Shipping zones override Local Delivery Zone - how do I swap that?

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I currently am set up for local delivery within a 12 mile radius of my store which goes into part of MD and VA.  I also have shipping set up for MD and VA.  I'd like the Local delivery zone to override the shipping zone so that people within 12 miles of my store who live in MD or VA will get local delivery rates, however, the system is charging them shipping rates - even when they are only 3 miles away.  How can I change this?

Thank you!