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Zone-Based Rating

What is Zone-Based Rating?

Zone-based rating groups geographic areas into zones and applies rate structures based on zone-to-zone movements rather than individual city-to-city combinations. Instead of maintaining separate rates for every possible origin-destination pair (which becomes unmanageable as your operation grows), you define geographic zones (Northeast, Southeast, Midwest, etc.) and create rates between zones. A shipment from any city in the Northeast zone to any city in the Southeast zone uses the same base rate, simplifying rate management while maintaining pricing consistency.

This approach dramatically reduces the number of rates you need to maintain. Without zones, covering 10 origin cities to 10 destination cities requires 100 individual lane rates. With zone-based rating, you define 2-3 zones and need only a handful of zone-to-zone rates that cover all those same city combinations. Rate updates become manageable and your pricing stays consistent across similar lanes.

How Zone-Based Rating works:

  1. Access the Rating module and select Zones. Navigate to the zones management interface where you'll create and define the geographic zones for your operation.
  2. Click "Create Zone" to define a new geographic area. The zone creation interface opens where you'll name the zone and define which geographic locations it includes.
  3. Name the zone clearly to indicate its geography. Use names like "Northeast," "Texas," "California," "Upper Midwest," or "Southeast Coastal" that make it immediately obvious what areas the zone covers.
  4. Define the zone boundaries by adding locations. Add cities, states, ZIP code ranges, or counties that belong to this zone. You can include an entire state ("all of Illinois"), specific metropolitan areas ("Chicago metro area including suburbs"), or ZIP code ranges ("60000-60999").
  5. Set zone priority if zones overlap. In cases where a location might fall into multiple zones (a border city that could be considered part of two adjacent zones), set priority so the system knows which zone takes precedence for rating purposes.
  6. Create additional zones to cover your operating area. Build out all the geographic zones relevant to your operation. Most operations use 5-15 zones to cover their primary service areas, striking a balance between simplicity and pricing precision.
  7. Save your zone definitions. Once all zones are created and defined, they become available for use in rate table construction.
  8. Build rate tables using zone-to-zone rates. When creating customer rate tables or carrier tariffs, instead of creating individual city-to-city lanes, create zone-to-zone rates. Enter "Northeast Zone" as origin and "Southeast Zone" as destination, then set the rate that applies to any shipment moving between those two zones.
  9. The rating engine applies zone rates to quotes and orders. When you create a quote or order with origin Boston, MA and destination Atlanta, GA, the system identifies that Boston is in the Northeast zone and Atlanta is in the Southeast zone. It then pulls the Northeast-to-Southeast rate from your rate table.
  10. Create dimension conversions for weight or distance adjustments. If you need rates to vary within a zone-to-zone pair based on weight or distance, set up dimension conversions. For example, the Northeast-to-Southeast base rate might be $2,200, but shipments over 40,000 lbs get a $200 premium, calculated through dimension conversion rules.

What it means for you:

Rate maintenance becomes manageable as you grow. Instead of maintaining hundreds or thousands of individual lane rates, you maintain a few dozen zone-to-zone rates. When market conditions change and you need to adjust Southeast pricing by 5%, you update the handful of rates involving Southeast zones rather than hunting through hundreds of individual lanes.

Pricing consistency improves across similar lanes. Without zones, you might charge $2,400 for Boston to Atlanta but $2,100 for Boston to Charlotte, even though they're similar distances and costs. Zone-based rating ensures pricing consistency for shipments with similar characteristics, which builds customer trust and simplifies internal rate management.