Zone skipping for reduced shipping costs

Zone skipping is a cost-effective parcel delivery practice that helps businesses stay ahead of the competition and meet consumer demand.

What is zone skipping?

Zone skipping is a strategy that involves consolidating shipments or packages and sending them directly to a distant destination, bypassing intermediate stops or avoiding certain geographic areas. That is, goods are transported straight to the target region without going through additional sorting processes at other hubs.

Zone skipping enables companies to anticipate customer orders based on demand forecasting. For example, suppose data shows that residents of a specific city will likely purchase a particular product at a certain time of year. In that case, the retailer can pre-position those goods near local warehouses or DCs. To implement zone skipping, organizations might select carriers with the most competitive rates or those that don’t service specific areas to streamline delivery.

When should you use zone skipping?

Any ecommerce business owner looking to optimize their shipping strategy and reduce costs can benefit from zone skipping. A case in point would be retailers who need to deliver goods to a specific region regularly.

This practice is especially useful for international and long-distance shipments. In addition to speeding up deliveries, it minimizes costs by avoiding national zone-crossing fees in large countries like the US. Zone skipping can also reduce damage to packages during transit.

It’s important to note that this shipping method will only be effective if the total cost of a full truckload (FTL) or less-than-truckload (LTL) is lower than the cost of sending individual packages from the origin.

What are the benefits of zone skipping?

Opting for zone skipping can offer several advantages when organizing product shipments:

• Cost savings. Sidestepping intermediate DCs and bringing goods closer to their destination optimizes vehicle capacity, leading to higher profit margins.
• Faster delivery. Direct shipments involve less handling, sorting, and processing by positioning products closer to potential buyers.
• Greater control. Consolidating shipments into fewer movements allows businesses to better monitor their products. This is even more effective when using a distributed order management system like Easy DOM. This software enables real-time tracking of estimated shipping/delivery dates and order status with carriers.
• Fewer damages. Simplifying order management and avoiding transshipment reduce material handling, promote better product preservation, and help minimize inventory shrinkage.
• Satisfied customers. Consumers receive items quickly and in good condition, leading to a positive shopping experience.
• Scalability of operations. Since pallets are prepared based on demand forecasts, zone skipping provides flexibility in shipment volumes and frequencies. It makes it easier for companies to adapt to changing market needs.
• Sustainability. Consolidating shipments results in more environmentally friendly transportation operations, supporting sustainable logistics practices.

How to incorporate zone skipping into your supply chain

Before organizing shipments around a zone skipping strategy, it’s essential to ensure that your company can handle certain processes effectively:

• Efficient order fulfillment. Consolidating shipments into a single load requires warehouse associates to organize orders quickly. This may involve adapting the facility to include an adequate sorting system and enough space to organize packages by their final delivery points.
• Labeling capabilities. The more carrier-compatible labels your operation can generate, the easier it will be to pre-label orders. Easy WMS’s advanced Multi-Carrier Shipping Software functionality integrates with carriers to automate label and packing list printing.
• Set prioritization rules. Easy DOM provides maximum transparency and visibility into inventory availability. It assigns orders based on factors such as priority, creation date, committed delivery date, or release date.

Key elements of zone skipping

Successfully implementing zone skipping requires careful planning and evaluation of the process:

• Plan in advance. Identify which orders can be consolidated for shipping, analyze transportation requirements, and determine the target destinations.
• Leverage technology. Software solutions like Easy DOM enable optimized routing, global inventory visibility, and multilevel omnichannel integration. They’re an asset for companies that manage complex distribution networks with multiple sales and delivery channels.
• Assess the results. Reviewing the outcomes of zone skipping is imperative. To assess its effectiveness, focus on cost savings, transit times, and order fulfillment rates.

Implement zone skipping with Interlake Mecalux

Are you considering digitalizing or automating your logistics operations? Interlake Mecalux can help with our omnichannel software solutions. Our Easy WMS warehouse management system provides comprehensive visibility and control over product traceability and status. Moreover, Easy DOM — our distributed order management system — enables companies to perform order orchestration, segment shipments by customer type, and create specific prioritization rules. Contact us, and we’ll analyze your needs to offer you the solution that best suits your company.