The U.S. Postal Service determines ZIP codes by geographical areas and population concentrations, not by mileage radius. ZIP code use began on July 1, 1963, after the Post Office Department assigned a five-digit ZIP code to every address in the nation.
The first digit in the ZIP code designates a wide geographical area of the country. The next two digits represent target concentrations of population and areas where people have access to networks of transportation. The fourth and fifth digits represent postal zones in larger zoned cities, or small post offices. Using the code was voluntary until 1967, when the Post Office Department mandated its use for second- and third-class bulk mail.