Recently I switched our shipping provider from UPS to FedEx. I was with UPS for over 15 years. UPS is a great company, and they always treated me fairly. Besides a few minor annoyances such as the horrendous electronic formatting of their invoices (which for some reason it it impossible to download a version with column headers to tell you what you are looking at) and the fact that they switched our reps frequently enough that by the time a relationship was developed it was over, I never had a negative thought about them outside of the annual price increase which happens at FedEx too.
For years when a FedEx rep would ask to come see me I would tell them not to bother. We were integrated with UPS systems on our back-end software. I was happy with the service. No need to waste their time.
But the local FedEx area manager was persistent. He offered me Penguin tickets, Steeler tickets, concert tickets etc. It's hard to completely brush someone off when they are so tenacious, which is something I admire. Plus he was offering gifts. So finally I agreed to meet for lunch, and then a Pirates game (season opener no less) where both of us brought our sons. He and I developed a relationship, which was made easier by the fact that we are in a very similar place in our lives in terms of age and family. It's safe to say if he was my neighbor we'd probably be hanging out.
But liking a guy doesn't mean I would completely change everything about the way our operations worked. FedEx had a much better rate for their Smartpost service on packages over 1 pound than UPS. UPS has Mail Innovations under 1 pound, and those rates beat Smartpost by a small percentage. But over 1 pound UPS calls their service Surepost and FedEx was beating their price by almost $2. That price difference made it a financial no-brainer except for the software development cost associated with switching our systems over. But FedEx gave me $5,000 towards software development.
When I informed UPS that I would be making the switch I mentioned that their lack of relationship building opened the door, but that the pricing was what sealed the deal. And I also mentioned that FedEx has credit card billing, which means I don't have to pay someone to write a check every week, pay for a stamp, etc. Plus I get to collect reward points and I get to drag out the payment to when the credit card bill is due. I also liked the fact that FedEx Home Delivery goes out on Saturday, although you sacrifice Monday for that and UPS seems to be moving to a 6 day delivery schedule so if I were evaluating today that probably wouldn't have been a factor.
My UPS rep brought in the big guns and offered credit card billing and wanted to talk price. But my decision was made and I told them I would feel like they were ripping me off for the past transactions if they did become price competitive. The only way I would consider it is if they would make any improved pricing retroactive for a year. I knew they wouldn't take that offer. Also, my FedEx rep brought up the fact early on that if all I was going to do was use his offer to lower my UPS prices he would bow out now. I am not like that but I am sure he runs into that all the time so I thought it was a smart technique on his part. I'd feel like a real asshole if I did exactly what he asked me not to do.
Compare and Contrast
Having just made the switch I am in a unique position to compare and contrast service levels.
Where FedEx is Better
- delivery times: FedEx is equal to or better than UPS in all regions for packages leaving the Pittsburgh area for the Ground/Home Delivery options.
- pricing: This varies from account to account but overall I'm getting a better deal.
- invoicing: both in formatting and allowing me to pay via credit card.
Where UPS is Better
- pickup: UPS was much more flexible with pickup times, and the drivers overall were more patient and flexible.
- simplicity of shipping types: With FedEx they have a Ground and a Home Delivery option which are very similar but have some key differences. It's not always obvious to us if we are delivering to a business or home so that provides some friction. This isn't the case with UPS.
Where Your Mileage Will Vary
- Your rep: Ultimately in business we are dealing with individual people. Larger companies like FedEx and UPS have layers of bureaucracy that need to be overcome at different times in order for the company to treat you fairly. A good rep recognizes these times and works through the bureaucracy. A great rep warns you ahead of time about the traps and maps out how to avoid them. I'm currently very happy with both my rep and his manager. I've learned over the years that all it takes is a promotion for all that to go away in an instant, though.
Stay in touch with reps from both companies, and make sure the incumbent knows you are in touch with the other. Share your invoice with the challenger and see what they'll do. If possible keep your operations simple enough that making the switch to one or the other is easy.
If you are currently with UPS press them for credit card billing, they can and will offer it if they have to.