Most shippers are used to being nickeled and dimed by surcharges and rates that increase every year. But most of them pay anyway, because shipping is so essential to doing business in today’s economy. Retailers and manufacturers must compete not just locally, but nationally and globally — and to make their residential customers happy, they need to get goods to them quickly and effectively.

The most expensive part of the shipping process is the final leg, which is known as the “last mile,” regardless of how far packages travel to reach their final destination. It’s expensive because it’s inefficient — deliveries are made in small quantities to many different residential locations as opposed to concentrated deliveries to a few commercial locations.

It’s not often that carriers offer shippers opportunities to save money. But in an effort to reduce those last-mile costs, UPS created SurePost, a consolidated delivery service that uses the U.S. Postal Service to complete the last leg of each delivery to residential customers.

USPS has a mandate to deliver to every address in the U.S., no matter how far-flung. Amazon has long taken advantage of this, as President Donald Trump has pointed out. Now UPS and FedEx are plugging into the Postal Service’s network as well.

UPS customers have the option of choosing SurePost instead of standard ground shipping. Let’s find out if it’s right for your business.

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What is UPS SurePost?

UPS SurePost is a shipping service that utilizes UPS’s ground networks to cover most of the distance a parcel needs to travel, but relies on the U.S. Postal Service for the final leg of the shipment. It’s a cheaper option that, according to UPS, provides just about the same level of service as standard ground shipping.

How does UPS Surepost work?

The first half of the delivery process remains the same – the only change occurs when UPS drops the package off at the USPS closest to the final destination. From that point, USPS completes the delivery.

FedEx’s SmartPost has a similar process, but instead of dropping the package off at the nearest USPS to the final destination, the package is taken to the closest USPS regional hub – that makes the UPS SurePost delivery slightly faster than FedEx’s SmartPost.

How much does it save?

2019 rates for UPS SurePost include:

  • For a one-pound package, rates range from $8.52 in Zone 2 to $10.63 in Zone 8.
  • For a 3-pound package, rates range from $9.54 in Zone 2 to $13.24 in Zone 8.
  • For a 7-pound package, rates range from $10.90 in Zone 2 to $15.85 in Zone 8.

UPS SurePost can be as much as 20 percent cheaper than UPS residential ground service, with similar service offerings. For example, UPS SurePost gets picked up with the rest of your ground and express packages. You don’t need to make other arrangements to take advantage of this service.

Shippers and customers can still track packages, including during the final leg of their journey, with USPS. Parcels technically include two shipping labels, one for each service, but customers can see shipments move through both services seamlessly with just one tracking number.

SurePost also offers UPS customers two additional perks. First, USPS offers Saturday delivery standard to all its customers, including UPS SurePost shippers. Second, USPS delivers to every address in the U.S., which could give your business access to customers that UPS did not serve with standard ground shipping — including P.O. boxes, which UPS ground normally does not serve.

SurePost does include some surcharges, however.

Packages with any dimension measuring between 34 and 48 inches, one dimension between 17 and 30 inches, or weighing over 35 pounds carry a $2.95 Non-Machinable Charge. Packages larger than that carry a $14.25 Additional Handling charge.

Certain ZIP codes include a Delivery Area Surcharge, which can be $1.85 or $2.35.

SurePost packages are priced according to the same dimensional weight formula as UPS Ground packages. They also carry the same peak season surcharges. These are two fairly recent introductions by the shipping industry that have been widely adopted and appear to be here to stay.

As you weigh whether to use UPS SurePost, keep in mind that both UPS and FedEx tend to raise base rates by about 4.9 percent every year. SurePost is no exception. Although it is a cheaper option, its costs are still going to rise, year after year.

Related: Estimate Your Shipping Costs: What Goes Into The Rates You Pay With FedEx and UPS

Who should use UPS SurePost?

UPS SurePost is a great option for businesses that want to increase their margins in the short term. It offers a savings opportunity without a significant sacrifice in service quality. Switching from Ground to SurePost service could reduce shipping costs by as much as 20 percent, and customers may not even notice.

The service is well suited to businesses that ship individual parcels to residential customers, since it allows shippers to dodge residential surcharges.

One blogger recommends shipping packages with SurePost if they cannot be shipped using USPS Priority Mail packaging and weigh between two and 10 pounds. Heavier packages are cheaper with UPS Ground, he says.

UPS and the Military

While UPS does offer delivery to areas where military personnel are stationed, because of security purposes, only USPS can actually deliver the packages to Army, Fleet, and Diplomatic Post Offices.

If your business frequently ships to APO, FPO or DPO addresses, SurePost might be the best option for you.

UPS SurePost Versus UPS Ground

UPS SurePost relies on the UPS Ground network. Parcels travel in pretty much the same way — passing from shippers’ establishments to trucks to warehouses, repeated as many times as necessary — until the final leg of their journey.

At that point, standard ground shipments are delivered to end customers by those big brown UPS trucks.

SurePost shipments, on the other hand, are dropped off at local post offices. Then, USPS trucks take them to customers’ homes or offices.

How long does UPS SurePost take?

UPS SurePost is typically one day slower than UPS Ground. On the last day of a typical ground shipment, UPS delivers a parcel to a customer’s home. With UPS SurePost, UPS delivers it to the nearest USPS branch instead. USPS typically delivers the parcel the next day, adding that extra day to the parcel’s journey.

Will customers notice if shipping is one day slower than they’re used to? Ground shipping typically takes anywhere from one to five days. Customers selecting the ground option know packages won’t arrive overnight. One extra day may not even pique their curiosity — especially if they can track the package from end to end and know when it’s slated to arrive.

Does UPS deliver with USPS?

It’s more accurate to say that UPS Ground delivers parcels to USPS, and then USPS delivers them to customers.

However, despite the agreement, up to 60 percent of UPS SurePost deliveries will still be delivered by UPS, because of a technology they designed to determine whether or not they will already be in a given location – in which case they’ll just deliver it themselves.

UPS says that neither shippers nor end customers should notice anything different between SurePost and standard ground shipping. They can track parcels throughout their journey using the same tracking number issued by UPS. SurePost delivery even integrates into most third-party shipping software solutions, the company says. It is important to note, however, that UPS SurePost is not available for international packages.

Is UPS SurePost Right for my Business?

UPS isn’t the only shipper experimenting with this type of service. FedEx has a very similar offering, known as SmartPost, that also utilizes USPS. DHL Parcel Metro another service that markets itself as a low-cost option, relies on a network of third-party couriers for last-mile service. Amazon’s developing shipping service currently does the same, though Amazon utilizes USPS as well.

For many small parcel shippers, UPS SurePost and its competitors can offer competitive, cost-effective alternatives to standard ground shipping. With SurePost, shippers still control the packaging process, and UPS Ground services still deliver packages most of the way. Customers typically only face a one-day delay. They may see a different delivery vehicle outside, but other than that, they may not know that USPS is part of the shipping process at all.

At a time when costs throughout the supply chain are rising, from materials to fuel to labor, many shippers are seeking ways to reduce costs. Further, 35 percent of the average shipping spend goes to surcharges, not base rates. SurePost offers shippers the opportunity to get a handle on some of those costs without sacrificing quality.

SurePost offers one additional advantage, too: If shippers are currently using USPS or a small carrier to move some of their parcels, they may be able to get similar service at a similar price from SurePost. That could increase the size of their account with UPS — and better their bargaining position the next time contract negotiation season rolls around.