Complete FedEx vs UPS rate comparison for 2025 holidays with real-world scenarios, peak surcharge analysis, and guidance on when each carrier offers better value for your specific shipping needs.
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Here's the question every business owner asks in November: should I ship with FedEx or UPS during the holidays, and which one will save me money?
The answer isn't simple. FedEx and UPS have nearly identical base rate structures—they've been matching each other's price increases for years. But when you factor in peak season surcharges, residential delivery fees, Saturday/Sunday delivery, and dimensional weight pricing, the differences add up fast.
Quick answer: For lightweight packages (under 10 lbs) needing Sunday delivery, FedEx saves $15-25 per package compared to UPS because Sunday delivery is included free with Express services. For heavy packages (20+ lbs) with negotiated rates, UPS often wins by $5-15 per package depending on zone. Ground services are nearly identical in cost, but FedEx Ground has slightly better coverage in some rural areas.
This guide breaks down exactly when each carrier offers better value through real-world cost scenarios. We'll compare rates for 1 lb, 5 lb, 20 lb, and 50 lb packages across different zones and service levels, showing you the actual costs including peak surcharges and extra fees.
By the end, you'll know exactly which carrier to use for each type of package you ship during the 2025 holiday season.
Base Rate Structure: FedEx vs UPS (Nearly Identical)
Both FedEx and UPS use zone-based pricing where cost increases with distance and weight. Your shipping zone is determined by the distance between your origin ZIP code and destination ZIP code. Zone 2 is local/nearby, Zone 8 is cross-country.
For a standard 5-pound package in Zone 5 (mid-range distance, like Dallas to Denver), here's the base rate comparison before surcharges:
| Service Level | UPS Base Rate | FedEx Base Rate | Difference |
|---|---|---|---|
| Ground (5-7 days) | $22.50 | $22.85 | FedEx +$0.35 |
| 3-Day Service | $35.20 | $36.10 | FedEx +$0.90 |
| 2-Day Service | $42.50 | $43.75 | FedEx +$1.25 |
| Overnight | $78.50 | $81.20 | FedEx +$2.70 |
Rates shown are retail list prices for commercial (business) addresses. Residential deliveries add $4.75 (UPS) or $4.90 (FedEx). Peak surcharges not included.
Key takeaway: UPS base rates are typically $0.35-$2.70 cheaper than FedEx for identical service levels. But this is before we add peak surcharges, Saturday/Sunday fees, and other extras that change the math significantly.
Why the rates are so similar: FedEx and UPS engage in near-parallel pricing. When one carrier announces a general rate increase (usually 5.9% annually), the other follows within weeks. They compete more on service reliability and features than on base pricing.
Peak Season Surcharges: Where Costs Add Up
During the 2025 holiday season (November 24 - January 11-13), both carriers add temporary peak surcharges on top of base rates. These surcharges can add $1.50-$8.00+ per package depending on weight, service level, and destination type.
UPS Peak Surcharges (Nov 24, 2025 - Jan 11, 2026)
| Service Type | Weight Range | Surcharge per Package |
|---|---|---|
| Ground (Commercial) | Under 5 lbs | $1.30 |
| Ground (Commercial) | 5+ lbs | $2.85 |
| Ground (Residential) | All weights | $3.20 |
| Air Services (2-3 Day) | All weights | $4.20 - $5.15 |
| Next Day Air | All weights | $5.50 - $7.20 |
Additional surcharges apply: Residential delivery ($4.75), Delivery Area Surcharge/DAS rural ($4.85-$5.95), Large Package ($95-$165), Additional Handling ($22-$45).
FedEx Peak Surcharges (Nov 24, 2025 - Jan 13, 2026)
| Service Type | Weight Range | Surcharge per Package |
|---|---|---|
| Ground (Commercial) | Under 5 lbs | $1.45 |
| Ground (Commercial) | 5+ lbs | $3.15 |
| Ground (Residential) | All weights | $3.50 |
| Express Services (2-3 Day) | All weights | $4.50 - $5.50 |
| Overnight Services | All weights | $5.85 - $7.80 |
Additional surcharges apply: Residential delivery ($4.90), Delivery Area Surcharge/DAS rural ($5.10-$6.25), Oversize ($95-$175), Additional Handling ($25-$50).
Pattern you should notice: FedEx peak surcharges are typically $0.15-$0.65 higher than UPS surcharges across most service levels. This means FedEx's initial base rate advantage disappears once you add peak season fees.
For a 5-pound residential ground package during peak season, you're paying an extra $7.90-$8.40 in surcharges on top of the base rate—roughly 35% more than the non-peak base cost.
Real-World Cost Scenarios: When Each Carrier Wins
Let's stop talking about abstract rates and look at actual shipping costs for packages you'd send during the holidays. All scenarios include peak surcharges and applicable fees.
Scenario 1: Lightweight Package, Short Distance (1 lb, Zone 2)
Package details: 1 lb gift box, Los Angeles to San Diego (Zone 2), residential delivery
| Service | Carrier | Base Rate | Peak Surcharge | Residential Fee | Total Cost |
|---|---|---|---|---|---|
| Ground | UPS | $11.25 | $1.30 | $4.75 | $17.30 |
| Ground | FedEx | $11.50 | $1.45 | $4.90 | $17.85 |
Winner: UPS by $0.55
Why UPS wins: Lower peak surcharges and slightly lower residential fees give UPS a small edge on lightweight, short-distance packages. The difference is minimal—only 3%—but it adds up over 100+ packages.
Scenario 2: Standard Package, Medium Distance (5 lb, Zone 5)
Package details: 5 lb product shipment, Dallas to Denver (Zone 5), residential delivery
| Service | Carrier | Base Rate | Peak Surcharge | Residential Fee | Total Cost |
|---|---|---|---|---|---|
| Ground | UPS | $22.50 | $2.85 | $4.75 | $30.10 |
| Ground | FedEx | $22.85 | $3.15 | $4.90 | $30.90 |
| 2-Day | UPS | $42.50 | $5.15 | $4.75 | $52.40 |
| 2-Day | FedEx | $43.75 | $5.50 | $4.90 | $54.15 |
Winner: UPS by $0.80 (Ground) and $1.75 (2-Day)
Why UPS wins: For standard 5-pound packages, UPS maintains a consistent cost advantage of $0.80-$1.75 per package across service levels. If you're shipping 500 packages during the holidays, UPS saves you $400-$875.
Scenario 3: Heavy Package, Long Distance (20 lb, Zone 8)
Package details: 20 lb product, Seattle to Miami (Zone 8), commercial address
| Service | Carrier | Base Rate | Peak Surcharge | Residential Fee | Total Cost |
|---|---|---|---|---|---|
| Ground | UPS | $54.20 | $2.85 | $0 | $57.05 |
| Ground | FedEx | $55.40 | $3.15 | $0 | $58.55 |
| Next Day | UPS | $142.50 | $7.20 | $0 | $149.70 |
| Next Day | FedEx | $145.80 | $7.80 | $0 | $153.60 |
Winner: UPS by $1.50 (Ground) and $3.90 (Overnight)
Why UPS wins: Heavy packages across long distances amplify small rate differences. UPS's slightly lower base rates compound with lower peak surcharges, creating meaningful savings of $1.50-$3.90 per package.
Important note: These are retail rates. With negotiated rates (available for businesses shipping 50+ packages/month), the gap can widen further—UPS typically offers deeper discounts on heavy packages than FedEx.
Scenario 4: Overnight with Sunday Delivery (5 lb, Zone 5)
Package details: 5 lb package, Dallas to Denver, ships Saturday for Sunday delivery, residential
| Service | Carrier | Base Rate | Peak Surcharge | Residential | Sunday Fee | Total Cost |
|---|---|---|---|---|---|---|
| Next Day Air | UPS | $78.50 | $7.20 | $4.75 | $20.00 | $110.45 |
| Priority Overnight | FedEx | $81.20 | $7.80 | $4.90 | $0 | $93.90 |
Winner: FedEx by $16.55
Why FedEx wins (big): FedEx includes Saturday and Sunday delivery at no extra charge on Express services. UPS charges $15-$25 extra for Sunday delivery. During Christmas week when Saturday/Sunday delivery is critical, FedEx becomes dramatically cheaper.
If you're shipping 100 overnight packages on Saturday December 20 for Sunday December 21 delivery, FedEx saves you $1,655 compared to UPS.
Scenario 5: Dimensional Weight Package (2 lb actual, 15 lb DIM, Zone 6)
Package details: 2 lb pillow in 18" × 18" × 12" box (bills as 15 lb DIM weight), residential
| Service | Carrier | Base Rate (15 lb) | Peak Surcharge | Residential Fee | Total Cost |
|---|---|---|---|---|---|
| Ground | UPS | $38.20 | $2.85 | $4.75 | $45.80 |
| Ground | FedEx | $39.10 | $3.15 | $4.90 | $47.15 |
Winner: UPS by $1.35
Why UPS wins: Both carriers use the same dimensional weight formula (length × width × height ÷ 139), so DIM weight penalties are identical. UPS's lower base rates give it the edge. However, the best solution for bulky items is to use smaller boxes—every inch matters.
DIM weight tip: For lightweight, bulky items, consider vacuum-seal bags (for soft goods) or tighter packaging to reduce dimensional weight charges. A 2-inch reduction in box size can drop you from 15 lb DIM to 10 lb DIM, saving $8-$12 per package.
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Saturday & Sunday Delivery: FedEx's Biggest Advantage
This is where FedEx pulls significantly ahead during Christmas week: Saturday and Sunday delivery is included at no extra charge with FedEx Express services (2Day, Express Saver, Standard Overnight, Priority Overnight).
UPS charges extra for weekend delivery:
- Saturday delivery: $4-$6 per package (included with some Express services)
- Sunday delivery: $15-$25 per package (available with Next Day Air Saver and Saturday Delivery)
When this matters most: During the final week before Christmas (December 19-24), Saturday and Sunday delivery become critical. If you're shipping packages on Friday December 19 or Saturday December 20 that need to arrive by December 24, FedEx's included weekend delivery saves $15-$25 per package compared to UPS.
For small businesses shipping 50-200 packages during this final push, FedEx saves $750-$5,000 in weekend delivery fees alone.
Exception: UPS includes Saturday delivery at no extra charge with Next Day Air, 2nd Day Air, and 3 Day Select services. It's only Sunday delivery where UPS adds the hefty surcharge.
Negotiated Rates: When the Math Changes
Everything we've discussed so far assumes retail/published rates. But if you're shipping 50+ packages per month, you should have negotiated rates with at least one carrier—and that changes the cost comparison significantly.
Typical negotiated discount ranges:
- Small volume (50-200 packages/month): 10-25% off retail rates
- Medium volume (200-1,000 packages/month): 25-40% off retail rates
- High volume (1,000+ packages/month): 40-60% off retail rates
Who offers deeper discounts? It depends on your shipping profile:
- UPS tends to offer better discounts on: Heavy packages (15+ lbs), ground services, high-volume shippers, predictable weekly volumes
- FedEx tends to offer better discounts on: Lightweight packages, Express services, inconsistent volumes, shippers needing flexible pickup schedules
Pro tip: Get quotes from both carriers annually. Play them against each other. If UPS offers 30% off and you show FedEx, FedEx will often match or beat it. Carrier competition works in your favor.
Example of negotiated rate impact (5 lb, Zone 5, Ground):
| Rate Type | UPS | FedEx | Savings |
|---|---|---|---|
| Retail rate (incl. peak) | $30.10 | $30.90 | UPS -$0.80 |
| 30% negotiated discount | $21.07 | $21.63 | UPS -$0.56 |
| 45% negotiated discount | $16.56 | $17.00 | UPS -$0.44 |
Notice that the absolute dollar difference shrinks as discounts increase, but UPS maintains its percentage advantage. Over 10,000 packages annually, that $0.44 difference saves $4,400—worth negotiating for.
Rural & Residential Delivery: Additional Surcharges to Watch
Both carriers add extra fees for residential deliveries and deliveries to rural or remote areas. These fees stack on top of base rates and peak surcharges.
Residential Delivery Surcharge (Applies to All Homes)
- UPS: $4.75 per package
- FedEx: $4.90 per package
If your destination is a home address (not a business), this fee applies automatically. There's no way to avoid it unless the customer picks up at a UPS Store / FedEx Office location.
Delivery Area Surcharge (DAS) for Rural Addresses
If you're shipping to ZIP codes classified as "extended" or "remote," both carriers add a Delivery Area Surcharge:
- UPS DAS: $4.85 - $5.95 per package
- FedEx DAS: $5.10 - $6.25 per package
DAS applies to roughly 15-20% of US ZIP codes—mostly rural areas in Montana, Wyoming, Alaska, northern Maine, etc.
How to check if DAS applies:
- UPS: Use the UPS Rate and Service Guide or contact UPS
- FedEx: Check the FedEx U.S. Delivery Area Surcharge ZIP Code List
For ecommerce businesses, this can be a surprise cost if you're offering flat-rate shipping. A package to rural Montana costs $10-12 more than the same package to downtown Chicago.
Solution: Build DAS into your shipping calculation at checkout, or set a minimum order value for rural deliveries to offset the extra cost.
Ground Service: Nearly Identical (FedEx Slight Edge in Coverage)
For standard Ground service—the cheapest option for packages not needing expedited delivery—UPS and FedEx are almost perfectly matched on cost and delivery speed.
Cost comparison (retail rates, 5 lb, Zone 5, including peak):
- UPS Ground: $30.10
- FedEx Ground: $30.90
- Difference: $0.80 (2.6%)
Delivery speed: Both carriers deliver Ground packages in 1-5 business days depending on distance. Cross-country (Zone 8) typically takes 5 days; nearby zones (2-3) arrive in 1-2 days.
Where FedEx Ground has an advantage: FedEx Ground delivers to slightly more remote areas than UPS Ground. In some rural ZIP codes in Alaska, northern Canada border areas, and parts of the Mountain West, FedEx Ground is available while UPS Ground is not (forcing you to use UPS 3 Day Select at higher cost).
Where UPS Ground has an advantage: UPS has more retail drop-off locations (UPS Stores, UPS Access Points) than FedEx, making it more convenient for in-person drop-offs in suburban and rural areas.
Bottom line on Ground service: Use whichever carrier you have negotiated rates with. At retail pricing, UPS is marginally cheaper; at negotiated pricing, they're nearly identical.
When to Use UPS vs FedEx: Decision Framework
Here's your quick decision guide based on package characteristics and timing:
Use UPS When:
- ✓ Shipping heavy packages (15+ lbs) with negotiated rates
- ✓ Shipping to commercial/business addresses (avoid residential fees)
- ✓ Using Ground service Monday-Thursday (no weekend delivery needed)
- ✓ You have better negotiated rates with UPS
- ✓ Volume consistency—UPS rewards predictable weekly volumes
- ✓ Need Saturday delivery (included with Next Day / 2nd Day Air)
Use FedEx When:
- ✓ Shipping Friday/Saturday for weekend delivery (saves $15-25/package)
- ✓ Lightweight packages (under 5 lbs) needing Express service
- ✓ Shipping to hard-to-reach rural areas where FedEx has better coverage
- ✓ Need flexible pickup schedules or later pickup cutoff times
- ✓ Shipping internationally (FedEx International often has better rates/service than UPS)
- ✓ You have better negotiated rates with FedEx
No Clear Winner (Effectively Identical):
- Standard 5-10 lb packages at retail rates (within $1-2 per package)
- Ground service to contiguous US
- 2-Day and 3-Day services (nearly identical pricing)
For detailed last-ship dates by carrier, see our guides: UPS Last Day to Ship Christmas 2025 and FedEx Last Day to Ship Christmas 2025.
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Frequently Asked Questions
Is FedEx or UPS cheaper for holiday shipping?
UPS is typically $0.50-$2.00 cheaper per package for standard ground and 2-day services at retail rates. However, FedEx becomes significantly cheaper ($15-25 per package) if you need Sunday delivery, which is included free with FedEx Express services but costs extra with UPS. For heavy packages with negotiated rates, UPS often offers deeper discounts.
Which carrier has lower peak season surcharges?
UPS has slightly lower peak surcharges across most service levels. During the 2025 peak season (Nov 24 - Jan 11-13), UPS surcharges range from $1.30-$7.20 per package compared to FedEx's $1.45-$7.80. The difference is $0.15-$0.65 per package depending on service level and weight.
Does FedEx or UPS have better rates for overnight shipping?
UPS has slightly lower base rates for overnight service ($78.50 vs $81.20 for a 5 lb package), but FedEx includes Saturday/Sunday delivery at no extra charge while UPS charges $15-$25 extra for Sunday. If you need weekend delivery, FedEx is $13-20 cheaper per package. For Monday-Friday delivery, UPS is $3-5 cheaper.
What about residential delivery fees?
Both carriers charge residential delivery surcharges: UPS charges $4.75, FedEx charges $4.90—nearly identical. These fees apply to all deliveries to home addresses and are unavoidable during peak season. The only way to avoid them is if customers pick up at UPS Store / FedEx Office locations.
Which carrier is better for heavy packages?
UPS typically offers better rates for heavy packages (15+ lbs), especially with negotiated pricing. UPS's volume discount structure favors heavy shipments, while FedEx's discount structure is more favorable for lightweight Express packages. At retail rates, UPS is $1.50-$4.00 cheaper for packages over 20 lbs.
Do negotiated rates change which carrier is cheaper?
Yes, significantly. Negotiated rates can range from 10-60% off retail pricing, and each carrier's discount structure favors different shipping profiles. UPS tends to offer deeper discounts for heavy packages and ground service; FedEx offers better discounts for Express services and inconsistent volumes. Always get quotes from both carriers annually.
Which carrier delivers to rural areas better?
FedEx Ground has slightly better coverage in remote rural areas, serving some ZIP codes where UPS Ground is unavailable. However, both carriers charge Delivery Area Surcharges (DAS) for rural deliveries: UPS DAS is $4.85-$5.95, FedEx DAS is $5.10-$6.25. Check each carrier's DAS ZIP code list for your specific destinations.
Can I use both FedEx and UPS to save money?
Yes, and many businesses do. Use UPS for heavy ground packages and FedEx for lightweight Express packages needing weekend delivery. Most shipping software (ShipStation, Ordoro, EasyShip) compares rates across carriers automatically. The complexity is managing two accounts, but the savings can be 15-25% across your total shipping volume.
What's the best way to compare rates for my specific packages?
Use a shipping calculator or rate comparison worksheet that factors in: (1) Actual package weight and dimensions, (2) Origin and destination ZIP codes (for zone pricing), (3) Peak season surcharges, (4) Residential vs commercial delivery, (5) DAS fees if applicable, (6) Your negotiated rates if available. Comparing base rates alone will mislead you by $5-15 per package.
Does dimensional weight pricing differ between carriers?
No, both UPS and FedEx use identical dimensional weight formulas: (Length × Width × Height) ÷ 139 for all services. If your package is large and lightweight, you'll pay DIM weight rates with either carrier. The solution is to use smaller boxes or vacuum-seal soft goods to reduce dimensional weight charges.
Which carrier is faster for ground shipping?
Delivery speed is nearly identical for UPS Ground and FedEx Ground—both deliver in 1-5 business days depending on distance. In rare cases, FedEx may deliver 1 day faster to remote areas where they have better coverage. UPS may deliver 1 day faster in areas with high UPS distribution center density (e.g., Atlanta, Louisville).
Should I switch carriers for holiday shipping?
Only if you can save 15%+ on your total shipping costs. Switching carriers mid-season adds complexity (new account setup, staff training, software integration). If you're currently with UPS and FedEx offers 20% better rates for your specific package profile, it's worth switching. If the difference is under 10%, stick with your current carrier to avoid disruption during peak season.
Conclusion: Choose Based on Your Specific Shipping Profile
There's no universal "FedEx is cheaper" or "UPS is cheaper" answer. The right carrier depends on your package weights, service levels, delivery destinations, and whether you need weekend delivery.
Quick recap of when each carrier wins:
- UPS wins: Heavy packages (15+ lbs), ground service, commercial deliveries, Monday-Friday shipping, businesses with negotiated rates favoring ground
- FedEx wins: Lightweight Express packages, Friday/Saturday shipping needing Sunday delivery (saves $15-25/package), rural areas with limited UPS coverage, flexible pickup needs
- Effectively tied: Standard 5-10 lb packages, 2-3 day services, ground shipments Monday-Thursday
For most small businesses shipping a mix of package sizes and service levels, the smart move is to use both carriers strategically. Ship heavy ground packages via UPS. Ship lightweight Express packages—especially those needing weekend delivery—via FedEx. Use shipping software that auto-selects the cheapest carrier for each package.
The carriers themselves use rate parity as a competitive strategy, so you won't find dramatic 30-40% cost differences between them. The savings come from understanding the nuances—weekend delivery fees, DAS charges, dimensional weight, negotiated discounts—and optimizing your carrier choice for each shipment.
Continue Learning:
- Complete Holiday Delivery Cutoffs Guide (All Carriers)
- UPS Last Day to Ship Christmas 2025
- FedEx Last Day to Ship Christmas 2025
- Cheapest Holiday Shipping Options (Small Business Guide)
- Last Day to Ship for Christmas (All Carriers)
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