Ecommerce businesses are on a constant quest to cut shipping costs without sacrificing speed and customer experience.
Yet, it’s tempting to do so by finding the cheapest carrier to ship customer orders. If the goal is to cut costs while also meeting customer needs, it takes some time to think through an effective shipping strategy.
One strategy that ecommerce businesses are taking advantage of is a shipping concept known as “zone skipping.”
In this article, we’ll discuss what zone skipping entails and how it can cut down on shipping costs for your business.
What is zone skipping?
Zone skipping is a shipping strategy that involves consolidating parcel or freight loads based on region and then sending them out in a single shipment.
Instead of having individual parcels cross multiple shipping zones and hiking up shipping rates, they’re shipped out in one larger shipment along with other packages heading to the same region.
The shipment is transported directly to the target region without going through a sortation process at multiple zones. That means it skips shipping zones and the shipper pays a regional rate.
Why is zone skipping important in ecommerce?
With zone skipping, online businesses have an opportunity to save delivery time while cutting down on shipping costs.
Instead of paying to ship thousands of individual parcels separately, zone shipping consolidates them into a single shipment.
Once consolidated, the businesses only pays a regional rate, which significantly brings down the cost of last-mile delivery.
Since zone skipping involves directly transporting shipments to the destination region without making multiple stops in between, it can also reduce delivery times.
How does zone skipping work?
Zone shipping works by consolidating a shipment, which directly ships from Zone 1 to Zone, skipping over shipping zones in the process.
The consolidated load is shipped across multiple regions and then only offloaded at the local delivery destination.
This type of shipment will only go through a sortation process once it reaches the destination region, where individual parcels are then routed for final-mile delivery.
The benefits of zone skipping
With zone shipping, ecommerce businesses can optimise their shipping operations.
Here are some of the major benefits of zone skipping.
Reduced last-mile delivery costs
Last-mile delivery for individual packages can quickly add up.
Zone skipping allows a business to ship to the destination and skip several shipping zones during the process, therefore reducing shipping costs.
With zone shipping, retailers can avoid the costs associated with carrier sortation at different regional hubs and only bear the regional cost of sorting in the destination zone.
So instead of paying national rates during the shipping process, they are only responsible for paying only a regional rate.
Stronger profit margins
Zone skipping can reduce overall shipping costs, which can yield higher profit margins for your business.
For instance, say it costs $10 to ship one package from Philadelphia to Minneapolis. Shipping 2,000 individual packages would end up costing you $20,000.
On the other hand, a truckload of 2,000 packages shipped to the carrier’s sorting facility in Minneapolis costs around $3,000. From here, you pay an additional $7 per order to deliver the packages all within the same zone.
That means you end up paying $17,000 overall, saving you a total of $3,000.
Shortens last-mile delivery timelines
When you send individual packages across several shipping zones, they typically have to make a stop at each zone, where they go through a sortation process so they can be routed to the right destination.
This process can significantly increase last-mile transit times.
Meanwhile, in zone skipping, a consolidated truckload would directly travel from one zone to the final zone without making any stops in between.
This means that it would take less time for the shipment to reach its destination region, allowing retailers to deliver their orders faster.
So what would’ve taken 4 to 5 days might only take about 2 to 3 days, for example.
Who can benefit from zone skipping?
Any ecommerce business owner that wants to optimise their shipping strategy and reduce costs can benefit from zone skipping.
This is particularly true for retailers that often have to move a large amount of freight into a specific region.
For example, if a businesses notices they are shipping a high volume of customer orders in a specific region, they can choose to implement zone skipping.
However, zone skipping isn’t as beneficial for low-volume monthly orders or when a business doesn’t see a high volume of orders come in from a specific region.
With the promise of improved transit times and reduced transportation costs, zone skipping is a great shipping option for many ecommerce businesses — especially if a business is seeing a high volume of orders.
Examples of zone skipping
Let’s say a retailer has to ship thousands of packages from their fulfilment centre in Georgia (Zone 2) to customers in California (Zone 8).
Some of the orders need to be delivered in Los Angeles, while others need to be delivered to San Francisco, but essentially, they’re destined for the same region.
Instead of shipping those packages individually, the retailer chooses to consolidate them into a single shipment.
The packages are first pre-sorted at a Georgia fulfilment centre and the shipment is then transported via freight shipping directly to two different sorting hubs — one in Los Angeles and one in San Francisco.
The truck doesn’t make any stops before reaching the final regional hub because all the packages are headed to one direction and do not need to go through additional sorting at other regional hubs in between.
Once the shipment arrives at each sorting hub, the packages are then sorted based on their destination to various regional cities.
For instance, packages sent to Los Angeles would then get sorted to deliver to cities like Santa Monica or Long Beach.
“Utilising ShipBob’s network of fulfilment centres allows us to lessen our carbon footprint as well. We’re currently storing inventory in some of ShipBob’s Southern California and Chicago facilities, which means that when we receive an order destined for someplace like New York, we don’t have to ship it from all the way across the country.
By shortening the transit distance, we get to shorten transit time and reduce the amount of pollution produced in the shipping process. Even in the final stages of fulfilment and last-mile delivery, ShipBob enables us to stay true to our mission!”
Juliana Brasil, Director of Operations at Food Huggers
Another similar approach to zone skipping is distributing inventory across distribution centres. For instance, if you want to serve customers in Australia and the US, you can split inventory across both locations. That way, when orders come in, they are routed to the nearest fulfilment location to reduce costs and delivery times.
Inventory that is shipped to an international fulfilment centre location in bulk, so you don’t have to pay for individual shipments each time an international order comes in.
“We currently use ShipBob fulfilment centres in the US, Canada, Europe, and Australia. Global fulfilment is a huge need in the corporate gifting market and a necessity for our clients. At Postal, we’re building and actively executing an international strategy.
There’s no way we’d be able to do this ourselves — but ShipBob’s combination of tech-forward APIs and logistics expertise allows us to scale globally with ease.”Ben Jablow, VP, Alliances at Postal
ShipBob’s last-mile delivery partners can save you a fortune
Developing a shipping strategy that optimises costs and meets customer expectations on fast, affordable shipping can be a challenge.
That’s why many businesses partner with ShipBob. ShipBob is an omnichannel fulfilment provider that offers:
- A network of global fulfilment centres
- Fulfilment technology that optimises shipping
- Reduced shipping rates from domestic and international shipping carriers
ShipBob’s growing fulfilment network makes it easy to strategically distribute inventory, so it’s stored closer to customers.
Once orders come in from your online store or various sales channels (including social and marketplaces), orders are shipped out from the fulfilment centre closest to the customer’s destination.
This can significantly reduce delivery timelines and shipping costs.
ShipBob also partners with leading carriers such as USPS, FedEx, and UPS, as well as several regional and international carriers to provide negotiated shipping rates.
For continental US orders, ShipBob offers 100% 2-day shipping coverage, so you can meet customer expectations on speed and convenience.
“Once we decided to implement ShipBob’s 2-day shipping for our US orders, we really saw a shift in how fast our orders were shipping. Even when we’ve had one fulfilment centre run out of inventory, orders get pushed to a different fulfilment centre and they still arrive on the customer’s doorstep in 2 days.”Maria Osorio, Logistics and Operations Director at Oxford Healthspan
Before each order is shipped, we compare rates across all carriers to find an option that will get you the best value so you can save on last-mile delivery costs.
These savings add up over time, allowing you to massively increase profits and grow your business.
Zone skipping FAQs
Below are answers to a few of the most common questions about zone skipping.
What are the most common zone skipping techniques?
The most common zone skipping technique involves consolidating your shipment through the carrier and transporting it to the carrier’s sorting facility in the destination zone. Another similar zone shipping strategy is inventory distribution and having orders shipped from the nearest location to the order’s destination.
What are the main zone skipping benefits?
Zone skipping is an effective strategy to reduce shipping costs and save time since packages don’t have to go through multiple sortation processes at different regional hubs.
How can I adopt zone skipping in my ecommerce business?
You can adopt zone skipping by partnering with reliable carriers who offer this solution. Alternatively, you can also choose to send your entire inventory to a fulfilment provider with multiple fulfilment centre locations, like ShipBob.