In the expanding world of e-commerce, delivering packages to customers’ doorsteps has become an essential and highly competitive aspect of the business. With the continued rise of online shopping, shipping carriers have had to adapt their operations to meet consumers’ increasing demands and expectations.
One particular challenge in the shipping process is the last-mile delivery, which refers to the final leg of a package’s journey from a local distribution center to the customer’s address. Interestingly, this seemingly short distance can often be the most costly and complex part of package delivery.
FedEx is one shipping company that has recently changed how they handle land-mile package deliveries. In 2021, the company began the rebranding from FedEx SmartPost to FedEx Ground Economy to keep up with the explosive growth of e-commerce and optimize its last-mile delivery process. The rebranded service, now known as FedEx Ground Economy Returns, offers a cost-effective solution for package returns with reliable delivery timelines. Today, we’ll look at the former FedEx SmartPost, the shift to FedEx Ground Economy, and what that means for businesses like yours.
Introduction to FedEx Services
FedEx offers a comprehensive range of shipping services designed to meet the diverse needs of businesses and individuals. Among these, FedEx Ground Economy stands out as a cost-effective option for shipping low weight packages to residential addresses across the United States. This service is particularly popular with businesses seeking to optimize shipping costs without sacrificing reliability or coverage. FedEx Ground Economy is often cheaper than traditional FedEx Ground services, especially for residential deliveries.
FedEx Ground Economy is tailored for non-urgent deliveries, making it an ideal solution for companies that need to ship packages efficiently and affordably. The service typically delivers packages within 2 to 7 business days, depending on the distance between the shipping location and the destination. With full U.S. coverage—including deliveries to Alaska and Hawaii—FedEx Ground Economy ensures that customers can reach even the most remote addresses. However, higher fees may apply for shipping to non-contiguous states like Alaska and Hawaii when using FedEx Ground Economy.
One of the key benefits of FedEx Ground Economy is its ability to provide reliable tracking for every shipment. Customers and businesses alike can track their packages throughout the shipping process, giving them peace of mind and greater control over their deliveries. The service is optimized for low weight packages, making it a cost effective option for companies looking to reduce shipping costs while maintaining high standards of service.
Whether you’re a small business shipping to customers nationwide or an individual looking for an affordable way to send packages, FedEx Ground Economy offers a dependable ground shipping solution. Its combination of broad coverage, reliable delivery, and cost savings makes it a smart choice for a wide range of shipping needs.
What Is FedEx SmartPost?
FedEx SmartPost was a hybrid shipping service that combined the resources of FedEx and the U.S. Postal Service (USPS) for package delivery. It was designed to provide a cost-effective solution for shipping lightweight packages to residential addresses by combining the speed and reliability of FedEx’s express network with the extensive reach of the USPS for final delivery. Service details included typical delivery times of 2–7 business days, coverage across all U.S. states and territories, and package size and weight limitations that made it ideal for small to medium parcels. Additionally, FedEx SmartPost was generally cheaper than traditional FedEx ground service, with estimates suggesting it could be 20 percent less expensive than FedEx’s Home Delivery Service.
How Does FedEx SmartPost Work?
When still operating, FedEx SmartPost utilized FedEx’s extensive express network for long-distance transportation and then handed off the packages to USPS for last-mile delivery. This collaboration allowed FedEx SmartPost to reach every U.S. residential address, including PO boxes and military residences, while offering competitive shipping rates for businesses. Shipments were managed efficiently throughout the process, with tracking available at each stage, giving businesses important shipment options to optimize their delivery strategies. Despite the last mile being operated by USPS, shippers still had tracking capabilities and service available Monday to Saturday.
The way FedEx SmartPost functioned allowed the shipping company to offer competitive shipping prices. However, the program was most useful for small, lightweight packages that weren’t time sensitive. Some shippers complained that the service was too slow or unreliable.
Why FedEx Transitioned From SmartPost to Ground Economy
The transition from FedEx SmartPost to FedEx Ground Economy was driven by several factors and the need to adapt to a changing market. Here are some of the likely reasons behind this decision:
By optimizing operations and leveraging partnerships for last-mile delivery, FedEx can reduce overall shipping costs, which directly lowers the amount businesses pay for shipping. This makes the service more attractive to retailers looking to manage expenses.
1. Growth of E-commerce
The rapid growth of e-commerce has led to a significant increase in package volume being shipped to residential addresses. Meeting customer expectations for timely delivery has become a priority for retailers, influencing their choice of shipping services. This surge in online shopping has placed greater demands on shipping services to handle higher volumes efficiently. FedEx recognized the need to optimize its operations to meet the growing demand and provide an improved customer experience.
2. Operational Efficiency
FedEx SmartPost’s hybrid model of utilizing both FedEx’s express network and the USPS for final delivery presented some operational complexities. The transition to FedEx Ground Economy aimed to streamline operations by consolidating operations within FedEx’s own network and utilizing contracted drivers. This allows FedEx to have more control over the entire shipping process, resulting in improved efficiency.
3. Cost Optimization
By focusing on ground transportation for the entire delivery process, FedEx can optimize routes, utilize its own delivery fleet more effectively, and potentially reduce costs associated with third-party partnerships.
Overall, the transition from FedEx SmartPost to Ground Economy was driven by the need to adapt to the changing landscape of e-commerce, optimize operational efficiency, reduce costs, and provide an improved shipping experience for customers. By streamlining operations and focusing on ground transportation, FedEx aimed to meet the evolving demands of the market while ensuring efficient and reliable package delivery.
How Does FedEx Ground Economy Work?
While FedEx SmartPost relied on FedEx’s express network and USPS for last-mile delivery, FedEx Ground Economy operates solely within FedEx’s own network, providing more control over the entire delivery process. As a shipping option, FedEx Ground Economy is ideal for businesses seeking affordable, low-weight, and non-urgent deliveries. FedEx Ground drivers, or sometimes contracted third-party drivers, complete the last-mile delivery, bringing packages directly to recipients’ addresses. However, FedEx Ground Economy offers full U.S. residential shipping, including to PO Boxes and locations that FedEx normally does not ship to.
These changes are an effort by FedEx to ensure greater reliability and faster transit times compared to SmartPost. One major change from SmartPost to Ground Economy is the addition of Sunday deliveries. Packages are typically delivered within 2 to 7 business days, highlighting the reliability and broad service scope of Ground Economy. Still, the following options are not available for Ground Economy: FedEx Ground Economy does not guarantee delivery times, and there is no money-back guarantee for late delivery.
Collect on delivery
Money-back guarantee
Declared value
Address correction
Signature proof of delivery
Evening, appointment, or date-certain delivery
Hazardous materials service
Redirect to hold at a FedEx location
Delivery redirects requested by shipper
FedEx Ground Economy does not offer features like signature proof of delivery or address correction.
FedEx Smart Post vs. Ground Economy: Differences and Similarities
The shift from FedEx SmartPost to FedEx Ground Economy began in 2019 as the company began delivering most SmartPost packages through their networks. The official rebrand happened in 2021 when they publicly introduced FedEx Ground Economy. The slow transition and similar product offerings meant that the two programs have many similarities; however, there are some key differences as well.
Delivery Method
How Does FedEx SmartPost Work?
SmartPost utilized a hybrid model, combining FedEx’s express network for long-distance transportation and the USPS for last-mile delivery. Packages were handed off from FedEx to the USPS for final delivery.
How Does FedEx Ground Economy Work?
Ground Economy operates solely within FedEx’s own network. It relies on ground transportation methods, such as trucks, for the entire delivery process, without involving the USPS.
Delivery Time
How Long Does FedEx SmartPost Take?
FedEx SmartPost shipping time was generally longer when compared to other FedEx services due to the involvement of the USPS for the last mile. Estimated FedEx SmartPost shipping time ranged from two to seven business days, depending on the distance and destination, and there were no Sunday deliveries.
How Long Does FedEx Ground Take?
Estimated delivery times for Ground Economy are similar to that of SmartPost. Deliveries range from two to seven business days, depending on the distance and destination. However, FedEx now delivers Monday through Sunday, allowing them to shorten the average delivery time.
Delivery Returns
How Does FedEx SmartPost Handle Returns?
SmartPost Returns followed a similar process to outbound delivery. To offer returns for their customers, businesses would include a prepaid shipping label along with the shipment. Then, the customer could leave the box in their mailbox, give it to their USPS carrier, or drop it off at a FedEx office.
How Does FedEx Ground Economy Handle Returns?
Ground Economy returns functions nearly the same as FedEx SmartPost Returns. However, customers now have even more options, with the ability to print a shipping label from a QR code or create one online.
Tracking Abilities
Does FedEx SmartPost Give USPS Tracking?
Tracking was available for packages delivered through SmartPost, even once the package was handed off to USPS. The 20-digital FedEx tracking number was converted to a USPS tracking number once the handoff was processed.
Does FedEx Ground Economy Have Tracking?
Now that Ground Economy handles delivery for the entire process, only the FedEx tracking number is needed.
FedEx Ground Economy vs. Home Delivery
Now that we understand the similarities and differences between FedEx Ground Economy and FedEx SmartPost, we can compare them with another popular delivery option, FedEx Home Delivery. First off, Home Delivery accepts packages up to 150 pounds, while Ground Economy has a maximum of 70 pounds. In addition, Home Delivery is a bit faster, with deliveries made between one and five business days.
However, perhaps one of the largest differences between the two programs is the contractual agreement. Ground Economy is a contract service, meaning businesses must sign an agreement with FedEx outlining the terms and conditions of the contract. Meanwhile, Home Delivery is not a contract service.
Rebranding Implications for Businesses
The rebranding of FedEx SmartPost to FedEx Ground Economy brings significant implications for shippers. Parcel management, with its inherent complexities and risks, requires careful attention to avoid unnecessary costs. By eliminating the handoff to USPS and taking responsibility for final mile delivery in-house, FedEx aims to streamline the process and enhance efficiency. FedEx Ground Economy offers improved reliability and potentially shorter transit times compared to the previous service.
FedEx Ground Economy services a wide range of locations, including PO Boxes, Puerto Rico, Virgin Islands, and other U.S. territories, ensuring coverage for diverse delivery destinations.
However, this shift still necessitates FedEx contract negotiation and thorough FedEx invoice auditing to ensure accurate rates and maximize return on investment. Companies must be vigilant in monitoring any invoice errors or unjust surcharges on their bills each month.
The importance of analytics and shipment auditing cannot be overstated in today’s shipping industry. To address these challenges and optimize small parcel shipping costs, partnering with a cost reduction firm is your best choice. Companies like P3 Cost Analysts can provide invaluable expertise and solutions. By leveraging comprehensive analytics and auditing capabilities, we help shippers make informed decisions, uncover savings opportunities, and enhance their overall shipping strategies.
The Bottom Line on SmartPost
The exponential growth of e-commerce and the need for operational efficiency and cost optimization have prompted FedEx to streamline its operations and bring the entire delivery process in-house. By eliminating the transfer to USPS and relying solely on its own network, FedEx aims to enhance reliability, shorten transit times, and provide a better shipping experience for customers.
While the transition from SmartPost to Ground Economy offers several benefits, one thing remains constant regardless of which parcel delivery service business owners choose. Shippers must carefully review their contracts with FedEx, negotiate favorable terms, and conduct thorough invoice auditing to ensure accurate rates and avoid unnecessary costs.
Future of Shipping
The future of shipping is rapidly evolving, driven by technological innovation, changing consumer expectations, and a growing emphasis on sustainability. FedEx is at the forefront of this transformation, investing in electric and autonomous vehicles to reduce its carbon footprint and enhance delivery efficiency. The company is also exploring the use of drones and other cutting-edge technologies to further streamline the shipping process and improve the customer experience.
As e-commerce continues to expand, the demand for fast, reliable, and cost effective shipping solutions is only increasing. FedEx Ground Economy and other ground services are adapting to meet these needs, offering businesses and customers flexible options for both standard and expedited deliveries. The rise of same-day and next-day delivery options is shaping the industry, and FedEx is committed to staying ahead by continuously improving its ground economy services.
Data analytics and artificial intelligence are becoming essential tools for optimizing shipping routes, predicting demand, and ensuring that packages are delivered on time. By leveraging these technologies, FedEx can provide greater reliability and efficiency, helping businesses manage their shipping costs while meeting customer expectations for timely delivery.
Looking ahead, FedEx’s focus on innovation, sustainability, and customer satisfaction will ensure that its services—including FedEx Ground Economy—remain a top choice for businesses and individuals. By embracing new technologies and adapting to the changing landscape, FedEx is well-positioned to lead the way in delivering reliable, efficient, and cost effective shipping solutions for the future.
Partnering with a cost reduction firm like P3 Cost Analysts can provide valuable expertise and solutions in navigating the complexities of small parcel shipping. We will help you get control over your shipping expenses and make sure the delivery companies are working for you.
For help in all aspects of parcel delivery, contact a P3 shipping expert today!
