UPS and FedEx could be offering new, lower rates for deliveries within a 50-mile radius under a new “zone 1” rate, instead of relying on USPS or other local courier services for “last mile”, business-to-consumer deliveries. UPS and FedEx are making changes within their companies to accommodate the growth of e-commerce and the increase in customer demand for faster delivery with more local delivery networks.
The United States is broken up into eight different parcel zones, each one with a different delivery rate and length. Zone 8 is the farthest and more expensive delivery route, while zone 1 applies to the shortest routes, or local deliveries, that historically have accounted for very little of UPS and FedEx’s service.
Typically, FedEx and UPS would turn away from localized deliveries, placing surcharges or imposing zone 2 rates, because their facilities’ package sorting networks were not structured to support the large volumes of parcels. In order to remedy this, FedEx Ground has added four major U.S. hubs and 19 automated stations. Likewise, UPS is spending hundreds of millions to automate its “Tier 1” hubs that handle a little more than half of its domestic volume.
With the new zone 1 rates for UPS and FedEx customers, shippers have options beyond USPS Parcel Select, a short haul service that was often used by the big carriers. This is great for companies like UPS, FedEx and even Amazon, but doesn’t bode well for the future of Parcel Select. With all of these rate changes, something is bound to fall through the cracks and end up costing you money. This can be prevented with Intelligent Audit’s freight auditing software, putting money owed to you back in your pocket, where it belongs.