If you’re running an online or omnichannel retail business, your customers expect free and fast shipping – and you probably want to give it to them so you can compete with other online sellers. But figuring out how to fulfill orders affordably can also get confusing, time-consuming, and expensive.
If you’re expanding from regional fulfillment to national fulfillment, you might not fully understand how parcel carriers like FedEx determine their prices. Once you understand FedEx shipping zones and how they work, as well as those of other parcel carriers, it becomes easier to determine the best way to get your parcel shipping costs under control.
What is a FedEx Shipping Zone?
Like the old saying goes: Time is money. Parcel carriers need reliable ways to figure out how much time and effort they will put into bringing your package from the fulfillment center to your customer so they can charge you accordingly. FedEx and other carriers use shipping zones to determine the shipping price based on how far away that customer is.
It costs FedEx more to move your package longer distances, so naturally the rates you pay go up proportionally the further away the customer is from your fulfillment center. If your package is shipping across town, then you may only pay a few dollars. But if it’s shipping 500 miles, then you might pay $15.
Most carriers measure shipping zones by mileage, originating at your fulfillment center and ending at the delivery destination. Though the zone structure may vary by specific service, FedEx’s standard shipping zones look something like this:
- Zone 1: 0-50 miles
- Zone 2: 51-150 miles
- Zone 3: 151-300 miles
- Zone 4: 301-600 miles
- Zone 5: 601-1,000 miles
- Zone 6: 1,001-1,400 miles
- Zone 7: 1,401-1,800 miles
- Zone 8: 1,801+ miles
With most parcel carriers, a package sent to Zone 1 might arrive the same day or the next day, while a package sent to Zone 8 could take five days or more, depending on the carrier. Paying more can shorten those shipping times. For example, a package shipped across all eight zones with FedEx Express will arrive sooner than one sent via FedEx Ground Economy, but using the Express shipment service will cost you.
Keep in mind that parcel carriers will factor the dimensional weight of your packages into the cost since bigger or heavier packages require more space in the van, truck, or cargo plane. This practice means that a large or heavy package will cost you significantly more to send over long distances.
Tips for Navigating Shipping Zones
The good news is that you can leverage your knowledge about FedEx shipping zones to implement strategies that will help you to reduce your parcel shipping costs. Here are some tips to help you avoid overpaying for parcel shipments:
1. Move your fulfillment center. If you’re committed to a single distribution center (DC) model, then get the most out of it. If your only DC is near Los Angeles and most of your customers are in the Midwest or on the East Coast, you aren’t doing yourself any favors. If you can’t justify multiple DCs, then you need to pick the best possible location for your single fulfillment center.
2. Open more fulfillment centers. Adding more distribution centers near your biggest consumer markets will keep you from paying high prices to ship large volumes over long distances. If you can build a national fulfillment network that keeps you from shipping more than two or three zones to reach any customer, it becomes much easier to keep your parcel bill under control.
3. Skip some zones. Since FedEx charges you based on how many zones your parcel moves through, you can book a truckload shipment on your own and send your packages closer to the final destination before putting them in the FedEx pipeline. This transportation strategy is known as zone skipping. It will save you some money and might get your packages to their destination faster as well. You can also consider services that use the U.S. Postal Service (USPS) for final-mile delivery. This strategy is most appropriate when shipping items under 15 pounds and when transit times may not be the driving force for the service type. Using USPS doesn’t necessarily mean bypassing the big parcel shippers. UPS (SurePost), FedEx Ground Economy (formerly SmartPost) and DHL eCommerce have programs that ship in bulk to a region but use USPS for final-mile delivery. In fact, all of DHL’s final-mile deliveries are done by USPS.
4. Use a 3PL. A third-party logistics provider can offer you all the benefits of your own national fulfillment network without the high infrastructure investment and associated legwork. Additionally, using a third-party fulfillment specialist can gain you some economies of scale on your shipments. Where you might move a few thousand packages each month, your 3PL ships millions of parcels monthly. This leverage gives your provider bargaining power with FedEx and other carriers to reduce parcel shipping rates for all of its customers across the board.
At Amware Fulfillment, we can help you get your zone-based shipping under control and optimize your parcel shipping costs. Contact us today to see how we can help you overcome your fulfillment challenges.