With shipping rates continuing to soar due to increased volume from e-commerce and limited capacity, businesses seek creative ways to save money—with zone skipping attracting some attention.
What is Zone Skipping?
Zone skipping is a logistics strategy businesses use to bypass the charges carriers apply to a package as it travels over established zones. Zones and applicable charges vary from carrier to carrier–and vary depending on the delivery service type.
By "skipping" traveling through multiple zones and having packages arrive within the last mile of delivery through bulk shipments, shippers can save a significant amount of money. Zone skipping is achieved by combining as many packages as possible to a particular region through one FTL or LTL load.
Will Zone Skipping Help You Become More Competitive in 2021?
What are the Benefits?
Beyond cost savings, there are situations where delivery speed increases because a package goes through fewer checkpoints. Less manhandling also reduces potential damage to packages. Lower shipping costs allow you to compete better on price as you can pass savings onto customers. And faster delivery times mean increased satisfaction from customers who have come to expect same-day/next-day deliveries.
How to be Successful
There are critical things to consider before employing a zone skipping strategy. It will not work well for every business. Retail and E-commerce Expert Meaghan Brophy tells us:
"Zone skipping is not right for everyone - particularly if you’re a small retailer, or your shipments are mostly local to your warehouse. However, for growing businesses, using zone skipping to get packages to local USPS centers and then utilizing USPS for last-mile delivery, can be a great way to save shipping time and costs."
Weighing the option
1) Volume & zones - Do you have a significant amount of volume traveling to one region or coast? You'll need enough to fill an FTL or LTL without creating a backlog for yourself or drawing out delivery times past customer expectations.
Are the shipments you are considering pooling together crossing multiple zones? The more zones crossed, the more savings you will achieve.
2) Does the math add up? - A load to a particular zone/region needs to be cheaper than shipping each package individually.
3) Can your internal systems keep up? - Zone skipping will likely incur an increase in capacity requirements for you. Can your processes and software handle the strain? Will you require additional labor or a systems upgrade? If so, you should evaluate these costs when determining zone skipping's ROI.
Zone skipping does not mean you will no longer work with carriers. In fact, you should consider leveraging the carrier relationships you have to see if there are pairing opportunities with some of their other customers. You may not need to fill an entire FTL yourself to benefit from those rates!
Carriers will still want to work with you even if you reduce the number of parcels you ship with them. You will still require their business in the last mile of delivery and potentially with pooling freight with other customers. And they are accustomed to partnering with shippers who wish to make the best use of their networks.
For more information, see our post Will Zone Skipping Help You Become More Competitive in 2021?.
FreightPOP offers one-click supply chain management for manufacturers, distributors, e-commerce/retailers, and 3PLs. To learn more, check out our case study highlighting how we quickly rolled out our solution to enable a national distributor to gain better control and visibility over their supply chain.