What is Warehouse Cross-Docking?

How would you like to streamline your supply chain processes? Think about the space you could free up if you removed the storage portion of shipping and receiving. It’s called Cross-Docking. When products are unloaded into the warehouse, the team then sorts and redirects them to outbound trucks or rail.

It’s possible for a product to go straight from receiving to the back of another truck, pausing along the way to get a new label or stamp. No storage is required unless the shipment doesn’t need to go out immediately. The time items are stored is much shorter, and the handling time required for each product is significantly reduced.

Some benefits of cross-docking are expedited shipping, minimal storage requirements, and streamlined loading and unloading.

Cross-Docking vs. Warehousing

Managers and strategists continue to grow less favorable views of warehouses. Labor costs, time waste, lost inventory, and redundancy all cost money and space. Warehouses can be seen as a problem to be managed. Some believe that large-grade warehouse storage is going away altogether.

Warehouses served their purpose very well for years. Then technological advances made ordering and inventory maintenance requirements much more accurate. Products can now be produced upon demand, making the need to store excess goods less important.

Supply chain managers have a couple of main goals: get the product from point A, which is production, to point B, which is the consumer, as quickly as possible with as little loss as possible.

There are some major companies that rely on cross-docking to avoid storage as much as possible. Businesses such as Walmart and Amazon use cross-docking to streamline their supply chains. With the amount of product those companies move, they have invested significant sums to polish the process.

Sure, giant corporations can use this process, but what about small businesses? The cost of storage and holding inventory on hand might be more than they can afford. Cross-docking can save them significant money over time.

By using current technology, small businesses can create a just-in-time shipping structure that will keep them well supplied but without any unnecessary inventory. Some online businesses can even ship the item upon order, creating the product and shipping through cross-docking.

Advantages of Cross-Docking

Time and cost are some of the most important factors in shipping. What will get the product to the customer in the fastest time with the lowest cost? Determining the answer to these questions has been what has pushed much of supply chain innovation. Cross-docking has been one of the biggest innovations to come from that push.

The benefits tend to outweigh the cons when integrating this method into your warehouse procedures. Let’s look at a few advantages that cross-docking can offer you.

Cost Reduction

Storing inventory in a warehouse takes up a lot of space. The inventory you store in a warehouse long-term costs you money. Your shipping partners will charge you for the used square footage your inventory takes up. There will be times when you will need to hold larger inventory at a warehouse, such as demand spikes, anticipated sales for holidays, etc. These inventory buildups can mostly be avoided by shipping items right at the time of order, then using cross-docking to get it into the customer’s hands fast.

Reduce Product Damage

Cross-docking reduces the possibility of product damage. The process eliminates the need to move products into and back out of storage. The fewer steps a product goes through, the lower the risk of damage. The steps the product goes through are limited to unloading, sorting, and loading on outgoing trucks.

Team Up With One Logistics Partner

One of the most common ways businesses set up their supply chains is by having the logistics and shipping partner handle the majority of shipping, but then having a delivery service deal with any rushed or on-demand orders. Cross-docking will eliminate a significant portion of the costs and allow you to warehouse and expedite shipping with the same partner.

Decrease Shipping Time

Items can be ordered and immediately shipped to the warehouse. Once they arrive, the products are moved from one truck to the delivery truck and are out for delivery right away. The speed the customer receives the product is considerably faster. Look at Amazon as an example. They ship every order to smaller cross-docking destinations and then load them out from the truck to the delivery vehicles, all delivered within approximately two days.

Cross-docking does provide many benefits. As such, one of the best ways to integrate this practice is to work with a full-service shipping and handling logistics partner. Having a logistics partner that will handle every step from warehouse to delivery will save so much time and frustration.

Why Choose Cross-Docking

You may be questioning what the big deal is when it comes to cross-docking. Why should you choose cross-docking? The shipping and receiving model you’ve used since 1981 has been working perfectly. Why fix what isn’t broken?

Those are valid questions. In short, cross-docking can save you money. Holding inventory will cost you money. Cross-docking reduces the amount of on-hand inventory, thus saving you money.

Slow supply chains cost time and money. Locking money away in inventory that is sitting in a warehouse isn’t an affordable option. Today’s world requires that your supply chain be agile, fast, and efficient. As consumers and businesses move ever more global, it’s more essential than ever to operate a streamlined supply chain.

Cross-docking is an efficient strategy that can boost a company’s warehouse cost-effectiveness. The process can be a major win-win for businesses, both large and small.

How Cross-Docking Works

Cross-docking starts with the distributor. A shipment is requested; it travels via truck, ship, or train to the receiving warehouse. The product is unloaded, then moved across the docks to the receiving truck. Once loaded on board, the truck heads off to the final delivery or more cross-docking warehouses.

With some shipments, the delivering truck may have portions of shipments for multiple delivery vehicles. The crew will unload the delivering vehicle and load the shipment onto multiple delivery trucks. Amazon uses this style of shipping to a science. They deliver to the main warehouse that then sends the orders pulled from the trucks to another location, where they are then sorted again and sent to regional areas before being sorted for delivery. The process is completed hundreds of times per day at each of their locations. This is how a giant company like Amazon can handle so many deliveries.

By breaking loads down from larger product deliveries to smaller routes over and over again, the products end up where they are going, and the smaller vehicles use less fuel. That increases profit while minimizing wear and tear on any one part of the delivery process.

Cross-docking allows future forecasting to actually mean what it was initially meant to. By planning out the expected sales of seasonal products, a company can cruise through a holiday season knowing what they will be delivered upon request without charging them with floor space in a remote warehouse. Some tangible products like food may require a small overlay in a warehouse, but overall, the process is streamlined and set up to deliver maximum product for minimum cost.

A cross-docking warehouse can use a centralized system to send products across a region or country. Place a cross-docking warehouse in any metropolitan area, and you will see the potential for quick delivery in any direction. Using a central hub with several spokes protruding from the center provides the best possible cross-docking option. Unloading one load can then be filtered throughout the center, which speeds processing and delivery times significantly.

This option reduces transportation costs and shortens delivery times. The faster a product can move from the receiving dock to the shipping docks, the faster it will be delivered to the end-user. Consumers appreciate a fast turnaround.

Large loads of product can be broken down here, filtering to several smaller delivery vehicles throughout the hub. A single received load may be enough to send multiple delivery vehicles out on routes for the day.

Manpower is reduced in these situations because the warehouse doesn’t need to store large quantities of inventory. When removing storage from the equation, the workforce can be streamlined to just a few workers.

The logistics company you hire can transport several different companies’ worth of goods on a truck that, once received, will be spread out amongst several delivery vehicles. Sharing shipping space with other companies will save a significant amount of money. Check with your logistics company to see if this method causes any delays from waiting for a full load. The process is called a “deconsolidation arrangement.”

Keep in mind that a properly executed cross-docking scenario will reduce damage, waste, and shipping time. It will provide a secure, safe, and ultimately fast delivery chain to your customers. It’s easy to see why this is the fastest-growing innovation to warehousing for several years.

Sorting and processing is the portion of the cross-docking process that takes the most time. Some products arrive without any accompanying company flair or logo and thus need to be labeled before being shipped out again. Other products may have the wrong labeling on the outer box, which should take a quick trip through a labeling line.

First and foremost, cross-docking will save you money. Rarely, a business isn’t a good fit for a cross-docking option. The old model of the warehouse has become obsolete. Search for a reason to stick with renting space in a warehouse for your yet-to-be-purchased merchandise to sit there, taking up space. You won’t be able to find one. Each piece of product sitting on that floor is costing you money. That money cannot be reclaimed.

Benefits of cross-docking

As should be apparent now, cross-docking is a great option for a wide variety of sectors and industries. It has become a critical component in logistics, and many companies feel it gives them a lift and an upper hand in their competitors. What is the reasoning behind the thought, and what will cross-docking deliver for your business? Well, there are several to keep in mind that could be apparent.

The first benefit is that cross-docking will help reduce the space required for your warehouse. That’s because of the fact that there’s very little inventory requirement. So basically, reducing the footprint and any costs associated with it will help with decreased cost. Naturally, this means that the price of keeping inventory lowers as well.

You will see definitive reductions in product handling as well. This will be minimized to receiving, sorting, and loading. You won’t; have to worry about inventory storage or product retrieval.

You can also make sure product quality is not only improved but raised to a new level by using cross-docking management practices. During the unloading process, your crew can inspect and check whether inventory has been damaged in any way during shipping and handling. This can help guarantee that customers are highly satisfied with their product.

Since there is less material handling required with this setup, it translates to labor cost savings and will save you money directly. As such, you will be able to pass savings on to your customers. In doing so, you can ensure that customers won’t face high costs that could be responsible for leading them to the competition.

Who doesn’t want a streamlined supply chain? Taking a product from the point of origin to the point of sale with as little interference as possible is always the right way to conduct business.

Inventory handling causes more waste and damaged products than almost any other aspect of the production process. When humans become involved, things tend to break. Avoid this by removing extra steps as much as possible. This not only reduces damaged goods but it also reduces cost in material handling.

Cross-docking reduces the cost of storing products. Most cases see businesses being able to send the product with minimal to no storage requirements. That saves warehouse costs.

Moving your product into the hands of your customer faster will make your customer more loyal to you. Loyalty breeds more customers. Your business will grow based on your ability to perform the necessary tasks of supplying products in a fast, efficient manner.

Cross-docking will cut warehouse storage costs. It also gives you the ability to add a new line of products due to available retail space.

Cross-docking provides a very efficient way to organize a warehouse. By reducing excess inventory, the overall warehouse can become much more streamlined for the shipping and receiving of products.

Managing inventory within a warehouse adds cost, time, and manpower to fulfill. Spending fewer hours on inventory will give your warehouse crew more time to spend on streamlining other processes, therefore saving more money and becoming even more efficient.

Cross-Docking And The Future Of Shipping

Shipping and receiving goods is never going away. As long as people want or need a product, someone is going to ship that product to them. With proper planning and future casting, your business can be right in the middle of the next wave of warehouse shipping standards. Cross-docking is for today what large inventory was for the 1950s. Keep your business ahead of the curve.

Shipping and receiving is overall just the meeting of goods with those that have need of them. If you can reduce the steps between creating the goods and delivering them to the customer, you are ahead of the game. Currently, cross-docking is the way to go. Who knows what innovations may become available in the future, but for now, let’s perfect this method.

Saving money and time in the shipping process is a main driving force in advancing warehouse technology. Keep your business at that cutting edge, and you will see some great returns, along with some pretty amazing technological advances.

Is Your Business Suited For Cross-Docking?

Some industries see greater returns more quickly from cross-docking than others. Consumer goods benefit greatly from cross-docking. In order to keep up with giants like Walmart and Amazon, cross-docking is essential.

Being able to deliver more products faster and with lower shipping costs is the biggest driver behind consumer goods working with cross-docking. Older methods of shipping and letting products build up in a warehouse have gone by the wayside. Put your company and your customers in the fast lane with cross-docking today.

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