Updated June, 2006
Would you trade all of the complex UPS, FedEx, and DHL rate tables
in the world for a single flat rate?
The United States Postal Service believes many people will
soon make that exact trade.
With the recent introduction of two new flat rate shipping options, The United States Postal Service is betting that "one size fits all" shipping will be an attractive option for volumes of shippers. Although it is an interesting concept, there are very few who are likely to benefit from this option.
Specifically, USPS now offers two flat rate boxes that can be shipped to any state in the nation at any weight for $8.10. In other words, if the contents fit, it will ship. One box, similar in shape to a shoebox, measures 11" x 8-1/2" x 5-1/2". The other, similar in shape to a department store garment box, measures 11-7/8" x 3-3/8" x 13-5/8".
Of course, there are a variety of added conveniences that a shipper gains by using flat rate boxes. First of all, this new flat rate or “set-rate” method provides an easy way to generate ship rates. Traditional shipping quotes are rarely accurate. With flat rate shipping, we can now feel confident on what we will actually be charged for a shipment without the added guesswork involved with fuel surcharges and uncalculated dimensional weights.
With set-rates, the shipper can now confidently say "this will cost exactly $8.10 to ship". These operational efficiencies alone may be worth quite a bit.
However, in order for flat rate options to become viable for direct sales merchants, the savings must be plainly visible.
Is $8.10 cheaper than normal priority mail and /or ground methods offered by UPS, FedEx, and DHL? When does it make sense to use a flat rate box? The following analysis takes a look at the costs involved with flat rate shipping versus a commonly used option such as standard UPS Ground (according to published rates).
The cheapest method in each individual scenario is highlighted in bold type.
| Carrier |
Weight |
Shipping Distance |
 |
| |
|
Same Zone |
1/2 width of U.S. |
Coast to Coast |
| |
|
(Zone 2) |
(Zone 5) |
(Zone 8) |
|
| UPS Ground |
1 lb. |
$5.79 |
$6.46 |
$6.58 |
| Standard Priority |
1 lb. |
$4.05 |
$4.05 |
$4.05 |
| Flat Rate Priority |
1 lb. |
$8.10 |
$8.10 |
$8.10 |
|
| UPS Ground |
2 lbs. |
$5.83 |
$5.64 |
$7.35 |
| Standard Priority |
2 lbs. |
$4.20 |
$5.70 |
$6.05 |
| Flat Rate Priority |
2 lbs. |
$8.10 |
$8.10 |
$8.10 |
|
| UPS Ground |
3 lbs. |
$5.86 |
$7.44 |
$7.95 |
| Standard Priority |
3 lbs. |
$5.00 |
$8.25 |
$9.00 |
| Flat Rate Priority |
3 lbs. |
$8.10 |
$8.10 |
$8.10 |
|
| UPS Ground |
4 lbs. |
$5.97 |
$7.77 |
$8.35 |
| Standard Priority |
4 lbs. |
$5.60 |
$9.95 |
$10.90 |
| Flat Rate Priority |
4 lbs. |
$8.10 |
$8.10 |
$8.10 |
|
| UPS Ground |
5 lbs. |
$6.26 |
$8.09 |
$8.75 |
| Standard Priority |
5 lbs. |
$6.15 |
$11.60 |
$12.80 |
| Flat Rate Priority |
5 lbs. |
$8.10 |
$8.10 |
$8.10 |
|
| UPS Ground |
9 lbs. |
$6.92 |
$9.22 |
$12.42 |
| Standard Priority |
9 lbs. |
$8.35 |
$15.85 |
$18.45 |
| Flat Rate Priority |
9 lbs. |
$8.10 |
$8.10 |
$8.10 |
|
| UPS Ground |
35 lbs. |
$10.82 |
$23.60 |
$30.19 |
| Standard Priority |
35 lbs. |
$22.85 |
$49.95 |
$65.50 |
| Flat Rate Priority |
35 lbs. |
$8.10 |
$8.10 |
$8.10 |
As you can see, the flat rate box only makes sense when shipping relatively heavy weights. Unfortunately, not many of us ship 35 pound items in a carton closely resembling the size of a shoe box. Even with a weight of nine pounds, the flat rate box is only cost effective when shipping across the entire width of the country.
While this fact alone limits the ability of most direct merchants with lighter products to use this flat rate shipping method, it may also be prohibitive for those with heavy products that simply do not fit into the shoe or garment size boxes.
In the end, as flat rate options are becoming more popular due to the added convenience, it is important to keep in mind that they are not always the most cost effective option around. Perhaps this will change as new flat rate box sizes and prices are added to the service model but, until then, traditional shipping methods are still the option of choice in most situations.
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For additional assistance on determining the shipping carrier and shipping method that is most cost effective for your business, please contact us at 1-800-522-5939 or 408-848-3525 or info@rushorder.com. |
