Terms & Glossaries of Shipping and Trading

Zone Rate

A zone rate is a type of freight rate based on the number of geographic areas that a delivery has to pass through to reach its final destination. The more zones a delivery needs to pass through between its starting point and its destination, the progressively higher the freight rate will be. 

What is Zone Rate?

Zone rate refers to a pricing system where shipping rates are determined based on the shipping zones or regions involved. Each zone is assigned a specific rate, which is based on the distance between the origin and destination of the shipment. This system is commonly used in the shipping industry to calculate the cost of transporting goods over long distances.

Here's an example:

Let's say you want to ship a package from New York City to Los Angeles. The shipping company may have a zone rate pricing system in place, where the United States is divided into different zones based on geographic location. New York City and Los Angeles may be in different zones, and each zone has a different rate based on the distance between them.

So, the shipping company would calculate the shipping cost based on the zone rate for the zone that New York City falls under and the zone that Los Angeles falls under. The total cost of shipping would be determined by adding up the rates for each zone.