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FedEx Ground Economy: Discount Rates

By Last updated on: July 30, 2021

FedEx Ground Economy discounts are significant to shippers. These discounts are the maximum savings available to shippers based on the published rates for the year. During a FedEx contract negotiation, pay attention to all of these points to maximize your yearly savings.

Estimated reading time: 4 minutes

FedEx Ground Economy: What is it?

Previously called FedEx SmartPost, FedEx Ground Economy is a cost-efficient shipping option for businesses. This service is ideal for US domestic residential deliveries and returns that are low-weight and nonurgent.

Delivery time for FGE takes 2 to 7 business days, depending on the travel distance. The greater the zone, the longer the time in transit. Also, package delivery is available Monday through Sunday, seven days a week. 

The maximum package size for an FGE is 70 pounds. Once again, it would be best if you had an alternative to packages 71 lbs and over. Also, the maximum package size is 130″ in length plus girth.

Exceptions to FGE

The following accessorial options are not available for FedEx Ground Economy:

  • Collect on delivery COD
  • Money-back guarantee 
  • Declared value 
  • Signature proof of delivery
  • Evening, appointment, or date-certain delivery
  • Hazardous materials service
  • Redirect to hold at a FedEx location or Delivery redirects requested by the shipper

FedEx Ground Economy: Base Rates

FedEx discounts are split into two levels. Namely, base and incentive level discounts. Base discounts are set in stone. The same discount will be applied no matter how much shipping is done.

Base discount rates will be split into three categories:

  • By Ounce
  • By Pound
  • Or Bound Printed Matter

Also, incentive level discounts fluctuate on your shipping volume. Therefore, make sure most of your discount is at the base level. Thereby ensuring you get the maximum discount even in times of reduced shipping.

FedEx Ground Economy: Earned discounts

Next, we need to look at the tier level or earned discounts. These earned discounts are based on the amount of charges each year, gross annualized transportation charges. In this case, these are charges before any discounts apply. The annualized transportation charges are basically the total amount of published rates.

Generally, we like to see a shipper fall into the middle category. This allows for deeper discounts when volumes rise. Plus, any reduction in shipping volume does not completely wipe all earned discounts out.

FedEx Ground Economy Discounts - tier level discounts

Minimum Charge Reductions

The minimum charge for all FedEx Ground Economy is a Zone 2, one-pound package. This means no matter how large FedEx Ground Economy discounts, the minimum amount FedEx will charge is this amount. However, a shipper can contractually negotiate to have this lowered. Most minimum reductions are $2.00 to $3.00. This is all part of successful FedEx contract negotiations.

FedEx Ground Economy Discounts Conclusion

A shipper should consider all service levels during a successful FedEx contract negotiation. Even if they are not currently in use. Many ground shippers eventually look for a lower-cost option. FGE is a cheaper and slower alternative to FedEx Home Delivery. If you have any questions, contact us for comprehensive contract analysis. We can help provide support from data analysis to proposal quantification. Lastly, check out our contract negotiation page for more information.

Brian Gibbs

Author Brian Gibbs

More posts by Brian Gibbs

Brian Gibbs | President of Refund Retriever

Brian Gibbs founded Refund Retriever in 2006 while running his first eBay-based business and seeing the shortcomings of other shipment auditing companies. Refund Retriever's primary focus is FedEx and UPS parcel invoice auditing. After graduating from Texas A&M University in 2001, he graduated from the University of Houston in 2004 with a JD and MBA. Gibbs has been featured in Forbes, Entrepreneur, and other publications discussing parcel auditing, shipping, e-commerce, and more. Learn more at www.refundretriever.com or call (800) 441-8085 for more information.

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