UPS launches flat shipping rates based on package size

Dive Brief:

• UPS announced the launch of flat shipping rates under its UPS Simple Rate program, whereby shippers can use their own packaging and pay a flat rate based on package size, not weight or geography. 
• UPS Simple Rate applies to five sizes of packages, ranging from XS to XL, and shippers can choose from three shipping speeds: ground, 3-day select and 2nd day air.
• The logistics provider positions the flat rates as a benefit to small businesses, taking the “guesswork out of shipping” and enhancing transparency.

Dive Insight:

UPS arrived to the flat rate shipping game relatively late.

The U.S. Postal Service launched flat-rate pricing for envelopes in the 1991 and added that offering to a Priority Mail flat rate box in 2004, according to PracticalEcommerce. FedEx introduced OneRate, its flat shipping rate program, in October 2013. UPS Simple Rate was announced in September 2019. 

Although UPS is a latecomer, its service offerings may be differentiators. For starters, it lives up to its namesake: it’s simple. The flat rate applies to any domestic shipments (excluding Alaska and Hawaii), which differs from FedEx which charges rates based on three zones.

UPS also says its maximum volume for flat rates is higher than FedEx and USPS — up to 1,728 cubic inches for UPS, compared to 1,452 cubic inches for FedEx and 900 cubic inches for USPS. 

UPS notes neither FedEx nor USPS allows customers to to use their own packaging.

FedEx’s One Rate offers 12 sizes of FedEx Express packaging, including envelopes, boxes and a tube. However, FreightWaves, citing a person familiar with the matter, reported FedEx is starting to change its program to allow shippers to use their own packaging. 

Shippers’ ability to use their own packaging is critical for branding, especially for small businesses trying to make a name for themselves in a crowded marketplace.