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It is important that your company is using the most cost-friendly and efficient shipping strategies. Zone skipping is a technique whereby the shipper consolidates individual packages into TL or LTL and is transported together to the destination region. Zone skipping works for companies that have a high density of packages to a particular area, city or set of zip codes.
Upon arrival at a sorting facility, the packages complete their journey to the final destination. Parcel carriers assign rates, in part, based on distance and how many “zones” a package travels through. Different regions are assigned zone classifications based on the miles from pickup zip code to delivery zip code:
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
*The more zones your shipments pass through on their way from Point A to Point B, the more money and time you'll save. More savings = more zones
With zone skipping, packages enter the carrier’s system in the final delivery zone, avoiding the high cost of multi-zone moves. You can reduce the cost of parcel shipping, speed up delivery times, and even minimize the likelihood of delays and potential damage. A company can import their current shipments from their ERP, TMS, WMS, or spreadsheet into an optimizer tool, which will then spit out a variety of load options that show route possibilities, Co2 consumptions, plan comparisons, and a savings summary.
Example of Zone Skipping:
Shipping 4,000 packages from Tennessee to California @ $10 each equals $40,000 in shipping costs
Compare this to one truckload of 4,000 orders shipped from Tennessee to the carrier’s sorting facility in California @ $4,000
Then add the cost of parcel shipping (from the carrier’s facility to the customer – all within zone 2) @ $7 each
$4000 + (4,000 x $7) equals $32,000
In this example, the savings equal $8,000 ($32,000 vs. $40,000)
The consolidated truckload of packages is heading via USPS from Nashville (Zone 7) to Los Angeles (Zone 2) with no stops in between. This direct shipment is an example of zone skipping, as zones were skipped in the process of getting the truckload from Nashville to Los Angeles. The shipper pays the regional cost of sortation in Los Angeles.
Companies need an optimizer to plan these loads. Optimizers can show other opportunities too, such as pooling, consolidation of shipments, multi-point optimization, and shift modes to reduce costs.