The Real Cost of FedEx Ground vs UPS Ground in 2026

When small business owners compare shipping options, the focus is often on base rates. This approach is like buying a car and only considering the sticker price, ignoring insurance, fuel, and maintenance. Base rates are just a part of the total cost — often representing around 60% of what you'll actually pay. The remaining costs come from surcharges, which are where the real differences between FedEx Ground and UPS Ground lie.

After analyzing my shipping invoices for January 2026, which included 847 packages shipped via FedEx Ground and 912 via UPS Ground, I discovered some insights that changed how I manage my shipments.

Base Rate Comparison: 2026 Published Rates

Let's begin with the base rates, which are the most straightforward part of the comparison. Here are the published daily rates for a 5 lb package:

At first glance, these differences seem negligible, with FedEx slightly more expensive than UPS by a few cents. However, stopping here would be a mistake because these numbers only tell part of the story.

The Surcharge Reality

Surcharges are the hidden costs that can significantly affect your shipping expenses. Let's break these down:

Fuel Surcharges (The Big One)

Both FedEx and UPS apply a fuel surcharge as a percentage of the base transportation charge. In January 2026:

• FedEx Ground charges an 8.5% fuel surcharge.
• UPS Ground charges 8.0%.

A half-percent might not seem significant, but on a $15 base rate, it adds about $0.08 per package. When multiplied across thousands of shipments, this seemingly minor difference can accumulate into a substantial cost.

Residential Delivery Surcharges

Residential deliveries incur additional charges, and here the disparity becomes more noticeable:

• FedEx Ground charges $6.15 for residential deliveries.
• UPS Ground charges $5.95.

If most of your packages are destined for residential addresses, this $0.20 difference can quickly amount to substantial extra costs. For instance, on 500 residential deliveries a month, you'd pay $100 more with FedEx.

Additional Handling Surcharges

These surcharges apply to packages that are heavier, longer, or packaged in certain ways:

• For weight, length, and packaging, FedEx charges $17.50, while UPS charges $17.00.
• Oversize packages incur fees of $95.00 with FedEx and $92.00 with UPS.
• Non-standard packaging is $35.00 with FedEx versus $31.00 with UPS.

FedEx consistently charges a few dollars more, which can add up if you frequently ship bulky or heavy items.

Delivery Area Surcharges (DAS)

Delivery area surcharges are applied to shipments in remote or rural locations. As of 2026:

• For commercial extended areas, FedEx charges $4.80, while UPS charges $4.50.
• Residential extended charges are $6.15 combined with residential for FedEx and $5.80 for UPS.
• Remote or super extended areas cost $11.00 with FedEx and $10.50 with UPS.

Approximately 15% of US addresses qualify as "extended", meaning these charges can significantly impact your expenses if you're shipping to rural areas.

My Real Invoice Analysis

Analyzing my invoices from January 2026 provided a clear picture of the costs involved:

FedEx Ground — 847 Packages

UPS Ground — 912 Packages

The average cost per package was $20.58 with FedEx compared to $20.01 with UPS. This $0.57 difference per package resulted in about $6,200 in savings over a year at my shipping volume.

Where FedEx Wins

FedEx isn't entirely outmatched by UPS. It has its own strengths:

FedEx Ground Delivery Days: FedEx Ground delivers Tuesday through Saturday in most areas, and even on Sundays in some metropolitan areas. In contrast, UPS Ground operates Monday through Saturday, making FedEx the go-to for weekend deliveries without extra charges.

FedEx SmartPost/Ground Economy: For lightweight and non-urgent packages, FedEx Ground Economy (formerly SmartPost) can be 30-40% cheaper than standard ground rates for packages under 3 lbs. Although slower, it’s a cost-effective option when speed isn't a priority.

FedEx Money-Back Guarantee: FedEx Ground offers a money-back guarantee on delivery dates. This can be an advantage if on-time delivery is crucial enough to justify claiming refunds.

Where UPS Wins

UPS has several advantages that make it a strong contender:

Lower Surcharges Across the Board: As seen earlier, UPS consistently charges less for surcharges, saving anywhere from $0.20 to $3.00 per shipment. These savings accumulate over time.

Better Negotiated Discounts: UPS tends to offer more aggressive contract discounts. Many shippers report that UPS provides 45-55% off published rates, compared to FedEx's 40-50% for similar volumes.

UPS Access Point Network: With over 50,000 Access Point locations in the US, UPS waives residential surcharges for deliveries to these points, saving $5.95 per package.

Carbon Neutral Option: UPS offers a carbon neutral shipping option for $0.05 per package, making it easier for businesses to commit to sustainability.

The Decision Framework

Based on my experience, here's how I decide which carrier to use:

Route to FedEx Ground When:

• You need delivery on Saturday without a surcharge.
• Shipping lightweight, non-urgent packages via Ground Economy.
• The money-back guarantee is important for the shipment.
• FedEx provides better zone transit times for the destination.

Route to UPS Ground When:

• Shipping to residential addresses (lower surcharge).
• Handling heavy or oversized packages (lower additional handling fees).
• Shipping to extended delivery areas (lower DAS).
• Customers can use a UPS Access Point (eliminates residential surcharge).
• You've secured a strong UPS discount.

The Savings Strategy Nobody Talks About

The real savings don't come from choosing one carrier over the other. Instead, they come from using both carriers strategically. By routing each package to the cheaper option based on weight, zone, dimensions, and delivery type, I saved 11% compared to using one carrier exclusively. For my approximately 1,800 packages per month, that's about $3,900 in monthly savings.

Carriers are aware of this strategy, which is why they often include minimum volume commitments in their contracts. However, small to mid-size shippers can typically use both carriers without hitting these minimums. To maximize savings, ensure your shipping software calculates the best option for every package. Not doing so means leaving money on the table.