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Shipping Zones and Their Role in E-Commerce Fulfillment

Jul 25, 2023 - Lars Anderson
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As an e-commerce business owner, your priority is getting your products in front of customers. You want to know that when you ship something to them, they're getting the product on time and in good condition. You also want to be sure you and your customers aren't paying too much for shipping.

Zip codes and shipping zones play a large role in order fulfillment and logistics, so it's necessary to learn about them and how they may affect your business. By gaining a good understanding of shipping zones, you'll be in a good position to save money with cheaper shipping rates and provide varied shipping options to your customer base.

What Are Shipping Zones?

Shipping zones are geographical regions set up by shipping carriers. They are not always the same, so it's possible to have unique zones based on the company. You have to reach out to the specific shipping carrier to find out about their zones. For example, you may need to ask for a postal zones map containing USPS shipping zones or FedEx shipping zones.

The importance of understanding shipping zones is that each one has its own shipping rates and shipping time for delivery. If you plan to ship locally, you may only use one zone, but national or international orders may cross several shipping zones. 

Shipping zones simplify the shipping process for carriers and help you calculate how much you'll have to spend on shipping charges.

The Impact of Zip Codes on E-Commerce Business Fulfillment

Zip codes play a vital role in the fulfillment process for the following seven reasons. 

Accurate Shipping Cost Calculation

Zip codes make it simple to get accurate data on where a package starts and where it ends up. With the correct zip codes, the shipping carrier, usually USPS, UPS, DHL or FedEx, knows exactly how long it should take to get the package to its destination as well as how much it will cost in manpower to make that delivery.

Shipping rates and shipping fees vary based on:

  • The carrier you choose
  • The weight of the package
  • The size of the package
  • The distance the package has to travel
  • How many transfers the package makes before reaching its destination
  • How fast you want the package to get there

Based on these factors, it's reasonable to assume that a next-day package will cost more than one with two-day shipping. In that scenario, the faster shipping speed simply costs more since fewer transfers occur. 

Many e-commerce brands use a default shipping method called standard ground shipping. This kind of shipping takes one to five days on average, but the shipping speed may vary based on the destination, time of year and other factors. 

Other shipping options may include:

  • Next-day delivery
  • Overnight
  • 2-day shipping
  • Flat-rate shipping

Affordable Shipping

The zip codes where your orders are going may determine the shipping method your e-commerce business uses. 

Zip codes help measure the distance packages will travel, making them necessary for finding the most affordable shipping options. The USPS groups zip codes into regions, and certain regions may have lower rates due to distance or ease of travel. 

To determine your shipping costs, consult a shipping zone chart or shipping zone map. Make sure that map is local, as zones are relative to your location rather than fixed.

Then, speak with shipping carriers about the shipping options within those regions. You may be able to negotiate a better rate

Common zones include:

  • Zone 1: The zone where the package originates
  • Zones 2 through 8: The destination for the package

More specifically:

  • Zone 1: A 50-mile radius
  • Zone 2: A 51- to 150-mile radius
  • Zone 3: A 151- to 300-mile radius
  • Zone 4: A 301- to 600-mile radius
  • Zone 5: A 601- to 1,000-mile radius
  • Zone 6: A 1,001- to 1,400-mile radius
  • Zone 7: A 1,401- to 1,800-mile radius
  • Zone 8: A 1,801+-mile radius

The zone the farthest from you will have the highest number. 

Your shipping strategy depends on the outcome of those conversations and the shipping areas that carriers can service.

Consistent Pricing Structures Based on Distance or Zones

Pricing structures may not be consistent without zip codes. Zip codes not only define areas of cities or towns, but they also define regions as they're grouped into zones. Shipping zones often have one rate for all packages traveling within them, and knowing that rate, combined with the rates of other zones that packages travel through, can help you keep prices consistent. 

Efficient Logistic Operations and Delivery

Logistically, working within the same zip code is often the easiest way to save money. Why? The carrier doesn't have to travel as far or use as many workers to get the package to the destination. 

Zip codes help carriers:

  • Plan routes based on geographic region
  • Verify addresses to reduce shipping errors such as undeliverable shipments
  • Plan for shipping density, making sure carriers can maintain the concentration of orders within a zip code

Overall, it's easier to plan for deliveries when carriers are sure the destinations are correct, making zip codes a must-have for all shipping options.

StrategicStrategical Planning of Warehouses or Distribution Centers

Another important aspect of using zip codes and shipping zones is that carriers can define how many warehouses or distribution centers they need based on the number of people living within a zip code. Looking at population by zip code also helps carriers determine when they might need to expand their operations. Additionally, looking at the location of large suppliers or clients within a shipping zone may assist carriers in deciding where to build their warehouses or distribution centers to be of the most help to their customers. 

Enhanced Customer Experience

Customers want to get their packages as quickly as possible. Zip codes, zone shipping and shipping areas serviced by carriers make package transit faster and more straightforward, so packages don't get lost and customers get their items on time or early. 

They also help you, as a business owner, optimize your shipping costs for each delivery zone. 

How can you optimize your shipping costs to enhance the customer experience? 

  1. Reduce your package weight as much as you can, minimizing the cost to ship the product regardless of where it's going.
  2. Use the right size of packaging to get your products down in weight and size. Use less filler cushion and opt for lighter packaging materials (like packing peanuts) to see improvement in the cost for shipping rates.
  3. Consider including the cost of shipping in the product's price. For example, if you'll ship a pair of jeans for $5, why not just add that $5 to the cost of the product and make shipping free? That way, your customers don't have any surprises at checkout. 
  4. Opt for flat-rate shipping to minimize costs for customers. Get to know your average shipping cost by shipping zone, and use that rate as a flat-rate cost for all orders.
  5. Compare carriers to find the cheapest one for your shipping needs. You may want to work with more than one carrier based on how far the package is going or the type of product you're sending. For example, using a local fulfillment company could save time and money on products staying close by.

Ask if your preferred carrier has a shipping zones calculator you can use to work out the logistics of shipping to different places on a shipping zones map. For example, the USPS zone map might show that it costs $5 to ship a small item to Zone A but $25 to Zone B. You can account for those differences by setting a flat-rate shipping option or working the cost into the price of the items, depending on your preference.

Doing all these things can improve your customers' experiences, meaning they're more likely to shop with you again.

Minimized Shipping Errors and Package Loss

Shipping carriers handle thousands, if not millions, of packages a day. For example, the U.S. Postal Service processes and delivers 23.8 million packages daily. With this volume, no wonder some items get lost.

However, the majority of mail does get where it needs to go, and zip codes and shipping zones are largely responsible for it getting there on time. 

Shipping zones and zip codes:

  • Assist with address accuracy, boosting packages' chances of getting delivered to the customer.
  • Expedite routing and sorting, as packages or letters going to the same zip code stick together for better efficiency.
  • Improve tracking, allowing you to stay updated on a package's journey. If it gets lost along the way, tracking efforts may help find the package or prove it didn't arrive.

Overall, zip codes and shipping zones help improve transportation and delivery accuracy to get packages to their destinations efficiently. 

Streamline Your Product Delivery With an E-Commerce Integrated Platform

By understanding the importance of shipping zones and zip codes, you'll quickly learn how to make shipping as efficient and economical as possible to impress your shoppers.

Making the best impression on your customers after they buy is key for customer retention and repeat purchases. At Cart.com, we handle picking, packing, shipping and storage, so you can spend time focused on your brand and providing quality customer service. Learn more about all our fulfillment options here. 

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