FedEx Home Delivery vs. FedEx SmartPost: What’s Better for Shippers

By March 20, 2019 FedEx, News, Shipping Knowledge

Shippers have to balance cost and time. Get the package delivered to the customer sooner, and it’s likely going to cost more money.

Sometimes it’s worth the cost and sometimes it’s better to save a few dollars and add a few days to the final delivery time. But cost and transit time aren’t the only two factors when deciding on whether to ship via FedEx Home Delivery or FedEx SmartPost.

Let’s start with the basics. What’s the difference between FedEx Home Delivery and FedEx SmartPost? Both are FedEx products that deliver packages to residences.

With FedEx Home Delivery, FedEx controls the package the entire route, from pick-up to front-door.

SmartPost is a last mile final delivery partnership between FedEx and the United States Postal Service (USPS). This collaboration provides less expensive shipping costs with greater delivery coverage in the United States and territories, but at the expense of a slightly longer delivery window. It’s a win-win for all involved.

Shippers and customers like the service because it’s more cost effective than FedEx Home Delivery, but with the excellent tracking services and visibility provided by FedEx, for an optimal website experience.

The carriers like it because it addresses a pain point. For FedEx, that pain point is home delivery, a more expensive, time consuming and challenge-filled prospect than delivering to commercial customers.

The postal service mandate is daily delivery to almost every home in the United States, so it’s not much more work to deliver a package. And the USPS gets a cut of the funding, addressing one of their pain points.

 

How FedEx SmartPost Works

FedEx collects and routes the packages the same way it does with any other package. They pick up parcels from the shipper’s location and sort them the same day at the FedEx distribution facility. The packages are then transported via the FedEx Ground shipping network. The shipments arrive at one of 34 FedEx destination hubs, where they’re sorted and brought to the local post service office or bulk mail center closest to the final delivery location. At this point, the packages are officially handed over to USPS for the final leg of the journey, and they’re brought to the residence, along with the rest of the USPS mail.

While carriers are offering more overlapping options these days, there are still many differences between them, making one shipment a good fit for SmartPost because it’s disqualified for FedEx Home Delivery, and another a better fit for Home Delivery because of timing issues, for example. Here are some of the pros and cons of each.

FedEx SmartPost Pros and Cons

SmartPost Pro: No residential delivery surcharges

This is a big one! The current rack rate for a residential surcharge via FedEx Home Delivery is $3.65 per package. Send it SmartPost, and that fee disappears since FedEx isn’t actually making the residential final delivery themselves.

SmartPost Pro: 100% United States coverage

The USPS already delivers to nearly every residence in the country, so they can easily deliver FedEx packages along with the regular mail. One postal service advantage is that they can also deliver to post office boxes and military and diplomatic APO, FPO and DPO destinations. FedEx does not deliver to P.O. boxes or to military bases or diplomatic locations.

SmartPost Pro: FedEx tracking is available

You can still use FedEx tracking to see where your SmartPost packages are at any given time, in spite of them switching carriers at the end.

SmartPost Con: FedEx SmartPost does not pick up packages originating outside of the contiguous United States

Alaska and Hawaii, along with the United States territories, are not served by SmartPost for pick-ups. That said, SmartPost can do the deliveries.

SmartPost Con: SmartPost takes longer than FedEx Home

Estimates vary, but transit time is longer for SmartPost packages compared to FedEx Home Delivery. Estimates range from 1.5 extra days to five days for SmartPost.

SmartPost Con: No FedEx “on time or it’s free” guarantee

Both FedEx Home Delivery and Ground offer a full refund if packages aren’t delivered on time or by the right date. With SmartPost, there is no guarantee, as they don’t control the postal service final delivery times.

SmartPost Con: Damage and loss claims are not always available from FedEx

Once the package is handed over to the postal service, FedEx has no more liability for any loss or damage. Claims can be made with the postal service, however, that’s a separate process.

 

FedEx Home Delivery Pros and Cons

Home Delivery Pro: No Saturday delivery surcharge

Contrary to popular belief, Saturday delivery actually carries no surcharge, making this option more financially viable for shippers. SmartPost also has no Saturday delivery surcharge.

Home Delivery Pro: The package can be held at another location

If the customer is not going to be home for final delivery, the customer can schedule the package to be delivered to a FedEx location, even while it’s already en route.

Home Delivery Pro: Delivery is faster than SmartPost, and guaranteed

Home Delivery is guaranteed in 1 to 5 business days within the contiguous United States, and 3 to 7 business days to and from Alaska and Hawaii. SmartPost packages take longer and do not come with a money-back guarantee.

Home Delivery Con: Home Delivery is only available in the 50 United States

You cannot use Home Delivery to send a package to someone in the foreign service or a soldier using an APO address, for example. Nor does Home Delivery include post office boxes or United States territories.

Home Delivery Con: No Saturday pick-up

Home Delivery will make Saturday deliveries in most areas, but only picks up Monday through Friday.

 

Considerations When Choosing FedEx SmartPost or FedEx Home Delivery

Shippers must add SmartPost into the contract in order to offer or use this service. It’s a helpful one to add in when giving customers shipping costs options, whether the shipper is offering free shipping or reduced shipping, or charging customers. Here are the reasons why a shipper or a customer might choose one service over another.

1.) Fees: Both services offer Monday through Saturday delivery, but FedEx Home Delivery charges a residential delivery fee, while SmartPost does not.

2.) Non-traditional residential address: The customer lives on a military base or wants shipping to go to a post office box. That customer cannot use FedEx Home Delivery.

3.) Cost is the greatest factor: SmartPost packages are usually the less expensive shipping costs option, but package size or other factors could affect pricing.

4.) Time-sensitive: FedEx Home Delivery promises 1-5 business day delivery time within the contiguous United States, or 3-7 business days to and from Alaska and Hawaii, and guarantees the final delivery date. SmartPost typically delivers in 2-7 business days based on distance (note “typically” as the timing is not guaranteed). Delivery outside the contiguous United States can take longer. Some shippers like to run internal studies tracking the transit time for various services to different locations.

5.) Saturday pick-up: FedEx Home Delivery does not pick up packages on Saturdays (it uses FedEx Ground service). SmartPost does offer Saturday pick-up. Both services offer Saturday delivery.

6.) Declared value: If you want to declare a parcel value of more than $100, you’ll need to choose FedEx Home Delivery. The declared value for SmartPost packages is a maximum of $100.

7.) Additional services: FedEx Home Delivery allows additional services, such as FedEx Delivery Signature Options, Return Solutions, FedEx Delivery Manager, a money-back guarantee, collection on delivery, declared value, signature proof of delivery collection, and evening or appointment delivery times. These features are not available for SmartPost. The customer can also request delivery to a FedEx location instead of the residence.

8.) Size matters: Both services max out at 70 pounds per package. However, the dimensional weight is different. Home Delivery allows 108” in length, 165” in length plus girth (considered L+2W+2H). SmartPost sizing is a maximum of 130” in length plus girth.

9.) Surcharges: FedEx Home Delivery has more surcharges than SmartPost. SmartPost package surcharges include: non-machinable packages (parcels with dimensions between 27”+, any two dimensions greater than 17”, more than 35 pounds, cylindrical tube packaging); delivery area; balloon items (weighs more than 20 pounds, but measures 84” to 108” in length + girth); oversize items (measuring 84” to 130” in length + girth); package re-labeling for parcels requiring an over-label or hand keying; third party billing (billing to an account that’s not related to the shipper).

When Offering SmartPost to Customers

Online shoppers expect not only ground service to be offered as a cost-effective shipping option, but economy ground as well, with 69% of shoppers expecting a choice including both services at check-out, according to the Pulse of the Online Shopper survey by UPS. A full 42% of shoppers will choose the economy ground option, and 20% will choose the ground option, with SmartPost falling into the economy ground category. The transit time for that category is 5 to 7 days from purchase. The survey showed that shoppers are looking for the best shipping costs. It also showed that 51% of online shoppers are looking for free shipping and discounted shipping costs when choosing one retailer over another, making SmartPost a smart shipping choice for retailers.

Shipping costs are not just a line item – they can be a competitive advantage or a liability, so it pays to ensure that your company is getting the best prices while meeting customer expectations. It’s hard to know whether you’re getting the best deal and determining which ones deserve money back, for missing the time or day guarantee. Invoice audit and recovery services, like those offered by Shipware, can often save shippers up to 30% of their annual shipping spend, by automatically sending claims to the carriers for missed delivery times/dates, missing discounts, and total billing accuracy. Shippers leave $2 billion on the table each year in unclaimed refunds from FedEx, UPS, and the LTL carriers.

Shipware can save money for 90% of shippers, and we offer a free shipping analysis. If we can’t offer you savings over what you’re paying and recovering now, we will give you $10,000.

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