ECommerce is surging forward, reshaping the way we shop.
With shoppers expecting faster deliveries, supply chains are under pressure to keep up.
Did you know that 58% of consumers would stop buying from a brand after just 1-3 shipping delays?
Yes it’s true!
For retailers grappling with high shipping costs and delivery timelines, there’s one solution with real potential – zone skipping.
But what exactly is that?
In this blog, we’ll break down what it is, how it works, its essential elements, why it’s crucial in eCommerce, and how it can help cut costs.
Let’s dive in!
Understanding The Basics: What is Zone Skipping?
Zone skipping is a shipping strategy that involves skipping over specific geographic areas, or “zones,” to cut down on delivery costs.
This is often achieved by partnering with carriers who either do not service certain zones or provide lower rates for specific regions.
For instance, if you’re shipping from Canada to Asia, you might skip certain zones along the way to streamline costs and make the shipment more affordable.
Zone Skipping: How Does it Work?
Here’s how it works:
1. Combining Shipments
In zone skipping, multiple shipments heading to the same area are grouped into one larger shipment.
By consolidating these, companies save on costs, make better use of cargo space, and reduce the overall shipping expenses.
2. Preparation at Starting Point
Once shipments are combined, they’re prepared for the journey in the origin zone.
This includes packaging, labeling, and completing paperwork for each item. The entire combined shipment often gets a single tracking number to keep track of its progress.
3. Direct Transport to Final Zone
Rather than stopping at multiple distribution centers, the combined shipment travels straight to the destination zone.
This skips any intermediate zones, allowing for faster and more efficient shipping.
4. Customs Clearance (for International Shipments)
For international zone skipping, customs clearance is handled only at the destination, not at every stop along the way.
This streamlines the paperwork and speeds up the customs process.
5. Unbundling and Delivery
When the shipment reaches the destination zone, it’s separated back into individual orders.
Each package is then sorted and labeled as needed, ready for final delivery to each customer within that area.
Key Elements for Effective Zone Skipping
Logistics requires several essential elements to function effectively, some of which are listed below:
Shipment Planning
Efficient planning helps combine compatible shipments for zone skipping. This means looking at the size and destination of shipments to use cargo space wisely and save on costs.
Clear Documentation
Keeping accurate paperwork, like shipping lists, bills of lading, and customs forms, is key. This ensures compliance with rules, makes customs smoother, and avoids delays.
Carrier Partnerships
Partnering with trusted carriers who know how to handle zone skipping is vital. Good partnerships mean better coordination, timely deliveries, and smooth handling of combined shipments.
Using Technology
Logistics tech tools make managing zone skipping easier. Systems like transportation management software, tracking, and real-time visibility tools keep everyone updated and allow quick solutions to issues.
Performance Tracking
Regularly checking how well this is working is essential. Tracking savings, delivery times, customer satisfaction, and compliance helps spot areas for improvement and make adjustments when needed.
Now let’s understand how zone skipping proves to be beneficial in logistics.
Zone Skipping: Benefits
It brings many advantages to businesses managing logistics and supply chains. Here are the main perks:
1. Saving on Costs
Zone skipping cuts shipping expenses by reducing or even skipping the need for middle distribution stops.
Let’s look at this example:
Imagine you’re sending 4,000 packages from Mumbai to Delhi at ₹800 each. The total shipping cost would add up to ₹32,00,000.
However, if you arranged for a truck to transport all 4,000 packages from Mumbai to a local facility near Delhi, you’d pay a much lower flat rate, say, ₹12,00,000. This significantly cuts down on transportation and final delivery costs by streamlining the last leg of delivery.
Afterward, you’d pay for local delivery from the Delhi facility to each customer’s doorstep. If that cost ₹400 per package, your total shipping expense would be just ₹28,00,000.
In the end, you’d save ₹4,00,000 on that shipment!
2. Faster Delivery Times
Skipping intermediate zones means goods move faster. Unlike traditional models that stop at multiple warehouses, this allows for a direct route, reducing the time spent in handling and sorting.
3. Easier Customs Process
For international shipments, zone skipping makes customs clearance simpler. Instead of stopping for customs checks in each zone, the whole shipment clears customs only once, at the destination.
4. Better Control and Tracking
Zone skipping improves tracking and management of shipments. By consolidating multiple packages, companies can use one tracking number, offering real-time updates and helping address any issues quickly. This makes for easier management and better customer communication.
5. Lower Risk of Loss or Damage
Every transfer can introduce handling errors or delays, so reducing them helps protect items, especially fragile or high-value goods.
6. Greater Flexibility and Adaptability
Businesses can consolidate more effectively, making it easier to respond to shifts in demand, customer orders, and inventory needs.
7. More Sustainable Shipping
By grouping shipments and streamlining routes, zone skipping helps reduce fuel usage and carbon emissions, supporting environmental goals and responsible practices in the supply chain.
FAQs: Zone skipping
Which businesses gain the most from zone skipping?
Businesses that ship large volumes or send goods over long distances are the primary beneficiaries of zone skipping. For example, eCommerce retailers, particularly those handling time-sensitive items, frequently utilize this strategy to manage delivery costs and accelerate shipping.
Are there any extra costs linked to zone skipping?
Although this can lead to overall savings, there might be upfront expenses for hiring trucks or coordinating specific carriers. Moreover, final-mile delivery fees still need to be considered, making it crucial to calculate carefully to ensure actual cost savings.
Does zone skipping provide benefits during peak shipping seasons?
Definitely. It enables companies to handle higher volumes more efficiently and guarantees faster deliveries, which is crucial during busy periods such as festivals or sales events when conventional routes might face delays.
Conclusion
Zone skipping is an effective strategy for reducing shipping expenses and significantly improving delivery times, ultimately boosting your supply chain’s efficiency and cost-effectiveness.
That said, it’s important to assess the advantages of these shipments individually, taking into account their influence on supply chain agility, control, visibility, and potential savings.
For complete confidence in having the most optimized logistics and shipping plan, QodeNext is here to assist you. Don’t hesitate to reach out to us!
