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Shipping Zones allow you to create a zone consisting of a country or a country/state combination. These zones can be commonly split up by international boundries such as European zone, North America zone, or you can split them by Lower 48, Alaska & Hawaii, or whatever combination you choose.
You have complete control over the zone. Simply build a zone by giving it a name, then edit that zone and add countries to it.
Creating Rates for Zones
Once you have shipping zones, you can use any shipping method with them. Setup a price table or weight table method and apply it to only a certain shipping zone. Simply create a shipping method as usual, but select which zone it will apply to. Leave it empty, and the rate will be used for everyone globally.
Note: Important considerations when setting up shipping zones, particularly when using live rate calculators. The customers address is not known when the customer visits their cart, so it will not always calculate a shipping rate. If you are using zones, every country should be considered, including a default fallback rate when a zone is not applied yet.
It is a good idea to setup a zone system only if you know you want to appy it and understand its full potential. Otherwise, leave it as 'Do Not Apply Zone' and your rates will be applied globally.