The Pros and Cons of Hybrid Shipping Services Provided by the USPS and FedEx
While the phrase “collaboration with competitors” might seem self-contradictory, it is actually a sign of healthy competition. For example, shipping carriers may team up to make their services more affordable for customers and simultaneously reduce their operation costs. The examples of the so-called hybrid shipping services provided by the United States Postal Service (USPS) and FedEx are USPS Global Express Guaranteed (GXG) and FedEx Ground Economy (fomerly known as FedEx SmartPost).
The USPS is an independent government agency that provides postal services in the United States, whereas FedEx is a multinational company focused on transportation and shipping services. Naturally, the USPS and FedEx are direct competitors since both provide shipping services to the population, but they also assist each other in the transport of some packages through special agreements that allow them to benefit from their competitor’s strengths while getting a share of the revenue.
USPS Global Express Guaranteed (GXG)
GXG is the fastest international shipping option provided by the USPS due to its collaboration with FedEx. Packages are typically delivered within 1–3 business days, although the actual number of days may vary depending on the destination country.
How do the USPS and FedEx cooperate to provide the service? The USPS is the carrier that customers deal with. It collects shipments and payment from customers, processes packages, and delivers them to a FedEx location. FedEx Express, in turn, deals with customs clearance and delivers shipments to their country of destination.
FedEx Ground Economy
While GXG is an international hybrid shipping service, FedEx Ground Economy delivers lightweight, non-urgent packages within the United States and U.S. territories. Where does the USPS come into play here? It is responsible for the final leg of delivery. This collaboration allows to deliver packages faster than by regular mail and cheaper than by FedEx ground.
Once a FedEx Ground Economy package is accepted by the carrier, it is delivered to a FedEx hub closest to its final destination through a system of fulfillment centers and warehouses. When the package arrives at the hub, the USPS takes over to deliver it to the recipient. As a rule, it takes 2 to 7 business days to deliver a FedEx Ground Economy package within the contiguous United States.
UPS has a similar hybrid service provided in collaboration with the USPS, which is available to select UPS customers. Similarly to FedEx, UPS delivers UPS SurePost shipments to a post office via its UPS Ground network, leaving it to the USPS to deliver packages to recipients. Both FedEx Ground Economy and UPS SurePost are frequently used by major e-commerce companies like Walmart and Amazon.
So, what are the pros and cons of hybrid shipping services? Shipping carriers benefit from collaboration because it allows them to offer customers better service at a lower price while reducing workload. In addition, collaboration with the USPS enables FedEx and UPS to deliver packages to PO boxes, which they are normally unable to do. But what’s in it for customers?
FedEx Ground Economy and Global Express Guaranteed are a middle ground between the services provided exclusively by the USPS or FedEx. They are typically faster than comparable USPS services and have more affordable postage rates than comparable FedEx services. In addition, FedEx Ground Economy allows to avoid surcharges for residential delivery and Saturday delivery.
Of course, hybrid shipping services are not always the best option. They have their pros and cons like any other service out there. For example, while FedEx Ground Economy can save you money and trouble, sometimes speed is the priority. FedEx Ground Economy is slower than FedEx’s traditional ground delivery because it consolidates multiple packages together before transporting them between hubs. If you don’t want to wait for an extra day or two, it is probably not the best option for you.
In addition, hybrid shipping isn’t always the cheapest option among all the available methods of shipping because the price depends on many factors such as the size and weight of your package, distance, etc. Hybrid shipping services are most often the best option for medium-sized packages that don’t meet the USPS flat rate criteria. Lighter packages are generally best suited for the USPS, while packages that are on the heavier side are a great fit for FedEx or other private carriers.
So, hybrid shipping does have it prose and cons, but if you keep these prose and cons in mind and compare all options available to you, you can save quite a lot of money using FedEx Ground Economy or save you precious time using Global Express Guaranteed.