A Refresher on Shipping Zones
Story Highlights:
• Shipping zones tell you how far packages have to travel to get from their place of origin to their final destination.
• Each carrier sets their own shipping zones—and corresponding rates.
• The shipping service type you choose dictates how long the package will take to reach its destination.
The Story:
It’s a given that monitoring expenses is key in building a thriving e-commerce business—and shipping is one cost that can quickly devour a budget. Something to consider when looking for ways to save on shipping expenses are shipping zones. Read on to learn more about what they are, why they’re important, and how understanding the way they work can help you reduce shipping costs.
What Are Shipping Zones?
Shipping zones (or postal zones), are the geographic perimeters or areas used to organize shipments. Shipping zones tell you how far packages have to travel to get from their place of origin to their final destination. And they cover both domestic and international areas.
Carriers use shipping zones to set rates for each shipment. Rather than measuring costs based on miles traveled, shipping zones simplifies the process and also makes pricing more predictable for e-commerce shippers. Different shipping services are available for different zones as well.
The place of origin and the final destination each have a corresponding postal zone. For example, the shipper might be shipping a package from zone 2 to zone 4. This will be less expensive than packages shipped to zone 6 from the same location.
Shipping zones aren’t universal. In fact, each carrier sets their own shipping zones—and corresponding rates:
USPS shipping zones are both international and domestic. USPS shipping zones apply to and vary between Priority Mail, Priority Mail Express, Priority Mail Regional Rate, and First-Class Package Service. Shipping zones do not affect rates for USPS Flat Rate shipping.
FedEx shipping zones are also both domestic and international. FedEx Freight also offers zone-based pricing for FedEx Freight Priority and FedEx Freight Economy shipments.
UPS shipping zones are only available for domestic shipments.
Why Are Shipping Zones Important?
Shipping zones matter because they are a significant factor in figuring out the cost of the shipment. This is how carriers determine their rates for each shipment. In addition to cost, postal zones help merchants predict how long shipments will take.
This is important because today’s consumers expect not only free, but also fast shipping. Free shipping is important to 83 percent of American shoppers, and speed of delivery is the second-most important factor in the decision to buy. In fact, most customers opt for 2-3 day shipping instead of 4-7 days.
If you’re using zoned shipping services to fulfill customer orders, review this information to ensure you are setting realistic expectations for cost and arrival.
How to Calculate Shipping Zones
To calculate shipping zones, you’ll want to refer to the respective carrier’s resources. You’ll need the origin and destination zip codes, as well as information about the package like size, weight, shape, etc. Heavy, large packages typically come with higher shipping costs.
You can also choose which shipping service you plan to use, as this may affect the rate as well. It will also affect zip code and zone availability—some shipping services, for example, are only available for a limited range of destination zones. The shipping service type also dictates how long the package will take to reach its destination.
Keep in mind that if you have to split an order and fulfill from different warehouses, the shipping rates might be different for each package. While this is a great way to reduce shipping time, it might come with added costs.
Should You Charge Customers for Zone Shipping?
As mentioned, fast and free has become the new black. But if it’s not possible for you to offer it right now, a little creativity can help you recoup those expenses and still create a positive customer experience. Here are a few ideas:
• Bake shipping costs into the product price. This way customers are reimbursing your for shipping without even knowing it.
• Test different shipping options. Use conversion rate optimization (CRO) software to run A/B tests with various shipping options and charges.
• Offer free shipping to close customers. For shoppers in your shipping zone or not far from it, you can set up a rule so they get free shipping while others may pay an additional fee.
• Use free shipping as a promotion—be it a limited time sale or a coupon code in exchange for an email subscription.
How to Set Up Your Store’s Shipping Zones
If you’re ready to set up shipping zones on your e-commerce site, consult these resources:
Explore Shippo today for fast, convenient and cost-effective shipping solutions.
