FedEx has rolled out a new flat-rate shipping service that it is marketing to small businesses, including eBay sellers, who are hungry for more predictable rates.
Dubbed One Rate, FedEx’s new offering closely follows on the move by the U.S. Postal Service to overhaul its Priority Mail service, including rebranded packages and clearer delivery estimates. USPS Chief Marketing and Sales Officer Nagisa Manabe explained that those changes aimed “to fill in some competitive gaps in the shipping marketplace,” which is critical for the long-term viability of the cash-starved Postal Service.
Now, FedEx is refreshing its own Express service with One Rate, which, in addition to flat-rate pricing, offers a dozen package options and 1-, 2- and 3-day domestic delivery service. FedEx has already been promoting the service on eBay, and bills it as a shipping option tailored to consumers and small businesses.
“FedEx One Rate is a simplified, flat rate pricing option for FedEx Express customers who want more predictable pricing choices while still receiving the reliability and excellent service of the FedEx brand,” said FedEx spokeswoman Carla Boyd.
“FedEx One Rate is a great offering for our consumer and small business customers,” Boyd added. “It especially offers small business customers the ability to better manage expenses while still benefitting from the reliability of FedEx.”
One Rate, limited to domestic shipments, brings five new package options to the FedEx Express menu, inviting mailers to add to the box without adding to the rate, though there are weight limits.
One Rate pricing is determined by three factors: the type of package; the distance it is traveling; and the delivery service the shipper selects. A rate schedule is available in FedEx’s update shipping guide, on page 62.
Boyd declined to comment on the extent to which FedEx views its new service as a competitive play against the Postal Service.
“We do not speak to our competitors’ or customers’ businesses,” she said. “Our offering is unique to FedEx.”
A cursory analysis from Stamps.com, an online provider of USPS postage services, suggests that, at least in some categories, the USPS services offer a significant savings.
Looking at comparably sized packages and shipping routes, Stamps.com estimates that shippers would save between 28 percent and 54 percent using Priority Mail over FedEx One Rate Express Saver (three-day delivery), depending on the route.
“I think that Priority Mail will be a better fit for ecommerce sellers over the new FedEx One Rate product based on the pricing being offered,” said Eric Nash, Stamps.com’s director of online marketing. “Keep in mind that 91 percent of Priority Mail packages are delivered within one to two days in the U.S., so most customers will be getting the items faster using the USPS Priority Mail.”
FedEx is offering One Rate packages for free, and provides the familiar online tracking services customers are used to.
One Rate packages are not eligible for insurance, though FedEx is allowing customers to declare a value of up to $100 at no charge, and higher amounts for a fee.
FedEx is not offering additional discounts to One Rate fees for account holders, though the company will add volume from One Rate shipments to the earned discount programs it offers.