Updated
ShipStation offers discounted UPS rates to users. These rates are lower than what you might get directly through UPS if you have a small to medium-sized business.
ShipStation negotiates against the aggregated volume of its whole customer base and passes the result through, which is how a small shipper gets pricing it could not negotiate alone. For US accounts those rates cover USPS, UPS, FedEx, DHL Express and GlobalPost, with USPS cubic rates included by default on qualifying shipments. Canadian accounts add Canada Post, Canpar and Purolator, and UK and EU accounts have their own list. For a carrier outside that list you bring your own account, which ShipStation connects and rates alongside the discounted ones.
How much the discount is worth varies by carrier, and UPS is one of the two where it is worth the most. On USPS the commercial tiers are set by USPS, so the same floor is available through any platform. On UPS and FedEx the negotiated element is larger, which is what makes the question in the title worth asking. More on the USPS side of it.
They do their best work on small, light packages. In the accounts I have worked in, parcels under 5 lbs are where ShipStation’s UPS rates are hardest to beat.
ShipStation uses the DAP (Digital Access Program) to offer negotiated rates to their users. This program lets platforms like ShipStation pass on their discount to users of their platform.
Two things are worth knowing about them.
ShipStation’s UPS rates give you access to a service called UPS Ground Saver. This is the rebranded SurePost service. These rates are usually cheaper than UPS Ground for lightweight residential parcels.
The discounts are deep. ShipStation publishes them as up to 81% off UPS Ground daily rates, 75% off UPS 2nd Day Air and 85% off daily rates for international shipments.
There are 3 factors that make UPS Rates unfavorable compared to what you might be able to negotiate directly with UPS.
Weight. The rates get less competitive on heavier items. Above roughly 5 lbs I see the discount thin out.
Size. When dimensional weight gets above 5 lbs (dimensional weight = length x width x height ÷ 139, the divisor ShipStation documents), ShipStation UPS rates get more expensive.
Delivery Area Surcharges. You can read more about the DAS (Delivery areas surcharge) here. You can typically negotiate these down more than what you’ll get with ShipStation UPS rates.
It can be a challenge to determine when it’s better to use your own UPS rates than ShipStation’s, and the better answer is usually to connect both and let a rate comparison decide per order. Consolidating onto one carrier costs more than the discount returns. Rate Shopper is the native way to make that comparison per shipment, and setting a Rate Shopper strategy by rule covers routing each order to the right one.
If you want to compare your own UPS rates against the alternatives on your actual order mix, the self assessment does it from two ShipStation exports.
Knowing how a carrier prices a parcel is useful. The harder question is which parcel to make — because the packing decision sets the dimensional weight and the cubic tier, and the cheapest box changes with the contents, the destination and the rate card.
There are eight situations where that decision has grown past what a rule can express. Most operations are in two or three of them.
