Many shippers look at FedEx SmartPost (FedEx Ground Economy) vs Home Delivery with a confused look. With FedEx rates rising each year, we help many small parcel shippers evaluate current contracts and discount rates. One of the most commonly asked questions, “Would Smart Post be an option to lower shipping costs?”
There are many pros and cons to take into consideration. Customer expectations, additional customer service costs, time in transit, current discount rates, and much more.
Pros of SmartPost:
- Saturday delivery: USPS is the final delivery method, packages are delivered on Saturday at no extra cost.
- Ship to all addresses: USPS will deliver to PO boxes.
- No residential surcharge
- Normal driver pickup
- Weekly FedEx spend still good: Agreement incentive tier levels and spend stays with FedEx and not USPS so other service discounts are greater
Cons of SmartPost:
- Time in transit –An additional 2-5 days in transit over Ground or Home Delivery
- NO on time or its free guarantee – Ground/HD both offer a day-definite on time policy or you get a full refund
- Tracking goes over to USPS tracking
- We see more undelivered packages for our clients
- FedEx now applies a dimensional weight (DIM) factor of 139 to all SmartPost packages, check out our post about DIM weight.
FedEx SmartPost vs Home Delivery Comparison
So let’s take a look at two different customers sending a Home Delivery and SmartPost package with the same weight and zone.
The published rates for all 4 packages are the same, the base rate is $12.05. The best part of SmartPost is the lack of a residential surcharge fee. Take a look at the two different scenarios, one shipper sees huge cost savings with SmartPost and the other shipper is only saving a few cents.
Is SmartPost cheaper?
FedEx SmartPost vs Home Delivery, is SmartPost cheaper? Yes, SmartPost is a viable option to lower your shipping costs if you have deeper negotiated discounts for this service. As you can see above, shipper 1 has a huge advantage using SmartPost. Shipper 1 is saving $5.24 and shipper 2 is only saving $0.34! Shipper 2 should not be using SmartPost until he can successfully negotiate shipping rates to lower that cost.
Proper business intelligence and supply chain visibility are key. Let Refund Retriever provide free reports and analytics to find out what is the most cost-effective shipping method for your company.
Effective March 8, 2021:
FedEx SmartPost and FedEx SmartPost Returns will now be known as FedEx Ground Economy, and FedEx Ground Economy Returns. FedEx will still provide the same residential shipping for low-weight packages. It just has a new name: FedEx Ground Economy, formerly FedEx SmartPost.