What is zone skipping?
The high shipping cost of cross-country shipping is one of the biggest problems for eCommerce brands. Customer orders face extended delivery times as carriers sort, cross-dock, off-load to distribution hubs and re-load again onto trucks for the next leg of the shipping journey.
Similarly, major parcel carriers like USPS and FedEx base shipping rates on how many zones a parcel travels through. This significantly increases shipping costs when you deliver packages over long distances, potentially losing out on sales to competitors with lower shipping rates.
Zone skipping is a shipping strategy that involves consolidating individual packages into a single truckload and sending the shipment to a carrier’s distribution center closer to the package’s final destination. A regional delivery partner delivers the orders directly to customers’ doorsteps.
Zone skipping offers a cost-effective and faster shipping option for eCommerce businesses to get their packages to any destination.
In this article, we’ll review how you can implement zone skipping in your eCommerce business and how it helps you avoid the high cost of multi-zone shipping.
How Zone Skipping Can Reduce Last Mile Shipping Costs
In addition to lowering the shipping costs of shippers, zone skipping also offers faster delivery to customers by skipping unnecessary multi-facility stops, which can reduce last mile shipping costs.
Here’s an example comparing carrier and zone skipping shipping costs.
A company ships 1,000 packages from Utah to Colorado at $15 each. The shipping costs amount to $15,000.
In contrast, the company can send a truckload of 1,000 packages from Utah to a sorting facility in Colorado at a bulk rate of $3,000. The packages are sorted at the last mile carrier’s sorting facility and sent out for local delivery to customers at $9 per parcel.
Total shipping cost for 1,000 packages via ground shipping = $15,000
Total shipping cost for 1,000 packages via zone skipping = $3,000 + $9,000 = $12,000
Total savings = $15,000 – $12,000 = $3,000
Another advantage of zone skipping is that it helps you compete with the customer-favorite Amazon shipping by increasing your order delivery speed and lowering your shipping cost. You can pass these cost savings to your customers, improving brand loyalty and increasing customer satisfaction.
Zone Skipping Shipping Costs and Transit Times
With customer expectations for lower shipping fees and fast delivery times at an all-time high, zone skipping offers a great option for shippers to minimize their overall transportation costs. For shippers looking to lessen their costs and eliminate the need for traveling to local sorting facilities, shipments can be delivered to the final destination with fewer stops and at a lower price.
Here’s an example:
A shipper in New York needs to ship 100 packages to different customers in Los Angeles. With the traditional parcel shipping strategy, a carrier would pick up the parcels in New York and enter them into its New York network. From there, these packages would be transported across the United States through various shipping zones. Along the way, these packages are sorted, unloaded, and re-loaded onto different trucks before being delivered to their final destinations.
Traveling through multiple shipping zones, package sorting, and frequent loading and unloading further drive up the costs shippers have to pay and increases transit time. The standard FedEx Ground delivery time from Boston to Los Angeles is around 4-5 days.
Substitute packages with pallets, and the same shipping costs and transit times apply to LTL (less-than-truckload) shipments.
Using zone skipping can reduce shipping costs by avoiding shipping zone rates, sorting, and unloading and re-loading fees. Moreover, customers only pay for shipping to a single zone.
For our New York-to-Los Angeles example, this would mean the shipper consolidates the 100 packages into a single truckload and sends it to Los Angeles, California, at a flat rate. From there, individual packages can be delivered to customers through a regional carrier.
This logistics technique minimizes the need for additional handling in sorting, loading, and re-loading, avoiding fees and improving transit times.
How to Incorporate Zone Skipping Into Your Supply Chain
The first step in implementing zone skipping into your logistics operations is identifying the areas with potential cost savings.
Sifted’s solution creates visibility into zones that are frequently being shipped to, and frequently costing them the most money. With this visibility, you can enlist the necessary transportation providers to execute the zone skip.
Let’s go over the steps you need to take to ensure the smooth induction of zone skipping into your supply chain.
Ensure you have an efficient sorting process.
Shippers need to build the right sortation system that meets their requirements efficiently. For example, it should offer adequate output to fulfill average and peak operational demands.
Secondly, you should have adequate warehouse space where workers can presort packages based on the final delivery point and convey them to be loaded onto trucks.
Similarly, the sortation technologies you employ must process the parcel types and sizes you ship to your customers. Package sizes and shapes frequently fluctuate in eCommerce shipping, which can slow down operations if a large number of your packages don’t support your sorting systems.
A dedicated dock door should be available.
If you ship hundreds or thousands of packages each day, implementing zone skipping increases the complexity of your fulfillment operations.
To streamline your warehouse operations, assign separate or dedicated docks for zone skipping processes. These loading docks must be conveniently located to dedicated freight elevators and conveyor lanes to accommodate the smaller packages as well as large consolidated shipments.
Use multi-carrier shipping technology.
A multi-carrier shipping software can create zone visibility that can help with zone skipping.
With Sifted, you can gain visibility into what areas of the country you frequently ship to, what zone you’re paying for with each region, and simulate how zone pricing would change with a new distribution center or zone skipping. Through network optimization, you can help your packages reach their final destination quicker, cheaper, and with lower emissions.
The multi-carrier shipping solution also produces the necessary paperwork to carry out the zone skip successfully. This includes the consolidated shipments’ documentation of the line haul from your warehouse to the carrier’s distribution hub and printing carrier-certified labels for packages being inducted into the carrier’s network.
Have adequate labeling capabilities.
In traditional shipping methods, you put labels on packages before sending them out of your warehouse. However, with zone skipping, you can either pre-label packages that will be shipped from the trans-loading facility to the customer, or the distribution hub staff can label the packages for you after they are unloaded at the carrier’s facility.
Different packages in a consolidated truckload can have different handling requirements. Therefore, you need to establish a robust working process of printing the shipping labels correctly to avoid any errors.
Organize your shipping data with Sifted Logistics Intelligence
Zone skipping offers a better alternative to simply handing over your shipments to a major shipping carrier. It involves internally sorting your packages and consolidating them into a single truckload. This shipment is then sent to a last-mile carrier’s facility closer to the final destination. From there, individual packages are delivered to the customers.
Zone skipping helps eCommerce brands circumvent high shipping zone rates, deliver packages faster, and at a discount.
Sifted Logistics Intelligence gives shippers complete visibility into their shipping data and helps you optimize shipping costs using AI-powered demand forecasting.
Ready to simplify your order fulfillment? Get a free demo from Sifted!