Many shippers look at FedEx SmartPost (FedEx Ground Economy) vs. Home Delivery with a confused look. With FedEx rates rising yearly, 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?”
Estimated reading time: 4 minutes
FedEx SmartPost vs Home Delivery
There are many pros and cons to take into consideration. Customer expectations, additional customer service costs, time in transit, current discount rates, and more.
Pros of SmartPost:
- Monday – Sunday Delivery
- Ship to all addresses: USPS will deliver to P.O. boxes.
- No residential surcharge
- Normal driver pickup
- Gross shipping spend applies to yearly revenue tier incentive:
- Agreement incentive tier levels stay with FedEx and not USPS, increase other service discounts
- U.S. territories and Puerto Rico are treated as U.S. domestic packages
Cons of SmartPost:
- Time in transit –An additional 2-5 days in transit over Ground or Home Delivery
- NO on-time or free guarantee
- Ground/H.D. both offer a day-definite on-time policy, or you get a full refund
- Package weight limit: 70 lbs.
- Maximum length plus girth: 130 inches
- Package length, width, or height cannot exceed 60 inches
- We see more undelivered packages for our clients
- FedEx dimensional weight (DIM) factor of 139 to all SmartPost packages
- Cannot ship from: Alaska, Hawaii, Puerto Rico, and the U.S. territories
FedEx Ground Economy Services Not Available
- FedEx Money-Back Guarantee
- Declared value
- Shipper-requested delivery redirect
- FedEx Hold at Location
- FedEx evening delivery
- Date certain delivery
- Collect on delivery
- Signature proof of delivery
- Address correction
- FedEx Redirect to Hold
- FedEx Appointment Home Delivery
- Hazardous materials shipments
FedEx SmartPost vs Home Delivery Comparison
Most FedEx Ground Economy packages are delivered by FedEx. However, certain destinations (i.e., P.O. Box, U.S. territories, Military Mail) will receive delivery by United States Postal Service (USPS). U.S. territories and Puerto Rico, are categorized as international destinations by FedEx. Conversely, U.S. territories and P.R. are treated as U.S. domestic locations for FedEx Ground Economy. 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. So then, take a look at the two different FedEx SmartPost vs Home Delivery scenarios. One shipper sees huge cost savings with SmartPost and the other shipper is only saving a few cents.
Shipper 1 – Zone 8
Shipper 2 – Zone 7
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. Therefore, Refund Retriever provides 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.