How Shipping Zones Affect E-Commerce Fulfillment Cost

When shipping domestically, the cost of delivery varies depending on the distance. However, the price is not calculated for a particular address but for groupings of shipping zones by ZIP Codes.

The entire country is virtually divided into 100-mile-wide areas; it's designed to help carriers calculate prices for deliveries. There are eight major shipping zones in the US and the ninth one that encompasses territories outside the 48 mainland states.

Fulfillment costs are costs associated with storing, shipping, and receiving the merchandise.

To understand how shipping zones are calculated, pay attention to your deliveries' origin address. The rates go up every 100 miles of the way. The distance is always measured from the center of the zone: Shipping from the edge of one to another won't do the trick. Use an e-commerce fulfillment center that can serve both as a storage facility and the point of origin for all the orders shipped to your store.

Shipping zones are dynamic: When you're shipping from two locations, you might see a difference in both the zone number and the price, even if the destination is the same.

For example, here's how a zone map looks if you send all your parcels from New York City:

As you can see, the zone demarcation is entirely arbitrary and has no apparent contours.

Carriers use special matrixes (e.g., the USPS's chart) to accurately estimate the shipping cost by zones: It shows how the zones are being allocated regarding ZIP Codes. Each carrier has its own type of chart; be sure to check in with them before planning any non-local shipment.

In this example, there is no difference between Zones 1 and 2, but the price may vary depending on the service and carrier.

There are still some exceptions when delivering to different shipping zones. FedEx and UPS offer exact-day delivery options that mitigate the effect of the shipping zones. USPS relies only on the shipping zones for their pricing.

All carriers use shipping zones to calculate prices. Each carrier has a dedicated page on its website that can help you understand how shipping zones work and what the different shipping zones are.

There are nine zones in total: eight for the 48 contiguous states and one for the remaining addresses.

FedEx uses two zoning systems when determining rates, one for freight and one for non-flat rate services. There is no official FedEx shipping zones chart, but a generated table of the zones for each service provides all the information.

UPS also provides an easy method of looking up shipping zones by ZIP Code. There is also a UPS shipping zones chart, but it is only used to show the difference in delivery time frames for UPS Ground services.

USPS uses shipping zones for almost all of their services except flat rate boxes, envelopes, Media Mail, Library Mail, and Marketing Mail. Since the carrier doesn't provide exact-day services, it is imperative to look at the zones crossed for estimated delivery time.

One way to reduce shipping costs is to have more fulfillment centers. Opening an additional fulfillment center means pouring many resources into it, but with a large enough order volume, the ROI can be remarkable. Two or more fulfillment centers throughout the country can significantly reduce the shipping cost since there would be virtually no expensive zones between the facilities. That means better sales.

Above a certain point, flat rates become a cost-efficient way to ship to remote regions. Using local carriers for last-mile deliveries may cut some costs as well. When customers have the option to combine different shipping options to achieve the best value, it motivates them to complete the purchase.

Setting up shipping zones for Magento 2 is relatively easy with Calcurates. With Calcurates, you won't need a dedicated shipping zones calculator, as Calcurates has this functionality built-in. Transparent rates mean greater customer experience, which always supports sales growth. You don't need to follow complicated instructions to learn how to set shipping zones. Just install Calcurates, activate the shipping zone method of calculating rates, and they will be accounted for automatically.

How to Set Up Shipping Zones for your Magento 2 E-commerce

1. Set a name and description for your Shipping Zone

2. Set a condition for your Shipping Zone using available geo attributes (Country, Region/State, City, Postal Codes, Address Line, Address Type) and operator

3. Combine multiple geo conditions to configure complex Shipping Zones

4. Save configured Shipping Zone and assign it to your Shipping Options to make them serve only the selected Zone. You can assign multiple Shipping Zones to one Shipping Option.