Cross-docking is the practice of unloading goods from inbound delivery vehicles and loading them directly onto outbound vehicles. By eliminating or minimizing warehouse storage costs, space requirements and inventory handling, cross-docking can streamline supply chains and help them move goods to market faster and more efficiently.
Cross-docking usually takes place in a dedicated docking terminal in a warehouse, where inbound goods are first received at a dock and sorted according to their final destinations. They are then moved to the other side of the dock via forklift, conveyor belt or other equipment and loaded on outbound vehicles.
Cross-docking works best with products that need to be transported quickly, such as food, that have already been sorted and labeled for customers, do not need quality inspections or have steady demand.
Some manufacturers use cross-docking in their own facilities, moving finished goods directly from production to an outbound dock without first storing them in the warehouse. Not having to store the products avoids associated labor costs for order fulfillment processes, such as picking and putting away goods, or the use of fulfillment technologies such as pick-to-light. Other industry sectors employ cross-docking, including distributors and retailers such as Wal-Mart Stores Inc.
Some of the greatest efficiencies from cross-docking come from consolidating less-than-truckload (LTL) inbound shipments. LTL shipping companies can save money by using fewer vehicles on the outbound side. Conversely, breaking down large, full loads in a cross-docking operation can make delivery to customers more efficient.
Cross-docking has some disadvantages, however. For one thing, setting up a cross-docking terminal requires significant planning and design, and the process must be closely monitored to ensure it is working as intended. Cross-docking also requires maintaining a large number of carriers to ensure there are enough vehicles -- typically trucks -- to deliver goods efficiently to customers. It also puts pressure on the logistics provider and its suppliers to keep a steady stream of customer-ready goods arriving at inbound docks, since there is little time and infrastructure for inventory management.
An example of cross docking is when freight from incoming trucks is wheeled across the shipping dock and loaded directly on outbound trucks without entering a warehouse.
Why is cross-docking used?
Cross-docking is also often used when handling time sensitive and perishable inventory. Due to the reduced shelf life, inventory needs to reach retailers with a reasonable remaining shelf life. By forgoing storage and utilizing cross-docking delivery time is reduced. This provides the goods with a longer sales window.
In simple terms, inbound products arrive through transportation such as trucks/trailers, and are allocated to a receiving dock on one side of the ‘cross dock’ terminal. Once the inbound transportation has been docked its products can be moved either directly or indirectly to the outbound destinations; they can be unloaded, sorted and screened to identify their end destinations. After being sorted, products are moved to the other end of the ‘cross dock’ terminal via a forklift, conveyor belt, pallet truck or another means of transportation to their destined outbound dock. When the outbound transportation has been loaded, the products can then make their way to customers.
At i Logistics USA we have the Warehouse Management System (WMS) and the appropriate warehouse space so that you have the best control of your merchandise 24/7, contact us for more information.