Zone skipping is a shipping technique that is deployed in order to allow businesses to take advantage of local rather than national freight rates. The opportunity to both reduce transportation costs and achieve transit time improvements is significant particularly in cross border and long haul domestic shipping situations.
What is Freight Consolidation?
Farrow consolidates Parcel and LTL Freight from its many North American customers into LTL and TL shipments for Northbound and Southbound cross border shipments and for shipments from Eastern to Western Canada. This allows Farrow customers to take advantage of lower rates.
What is Zone Skipping?
Carriers generally group several geographical regions into zones and provide shipping charges for movement of goods between them. Zone skipping occurs when businesses use freight consolidation to directly induct LTL and FTL shipments into the “last mile of delivery” or local area to take advantage of lower costs thereby skipping the cost direct shipping across multiple zones. Upon arriving at a local sorting facility, parcels and pallets are then delivered to their final destination using local carriers.
An Example of Zone Skipping
If you are shipping 5000 parcels from Ontario to Vancouver at $10 each, that would amount to $50,000 in total shipping costs.
However, if you send a truckload of 5000 parcels from Ontario to a sorting facility in Vancouver, it would be a flat rate of $5000. Afterwards, you add the cost of local parcel shipping from the sorting facility to the customer, which amounts to $7 per parcel. With the original $5000 flat rate shipment, then the 5000 parcels at $7, it would total $40,000 dollars – saving your company $10,000.
By using these logistics techniques, your business can reap three major benefits:
Costs Savings for your Business and Customers
By taking advantage of both these techniques, you’ll be able to reduce the cost of freight on your inventory and the cost of delivery. These cost savings can be passed on to your customers, who will pay less for their shipments.
Reduced Transit Times
By using zone skipping, parcels no longer have to travel to multiple sorting facilities to reach their final destination. Instead, you’ll experience faster shipments to local carriers which will create quicker deliveries for your customers.
Full Track and Trace Visibility
By taking advantage of Farrow Consolidation and Zone Skipping, both your business and your customers can easily see the whereabouts of your shipments and its expected arrival times.
You can learn more by visiting our Farrow Logistics resource page, where you’ll find maps of how zone skipping in Canada will reduce transit times.