As a passionate online deal hunter and veteran of countless hours tracking packages across the web, I‘ve long been fascinated by the behind-the-scenes choreography that brings orders from warehouse shelf to front porch. One of the most intriguing logistics puzzles out there revolves around a service that many retailers rely on but few shoppers fully understand: FedEx SmartPost, also known as FedEx Ground Economy.
If you‘ve ever watched your package‘s progress online only to see its tracking number suddenly switch from FedEx to the US Postal Service (USPS), you‘ve encountered this unique hybrid delivery system in action. On the surface, it can seem downright perplexing. Why would a package that started its journey with one carrier get handed off to another right before reaching its final destination? What exactly happens during that baton pass between shipping giants?
As it turns out, this FedEx/USPS tag team is a strategic collaboration nearly two decades in the making, designed to capitalize on each carrier‘s strengths to provide an efficient, cost-effective delivery option for shippers. It‘s a key part of the ecommerce infrastructure that keeps all those free shipping offers flowing. Let‘s dive in and unravel how it works and what it means for retailers and shoppers alike.
The Origins and Evolution of FedEx Ground Economy
The story of the FedEx/USPS alliance traces back to 2004 with the launch of a service then known as FedEx SmartPost. The concept was straightforward but innovative: let FedEx handle the long-distance hauling of packages to get them close to their destination, then hand them off to USPS to tackle the "last mile" of delivery to the customer‘s doorstep.
In 2021, FedEx rebranded the service as FedEx Ground Economy, but the core model remains the same. The goal is to leverage FedEx‘s extensive transportation network and logistics expertise for the bulk of the package‘s journey, then tap into USPS‘s unmatched last-mile reach to complete delivery as efficiently as possible.
Just how prevalent has this hybrid approach become? The numbers paint a striking picture:
- In fiscal year 2021, FedEx Ground Economy accounted for over 3 billion packages, or nearly 40% of FedEx Ground‘s total volume (FedEx, 2021)
- SmartPost/Ground Economy volume has grown from 1.7 billion packages in 2016 to 3.1 billion in 2021, an 82% increase in just five years (FedEx, 2021)
Clearly, retailers are embracing the service in a big way. But what does the end-to-end process actually look like? Let‘s walk through it step by step.
Anatomy of a FedEx Ground Economy Shipment
Every FedEx Ground Economy package starts its life like any other FedEx shipment. The shipper, usually an online merchant or marketplace seller, preps the order and either has it picked up by FedEx or drops it off at a staffed FedEx location like one of their Office stores. The key difference is that the shipper has chosen Ground Economy as their shipping method and the package is labeled accordingly.
From there, the package enters FedEx‘s sprawling network of trucks, planes, and distribution centers. The company‘s logistics experts work to route the package as quickly and efficiently as possible towards its destination region. This part of the process can actually be significantly faster than if USPS handled the entire shipment from start to finish, especially for coast-to-coast deliveries.
Here‘s where the handoff happens. Once the package reaches the FedEx hub closest to its end point, it‘s sorted and prepped for transfer to the local post office. USPS takes it from there, delivering it the last few miles to the recipient‘s address, often alongside letters and other packages.
If no one is available to accept delivery on the first attempt, USPS follows its standard protocols for leaving a notice and holding the package for redelivery or customer pickup. The whole process typically takes anywhere from 2 to 7 business days from pickup to delivery.
Under the Hood: The Economics of Hybrid Shipping
So why have so many shippers hopped aboard the FedEx Ground Economy train? In a word, it comes down to cost savings. Using this hybrid approach can be significantly less expensive than relying solely on FedEx Ground, which provides door-to-door service without the USPS handoff.
While exact rates vary based on factors like package weight, dimensions, and distance traveled, FedEx Ground Economy can save shippers an average of 20-40% compared to conventional FedEx Ground (Reveel Group, 2021). Those savings come primarily from letting USPS tackle the labor-intensive last mile of delivery, piggybacking on postal carriers‘ existing daily routes.
For shippers, those reduced costs open up new possibilities. They can offer customers free or discounted shipping while keeping their own expenses in check – a major strategic advantage in an ecommerce landscape where free shipping has increasingly become table stakes.
The savings also help shippers balance out the inherent added costs that come with serving harder-to-reach rural areas, where population density is lower and delivery routes are more spread out. The USPS last mile network is uniquely equipped to handle those deliveries, as they‘re already visiting virtually every address six days a week.
From USPS‘s perspective, taking on last-mile delivery for FedEx Ground Economy provides a valuable new revenue stream. The postal service has seen its letter mail volumes decline for years due to email and other digital alternatives, so package delivery has become an increasingly important part of the business.
In fiscal year 2021, packages accounted for over 40% of USPS‘s total revenue, up from just 25% a decade earlier (USPS, 2021). Tapping into the growing ecommerce package delivery market through partnerships like the one with FedEx helps USPS stay relevant and financially viable.
The Customer Experience: Tracking Confusion and Pleasant Surprises
For all its behind-the-scenes benefits to shippers and carriers, FedEx Ground Economy can sometimes create friction in the customer experience department. Since packages start out with a FedEx label and tracking number, that‘s naturally where shoppers head to keep tabs on their order‘s progress.
But once the package switches to USPS control, that FedEx tracking info essentially dead-ends. Plugging the number into FedEx‘s website or app will usually return a generic "transferred to USPS" or "at local post office" message, with no further details on when exactly it will arrive.
That uncertainty can be unsettling, especially for customers in a hurry to get their hands on their purchase. It‘s one of the most common pain points I hear about from fellow online shoppers when it comes to hybrid shipping. That said, there are some workarounds.
One useful tip is to take your original FedEx tracking number and add a "92" to the beginning before entering it on the USPS tracking website. In most cases, this will pull up your package‘s information within the postal service‘s system and provide a clearer picture of when to expect delivery.
If that doesn‘t work, it‘s always worth reaching out directly to the merchant‘s customer service team for guidance. Since they chose the shipping method and have a direct relationship with FedEx, they may be able to provide additional insight or contact points to help locate an elusive package.
The silver lining is that once the initial confusion clears up, FedEx Ground Economy packages actually tend to reach their destination quite reliably and on schedule. FedEx reports a 98% on-time delivery rate for the service, a testament to the well-oiled nature of its partnership with USPS (FedEx, 2022).
Plus, those stealthy hand-offs to USPS sometimes lead to unexpectedly early arrivals. I can‘t tell you how many times I‘ve been pleasantly surprised to discover a FedEx Ground Economy package waiting in my mailbox a day or two ahead of schedule. In an era of supply chain disruptions and delivery backlogs, that‘s no small feat.
Putting FedEx Ground Economy in Context
So where does FedEx Ground Economy fit into the larger landscape of budget-friendly ecommerce shipping? It‘s certainly not the only game in town.
Shippers looking to tap into the combined power of a private carrier and USPS‘s last-mile network also have the option of UPS SurePost, a similar hybrid service. Like FedEx Ground Economy, it moves packages through UPS‘s network before handing them off to USPS for final delivery in certain areas.
There are also USPS-only options like Priority Mail that can sometimes be cost-competitive for shippers, especially for smaller, lighter weight packages. The key advantage of FedEx Ground Economy is the ability to capitalize on FedEx‘s long haul speed and efficiency before engaging USPS for the last mile.
Another consideration is the environmental impact of hybrid shipping models. By consolidating packages and reducing the number of delivery vehicles on the road, services like FedEx Ground Economy have the potential to curb emissions and traffic congestion.
A 2018 study by the University of Washington found that a USPS last-mile delivery in an urban area produces about 30% less carbon emissions per package than a conventional UPS or FedEx delivery (Goodchild & Wygonik, 2018). As sustainability becomes an increasingly urgent priority for many retailers and consumers, that‘s a noteworthy point in hybrid shipping‘s favor.
The Road Ahead for Hybrid Shipping
Looking toward the future, it‘s clear that the lines between major parcel carriers will only continue to blur. As ecommerce volumes keep climbing and retailers seek any edge they can get to stay competitive on shipping costs and speed, creative partnerships like the FedEx/USPS one are poised to keep thriving.
At the same time, the pandemic-fueled rise of same-day delivery options from services like Instacart and DoorDash could start to chip away at USPS‘s last-mile dominance in the years ahead, especially in dense urban markets. Major retailers like Amazon and Walmart are also increasingly taking control of their own delivery networks, potentially reducing their reliance on outside carriers over time.
Still, the unmatched ubiquity of USPS‘s network and its long track record of handling high delivery volumes six days a week suggest that partnership with the postal service will remain an important tool in carriers‘ arsenals.
Embracing the Ecommerce Ecosystem
In the end, services like FedEx Ground Economy embody the kind of outside-the-box collaboration and flexibility required to keep pace with the relentless demands of 21st century ecommerce. They may introduce some added complexity to the customer experience, but they also create real value and cost savings for shippers that help keep online shopping accessible.
As a savvy ecommerce enthusiast, understanding the mechanics and trade-offs of hybrid shipping models like FedEx Ground Economy is key to being an informed consumer. The more we can demystify the journey our packages take from click to doorstep, the better positioned we are to make smart purchasing decisions and know what to expect along the way.
The next time you‘re eagerly refreshing your tracking information and see that telltale handoff from FedEx to USPS, simply take a breath and appreciate the finely tuned fulfillment machine working on your behalf. With a little insider knowledge, you can embrace the ecommerce ecosystem in all its intricate, interconnected glory.
Happy tracking!
References
FedEx. (2021). FedEx Annual Report 2021. https://www.fedex.com/content/dam/fedex/us-united-states/Private-Citizen/FedEx_2021_Annual_Report.pdf
FedEx. (2022). FedEx Ground Economy. https://www.fedex.com/en-us/shipping/ground/economy.html
Goodchild, A., & Wygonik, E. (2018). A comparative analysis of carbon emissions from last mile package delivery. University of Washington Urban Freight Lab. https://depts.washington.edu/sctlctr/sites/default/files/research_pub_files/UFL-Last-Mile-Delivery-Emissions.pdf
Reveel Group. (2021). FedEx SmartPost/Ground Economy Service Guide. https://www.reveelgroup.com/fedex-smartpost-ground-economy-service-guide/
USPS. (2021). United States Postal Service FY 2021 Annual Report to Congress. https://about.usps.com/what/financials/annual-reports/fy2021.pdf
