Offering a reduced rate, zone 1 local delivery service, will dilute the profitability of this existing business. However, last mile, next day, local delivery is growing quickly so you can’t expect UPS and FedEx to ignore this opportunity for much longer. Both carriers have looked at zone 1, reduced rate delivery service but have passed. Surprisingly, both carriers already make many local deliveries within the zone 1 geography and make a lot of money on these zone 2 priced shipments. UPS and FedEx are very careful about tinkering with their legacy distribution models. Recently, published articles have suggested that both UPS and FedEx will enter the zone 1, local delivery space. Such a service could be offered in medium to large sized metropolitan markets, drive additional e-commerce profits and support last-mile delivery solutions. In recent weeks, the founder of FedEx, Fred Smith, has stated that FedEx is not a local delivery service provider but rather, a global transportation company that makes local deliveries. However, he did not state that FedEx will not be entering the zone 1 delivery space with aggressive, next day, local delivery rates.

As a FedEx or UPS shipper, you do not have access to a pricing zone map as accessibility to these maps would allow a customer to easily visualize and understand distance based transportation cost exposure.įor purposes of this article, focus on zone 2 in yellow, which encompasses an area of about 200 x 300 miles. Zone 2 represents the origin shipping point for all UPS/FedEx Ground and Express shipments no matter where you ship from. As depicted in this map, origin zone 2 shipping geography encompasses a large area. This means it costs the shipper the same to send a box cross-town or across the state. The carriers do not extend lower, local rates which would be called zone 1 pricing. This local shipping marketplace, encompassing an approximate 50-mile radius, has been left to the local delivery service providers as UPS and FedEx do not compete for this business based on price. Now, don’t confuse this with a Ground transit days map which is a proof source that the carriers hand out like candy, to depict ground service days. The title graphic for this article is a representation of a parcel carrier pricing zone map for a shipper located in Southern California.

Fedex zone chart ground