Friday, March 12, 2010

Shipping Ripoffs

USPS Priority Mail is the best bargain in shipping - provided you go to a real Post Office!

The shipping business is in decline right now. As more and more people send documents over the Internet, the need for "overnighting" documents by FedEx, UPS, or USPS Express Mail has dropped of precipitously. And yet, the number of rip-offs in this business has increased dramatically.

I became disillusioned with FedEx early on, when I used to "overnight" documents to clients. I set up a FedEx account, because that's the way we did it at the "big firm" and I sent out many FedEx packages using those three-layer carbon slips. Those were the days.

At the end of the month, I'd get a number of bills from FedEx and I would put them all together and write a check. The next month, I'd get a notice saying I was delinquent on my account.

So I called their accounting department, and they told me that each "waybill" was separate, and if I wrote one check for over that amount, it would not be applied to other "waybills" on my account, but merely credited as an overage on my account.

So, I ended up paying double or even triple for shipping without realizing it. When I asked them when they would refund the "overpayment" on the other waybills, they replied that they would if requested in writing.

This seemed totally bizarre to me - what other company bills you by the "eaches" instead of sending you one big bill for all their services. And what other company would apply your payment to only ONE bill and not automatically apply the overage to other bills on your account?

A poorly run one, in my opinion. I said "goodbye" to FedEx and have never gone back.

I found that United States Postal Service (USPS) Priority and Express mail were as good as, if not better than, FedEx and UPS, at a lot lower cost. Priority Mail in particular is very cheap (about $5 to send an envelope of ANY weight) and usually arrives within a day or two.

And if you set up an account online at (Note: NOT .gov, the USPS is a separate corporation) you can track your Priority mail packages online, for free, and also get a discount on postage and print shipping labels right from your computer. Pretty sweet, pretty cheap, pretty easy, and your local Post Office will even provide free boxes.

And they don't play stupid games with the billing, either. You can set up each invoice to bill to your credit card, and track spending online.

However, in recent years, a number of "private" post offices and shipping services, usually affiliated with photocopy shops, have popped up, and offer to sell USPS, FedEx, and UPS services, often for fees that are far higher than normal.

Some even have the cheery logos and lighted signs of the shipping companies in their windows. However, these are merely private companies that offer to do packaging for you and to hold packages for shipping, and also collect money for shipping - all for an excess fee.

Sometimes, this can be a nominal amount, but oftentimes, these "convenience" centers charge 50% to 100% more than the nominal postage or shipping charges due.

And I hate to say it, but on more than one occasion, I have been snookered into using these places, thinking they were "official" FedEx or UPS shipping drop points.

If you must use UPS or FedEx, go directly to the SHIPPING HUB if you want to pay for a package. That is the only way to get the lowest price on shipping. You can locate the hub online. You may have to drive to near the airport to find the local hub.

The United States Postal Service (USPS), on the other hand, charges the same amount at all of its official Post Offices (note: Private post offices and postal boxes do not count!). So it is far more convenient to use than the FedEx or UPS hub.

So, why, pray tell, do people use FedEx or UPS at all? If the USPS has far more outlets, charges consistent prices, and offers shipping charges that are sometimes half their competitors, why would anyone use FedEx or UPS at all?

And why, pray tell, would anyone use one of these "private" Post Box places or fake FedEx/photocopy shops to ship goods and pay nearly double for shipping charges? It simply makes no sense at all.

But then again, people bought Edsels, too. As one famous economist put it, "There are Idiots, look around you". The so-called "invisible hand" of the marketplace is imperfect, and while most people will seek out bargains and good deals, many people will simply make bad choices or are too lazy or ignorant to think about their economic decisions.

So, off they go, to "FedEx/Kinkos" and they overpay for shipping. Why? Because they know no better. And they don't like the "line at the Post Office" or they mistakenly believe that the Post Office is "unreliable". Or they just are not careful with money and value convenience over thrift.

I suspect you will see these types of businesses falter in the coming months and years. Like DVD rental stores, they will go the way of the dinosaurs, as people realize that overpaying for a basic service makes no sense, and as their business model becomes obsolete (photocopying? How quaint!).

In the meantime, don't overpay for shipping services. You can send a USPS Priority Mail medium flat-rate box anywhere in the USA for $10. Why pay $25 to send a mere envelope by FedEx or UPS?

It makes no sense.