Shipping software provider Shippo has become the first company of its kind to have a direct platform account with FedEx through a new agreement, meaning shippers can access discounted FedEx rates directly through Shippo for two of the carrier’s economy offerings.
Back the other way, FedEx gets access to tens of thousands of SMB sellers using the Shippo platform.
The two FedEx services offered through the partnership are FedEx Ground Economy and FedEx International Connect Plus (FICP). Ground Economy offers 2-7-day delivery for packages up to 70 lbs. and 130 inches in length plus width, while FICP offers day-definite service in the same timeframe to 190 countries, with the ability to reroute to a pickup location if they use FedEx Delivery Manager.
Shippo customers enter the to/from information for the order, plus weight and dimensions, then see the applicable FedEx rates before submitting.
Nima Elyassi-Rad, head of business development for Shippo, said its customers, including shippers as well as service providers, can access the discounted rates directly without creating a FedEx account, as they have to with the carrier’s existing Advantage program. Ecommerce platforms like BigCommerce and marketplaces like Walmart.com offer FedEx Advantage to their shipper customers; the latter advertises discounts of up to 50% using the program.
“Being a shipping API-first company, for us it’s tremendously important to be able to provide infrastructure for parcel shipping for our customers, the large majority of which are SMBs,” said Elyassi-Rad, who had been a Shippo investor before taking on his role last year. “As FedEx doubled down on the SMB market, we’ve been in contact with their execs on a quarterly basis to identify gaps in the market. Given our merchant profile, this can bring more business to FedEx and expand the relationship.”
Speaking of the longer service level of Ground Economy, Elyassi-Rad said not everyone needs super-fast delivery on all ecommerce orders, despite hype to the contrary. “Depending on who you talk to, it’s ‘two-day delivery is dead’ or ‘long live two-day delivery,’” he said. “And depending on what type of business you are, and managing customer expectations, you can offer different service levels, from standard to express to overnight. FedEx is giving them that kind of optionality.”
Ryan Kelly, FedEx’s VP of Ecommerce, Small and Medium Business and Retail Marketing, said the program was an evolution of a five-year relationship with Shippo, which had been a FedEx Advantage partner. He said there are dozens of Advantage partners, including ecommerce platforms, technology providers, marketplaces and associations.
“The timing made sense,” Kelly said. “This master platform account allow access to our portfolio without a direct relationship. It works for us, for Shippo and for small businesses that haven’t graduated to the place where they want a FedEx account of their own.”