I participate on the trading forums, and I ship via USPS Priority, with delivery confirmation. I as well was told by a clerk that insurance was a waste of money, and delivery confirmation tagged packages are handled the same.
Never had a problem shipping a knife; never been asked what my package contained either, just if it was hazardous or flammable.
I say don't volunteer information, and if someone asks you what's in the package, just say it's a tool. it's not a lie, and you avoid the potential of them marking the package as a knife, which is a statement saying 'steal me please' to a less than honest USPS employee.
UPS is a hassle, and a lot more expensive than USPS. I'd use Fed Ex, but they don't have any locations that are easily accessible.