Zone Skipping

Definition

Zone skipping is the practice of delivering a large quantity of packages via truckload (TL) or less-than-truckload (LTL) services to a parcel carrier hub, local to the package’s final destination. Doing so allows for the shipper to decrease costs by skipping carrier zones.

This practice should be considered only if the total cost of the TL or LTL carrier plus the costs associated with the local delivery of the packages is less than the cost of all packages shipping out of the origin point via a small package carrier.

To better understand the definition of zone skipping, as it applies to small parcel deliveries, it’s important to understand the following:

Zones are basically mileage-based rates from the pickup or origin point to the delivery point, or the origin Zip Code to destination Zip Code. For most small parcel shipments there are seven (7) zones.

Zone Distance

Zone 2:         Less than 150 miles from pickup zip code to the delivery zip code
Zone 3:         151 – 300 miles from pickup zip code to delivery zip code
Zone 4:         301 to 600 miles from pickup zip code to delivery zip code
Zone 5:         601 to 1,000 miles from pickup zip code to delivery zip code
Zone 6:         1,001 to 1,400 miles from pickup zip code to delivery zip code
Zone 7:         1,401 to 1,800 miles from pickup zip code to delivery zip code
Zone 8:         1,801+ miles from the pickup zip code to delivery zip code

Benefits of Zone Skipping

Typically, zone skipping is used for two reasons:

To lower shipping costs
To move packages to their destination faster

Most small package carriers charge for shipping, on a per-package basis. This delivery charge is calculated based on the ship-to zone, parcel weight, and parcel dimensions for each package.

Reduce Shipping Costs

While shippers can rarely change the weight or dimension of a shipment, they can affect the zone charges by hiring a carrier or trucker to move their packages from their distribution center to a point closer to the delivery point, called line-haul (if they ship enough and have the right metrics to make the process economical).

Zones	2	3	4	5	6	7	8	44	45	46
1 lb	$8.23	$8.65	$9.35	$9.76	$10.10	$10.22	$10.39	$31.45	$31.40	$41.43
2	8.89	9.89	10.59	10.82	11.29	11.72	11.92	34.99	35.15	44.96
3	9.25	10.32	11.16	11.62	12.09	12.50	13.11	38.02	40.07	47.88
4	9.52	10.48	11.51	12.26	12.60	13.42	14.05	41.75	42.70	51.93
5	9.87	10.96	12.03	12.92	13.48	14.17	14.97	45.26	46.35	55.24
6	10.19	11.26	12.32	13.30	13.79	14.54	15.25	48.84	49.32	57.37
7	10.77	11.53	12.64	13.72	14.05	14.93	15.98	52.14	53.15	60.29
8	10.98	11.84	12.97	13.98	14.47	15.38	16.52	53.62	55.91	62.94
9	11.15	12.00	13.14	14.10	14.78	16.02	17.40	57.40	59.78	66.70
10	11.41	12.12	13.27	14.49	15.09	16.95	18.55	60.98	64.92	70.28

Using the example of shipping packages with an average of 3 pounds from a distribution center (DC) in Los Angeles and having a line-haul carrier deliver the packages to UPS in Chicago. For every package we can move from the origin point to a carrier entry point in Zone 7 (Chicago) for delivery within 150 miles of Chicago, we can save an average of $3.25 per package

It is also important to know that the smaller/lighter the packages being shipped, the more packages you can fit on a trailer. With smaller lighter packages it may well be possible to ship 3,000 to 6,000 packages on a trailer.

Key Elements for Successful Zone Skipping

Package density to a particular area, city or set of zip codes
Parcel density on your line-haul trailer (shipping trailer)
Zone skipping savings per parcel
Line-haul costs – cost to move your parcel trailer from the DC to the carrier insertion point.

Enterprise shipping systems such as the InfoShip®/Vx multi-carrier shipping system can be configured to enable you to take advantage of zone skipping reduce shipping costs. InfoShipVx handles this seamlessly by segregating zone skip zip codes and allowing for unlimited zone skip carrier accounts.