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9 Ways to Reduce FedEx & UPS Shipping Costs

By Last updated on: November 13, 2023

Let’s reduce shipping costs. FedEx and UPS are the world’s leading shipping couriers you can trust for speedy delivery of packages. Shipping costs can differ based on factors such as shipping destination, package size, weight, and shipping service selected. This blog presents ways to decrease shipping costs with FedEx and UPS.

1. Study, Assess, and Compare Shipping Options:

FedEx and UPS offer various shipping options with individual delivery speeds and pricing. Compare the options and choose the one that best satisfies your needs while minimizing expenses.

FedEx and UPS are very similar in service level and accessorial fee categories. The carriers increase rates at the end of each year with slight differences in the increases. In 2023, the general rate increase for FedEx and UPS was an average of 6.9%.

2. Negotiate Carrier Discount Rates to Reduce Shipping Costs:

If you repeatedly ship with FedEx or UPS, you are qualified for discounted rates based on the shipping volume. Contact FedEx and UPS about negotiating rates based on your shipping volume.
The carriers will discount service levels, accessorial fees, and pricing terms to reduce shipping costs. Shippers must understand what services they use and what accessorial fees affect shipping costs. Shipment reporting and analytics like those provided by Refund Retriever are the first steps of any contract negotiation.

3. Use Flat Rate Services and Materials:

FedEx and UPS provide flat-rate packages for certain services. FedEx One Rate or UPS ground flat rate are viable options. Both provide boxes to enable the shipment of items of a specific weight and size for a flat rate, which can lower shipping costs compared to standard shipping rates.

Additionally, the carriers will provide package material for flat-rate services. FedEx currently offers twelve different flat-rate packaging options. These options include envelopes, padded paks, boxes, and tubes. Carrier-provided packaging will reduce shipping costs for any shipper.

4. Employ Packaging Optimization:

Another way to lower FedEx and UPS shipping costs is by adequately packing your items. Optimize packaging using correctly sized boxes or envelopes to transport items. Optimization ensures that you use proper packing materials to guarantee your package’s safety without adding excessive weight.

In addition to safely hauling products, a properly sized box will decrease the dimensional pricing applied by FedEx and UPS. Each box you send will be charged the higher of the actual or dimensional weight. The standard DIM divisor is currently 139. Therefore, a 12x12x12 box will have a dimensional weight of 13 pounds, and FedEx and UPS will charge you a minimum of 13 pounds unless the actual weight is greater.

DIM Weight Calculations reduce shipping costs
DIM Weight Dimensional FedEx UPS Refund Retriever Calculations

5. Utilize Third-Party Insurance:

Particularly for expensive items, shipping insurance can greatly decrease your profit margins. However, choosing a third party could result in reduce shipping costs. Most people often select insurance from shipping carriers only. Typically, a third-party shipping insurance provider is less costly than what FedEx or UPS will provide.

6. Evaluate FedEx/UPS Ground Multiweight:

If you have multiple packages going to the same destination, FedEx/UPS ground multiweight can reduce shipping costs. UPS It will allow you to combine numerous packages into one load, resulting in lower shipping costs than shipping each package separately. UPS also offers a ground with freight pricing option to reduce the costs of multiple packages going to one location.

7. FedEx/UPS Discounts to Reduce Shipping Costs:

FedEx and UPS offer discounts to specific customers, including small businesses, nonprofits, and eBay sellers. Check if you are eligible for third-party discounts, and take advantage of them to decrease your reduce shipping costs. Check with trade associations or organizations for member deals if your shipping volume is seasonal or descending. Additionally, American Express offers promotions on FedEx shipping.

International shippers can also use the FedEx Great Rates program to ship internationally. Cargo planes have a set amount of space to transport packages, and if an aircraft is not full, it is beneficial for the carrier to fill it up. So FedEx will offer reduced rates on ready-to-go packages to maximize the already scheduled flight.

8. Review and Optimize Shipping Settings:

Regularly review and alter your shipping choices, such as address verification, delivery confirmation, and insurance. You can FedEx and UPS reduce shipping costs for FedEx and UPS to save money by ensuring your settings are tailored to your shipping requirements. If your shipping software has address validation, use it. Packages will arrive on time and lower the amount of address correction fees on your invoices.

9. Utilize the FedEx and UPS On-Time Guarantees:

UPS and FedEx offer a money-back guarantee on packages delivered late. Historically, all UPS and FedEx packages were guaranteed to arrive on time or it’s free. If a package is delivered more than a minute after the expected delivery, your company deserves a refund for the shipping charges. But this has temporarily changed after COVID. Currently, UPS guarantees on-time delivery for next-day air and international express packages. FedEx guarantees on-time delivery on all service levels for members of FedEx My Rewards. Refund Retriever specializes in finding late deliveries in your company’s billing invoices.

Evaluating the FedEx and UPS terms and conditions, pricing policies, and shipping guidelines will enable you to fully understand your shipments’ costs. Therefore, it’s a good idea to periodically review your shipping costs and explore different alternatives to find the most cost-effective shipping solution for your shipping needs.

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 or call (800) 441-8085 for more information.

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