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  • Home / Blog / Glossary

Cross-docking

01 Apr, 2022 | 2 Min Read
Cross-docking

Table of Contents

Cross-docking: Simplified Definition

Cross-docking is a process in which products are transported directly from an incoming supplier, manufacturing factory, or inbound vehicle to outbound transit. You don’t usually handle or store any product, unlike traditional warehousing. Cross-docking is more of a sorting center that eliminates superfluous handling and storage, lowering inventory and operational expenses.

Cross-docking: Technical Definition

ClickPost defines Cross-docking as the logistics procedure that takes place in a distribution docking terminal where products from a supplier or manufacturing plant are transferred straight to a retail chain or customer with minimal to no storage or handling time. Products are unloaded from trucks or railroad cars at an inbound dock, sorted, and then reloaded onto outbound transportation docks in trucks or rail cars to continue their journey. Cross-docking eliminates the storage link in the supply chain. 

Why is cross-docking used?

  • Reduces storage space, resulting in overall cost reductions for businesses that typically spend $4-7 per square foot of warehouse space.

  • Inventory carrying expenses are reduced since items are moved directly from inbound to outbound transit with little to no storage time.

  • The number of operations/load handling is drastically decreased.

  • Because most items aren't housed in a warehouse, this improves overall product quality and decreases the danger of product damage.

  • Reduces delivery time and improves customer satisfaction.

What are the types of cross-docking?

The warehouse management has five types of cross-docking possibilities to choose from based on the products they are transporting.

  • Manufacturing Cross-Docking: This technique entails receiving purchased and inbound products that a manufacturing unit needs. 

  • Distributor Cross-Docking: This process combines commodities from many vendors into a mixed product pallet, then delivered to customers.

  • Retail Cross-Docking: Here, procurement is done in two categories. 1. Staple stock- Goods needed daily like groceries, fruits, vegetables, etc. 2. Direct freight- Goods are required once a year and are usually not stocked.

  • Transportation Cross-Docking: Here, several different carriers' less-than-truckload goods are mixed and delivered to customers to obtain economies of scale.

  • Opportunistic Cross-Docking: Transferring a product directly from the receiving dock to the outbound shipping dock to meet a customer sales order without storing the materials.

How does cross-docking reduce storage and handling cost?

Cross-docking can help improve the supply chain for perishable or temperature-controlled commodities like food that need to be transferred as rapidly as feasible. Additionally, cross-docking can make transporting already packaged and sorted products to a specific consumer a faster and more efficient operation. As a result, the cross-dock facility can save 50% on distribution costs. It lowers the cost of running the plant. Cross dock facilities are less expensive than full-fledged distribution centers because they are smaller.

What are the disadvantages of cross-docking?

  • The procedure is time-consuming. 

  • Cross-docking operation is costly to set up.

  • It necessitates successfully integrating the complete supply chain and information systems such as fleet and warehouse management software.

  • It takes a lot of time to plan and coordinate.

How is a cross-dock different from a conventional warehouse facility?

A cross-docking system employs the best technology and business systems to establish a just-in-time shipping procedure. In contrast, typical warehousing systems require a distributor to have product stocks on hand to ship to your clients. A cross-docking warehouse can move items immediately from receivables to outgoing shipping without the need for long-term storage in a system with incoming and outgoing trucking docks.

 

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