Zone-Based Pricing: How It Works

zone-based pricing, zone-based shipping rateContrary to mainstream belief, carriers and linehaul shippers don’t just charge according to freight weight, freight size, and travel distance. Several LTL shippers, in particular, are transitioning to a zone-based pricing model. We’ll explain how this affects the going rates.

How Zone-Based Pricing Works

Yes, all the aforementioned factors—freight weight, size, and travel distance—are part of the pricing formula. Zone-based pricing, though, may be the little-known fourth factor depending on the travel route. Basically, if the carrier has to travel through challenging terrain or to remote locations, then the shipment may incur additional fees.

Essentially, North America (including Mexico and Canada) is divided into zones. The industry rates each zone according to terrain complexity. Is the terrain flat, mountainous, hilly, icy, etc.? If the journey requires difficult navigation, this will factor into the fee.

Zone-Based the New Pricing Model

More carriers are starting to adopt this type of pricing model. No need to panic, though; this doesn’t automatically mean higher charges with every outbound load. In fact, zone-based pricing makes fees and adjustments easier for both shipper and client. The rates are all-inclusive; this also makes it easier for carriers to establish a flat rate. For clients, they know the final cost upfront with no worries about hidden fees.

The Old Shipping Model

In the past, the freight industry charged mainly according to zip code. However, under zip-to-zip shipping, the LTL industry incurred financial losses. Analysts projected that zone-based pricing should provide a resurgence of profit.

We Connect You with the Best Carrier

Regardless of the pricing structure, Machine Transport will connect you with the best shipper based on your freight needs. You can also request a quote for an estimated price. We work with various North American shippers and are familiar with zone-based pricing and other current shipping rate models.

Machine Freight Transport in North America

Serving the manufacturing industry in the U.S, Canada, and Mexico