Tricky decision of choosing a right delivery service

How to reduce lost packages?

BY JEEHYE RA

Delivery trucks of FedEx and UPS ©PYMNTS

Delivery services have become an essential fabric of modern society. Especially after Covid-19, online shopping and other contact-less spending increased, adding more volume to goods delivered to home. The beauty industry is also embracing many beauty supplies operating online shops, and more and more businesses are using parcel delivery services to send out documents or checks. Choosing the right delivery service for your business is always a headache. Aside from the convenience of use, you want the right price and reliable service. You always face the risk of loss or damaged packages, so you need to consider how your service provider resolves claims. Here we will discuss pricing information for the two major carriers, FedEx, and UPS, including business account discounts, how to claim lost packages, and extra services to reduce theft risk.

Federal Express, commonly called FedEx, was founded in Little Rock, Arkansas in 1971 and started service on April 1973.

United Parcel Service, commonly known as UPS, started as American Messenger based in Seattle, Washington in 1907 as a mail carrier for the Seattle area and shifted toward parcel delivery service in 1922, expanding to all States and Canada in 1978. Currently, UPS headquarter is in Sandy Springs, Georgia.

As of 2021, FedEx reported $84 billion in revenue, had 850,000 employees, and was operating in 220 regions globally. In the same year, UPS recorded $97.2 billion in revenue, had 534,000 employees, and was operating in 220 regions.

Both carriers offer domestic and international ground and air delivery services, but UPS is more focused on domestic package delivery and increasing its ground fleet while FedEx has twice more airplanes for international express services.

How shipping rates are determined

UPS and FedEx determine shipping rates based on the weight and size of packages, destination, and delivery time. We will compare shipping rates of 15″x12″x12″ packages from Los Angeles to New York weighing 5 lbs.

Comparably, UPS offers lower shipping rates than FedEx. Both companies offer express service for an earlier delivery date. FedEx provides overnight services within specified time, making it faster than UPS but also more expensive.

We added the US Postal Service to the comparison. This time, we calculated from Berkeley, California to Lebanon, Kansas.

The results show that the USPS offered the most cost-saving for smaller packages with less than 5 lbs weight, but its competitive edges disappear quickly as the size and weight increased.

Business rates

Both companies offer discounted business rates.

© FedEx

You can create a business account by filling out basic information, which entitles you 40% discount for domestic and international FedEx Express and a 20% discount for FedEx Ground and Home Delivery, Return services. FedEx Freight is offered at up to a 70% discounted rate. While it does not have monthly fees, you need to provide credit card information. $1 charge will be posted on your credit card for verification purposes.

©UPS

UPS runs Easyship service for small business. Like FedEx, it’s easy to enroll, and you will get up to 77% discount on Ground services, 72% on 2nd Day Air, 72% on Next Day Air, and 88% for international.

Customer satisfaction rates

In 2019, U.S. Packaging and Wrapping conducted an experiment. They used UPS, FedEX, and USPS to send bottles of water to California, Florida, Michigan, Oregon, and Pennsylvania to measure the risk of damages. Each package was labeled, “shock watch”. They found that UPS delivery resulted in the least damage.

American Customer Satisfaction Index (ACSI) in 2022 shows that FedEx earned the score of 78 in 2021, 75 in 2022; UPS earned 75 in 2021, 74 in 2022, and the USPS earned 73 in 2021 and 70 in 2022. In 2021, FedEx was ahead of UPS, but UPS was in the lead in 2022. Interestingly, all three carriers barely made over the score of 70. These most competitive carriers show unexpectedly low customer satisfactory rates because of the complaints from the lost and damaged packages.

How to claim for lost package

If your shipment gets lost during delivery, you can access their official website to file a claim. You will need a receipt that was issued when you ship an item. Hence, you should keep the receipt until the delivery is made to the receiving party. FedEx requires you to file claims within 60 days for the loss in domestic services and 21 days for international services. You need to be specific about lost items as much as you can, so you will be wanting to keep a record of the brand name, a detailed description of the goods, size, and quantity. Claim reviews can take up to 270 days with UPS.

Services to reduce theft risk

• FedEx Delivery Manager®

    1. Redirection service
You can have the package kept at a nearby retail location. Participating retail includes Walgreens, FedEx Office, Dollar General, and local grocery stores. You can check the estimated arrival date on the FedEx app and redirect the shipment if necessary. These retail locations can hold the packages for up to 7 days.

    2. Delivery instruction
Leaving detailed delivery instructions for drivers can greatly help safe delivery. Regardless of home or business, you can pinpoint the location such as the side door, front door, and garage, which can also make filing a claim easier. Delivery instructions take up to 24 hours to show up in their system, so you should plan ahead.

    3. Vacation hold
You can suspend all package delivery for up to two weeks. If you are on vacation or need to go out of town for days, it is a great way to reduce the risk of a package being stolen. You can also set the date from when the normal delivery resumes.

• UPS My Choice

UPS services come in basic and premium ($19.99/year) memberships. Premium members can change the delivery date and place before the arrival and have a nearby UPS store to hold onto the package. Basic members can get a delivery notification and leave delivery instructions for free but choosing a different delivery date costs you $9.99 extra, changing to a different address $14.99, and sending it to a nearby UPS store $5.99.