The following sequence of nine illustrations presents a broader, high-level analysis first, progressing to an in-depth analysis.
As an overarching theme, the charts support the general narrative that FedEx will remain or become the cheaper carrier option in many areas. This is particularly consistent across most residential shipments (including postal-hybrid services), as well as packages exposed to dimensional or excessive-weight related Accessorials. Accompanying each chart are comments offering further explanation. Please note that in the Illustrations a negative percentage reflects a UPS advantage and a positive percentage is a FedEx advantage.
Illustration 1 details the overall price advantage of using FedEx vs. UPS for domestic service groupings (1 to 99 lbs.) in 2018 and 2019. Note that in most cases the carriers are in line with each another, except for 3-Day and Postal services. The 3-Day discrepancy is large, but it’s already priced in the market, as it has been this way for years. The price advantage for FedEx in Postal services is new, however, and important to take note of.
Illustration 2 details the overall price advantage in Postal services, SmartPost (FedEx) vs. SurePost (UPS), in 2018 and 2019. You’ll see that FedEx has at maximum a 2% price advantage over UPS in 2018. The cost advantage jumps to anywhere from 5% to 8% at 1 to 9 lbs. in 2019.
Illustration 3 details the price advantage of FedEx over UPS for International Export shipping in 2019 by country for 1- to 3-Day guaranteed services. FDX has the overwhelming price advantage for most lanes (although not much in percentage terms, with the maximum being 1.4%).
Illustration 4 also details the International Export shipping in 2019 price comparison by country, but for 2- to 5-Day guaranteed services. Shippers will have to “mix and match” to find the price advantage, but it appears UPS wins for exports to most Asian countries.
Illustration 5 details the International Import shipping for 2019 price comparison by country for 1- to 3-Day guaranteed services. Note that UPS has large advantage with imports from Japan and S. Korea, but FedEx has an advantage with Taiwan.
Illustration 6 details the International Import shipping for 2019 price comparison by country for 2- to 5-Day guaranteed services. Similar to Illustration 5, UPS has a large advantage with imports from Japan, S. Korea, and now also Saudi Arabia. FedEx has an advantage with imports from Taiwan.
Illustration 7 details the overall price advantage for popular Accessorial groupings in 2018 and 2019. UPS had some advantages in 2018 (such as with Oversize / Additional Handling Surcharges), but that changes in 2019, with FedEx becoming the lowest-cost option in most Accessorial groupings.
Illustration 8 below details the overall price advantage for Delivery Area Surcharge accessorials and Accessorials related to dimensions, weights, package type, etc. in 2018 and 2019. You’ll see that in every category FedEx is cheaper. This was also the case last year, but the gap widens even further in 2019 (especially for Delivery Area Surcharges tied to Postal services). Download a complete breakdown here.
Illustration 9 The four illustrations below compare the Fuel Surcharges of UPS and FedEx across several services.
Analyzing how the changes impact your specific situation is the first step. Most companies do not have the tools to do this on their own, so find a partner (Transportation Impact will do it for free) who can calculate precisely what each carrier’s announced GRI will mean to your company.
And remember, rate caps on the GRI (and other Accessorials) can be negotiated. No company should accept the increases from both carriers as a normal cost of business. It’s time to reevaluate your agreements and look for ways to lower your shipping costs.
Contact Transportation Impact for a free, no-obligation analysis of not only what your cost will be as a result of these increases, but also what your potential savings could be with a new carrier rate agreement. Call us at (252) 764-2885 or email us at email@example.com.