as stated, price is the big one. it's cheaper for the shipper.
another big advantage is that the USPS offers coverage to every residential address in the US, as well as PO boxes, APO, Alaska, Hawaii, Guam, Puerto Rico, US Virgin Islands and all other US territories. fedex can not deliver to a POB or to an APO. they ship to guam, alaska, hawaii etc, but it costs an arm and a leg.
from the seller's perspective, you dont want to give someone a reason NOT to buy from you. if you're joe customer from guam, and you get on my site and see i dont ship to guam (or i do ship there for $$$) thats a lost sale...
another advantage is saturday delivery. the USPS brings your mail on saturday. standard fedex ground does not deliver on saturday. you CAN get sat delivery through fedex at an additional cost.
tracking is included with smartpost at no additional charge. FYI after fedex hands the pkg off to your post office, you can track on the USPS site by putting 92 in front of the fedex tracking number.
no residential surcharge either. FedEx has a surcharge of like $3.25 to deliver to a residential address. UPS is about the same last time i checked. USPS does not have this surcharge. fuel surcharges are still included, but they are drastically reduced. can be up to 50% in many cases.
yes, transit times can be a little longer, due to the package being handed off to the USPS for final mile delivery... but if this was a truly time critical shipment, you would have picked 3 day or next day service.