Splitting your inventory across multiple fulfillment center locations, known as distributed inventory, can offer many advantages to an ecommerce seller.…
Shipping Zone Guide: How Distance can Affect Fulfillment Costs & Transit Time for Sellers
Shipping zones are an important aspect of fulfillment and logistics, as it can affect fees, time, and efficiency. Yet many sellers struggle to understand how to navigate shipping zones and how they can affect their bottom line.
Common FAQs about shipping zones in the US
What is a shipping zone?
Shipping zones are numbered geographical areas that carriers ship to, named numerically, ranging from Zone 1 to Zone 8 for all domestic shipments in the US. Shipping carriers utilize zones to measure the distance a package travels, not based on miles but instead on groupings of zip codes, from the origination point to the package destination.
The location where an order ships from is the point of origin, and is categorized as Zone 1. The location it is shipped to is referred to as the destination zone. The destination zone will depend on how far it goes from the point of origin. A shipping Zone of 8 will be the furthest destination.
How are shipping zones calculated?
Zones are calculated dynamically based on where a package is shipped from. This means that two separate points of origin that are shipping to the same destination can often be shipping to different zones.
For example, if you ship from San Francisco, California to Kansas City, Missouri, You are shipping to Zone 7. However if you ship from Austin, Texas to Kansas City, Missouri, you are shipping to Zone 4.
Tools for determining shipping zones for your orders:
- UPS Zones and Rates for the 48 Contiguous States: Enter your zip code of origin and download zone charts to a spreadsheet.
- USPS Domestic Zone Chart: Go to the tab “Get Zone for ZIP Code Pair.” Then enter the zip code you’re mailing from and the zip code you’re mailing to, and you will get the shipping zone for your destination
How do shipping zones affect costs?
Shipping carriers utilize zones to calculate rates for certain services that they offer. Some, like the USPS, offer a flat rate option that lets you pay the same price no matter which zone the destination is located in.
The USPS website lays out which services are not zoned (First-Class Mail, USPS Marketing Mail, Library Mail, and Media Mail), and which ones fall under zoned pricing (Priority Mail Express, Priority Mail, USPS Retail Ground, and Bound Printed Matter).
For services that fall under the zoned category, in most cases the greater the zone the greater the shipping cost will wind up being.
How does shipping weight affect the cost by zone?
Besides the origination and destination zip codes, as well as the carrier and service that is being used, exact shipping costs will depend on the dimensions and weight of the order being shipped.
For anything what weighs less than one pound, there won’t be much cost savings.
For shipments that weigh over one pound, the cost will be decreased if it is shipped from a location closer to the customer destination.
How can sellers afford to offer free shipping?
Offering free shipping can seem counterintuitive when it can be expensive to send orders to zones that are further from the origination. In order to offer free shipping sellers have to be strategic with their pricing strategy so it makes sense from a fiscal perspective.
Typically, this is accomplished using one of the options below
- Requiring a minimum dollar amount per order which helps increase the order value
- Shipping orders that weigh under one pound so zones aren’t used in calculating cost
- They factor the cost of shipping into the actual product price
- They reduce the number of zones that they are willing to ship to
How do shipping zones affect speed of delivery?
If a package is sent close to the point of origination (Zone 1 or Zone 2) it will usually arrive in fewer days that a package that is sent further away (Zone 7 or Zone 8). Cutting down on transit time is important because slow shipping can cause a seller to lose customers.
If all of a seller’s inventory is fulfilled from a single location, for example out of New York as seen in the map below, it can take 5-6 days to a arrive at a customer in parts of California.
Because of this, it is not surprising that same-day shipping and delivery can only ship to the closest zone(s).
How can you reduce shipping zones by choosing the best location to fulfill orders from?
If a seller outsources their fulfillment, as opposed to self fulfilling orders they will have much more flexibility over choosing the location an order is fulfilled from. The best location that orders should be shipped from is near your customers, which can be determined by analyzing past order history.
If your customers are spread out geographically, outsourced order fulfillment with a 3PL that has warehouses in large cities can help to reach more customers faster. If you are shipping from a less densely populated area, it hurts your ability to efficiently reach as many customers as possible.
How does increasing the number of fulfillment centers affect shipping zones?
If a seller splits their products across multiple fulfillment centers that are geographically close to their customers, they can reduce the amount of time in transit for many of their orders.
How can a 3PL automate fulfillment to help optimize shipping zones?
A third-party logistics (3PL) provider can help improve fulfillment by providing strategically located warehouse facilities that many sellers could not afford to own and operate by themselves.
If the 3PL is technology focused it can automate the order fulfillment process using powerful analytic tools that help route each order to the fulfillment center that is closest to the end destination. This can allow for the tracking information and each step along the shipping process to be sent to the seller and then shared with the customer.
If a seller understands zone shipping, they can improve their order fulfillment strategy to meet customer expectations around affordable and fast deliveries. This can help improve efficiency by cutting down the distance and time shipments take in transit, and can also help improve your bottom line by generating more sales and decreasing the cost of shipping.
You must effectively use zone shipping to your advantage to keep the cost of shipping down and ensure that your customers are completely satisfied with the time in which they receive their orders.\
There are many benefits to working with a third party logistics company (3PL), if you are seeking logistics support we’d love to hear from you. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support. Send us a note to connect about how we can help your company grow.