Are you looking for new ways to save money on parcel shipping? If you’re not already using zone skipping, then you may want to integrate it into your overall transportation strategy.
Put simply, zone skipping allows shippers to combine parcel distributions and ship them together to the destination region. Parcel carriers assign rates, in part, based on distance and how many “zones” a package travels through. With zone skipping, packages enter the carrier’s system in the final delivery zone, avoiding the high cost of multi-zone moves.
How Does Zone Skipping Work?
By consolidating shipments into a single full truckload, shipment —and then delivering it within a specific zone—you can reduce the cost of parcel shipping, speed up delivery times, and even minimize the likelihood of delays and potential damage.
Zone skipping involves shipping parcels or less-than-truckload (LTL) shipments, according to Raymond Handling’s Definition: Zone Skipping. Instead of delivering such shipments straight to the carrier, goods and/or materials are consolidated by destination region and sent in a single, larger shipment. “This gets the goods and/or materials closer to the delivery point, which is where the delivery carrier picks them up.”
From there, the packages are sent in mass from one area, like the Southeast, to another area, like Southern California. Upon arrival at a sorting facility, the packages complete their journey to the final destination. For example, Atlanta is in Zone 2. Los Angeles is in Zone 8. Shipping directly from Zone 2 to Zone 8 via consolidated truckload is considered Zone Skipping.
“Zone Skipping can be advantageous by lowering the per package price for shipping,” writes Ayal Latz in Zone Skipping. “Instead of shipping individual packages across various zones, one truckload is shipped. It is easy to do the math and determine the potential savings. These savings can accrue to the shipper, the marketer, or the end user.”
By the Numbers
Here, Latz does the math to show how zone skipping can benefit a shipper:
Shipping 3,000 packages from Georgia to California @ $10 each equals $30,000 in shipping costs
Compare this to one truckload of 3,000 orders shipped from Georgia to the carrier’s sorting facility in California @ $3,000
Then add the cost of parcel shipping (from the carrier’s facility to the customer – all within zone 2) @ $7 each
$3000 + (3,000 x $7) equals $24,000.
In this example, the savings equal $6,000 ($30,000 vs. $24,000)
Is Zone Skipping Right For Us?
There are a few key points to consider before you use zone skipping.
For starters, the strategy works best when the cost of the truckload (TL) or less than truckload (LTL) carrier – plus the expense related to the local delivery of the packages – is lower than the cost of all packages being shipped from the point of origin to the parcel carrier. If this math doesn’t work out in your favor, then you’ll want to explore alternate shipping approaches.
To achieve the best possible benefits from zone skipping, your company’s shipments must also cross multiple zones.
And, the more zones your packages are crossing during this process, the higher the cost savings and the bigger the benefits (i.e., faster delivery to local entry points, improved transit times, etc.).
Don’t Forget the USPS
The zone skipping concept can be used to bypass major parcel carriers systems altogether.
Using parcel consolidation with the United States Postal Service (USPS), shippers can consolidate packages and send them straight to a local USPS terminal for last-mile delivery. It avoids the worst parts of the USPS system (the hubs and handoffs that make it inefficient) and takes advantage of what is best about the system – daily home deliveries.
Staci Americas Logistics is a national fulfillment company that provides parcel consolidation through the USPS to significantly reduce clients’ outbound shipping costs.
To learn more about how Staci Americas can help you fully leverage zone skipping as a shipping strategy, contact us today.