February 3, 2022
Domestic vs International Shipping: Which Carrier To Use and Why
This blog post was originally published by Deliverr, which is now Flexport. The content has been adjusted to fit the Flexport brand voice and tone, but all other information remains unchanged. With the merging of Deliverr’s services (DTC fulfillment, B2B distribution, and Last Mile delivery) into Flexport’s existing international freight and technology services, we’re now able to provide merchants with true end-to-end logistics solutions spanning from the factory floor to the customer’s door.
In today’s world of eCommerce, offering both domestic and international shipping is an important business strategy. Chances are you’re already shipping domestically and may already understand the importance of international shipping (if not, read more here). But the piece of the puzzle you may be missing with both domestic and international shipping is understanding which carrier to use and why.
Before comparing carriers, let’s review some significant differences between domestic and international shipping:
Domestic shipping is when goods or documents are shipped from point A to point B within a country’s borders. Many companies rely on domestic shipping due to the speed of delivery. Though two and three-day delivery options are quite common, many companies now offer same-day delivery as well.
When shipping items internationally, there may be delays at the border or during the export/import process during the customs inspection. There are logistical considerations, additional paperwork items, and the potential for various taxes.
In fact, many countries have restricted and limited goods. Shipping an item to Colorado will likely not require any special documentation. However, shipping the same item to Guatemala—or even Canada or Mexico—will likely require documents outlining an explanation for export, declaring values, defining products, and so on. To stay up to date or learn more about the various limitations different countries may have, visit the Commerce Department’s Country Commercial Guides website. Not only will this site help you with restricted and limited goods information, but duties and taxes as well.
Because each country is different, customs can be difficult to navigate. That is why it is important to have contact and connection to a good shipping company or 3PL, like Deliverr. With the right people on your team, you can be sure that your company won’t have packages stuck at customs for weeks, with no one there to answer the phone.
Four Major Domestic Shipping Carriers
Domestic shipping can often prove a difficult problem to navigate for eCommerce businesses because there are three major shipping carriers to choose from. Each carrier provides a different priority mail and flat-rate option, so the challenge comes in comparing prices, speed, and over-efficiency. There is no ‘one-size-fits all’ answer for the perfect shipping carrier, so it’s important to assess how frequently your brand ships along with the types of packages and their weight.
USPS vs UPS vs FedEx vs DHL
Most businesses will find that a combination of all shipping carriers works best. Ultimately, you’ll need to compare and contrast what each shipping carrier can offer in order to determine what is best for your business wants and needs.
When to Use USPS
USPS (The United States Postal Service) is best used when you want to ship small packages in a quick and cost-efficient manner. Because USPS is federally funded, they pledge their service to all United States residents. That means, no weather or Act of God will deter USPS from delivering your packages.
USPS is best for small, light shipments along with any packages going to residential or PO boxes. Choosing USPS also works well for companies that need a more affordable shipping option. If your business is shipping packages under 13 ounces, the low-rates offered by USPS will be tough to match, making their service the best route.
The downside of choosing USPS is that the tracking methods are not great. Though their tracking system has improved over the years, it is still difficult to determine when deliveries are delayed or lost. Customer service complaints often involve lost packages.
When to Use UPS
United Parcel Service, better known as UPS, reaches a worldwide market and works well for large packages. UPS has a good reputation in the shipping industry and is known for speedy and secure deliveries, a reliable tracking system, and the affordability of heavy shipments. If your business is shipping packages weighing over two pounds, UPS has shipping rates that are more affordable than USPS. If shipping in large quantities, UPS often offers discounts as well.
The downside of choosing UPS includes the cost. Guaranteed peace-of-mind delivery comes at a cost. In addition, there is no free package pickup service, so you’ll have to pay a flat fee. UPS is also the only carrier (of the three) that does not offer Saturday delivery in its basic services. You can choose Saturday delivery, but it will cost you as its considered a “value-added service.”
When to Use FedEx
FedEx is best known for fast, dependable shipping–including air shipments and next-day deliveries. FedEx also provides a reliable tracking system, making it a good option for international shipping. The precise tracking system allows businesses and customers to view the shipments’ progress during each step of the process. Additionally, FedEx does offer Saturday delivery with no extra cost and offers the option to schedule pick-up times at one of their FedEx offices–which are often open later than UPS stores.
The downside of choosing FedEx is that the shipping rates are often higher. While this is not true in every instance due to varying shipping costs, FedEx frequently charges more than USPS. FedEx also charges a fee for most pickup services, except for its recurring Express pickup services. FedEx does have over 2,000 offices worldwide; however, in comparison, UPS has over 5,000. The availability could cause an inconvenience for small business owners based on location.
When to Use DHL
One of the most trusted international shipping companies worldwide is DHL. It should be noted that DHL also offers domestic shipping, but it is not a wise choice since USPS, UPS, and FedEx offer the same services for less. Like UPS and FedEx, DHL offers real-time monitoring with excellent tracking information. This means your deliveries will arrive promptly and safely, making DHL the perfect choice for international shipping.
Additionally, DHL offers a variety of services such as Worldwide Document Express and DHL Worldwide Parcel Express. They handle shipping hazardous items as well as “next-day” delivery across international locations.
Comparing the Cost of USPS, UPS, FedEx, and DHL
All four carriers have seen an increase in surcharges and rates due to the COVID-19 pandemic. There have been major shipping delays as well, even if choosing express shipping options.
USPS is going to be the most economical choice for shipping in most situations as previously mentioned. The costs will vary, though, based on the weight and dimensions of the packages. Using a site like Stamps.com will ensure you find the best rates re: postage solution which can save you money on “retail” rates. USPS also offers a shipping calculator here.
UPS offers two types of rates (like USPS): “daily” and “retail” rates. As a business (rather than as an individual retail customer), you would likely use the discounted daily rates. The discounts are offered if you organize scheduled UPS pickups. While their website does not offer a shipping calculator, it does provide guides and tables for daily rates and retail rates.
If your business frequently ships through FedEx, take advantage of the discounted rates offered. The FedEx site also offers a shipping calculator here.
If your business primarily ships domestically, it is not wise to use DHL. Any of the other three carriers would be a better choice. Though USPS, UPS, and FedEx all offer international shipping, DHL offers the best bang for your buck with a full range of cross-border shipping services covering more than 220 countries and territories across the globe. You can find the DHL shipping calculator here.
A Quick Recap
- USPS. Best for small, light-weight packages, shipping to residents and PO boxes in the United States, and free pickup
- UPS. Best for guaranteed shipping, heavy shipments, and package tracking
- FedEx. Best for speedy shipping, Saturday home delivery, and package tracking
- DHL. Best for international shipping with reliable package tracking
Ultimately, offering both domestic and international shipping can be beneficial to your company, and choosing the correct carrier to use does not need to be painful and complex. Most businesses will choose to mix and match their carriers in order to find the fastest, most cost-efficient method. If you’re searching for a 3PL (third-party logistics company) to help you with your shipping, be sure they utilize all different carriers to give you the best price and the fastest shipping possible.
The contents of this blog are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. We do not guarantee, represent, or warrant the accuracy or reliability of any of the contents of this blog because they are based on Flexport’s current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This blog has been prepared to the best of Flexport’s knowledge and research; however, the information presented in this blog herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this blog.