Day: July 8, 2024

Cutting delivery costs is a key priority for all ecommerce brands, especially as shipping rates and additional surcharges continue to rise. Combined with the push for ever-faster deliveries, this puts ecommerce businesses in a tough spot; is it really possible to shorten transit time and lower shipping costs, all at once?Yes, you can – it’s called zone skipping.Zone skipping is a parcel shipping strategy that puts your packages within reach of carrier facilities that cut both transportation time and last-mile delivery costs while giving you fewer shipments to keep track of on your shipping platform. This means bigger cost savings and a better customer experienceWe’re going to dive into zone skipping and how it holds the key to ecommerce businesses moving freight and parcels more efficiently – the what, the how, and the why.What is zone skipping?Zone skipping is a way to reduce shipping costs by consolidating shipments for the bulk of each parcel’s total shipping distance. When zone skipping, packages are grouped together according to the shipping zone they share for their final delivery point, rather than shipping orders individually. Once the consolidated load arrives at the appropriate shipping zone, the individual packages are split up and sent on to their final destination.The key benefits of zone skipping are the cost savings that shippers generate from packages crossing a lower number of shipping zones. Because bulk shipments typically take a much more direct route from A to B than a single shipment meandering its way through various distribution a sortation centers, zone skipping also helps achieve faster delivery times.Shipping zones explainedSo, how exactly does zone skipping help ecommerce businesses achieve lower shipping costs? To understand this, we first need to dive into what shipping zones are and how they work:For domestic U.S. deliveries, shipping zones refer to the regions used by shipping carriers to calculate shipping rates and transit times for package delivery. These zones are based on the distance between the origin and destination of each shipment. The closer the shipping zone, the less it costs to ship and the lower the transit time will be.Below is a summary of shipping zones for USPS, which numbers shipping zones from 1 to 8:USPS shipping zones, as calculated from Zone 1 based in Atlanta, Georgia.How does zone skipping save money?The zone skipping process lowers shipping costs for ecommerce brands in several ways:Bulk Shipping. By consolidating hundreds of individual shipments into larger ones, shippers can take advantage of economies of scale to achieve more cost-effective shipping rates, as a parcel carrier will offer the larger shipment at a lower price per unit compared with shipping each parcel separately.Reduced handling. Skipping zones reduce the number of handling processes involved in shipping a package from A to B. Consolidated shipments are sent directly to regional hubs or distribution centers, meaning there are fewer transit points where packages need to be sorted or checked. This can result in additional handling fees, fuel surcharges, or other types of accessorial charges.Better bargaining power: Larger volumes of consolidated packages allow businesses to use economies of scale to negotiate better shipping rates with carriers, leading to lower overall shipping costs.Leveraging local and regional parcel carriers. Shipping orders to regional hubs makes regional and local delivery services more accessible to your business. Because these services handle short distances and last-mile delivery, they are much more economical than using nationwide parcel carriers to cross multiple zones.Examples of zone skippingLet’s say that you are an ecommerce brand based out of California that receives orders from customers nationwide. Individually shipping each order directly to the end customer will result in each package crossing multiple zones and passing through numerous sortation centers, which racks up shipping costs considerably.Instead, you can ‘zone skip’, by consolidating shipments that are bound for the same zone. For example, you can bundle together all customer orders that are bound for the East Coast (in this case, to shipping zone 8) into a single shipment that goes to a regional distribution hub in New York. By transporting large quantities of orders in one consolidated truckload to zone 8, you can reduce transportation costs compared to shipping parcels to multiple regions separately.Consider that individual parcels from Los Angeles would end up crossing 7 zones before arriving in its destination zone in New York, allowing you to skip multiple zones by shipping directly across the continental US.Once parcel or freight loads arrive at a carrier’s sorting facility in your destination region (New York) the load is separated for final mile delivery via regional or local carriers to each package’s final destination. Those orders will be bound for numerous addresses within that destination zone, which would include New Jersey and Connecticut, as well as larger cities.Not only does this shipping strategy create a lower per-package price; but zone skipping also helps to shorten transit time by getting parcel closers to their intended address in one direct shipment, rather than multiple stops that carry a high risk of additional costs.When should ecommerce brands explore a zone skipping strategy?Zone skipping offers proven cost savings and faster delivery. However, it’s not the ideal shipping strategy for every business. You consider zone skipping if:You have a high monthly order volumeThe more orders you receive, the easier it is to consolidate shipments and negotiate cost savings with carriers based on volume. However, it’s difficult to reap the benefits of zone skipping, such as bulk shipping and reduced handling fees, when order volume is low. This is because the savings are less likely to outweigh the complexities and resources associated with implementing and managing successful zone skipping operations.Your orders are concentrated in specific regionsSkipping carrier zones is only feasible if you have a lot of individual packages that you can consolidate for shipping to one or more regional hubs. If customers are widely spread out nationally, it’s challenging to consolidate shipments enough to achieve the economies of scale necessary to make zone skipping cost-effective.Zone skipping offers a convenient way for ecommerce brands to streamline their shipping strategy and net some significant cost savings, while also speeding up last-mile delivery to meet rising demand for rapid shipping. As the ecommerce marketplace grows, tools like zone skipping can offer an important competitive differentiator. Lower shipping costs mean more resources to invest elsewhere in your logistics strategy, while rapid shipping means more satisfied end customers who are more likely to make repeat purchases.However, it’s important to note that skipping zones is only effective when you have enough packages going to areas with strong regional demand, as lower shipping costs primarily come from consolidating a large number of shipments to one zone. It’s a good idea to talk to a 3PL like Kase to find out that zone skipping could benefit your ecommerce business.

Day: July 8, 2024

An ecommerce Brand’s Guide to Zone Skipping in 2024

An ecommerce Brand’s Guide to Zone Skipping in 2024