individually or via ShipStation’s shipping rate calculator.

BEST OPTIONS FOR 2-3 DAY SHIPPING

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.

Residential Surcharge

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. 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.

BEST OPTIONS FOR 2 DAY SHIPPING

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 OPTIONS FOR NEXT DAY SHIPPING

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 OPTIONS FOR NEXT DAY AM SHIPPING

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)

To save on shipping your express parcels as well as everything else, sign up for ShipStation to see how cheap shipping can be.

Best International Shipping Options

STANDARD DELIVERY

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.

FAST DELIVERY

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.

EXPEDITED DELIVERY

For Expedited services, FedEx International Priority® offers a slight edge over UPS Worldwide Express®.

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 is not always going to offer you the lowest rate, let’s explore some more packaging options.

BEST FOR 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 FOR 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

Cubic pricing is broken into 5 categories, ranging from 0.1 to 0.5 cubic feet.

BEST DIMENSIONAL 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.

L x W x H

Divisor

The larger the divisor, the cheaper the parcel. USPS has the lowest rate when it comes to dimensional weight pricing:

CarrierDomestic Dimensional Formula
UPS(L x W x H)/ 139
FedEx(L x W x H)/ 139
USPS(L x W x H)/ 166

As you can see, since USPS has the largest divisor, thus its rate is the lowest.

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 OPTIONS FOR UNDER 1 POUND

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 OPTIONS FOR UNDER 5 POUNDS

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 OPTIONS FOR HEAVY PACKAGES

FedEx Ground and UPS Ground typically offer the best option for domestic parcels over 5 lbs.

USPS Media Mail

If you’re shipping physical media, USPS Media Mail is a great option as it is incredibly economical.

An advantage of offering free shipping through USPS is that it’s the only domestic carrier which 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.

ShipStation 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:

  • 40% 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!

Save time and money with ShipStation the best online shipping platform for your ecommerce business.

UPS Discounts

ShipStation + UPS Digital Access Program

UPS announced an adjustment to its UPS® Digital Access Program rates. Effective April 11, 2021, customers who sign up for a UPS account on ShipStation will now enjoy discounts of up to 50% off UPS® Ground shipments, up to 66% for UPS 2nd Day Air® service, up to 65% for UPS Next Day Air® service, and up to 76% off International services on eligible packages.

Discover the best rates for UPS® Ground Shipping labels when you use ShipStation.

START PRINTING DISCOUNTED UPS® LABELS

Say goodbye to surcharges

In addition to reduced shipping rates, ShipStation users also avoid certain surcharges, saving you even more money.

ShipStation + UPS® Advantages

  • UPS® discounts up to 62% off Daily Rates
  • 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

FedEx

If you’ve already negotiated rates with FedEx, there is required action to add them to ShipStation.

DHL Express

ShipStation customers can save up to 66% 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

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!

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.

Common hybrid services are:

FedEx SmartPost: A contract-based service that combines FedEx Ground with USPS.

UPS Mail Innovations: A contract-based service that combines UPS Ground with USPS. Works best for small parcels under 1 lb.

UPS SurePost: An economical combination of UPS Ground and USPS services, typically for larger parcels weighing up to 20 lbs.

Shipping Insurance

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 INSURED VALUES

ups insurance, usps insurance, fedex insurance, insurance coverage for carriers, default coverage, default insurance coverage shipping, carrier insurance coverage

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.

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 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.