Love the Zone You Ship

Posted on Feb 15, 2018 6:07:21 PM

Understanding how to use zone shipping to your advantage will make you fall back in love with your shipping provider.

What is Zone Shipping?

Zone shipping is a common practice that shipping carriers use when creating fee structures for their customers. Rather than showing costs based on a map of US state borders, a zone map will divide regions and countries not specific to the state borders, but rather taking into consideration the surrounding megaregions (see megaregion map below.) Essentially, the cost of shipping is determined by how many zones a package must cross when traveling from its original origin.

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Megaregions, or US population centers, are large metropolitan regions that share economic systems, transportation systems, and natural resources where population continues to grow. With distribution centers located in these largely populated areas, the distance a package travels might be a shorter distance to the destination than you think. OnTrac focuses resources in megaregions in order to be able to provide the very best advantages at the very best price.

Why is Zone Shipping important?

According to research done by The Colography Group, Inc., over 70% of packages stay within Zone 4, which is up to a 600-mile radius of the shipping origin. For regional carriers like OnTrac, who also service Zone 5, that percentage climbs to over 80%. In addition, the majority of these packages actually stay within Zone 2 (approximately 47.9% according to the below chart.) This means that the majority of packages shipped by companies stay within their general geographic region. Implementing a regional carrier, like OnTrac, will provide companies with a significant price savings with less fees and surcharges than the national carriers.

package-travel-distance.jpg

According to VISIBLE Supply Chain Management, “United States e-commerce sales reached $396 billion in 2016, and sales are estimated to grow beyond $684 billion by 2020; that’s nearly double the sales in just four years! Over 53 percent of global Internet users made online purchases in 2016—about 1 billion people. As a result, growing companies that aren't proficient in shipping could lose thousands, if not millions, of dollars. Employing strategic shipping strategies that take zones into account will become increasingly important as e-commerce sales continue to grow."

How to save with Zone Shipping?

Since zone shipping is used by all major shipping providers it is wise to fully understand how each carrier prices their zones. Rates will vary depending on the carrier and the shipping service that you select. Thankfully, OnTrac Ground uses the same rate zones as National Carriers, allowing a more accurate comparison of fees, surcharges and transit times. For example, did you know that OnTrac is 36% less for residential deliveries that require a signature compared to national carriers?

Plus, OnTrac can save multiple transit days for a single package to compared to the national carriers. Below is a Transit Day map that shows how much faster packages travel from Reno, Nevada throughout the OnTrac service region. Speaking of megaregions, OnTrac’s innovation has synchronized supply and demand specifically in the populated Reno area.

Transit Days from RNO.png

Using a multi-carrier strategy will allow for an overall greater shipping experience. For more information on how a regional carrier can set you up for success, continue reading here


OnTrac provides the benefits of next-day delivery at ground rates! To learn more about how OnTrac provides faster transit times and reduces shipping expenses, click here.

Topics: faster time in transit, Time in Transit, Zone 4 deliveries, save a transit day, ZIPTools, Zone Shipping

Regional Carriers ~ The Peak Season Solution

Posted on Oct 16, 2012 12:30:00 PM

The Peak Season Solution

It's Friday, December 21 at 6:00 PM, and you’re the distribution manager of a large e-commerce company. The national carrier’s last truck has just pulled away from your distribution center dock and you’re wondering how you’re going to get all the packages you have yet to process delivered by Monday the day before Christmas. Cyber Monday seems like a distant memory but you’ve still got this last peak season hurdle to surmount. What do you do?

While none of us has the luxury of a time machine to go back and change things, one course of action you could have taken was to add a regional parcel carrier to your carrier mix before the start of peak season. The regional parcel carriers operate in most large population centers and link the major cities of the US with next day delivery at Ground rates at distances up to 600 miles from their point of origin.

As their customers know, flexibility is the hallmark of regional parcel carriers. One of the most competitive features they offer is much later pick up times than the national carriers. That forlorn distribution manager could have had a regional parcel carrier pick up at 8:00 pm and still have satisfied his customers with shipments delivered by Monday December 24th.

Shipping Season OnTrac
In fact, some regional parcel carriers offer their very largest customers pick-ups on Sunday with delivery on Monday to Zone 4 destinations over 500 miles away. They also offer midnight pick-ups with deliveries that same day to Zone 2 destinations. This level of flexibility can provide your company with a huge advantage over your competitors. The very largest shippers are well aware of this and use regional parcel carriers accordingly.

The reason regional parcel carriers are able to offer this level of flexibility is because they are not tied to huge intra-continental line haul systems. Those networks often involve intermodal transport with limited departure schedules. The regional carriers operate on localized hub and spoke systems that link major metropolitan areas like Minneapolis with Chicago using tractor trailer line hauls with frequent departures.

Implementing the regional parcel carriers is much easier than you might think. They all have IT teams in place to help integrate with your shipping systems. And many of them have partnered with multi-carrier shipping software providers to create shipping modules that are the closest thing to plug and play in the shipping system world. And if you are concerned about limited dock door space, keep in mind that since the regional carriers can pick up much later than the national carriers, you can arrange a time for them to come after the national carriers have already departed from your facility.

Mark Magill, Director of Business Development, OnTracNow is the time to contact your local regional parcel carrier. The clock is ticking, it’s now October and on the day I wrote this article, there were only 55 shipping days left until Christmas!

For more information and to view this and other articles, click here.

Author:  Mark Magill, Director of Business Development, OnTrac

Topics: regional parcel carriers, later pickups, eCommerce, Zone 4 deliveries, Ground Shipping

5 Ways to Save Money with a Regional Package Delivery Company

Posted on Oct 1, 2009 4:28:00 PM

In the midst of the current economic climate, shippers are actively seeking to reduce their costs.  Shipping with a regional package delivery company can reduce a company's shipping spend by as much as 40%.

Just by eliminating the 85 plus accessorial charges that the national carriers levy, a company can save over 25% off their current shipping costs.

Below are 5 reasons, shippers should consider using a regional package delivery carrier:

1) Increased Productivity - Since regional package delivery companies use ground-based solutions to deliver their packages, they have much greater flexibility in offering their customers later pickup times.  They can offer pickup times as late as 8:00 pm and still provide next-day delivery.  For shipments staying in the local area, pickups can be made as late as midnight.

2) Faster Deliveries - Because regional package delivery companies are geographically based, they can provide guaranteed next-day delivery for ground shipments to Zone 4 destinations over 600 miles away from the pickup point.  And can often save a transit day compared to major national carriers.

 

 

3) Aggressive Pricing - Because regional package delivery companies have a specific market niche to fill, they offer rates as low as 40% less than national carriers.  Large companies typically have national contracts with discounted rates from the national carriers.  But now with the exit of DHL from the domestic market there is no "low price leader" to speak of.  As we have seen from the 2009 rate increases, even in challenging economic times, the national carriers will continue to add accessorial charges and raise their rates.  It would very much be in the shipper's best interest to find out where their shipping spend lies on the the national carriers discount tiers. They may be able to move a significant volume over to a regional package delivery company, maintain their national discount level and significantly reduce their costs. 

4) Accessorial Fees- The duopoly of national carriers have over 85 additional charges (accessorials) that can be added to the base price of you shipments.  These include delivery area surcharges, residential surcharges and additional handling fees.  They can add as much as 28% to your package rate.  Most regional carriers limit their additional charges to a handful of fees such as CODs, Saturday delivery and declared value.

5) Within the Region- The majority of packages shipped by companies stay withing their general geographic region.  According to a study done by The Colography Group, 70% of of packages remain within the Zone 4, 600 mile radius of the shipping origin.  And, for regional carriers like OnTrac who also service Zone 5, that percentage climbs to over 80%. 

Using a regional package delivery company can increase your company's productivity by providing later pickup times, give you a speed to market advantage over  your competitors through improved transit times and reduce your shipping expenses through lower rates and fewer accessorial charges. 

Topics: accessorial charges, regional package delivery company, Zone 4 deliveries, overnight shipping at ground rates, save a transit day, 40% less