The acronym for “zip” in zip code means Zoning Improvement Plan. That’s interesting. They called it the ZIP because in the early 1960s, the United States Postal Service felt the pressure of a huge increase in mail volume (mainly due to the advent of the computer and its effect on business mail). This increase, coupled with changes in transportation (a shift from trains to planes) and the rising cost of manual labor, forced the USPS to look at new automated methods of sorting and delivering the mail. The USPS also examined different coding systems to aid in the mechanization process.
After reviewing several new systems, the USPS officially adopted the Zone Improvement Plan in 1963. The plan assigned a five-digit code to every address in the United States. The code worked as follows:
The first digit designated a broad geographical area of the United States, ranging from zero for the Northeast to nine for the far West. This was followed by two digits that more closely pinpointed population concentrations and those sectional centers accessible to common transportation networks. The final two digits designated small post offices or postal zones in larger zoned cities.