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What are the benefits of cross docking services (cross docking)? The benefits are numerous for anyone considering the implementation of an advanced shipping methodology that can save time and money.
Benefits of cross docking for fulfillment and distribution include:
Cross docking services are ideal for businesses needing to split full containers or truckloads into multiple LTL shipments and have them delivered in a cost-effective and timely manner.
Using the best option for getting your goods from point A to point B in the fastest and safest way possible is most important. Find out more here.
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Cross docking is a service that takes a very different approach to traditional warehousing and distribution. Cross docking skips the concept of holding high-volume inventories as a buffer to maintain product flow.
This form of freight transport handles all products, such as raw and partial materials for manufacturers to finish products ready for store shelves. Supply and demand are instead synchronized and ordered as needed, which negates the need for inventory buffering.
The entire purpose of cross docking is to provide maximum speed, accuracy, and cost-saving measures. Cross docking as a service is carried out in a warehouse-like environment centered around inbound and outbound docks.
This environment is known as the cross docking terminal. This facility can also exist along a rail line or port. There is generally no difference between truck, rail, or port cross docking terminals other than the inbound and outbound vehicle types.
The unloading, screening, sorting, and reloading process remains the same. Advanced logistical technologies are employed to help facilitate cross docking procedures.
Two technologies that help provide accurate information up to the minute while supporting cross docking efforts include:
Ultimately, cross docking facilitates the transport of goods cheaper and faster while reducing the need to carry long-term, large-scale inventories.
The advantageous nature of cross docking occurs when a retailer orders products sent directly to stores from suppliers. A primary advantage of cross docking is that it promotes greater throughput and eliminates the need for opening up new distribution centers (DC) or warehouses.
Costs associated with storage and handling are minimized while deliveries are made faster and less time is spent in a facility. The automation of the warehouse receiving processes reduces costs while increasing productivity simultaneously.
Also, when an inbound truck picks up freight from a supplier on a return trip, it eliminates “empty miles.” Cross-docking creates advantages for both suppliers and retailers/DCs, as illustrated here:
| Advantages for Suppliers | Advantages for Retailers & DC |
| Reduced need for order fulfillment | Discounts through bulk ordering |
| Improved fulfillment timelines | Reduced labor via inventory management |
| Reduction in overall transport costs | Reduction in transport costs for freight |
| Consolidation of ASN data | Reduced warehouse costs |
| Eliminates the need for single store delivery | Eliminates the need for new facilities |
| Less EDI charges with consolidated orders | Reduction in an active safety stock |
It is paramount to understand that cross docking has its disadvantages. If you are to overcome any barrier to the service, you must be aware of the associated costs and time investment required. Having a trusted third-party logistics (3PL) partner can alleviate any disadvantage instantly.
Regardless, cross docking does save money on labor, transport, and warehousing, there are several disadvantages that you should understand. However, these downsides are not the result of cross docking but merely things to consider.
Advanced equipment is necessary for material handling in the fast-moving day-to-day operations of a cross docking terminal. The employment of advanced technologies is also essential to bring your operation into the modern era of accuracy and expediency.
Outlined here are some topics related to the pitfalls of cross docking when not using a trusted 3PL partner:
The advantages of utilizing cross docking in a warehouse are clear. The logistical procedures are cost-effective, with turnaround times less than 24 hours.
This approach aims to give a decisive advantage to the acquisition and distribution of goods. The traditional warehousing system requires that there is a product on hand to ship to customers.
The advantage of the cross docking warehouse rests solely in utilizing technology and systems that cut the traditional process entirely out. In this system, the product is moved directly from receivables without needing a long-term storage solution.
There are distinct advantages associated with cross docking warehouses that you cannot overlook.
Implementing warehouse management systems (WMS) and warehouse execution systems (WES) is critical for cross docking. They aid in meeting the ever-present challenges of cross docking services while providing the accuracy and proficiency required.
The connection of these software systems, while challenging, presents a decisive advantage to the function and flow of a cross docking warehouse. The capability of these systems is astounding as they stand out to provide a front-to-back view of the entire cross docking process.
Retail eCommerce grows exponentially year-over-year around the world. The eCommerce industry has been chipping away at brick and mortar businesses steadily and has no signs of slowing down.
For this reason, many companies are switching to an eCommerce model. A prominent advocate for this trend has been cross docking services, allowing for faster and more efficient businesses.
Getting goods to a consumer quickly while ensuring the correct item is delivered is crucial to eCommerce. Traditional warehousing is not effective enough to impact this space in a meaningful way.
Cross docking provides a distinct advantage over the competition in ways that help your business grow, meet consumer demand and increase your revenue stream. Keeping pace with demand surges on goods can be a constant struggle.
Implementing a cross docking service is required if you are in the eCommerce industry, primarily due to the need for speed. Ordering what's needed fast and in bulk can keep you one step ahead of your competitors.
The information gathered in this table illustrates a year-over-year revenue stream for eCommerce with the help of cross docking services. They play a significant role in keeping up with both demand and product flow of the goods in eCommerce.
| Recorded Year | Revenue | Percent Increase |
| 2017 | $424.9 Billion | -- |
| 2018 | $468.1 Billion | 10.17 % |
| 2019 | $516.5 Billion | 10.34 % |
| 2020 | $644.4 Billion | 24.76 % |
Source: Statista.com
Cross docking proves to be a consistently effective strategy in supply chain management and distribution. Also, advanced technologies solidify cross docking as the go-to solution in just-in-time (JIT) delivery times while making good on its benefits.
Cross docking is exceptionally complex and relies on steady supply, reliable trucking, up-to-date technologies, and precision handling. The use of an effective cross docking strategy is essential to any business looking to maximize profitability and customer satisfaction.
Distribution centers can serve as cross docking terminals with limited storage time and capacity. Also, cross docking can occur at large distribution centers and warehouses too. The practice of cross docking remains the same.
The distribution cross docking will change depending on your location and business type. These examples illustrate different forms of cross docking services that serve as an advantage to distribution services.
Any application of these cross docking strategies will provide a distinct advantage to any warehouse. The most common form of distribution cross docking is the hybrid and opportunistic approach. The number of distribution centers with only cross docking facilities is on the rise. While an expensive option, a trusted 3PL can offer the same service at a fraction of the price.
This form of cross docking usually follows two styles: The “hub and spoke” and “single-channel point to point” methods. These forms of cross docking are highly effective and unique to their specific use case.
A supply chain strategy involves implementing various techniques and methods that sometimes occur in the same facility. The advantages of this form of cross docking rest solely with the execution and continuous management of the facility and its operations.
R+L Global Logistics provides 3PL warehouse solutions for businesses in today's fast-moving market. We offer a stress-free solution that takes the burden off you and demonstrates the benefits of cross docking designed to improve your business.
As a 3PL, we can easily handle everything for you, including shipping, distribution, and warehouse management. R+L Global Logistics delivers the best in reliable labor, strategically located facilities with unmatched customer service.
Our unmatched level of service and care will go the extra mile for your business. We offer experience, dedication, and a philosophy that sets us apart from the competition while driving us to be a true partner in lifting the success of your business.
R+L Global Logistics cross docking solutions ensure that your products are delivered fast and error-free while guaranteeing your satisfaction. Contact us today, get a quote online, and get your products on the move.
