The concept behind zone-based pricing is simple. Geographic regions are broken out into zones. The closer a zone is to the origin, the less expensive the shipment cost. The farther the destination zone, the greater the shipment cost – and the greater the time to deliver.
Using zone pricing for parcel shipments is common. Most carriers label the zones numerically, starting with “1” or “2” as the origin zone, and then increasing the numbers for zones as they get farther away from the origin. Sometimes three-digit numbers are used (100, etc.) for different service types. Either way, the concept is the same.
So, how are zones determined and how can you use them to your advantage?
How are zones determined?
Each carrier determines its own zones. The starting point for any zone chart is the origin zip code. There is no one standard for the number of zones or the size of the zones. So, one carrier may have more zones than another and have larger (or smaller) zones in certain areas. The zones are developed based on the carrier’s network; where their facilities are located and the costs for them to service different areas.
And since zones are based on the shipment origin zip code, carrier zone charts are dynamic.
Carriers use zones because it simplifies pricing from their perspective. Shippers can and should take advantage of zone-based pricing, but the logistics of doing so require some orchestration.
How can I use zone-based pricing to my advantage?
The key to using zone-based pricing to your advantage is to understand that the pricing increases the more zones a package goes through. This makes sense, considering the shipment is moving a greater distance.
When you ship into the United States, the entry location is important since that is the origin, or the peg from which the zones are determined. By identifying import locations that are geographically closer to your final destination., the lower the cost and quicker the delivery time.
For instance, if shipping to Boston, it makes more sense from a price and speed perspective to bring the shipment into the U.S. via New York rather than Miami. Likewise, a shipment going to Atlanta would be better to bring in through Miami than New York.
Some things to consider include:
Origin and destination.
Carrier handling the shipment.
Method of transportation (air, ocean, land).
Taking into consideration these factors will help you determine the price to ship a package from Point A to Point B, but flexibility is important since certain destinations require different ports of entry. One size does not fit all.
With international shipments, it’s not just about getting the shipment to the U.S, but also through Customs so it can then be delivered. Clearance delays can be costly and frustrating, so working with a global logistics partner that can navigate both zone-based pricing and customs can be extremely beneficial.
As the largest non-integrator operator of U.S. Customs and Border Protection ECCF (Express Consignment Carrier Facilities) facilities in the U.S., IBC also operate CFS (Container Freight Station) facilities specializing in Section 321 Clearance and Type 86 clearance at five U.S. locations, including:
This allows us to strategically route our customer’s shipments to the most strategic port, as well as clear Customs with ease.
Entry points in the Northeast (New York), Southeast (Miami), Midwest (Chicago), Southwest (Dallas), and West (Los Angeles) provide you the flexibility to get your shipments to their destinations quickly and economically, even during peak season.
With a global distribution network of more than 18 network hubs, 59 gateways, and 220 countries and territories, our locations grant us the flexibility to do what the other integrators struggle with. We can strategically optimize shipping routes to expedite transit times and lower shipping costs.
For more information about our services and prices, contact us today to learn how IBC can create custom delivery and transportation solutions for your business.