We ship a great number of small packages, so perhaps our experience can help.
First, to Tim's points. Tim, Lilly Vernon and Lands End pay just about the same amounts for UPS as your employer. I've seen very very tough negotiations go on for weeks and UPS has stopped discounts at about 7%. They have said they would rather lose the business to Fed Ex. (I'm talking ground (not air) service here.) Fed Ex has serious problems with their ground service, and UPS knows it well.
Since the famous Xmas strike, UPS has considerably expanded their zone coverage for 'next day' ground service. This is because customers discovered just how good, and how cheap, USPS can be for deliveries within 250-500 miles. For example, from here near Albany NY UPS will deliver packages to Central and Northern Ohio, Boston, New York City, and Northern NJ (UPS Zone 2) THE NEXT DAY at standard ground rates.
However, those rates (UPS) are also double the USPS rates, which will typically deliver in 1-3 days to the same addresses.
Beyond Zone 2, the USPS gets much less cost effective compared to UPS but they keep an advantage until Zone 6. From Zone 6-8, UPS is actually less expensive then UPS.
Many small shippers are not aware that USPS will pick up packages, free of charge, at their place of business (including their home). The only requirements are that the shipper use labels prepared on the USPS web site, and either have a postage meter or buy postage when the labels are printed. Moreover, beginning in 2006 the USPS tracks packages and can report deliveries just like UPS!
For packages under 7 lbs I'd say that 90% of our shipments go USPS. Over 7 lbs, 60% go UPS.
Give USPS shipping a try, for package pickup with labels printed on their web site. I think you will be pleased.
Question for the group...we ship 5-10 packages daily. Back in my corporate life, when we shipped 2,000-10,000 packages a day we bought software that automatically calculated 'least expensive' delivery charges based on zip code and weight. But just annual maintance on that cost some $20,000 a year. Today we make a judgment call of which will be less expensive based on our experience and I'm sure we are right 70% or better. (It just takes too long to get the rates from both UPS and USPS to make the decision.) Does someone know of PC software that will make the calculations based on zip code + weight?
Lloyd Spear, Owner of Ross Rounds, Inc. Manufacturers of round section comb equipment and Sundance Pollen Traps.