Cross-Docking Explained: Here’s What You Need to Know
Cross-Docking Explained: Here's What You Need to Know
Labor takes a significant part of the shipping costs. In a dynamic market where businesses want to stay competitive and offer cheaper shipping, they are developing cost-effective distribution strategies. Cross docking is a logistic system that streamlines the process and decreases the costs. The automotive industry has developed this concept for years, focusing on optimizing delivery. Searching for a cross docking warehouse near me opens many possibilities for your business. This article shares all you need to know about this distribution system and lets you decide if it fits your company.
Basics of Cross-Docking
Cross-docking is a system that transports goods from the manufacturer or supplier directly to the customer with minimal storing and handling. For example, the goods are unloaded from a truck and loaded onto the truck that takes them to retail. The inventory won't be stored in a warehouse but immediately transferred to an outbound truck.
After unloading, the goods are prone to sorting and conciliation before making it to the final terminal.
Cross docking allows fast restocking, reducing shipping costs and improving customer satisfaction.
The benefits of Cross-Docking
The distribution strategy allows a streamlined shipping process that supports the supply chain. Businesses that rely on this method have advantages such as speedy delivery time and reduced costs.
Fast Shipping
Traditional distribution methods include lengthy product storage, which prolongs the delivery time. Cross docking minimizes or eliminates this to speed up the shipping process. The oversized loads are divided into smaller batches and grouped into transportation to the same destination.
Also, cross-docking simplifies the inventory-receiving process. The inventory is received and shipped instead of stored and entered into a warehouse management system.
Central Hub
All the activities, such as sorting, happen in one location, which helps optimize the process. Product sorting occurs in the facility before it gets loaded to the proper carrier, depending on the destination.
Less Handling
Cross-docking requires less handling, saving time, and protecting some product categories, like perishable produce. Short-shelf products such as medicines and cosmetics can quickly reach the store shelves with minimal handling.
What type of businesses benefit from Cross-Docking
This distribution method is preferred by companies that work with import and export, have stable demand, and have high inventory turnover. But it can be implemented in any business model as long as it suits the needs.
Businesses that offer perishable goods with a short shelf life are the perfect candidates for cross-docking. Once the products are received, they are loaded into the transportation dock. With less time spent in the terminal, there is less chance for spoilage, and the sales window is extended.
Working with multiple suppliers can be challenging. But cross-docking makes receiving, sorting, and consolidating loads much easier.
Types of Cross-Docking
Many business types upgrade their operations to implement the cross-docking method. Therefore, there are two common cross-docking types: post-distribution and pre-distribution cross-docking.
Pre-Distribution Cross-Docking
This method allows the goods to be unloaded, sorted, and repackaged if needed. The staff knows the end customer and follows the determined distribution instructions. The goods spend minimal time at the warehouse. Pre-distribution cross-docking is ideal for businesses that manage their own warehouses and know their clients.
Post-Distribution Cross-Docking
With this type of cross-docking, the goods wait in the warehouse until the details about the transportation are precise. Companies must identify the customers and determine the demand to complete the delivery process. The inventory can stay in the facility for some time, but the retailers and distributors can develop a strategy based on inventory forecasting.
