For years, UPS and FedEx have had zones of parcel delivery ranging from zone 2 to zone 8 within the contiguous United States, with Canada, Alaska, Puerto Rico, and Hawaii all having their own zone structures, as well. Recently, however, both carriers have quietly started to offer a "zone 1" structure of pricing for deliveries within a 50-mile radius to larger customers upon request. These short-haul deliveries represent a paradigm shift for the major parcel carriers; traditionally, these carriers have tried to attract packages that are heavier in weight and traveling longer distances, with lower-weight local deliveries often times utilizing such USPS final mile workshare products as FedEx SmartPost and UPS SurePost. Shippers have oftentimes had few, often costly options for local delivery, including local courier services. With rapidly increasing e-commerce volumes, as well as the advent of same-day, on-demand services such as Uber Freight and Deliv, short-haul delivery services have become increasingly desired by shippers and their recipients. Consequently, the traditional “hub and spoke” parcel sortation model of centralizing strategic sorting centers is being re-examined.
What Does This Mean for a Shipper?
For a shipper, this means that the price difference for residential delivery for a ground service might be worth another look when considering an overall carrier mix. Traditionally, the fuel and residential surcharges made local services cost-prohibitive, favoring the USPS final mile delivery services that have rapidly grown over the last decade. If the majority of a shipper's packages travel by ground and typically a longer distance, inquiring with the carrier about zone one pricing might help drive down overall parcel shipping costs while improving quality of delivery. Both carriers have made tremendous improvements to ground services, with a great deal of emphasis over the past 24 months on network efficiency with new hubs and sortation centers. Additionally, UPS recently announced Saturday delivery as a "new normal" for ground services. Depending on the shipper's specific delivery needs, the cost difference between ground and a final mile service such as FedEx SmartPost or UPS SurePost might be negligible enough that a shipper might decide to simply use a ground service for more or all shipments instead when the distance is shorter. Alternatively, shippers should also consider such regional parcel options as OnTrac, GSO and others, as well as on-demand options as Uber Freight and Deliv.
As always, the knowledge of these services ultimately enable the shipper to make the best choice for their particular shipping needs.
Krish Iyer is Director, Strategic Partnerships & Business Development, ShipStation. He can be reached at 615.545.1542 or firstname.lastname@example.org.