FedEx SmartPost and What it Means to FedEx Ground Contractors

In your research of FedEx and their ground service, you may have come across the term FedEx SmartPost and wondered about the service. As someone interested in purchasing a FedEx Ground route, you may also wonder how this service affects FedEx Ground drivers. Here are the pros and cons of the service.

What is FedEx SmartPost?

This service is the result of an interesting cooperation between the USPS and FedEx. Essentially, packages are still picked up by a FedEx driver and use the standard ground system until they reach the final leg of their destination. They are then handed off to the post office to complete the delivery for the “last mile.” This means instead of delivering the packages directly to residential homes, the FedEx Ground driver drops them at the local post office in some cases, while in others the postal service may pick up packages directly from the terminal.

Why would customers choose this service?

Customers choose this service for a number of reasons, and it is primarily the choice of the shipper.
  • The cost of shipping via FedEx SmartPost is lower, saving the shipper money.
  • SmartPost can deliver to P.O. Boxes, API, FPO, and DPO addresses where FedEx Ground cannot.
  • Saturday delivery at no extra cost to the shipper.
While there are a few other advantages to SmartPost over FedEx Ground, the primary reason for a shipper to choose this option is cost. The same is true for the person they are shipping to. Charges for FedEx SmartPost can be half the cost of standard Ground shipping depending on the shipper’s negotiated rate.

What are the Cons of FedEx SmartPost

FedEx SmartPost takes up to 1.5 days longer than standard shipping with FedEx Ground. The other drawback is that shipping switches to the USPS from the FedEx system, making tracking packages a little more challenging for both the shipper and the receiver. When it was initially introduced, this service did have some reliability issues. It took some time for FedEx and the USPS to get on the same page, transfer and track packages accurately, and develop a better working relationship. Over time, that relationship, the system, and even delivery times have gotten better.

What Does This Mean to a Contractor?

So there are a couple of simple things that impact FedEx Ground contractors when it comes to FedEx SmartPost. The first is that on your route, you may deliver a group of packages to a post office, especially if you serve a rural area that is a fair distance from your FedEx terminal. The process for dropping off these packages is unique, but similar, to the process you follow when delivering a package anywhere else. Contractors also make a little less money on these deliveries, because there is no residential surcharge, so you are paid more like a business drop off. However, the advantage is that residential deliveries take more time and cost more, so the SmartPost packages may be worth the tradeoff. The important thing is to think of your SmartPost delivery more like a business drop off than a residential one, and no matter what, the pick-up process for these packages works the exact same way as other business package pickups. The other positive of FedEx SmartPost deliveries is the same one that customers experience: you are effectively delivering packages to P.O. Boxes or other places where FedEx cannot drop off. This can be especially beneficial in rural areas where reaching some homes can be time-consuming and problematic, and in the case of severe weather, even dangerous.

What’s the Bottom Line?

As eCommerce becomes more popular and companies attempt to compete with giants like Amazon and their two-day or even same-day shipping times, FedEx SmartPost, while a money saver for shippers, doesn’t have a huge impact on the average FedEx Ground contractor. It’s not nearly as popular as the faster Ground or Express Services. In some cases, the service can actually save a contractor time and money. FedEx SmartPost offers some customers a less expensive shipping option, but it still creates loyalty to the worldwide FedEx brand, and when they need to ship packages more quickly, they’ll choose other FedEx services, helping you build your route. In the end, SmartPost is neither good nor bad, but rather simply a service that offers options to customers can even help increase profits on your residential routes, and even reduces costs to contractors in some cases. Are you thinking of purchasing a FedEx Ground route? Do you have other questions about being a contractor, or do you have a route to sell? Contact us today! We have the answers you are looking for, and can help you walk through the process every step of the way.

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1 Comment

  1. Excellent information for prospective buyers of fedex routes.
    Hoping to acquire a few routes in the near future.

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