As the world of online shopping and e-commerce continues to grow, so too do the number of package delivery options. Two of the most popular shipping companies are UPS and FedEx, but which one is better? In this blog post, we’ll take a look at UPS vs FedEx in 2023 and see which company is better suited for your shipping needs.
FedEx vs UPS Comparison
If you are managing an online store you have an important decision to take. FedEx and UPS are the top courier companies of the e-commerce industry, but can also provide competitive pricing. The best delivery services don’t involve merely searching for an appropriate provider. It’s important to find ally who will be helpful in delivering quality products for your customers. The right courier will provide your clients with the highest quality, speedy, and efficient services.
UPS vs. FedEx: An Overview
FedEx and UPS are the two largest global shipping carrier companies.
FedEx is an American multinational corporation founded in 1971. The carrier offers two types of services: non-freight shipments within the US and non-freight international parcels.
On the other hand, UPS, one of the oldest carriers in the market, founded in 1907, also offers non-freight shipping services for domestic and international shipments.
In terms of revenue, the two carrier competitors are quite tied. As of 2021, FedEx generated roughly $84 billion. It also has more than 850,000 employees and operates in more than 220 countries and territories.
On the other hand, UPS generated $97.2 billion in revenue — a 14.96% increase from 2020. UPS international package shipments include delivery to more than 220 countries and territories worldwide. Additionally, they have a large number of employees, 534,000 to be exact.
UPS
United Parcel Service, Inc. (UPS) delivers packages worldwide every day except Sunday. In 2019, UPS delivered around 24.7 million packages and documents each day, which totaled 6.3 billion, according to its 2020 annual report—a number unmatched by anyone else in the business.
The UPS Store and FedEx Office are retail outlets set up by the two companies to bring in individual shipping orders for their respective package delivery and express services. Having such stores and offices also represents the different approaches by UPS and FedEx to serve their customers.
While both outlets provide shipping, packaging, and certain office supply services such as copying and printing, they attract different kinds of customers because of the different nature of each company’s underlying delivery business. The UPS Store is often a relatively small retail setting, independently owned by franchisees. It primarily serves retail customers and small businesses for their small package delivery needs plus certain postal and shipping-related services.
Electronic Commerce and Logistics
The ongoing e-commerce development has played right into UPS’s core business of small package delivery. As more people make purchases regularly online, merchants on the Internet are increasingly pressured to make their offline delivery of goods on time to customers.
They see logistics as having a much bigger role in retail success, and to help themselves better navigate through the e-commerce way, online merchants rely on package delivery companies such as UPS to make the final connections to their customers. As a result, UPS has seen increased demand for its business and has even struggled to keep up its capacity during times of heavy shipping orders.
UPS manages all its businesses, such as air, ground, domestic, international, commercial, and residential through a single pickup and delivery network. The single network structure has allowed UPS to gain competitive strengths by maximizing network efficiency and asset utilization.
FedEx
FedEx Corp. (FDX) moves more than 18 million shipments each business day as of FY20 to more than 220 countries and territories around the world.2 When it comes to business models, the two companies have each found their different business niches, with UPS focusing on small package delivery and FedEx specializing in time-sensitive express service.
As for stores, FedEx Offices usually occupy large spaces, really resembling big offices, and are corporate-owned. FedEx Office can provide sophisticated equipment such as digital photo kiosks, laser printers, or desktop access with an image scanner and Adobe design software. FedEx mostly attracts retail customers and corporate clients, who prefer and can afford the kind of express services offered.
Express and Long-Haul Delivery
Online purchases require mostly regular local and regional deliveries as opposed to express, long-haul deliveries, which is more what FedEx does the best. With cost-efficiency in mind, online merchants are more likely to sell through their regional fulfillment centers or local chain stores to avoid long-distance deliveries that can be time-consuming and cost-laden. As a result, FedEx’s strength does not play into e-commerce development. To catch on with e-commerce’s demand for shorter-distance delivery, FedEx may have to realign its business model more toward its FedEx Ground while keeping its express advantage.
FedEx’s strategy is for its different business units—such as express, ground, freight, and services—to operate independently. However, 97.1% of FedEx’s clients use two or more of the company’s separate operating units, according to its investor relations page, providing a different kind of competitive advantage.
Delivery Services: UPS vs. FedEx
Both carriers offer ground and air shipping services within the US and internationally.
However, UPS focuses on domestic ground package delivery and has a larger fleet of ground vehicles. Meanwhile, FedEx specializes in global air express freight and has double the airplanes as UPS.
FedEx’s International Ground delivery is available in Canada and supports packages up to 150 lbs., so it is an option for heavier packages.
UPS Standard is an economical ground delivery service that only ships to the U.S., Mexico, and Canada and doesn’t ship to Hawaii or Alaska.
Both carriers offer a large variety of options and come with basically the same features, so let’s dive into each carrier and see where they differ.
FedEx vs. UPS: Ground Services Comparison
Both USPS and FedEx operate as rivals. Each service provided is generally similar to the other in terms of price, time and features. In this example, we can compare UPS’s services with the most commonly used ground service.
FedEx Ground vs. UPS Ground
Both services offer ground-based shipping within the domestic US. Here’s how they compare.
FedEx Ground Service Details
Delivery lead times between 1 – 5 five business days within the contiguous US; 3-7 business days for Hawaii and Alaska
Delivers Monday – Friday
No weekend delivery
The weight limit is 150 pounds (68 kg); the length limit is 108 inches (274 cm) and 130 inches (330 cm) for girth
Offers guaranteed delivery
Packages insured up to $100
Package tracking
UPS Ground Service Details
Delivers within 1 – 6 days within all 50 US states
Delivers Monday – Friday
No weekend deliveries
Weight limit of 150 pounds (68 kg)
Offers guaranteed delivery
Offers up to $100 in insurance
Package tracking
Takeaway: Both UPS and FedEx Ground deliver to every state in less than a week. Delivery times are comparable, come with a guarantee, and include tracking.
Update: Both companies have halted their delivery guarantees until the end of COVID-related restrictions.
Which is faster: UPS vs Fedex?
Each carrier has similar delivery periods. Even though the shipping companies will assure that your order will be delivered on a certain day, only FedEx guarantees a time limit for all service providers. So if you need quick and timely deliveries FedEx is your best choice.
The only exception in order for UPS to be quicker than FedEx would be in the transportation service. UPS Ground ships primarily more quickly within the United States as it operates an extensive trucking fleet. UPS is providing a quicker delivery network, delivering more than 100k trucks versus FedEx’87,300 truck fleet.
3-day delivery option UPS Compared to FedEx, UPS offers the more economical 3-day delivery option with UPS 3 Day Select. While USPS Priority Mail may be much more affordable in most cases, on-time delivery has been dwindling, and reliability is not as up-to-par as UPS for 3-day delivery.
Which is cheaper: UPS vs Fedex?
Now let’s compare the shipping prices of UPS and FedEx to find who is the cheapest.
Let’s assume we ship something on a Monday from San Francisco, CA to New York, NY.
UPS and FedEx determine shipping costs depending on the weight and dimensions of the package, the destination, and the delivery time expected. To compare UPS and FedEx shipping rates for domestic and international shipping, we have calculated the price based on different routes and sizes of packages.
The results show that UPS is slightly cheaper than FedEx for both domestic and international shipping. For domestic shipping, the cost of a 5-pound package is about 8% less with UPS than with FedEx. For international services, the cost of a 5-pound package from China to the US is about 10% less with UPS than with FedEx.
However, the exact cost of shipping depends on the size and weight of your package. If you have a heavier or larger package, FedEx may be less expensive than UPS. Also note that if an item is too large to fit in either carrier’s box sizes, they may impose other charges such as dimensional weight pricing which will increase the cost of your shipment.
It is important to compare the shipping rates of both UPS and FedEx when making a purchasing decision. The cost of shipping is a major factor, as it can have a significant impact on your bottom line. Ultimately, the best option for you depends on the size and weight of your package, as well as how quickly you need it delivered. By comparing the rates of UPS and FedEx, you can make an informed decision on which shipping option is best for your needs.
Which is better: UPS vs Fedex?
Determining which carrier meets a company’s shipping needs depends on a number of factors and what is most important for the shipper.
Certainly, the best carrier might vary depending on what kind of package you’re sending, how far it needs to travel, and a few other factors.
Here’s a list of factors you might want to consider before deciding which company would be the best for your business:
Package size
Shipment timeframe
Fedex standard overnight
UPS vs. FedEx FAQs
Below are some commonly asked questions on how UPS services differ from FedEx services.
Which is more reliable – FedEx or UPS?
Typically, reliability is a service feature that you pay extra for. However, both UPS and FedEx offer package tracking, insurance, and delivery guarantees on most if not all of their services. FedEx specializes in international air freight, and so might be a better choice for overseas shipping. UPS is a domestic shipping specialist and might prove to be more reliable within the US.
Is UPS more successful than FedEx?
USPS and FedEx are two titans in the package shipping sector. Although UPS has similarly large sales, its market cap is almost three times as big as FedEx. The company continues to convert its profits. December 11, 2023.
Why do people use FedEx instead of UPS?
The UPS standard overnight shipping service is generally slightly cheaper than UPS. FedEx serves e-commerce companies in a number of markets including e.g. FedEx specializes in the following areas but also delivers the most specialty items, like perishable foods or temperature controlled merchandise. 9 June 2020.
Which is better for large international packages – FedEx or UPS?
FedEx specializes in international air freight, while UPS focuses its efforts on domestic shipping. Both couriers set a weight limit of 150 pounds for international shipments. Exceeding this weight will result in additional fees from either courier. Use a rate calculator to compare the rates for your specific shipment size.
Final Thoughts
UPS and FedEx are two of the biggest express package delivery services in the shipping industry.
Determining which one is the best fit for your business just depends on your business needs. UPS offers lower shipping rates, but with FedEx, you get your packages delivered faster and with time-definite services. In addition, if you’re looking at the ACSI scores, FedEx has had a higher score in the last two years.
