Shipping Zones: Guide to Shipping Costs and Transit Times for Ecommerce
The concept of a shipping zone is important to grasp in the world of order fulfilment, yet many ecommerce business owners struggle to understand how zones work.
In this article, we’ll dive into some of the most common questions around shipping zones, so you can gain insight into the right shipping strategy for your online store. Let’s break it down!
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FedEx, UPS, USPS Shipping zones: what are they?
To estimate your shipping zones for USPS, UPS, and FedEx, use the table below (updated February 2022):
|Shipping Zone||Mile Radius (from origin)|
|Zone 1 (local)||50 mile radius|
|Zone 2||51 – 150 mile radius|
|Zone 3||151 – 300 mile radius|
|Zone 4||301 – 600 mile radius|
|Zone 5||601 – 1000 mile radius|
|Zone 6||1001 – 1400 mile radius|
|Zone 7||1401 – 1800 mile radius|
|Zone 8||1801+ mile radius|
|Zone 9||Freely Associated States|
Shipping zones are the geographical areas that carriers ship to, spanning from Zone 1 to Zone 8 for domestic shipments in the United States. Shipping carriers use shipping zones to measure the distance a package travels – not in miles but rather groupings of postcodes – from the point of origin to the destination.
The location from which an order is shipped is the point of origin and located in Zone 1. The address it’s shipped to is the destination zone. The destination zone number will depend on how far it is from the point of origin, with Zone 8 being the farthest away.
A lot of small businesses opt for using USPS because of how cheap and reliable it is. For many sellers not using distribution centres, they need to plan how they’ll ship goods across the continental United States’ 2,500+ miles of coast to coast customers.
How shipping zones work in ecommerce fulfilment
Here are some of the most common FAQs about shipping zones in the US.
1. How do you calculate shipping zones?
Zones are dynamically calculated based on where your package is shipped from. This could mean that two different points of origin that are shipping to the same destination address can be shipping to completely different zones.
For example, if you ship from Los Angeles, California to St. Louis, Missouri, you are shipping to Zone 7.
However, if you ship from Dallas, Texas to St. Louis, Missouri, you are shipping to Zone 4.
Want to determine shipping zones for your orders?
- USPS Domestic Zone Chart: Navigate to the tab “Get Zone for ZIP Code Pair.” Simply enter the postcode you’re mailing from and the postcode you’re mailing to, and you will get the shipping zone for your destination.
- UPS Zones and Rates for the 48 Contiguous States: Enter your postcode of origin and download zone charts to Excel.
Calculating shipping costs for ecommerce
How do shipping zones affect cost?
Shipping carriers use zones to calculate rates for certain services. Some services use a flat rate, letting you pay the same price regardless of the destination (as long as it’s within the United States).
USPS breaks down which services are zoned (Priority Mail Express, Priority Mail, USPS Retail Ground, and Bound Printed Matter) and which are not (First-Class Mail, USPS Marketing Mail, Library Mail, and Media Mail).
For services that are zoned, the greater the zone, the greater the cost in most cases.
How does order weight affect shipping cost by zone?
Besides the carrier and service used, as well as the origin and destination postcodes, exact shipping rates will also depend on order weight and dimensions.
With the January 2019 change to zone-based pricing for even lightweight packages sent via USPS First Class Mail, all businesses are affected by distance. However, the heavier a package is, the more dramatic the price increase will be as the zones increase.
Thus, you will see a lower shipping cost if you ship from a location closer to the end customer.
Let’s take the following example of shipping a 20 lb. box with the dimensions, 4 x 9 x 12 inches. This box is particularly heavy and will be expensive to ship.
As we can see from the chart below, the higher the zone, the greater the shipping cost. The lower the zone, the more manageable the cost for you and your customers.
A note on dimensional weight: Shipping carriers use this pricing technique to estimate weight calculated from the length, width, and height of a package, using the longest point on each side.
The shipping cost will be based on whichever number is greater: the actual weight of the package or its calculated dimensional weight.
How shipping transit times work for ecommerce
How do shipping zones affect delivery speed?
If a package is sent nearby (e.g., Zone 1 or Zone 2), it will almost always arrive in fewer days than a package sent to a higher zone, like 7 or 8. Reducing time in transit is important, because slow shipping can cost you customers.
In fact, 73% of shoppers expect affordable, fast deliveries and 24% of customers cancel an order due to slow shipping.
[Related infographic: The State of Ecommerce: What You Should Know About Online Shoppers]
Customers today believe the maximum amount of days considered acceptable to wait for their order is only 4.1 days (as compared to 5.5 days back in 2012).
If all of your inventory is fulfiled from one location – for example, out of New Jersey, as seen in the map below – it can take 5-6 days to deliver an order to a customer in Oregon.
Image source: UPS
[Download: The Guide to Offering Affordable 2-Day Shipping]
It’s no surprise that same-day shipping and delivery can only ship to the lowest zone(s).
Where is the best place to fulfil orders to reduce shipping zones?
If you outsource fulfilment, as compared to self-fulfillment, you will have more flexibility over choosing a fulfilment centre location. The location from which you ship orders should be near your customers, as determined by analising your past order history.
If your customers are geographically distributed, outsourced order fulfilment in large cities can help you reach a high volume of people faster, as opposed to shipping from a less densely populated area that can’t efficiently reach as many people.
Fulfil orders from closer to your end customers
Using data to choose an optimal fulfilment location helps you save money on shipping costs and reduce transit times. To do this, many brands split inventory across multiple fulfilment centres.
It may seem counterintuitive that using more fulfilment centres can save money, but there are many instances where it’s effective (most commonly by outsourcing fulfilment, as you won’t have leases, labour, equipment, and other expenses).
For example, since US shipping carriers use shipping zones to measure the distance a package travels for domestic shipments in the contiguous US — with the point of origin being Zone 1 and the destination being as far away as Zone 8 — the higher the zone, the more money it will cost (and the heavier the package, the greater the cost difference).
The chart below shows how using three locations (in Moreno Valley, California; Dallas, Texas; and Bethlehem, Pennsylvania) compared to just one 9in Moreno Valley, California) can contribute to a reduction in your average zone and the elimination of the several highest, most expensive zones.
Because the three fulfilment centre locations are in populous regions of a very large country, many of the areas remaining in higher zones include some physically large states that are small in terms of population (and thus, have fewer orders).
25% average cost-savings from using 3 fulfilment centres in different regions across ShipBob’s US network compared to 1
15% reduction in average transit times from using 3 fulfilment centres in different regions across ShipBob’s US network compared to 1
Some brands have seen that distributing inventory across several fulfilment centres can reduce shipping costs by 25% and bring a 13% cost savings to their bottom line.
To reduce shipping zones and costs, you can:
- Analyse historical order and postcode data to reevaluate your optimal fulfilment locations.
- Determine if a more central warehouse location (or even a bi-coastal strategy) would benefit your business if you’re often shipping from one side of the country to the other.
- Calculate what your shipping costs would be if you went from one fulfilment centre to two (or two to three, and so on) by experimenting with different locations, and how those would be offset by the additional transportation and warehousing costs you would incur.
In addition to reduced costs, distributing inventory also helps speed up transit times. While anybody can expedite shipments, the costs are very high, causing a major hit to margins and profitability. If you store inventory closer to customers, it can get to them faster via ground.
For example, the zone data below is based on ShipBob’s average standard US ground transit times (across all carriers), updated weekly from January 2020 through December 2021. It demonstrates timelines from click-to-delivery (i.e., when a customer places an order to when it is delivered to the shipping destination), broken out by shipping zones across the United States.
The top line (light green) represents the average Zone 8 shipment over time. Unsurprisingly, it is consistently the slowest zone to ship to, ranging from just over 3 days to 7.27 days at the very end of peak season 2020, just before 2021).
The bottom line (dark blue) represents the average Zone 1 shipment over time. The average for this more ‘local’ delivery ranged from 1.86 days to 3.66 days at the height of the 2020 holiday season.
If we recall the map example, where we used 3 fulfilment centres across different regions of the US, we can eliminate the 3 highest zones (6-8) to see the updated shipping speeds below.
- For the highest zone remaining (Zone 5), the fastest average shipping speed was 1.97 days.
- The slowest average Zone 5 shipping speed was 5.43 days during the chaotic peak season 2020 (which is a reduction of almost 2 days from the previous slowest Zone 8 shipping speed that same week).
How can ecommerce companies afford to offer free shipping?
It may seem counterintuitive to offer free shipping when it can be so expensive to send orders to high zones. Ecommerce companies that incorporate free shipping into their pricing strategy must be strategic in their decision to ensure it won’t hurt their margins. Typically, it’s done using one of the following options:
- They bake the cost of shipping into the product price (using the average shipping cost)
- They require a minimum dollar amount to be spent (to increase the average order value)
- They reduce the number of zones they ship to (more on that below)
How does increasing the number of fulfilment centres used when partnering with a 3PL affect shipping zones?
If you have products in multiple fulfilment centres that are close to your customers, you can reduce the time in transit for a greater number of orders.
In the maps below, we compare the use of one fulfilment centre in the continental United States with three fulfilment centres. The legend shows the colour of each shipping zone, with red representing the closest and cheapest zone to ship to.
As the zones increase, the colours shift to orange, yellow, green, blue, and even purple.
When using one fulfilment centre (in Moreno Valley California, as seen on the map to the left), we see one region of the country is shades of red and orange, yet much more is green, blue, and even purple — where the shipping rates will be higher, since it will go to Zone 8.
When using three fulfilment centres (in Moreno Valley, California; Dallas, Texas; and Bethlehem, Pennsylvania, as seen on the map to the right), there are many more red, orange, yellow, and green areas.
We’ve also eliminated any states in Zones 7 and 8, leaving only a couple of areas that are in Zone 6. These three fulfilment centre locations also provide coverage in highly populated states (e.g., California, Texas, and Pennsylvania), where the green areas are in many large states that have a small population (Montana, Wyoming, etc.).
Additionally, using multiple fulfilment centres can help you offer two-day shipping via ground in more regions, instead of relying on expensive air shipping.
[Related article: 3 Benefits of Using More Than One Fulfilment Centre]
If we look at the chart of the 20 lb. box from the example mentioned earlier in this article, great cost savings would be realised by eliminating the highest shipping zones.
Utilising three fulfilment centres as compared to one would enable more orders to be shipped to lower zones. In other words, the average shipping cost per order would dramatically decrease with the addition of each fulfilment centre.
To learn more about how distributing inventory across fulfilment centres can transform your logistics, check out this webinar.
How does a 3PL automate fulfilment and optimise shipping zones?
A third-party logistics (3PL) company can improve fulfilment by providing a geographic footprint that most ecommerce companies could not afford on their own.
A tech-enabled 3PL can automate the order fulfilment process using powerful algorithms that route each order to the optimal fulfilment centre. As each order is shipped, the tracking information and each step of the shipping process is sent to your store and shared with your customer.
If you understand zone shipping, you can adjust your ecommerce fulfilment strategy to better meet customer expectations around speedy and affordable deliveries. Not only will this help you improve efficiency by reducing distance and time in transit, but it can also help you reduce shipping costs, generate more sales, and improve your bottom line.
To keep fulfilment costs and overall logistics costs down, you must effectively use zone shipping to your advantage. Learn how ShipBob helps ecommerce businesses do this by fulfiling orders from their network of fulfilment centres in the largest US cities to effectively reach customers.