Cross docking is a logistics practice where products are taken from their original mode of transportation, repacked, and then loaded onto another mode of transportation. Sometimes, the product is staged at the warehouse before it is shipped out. The goal is to reduce the handling and shipping time by simplifying the process. This makes for a faster turnaround time, improving customer satisfaction, and generating a competitive advantage for businesses. However, it’s not without its limitations.
One of the biggest disadvantages of cross docking is its increased complexity. It requires a large fleet of forklifts and pallet trucks to effectively cross dock products. Depending on the size of the terminal, cross-docking can be a costly endeavor. The time it takes to deliver a package depends on the size of the shipment. Because it relies on other transport carriers and the distance from the source to the final destination, it can cause congestion in the dock and can cost an extra 20% to 30% of the original delivery time.
The most effective cross docking scenarios occur when demand for a product is well-known. The demand for a particular product can be guided by season, location, and type. A new product or service may be a good candidate for cross docking. For example, if a seasonal sale is successful, it may be a great opportunity to increase volume of an existing product. If the supply of a particular item is expected to be low, cross-docking can help reduce inventory.
Another advantage of cross docking is that it allows shippers to ship a full truckload to multiple destinations at once, with only one touch point between pickup and final delivery. For example, if a retail company in New York is shipping to multiple locations in Los Angeles, it can ship one truck load to a single cross dock in LA and then make individual deliveries to several destinations in Los Angeles. This saves both time and money. The benefits of cross-docking are clear and measurable.
When a cross-docked product is delivered to a cross-docked location, it will be more likely to be delivered to the final destination faster. This is the perfect solution for grocery companies who need to deliver products quickly. The inbound product will be allocated to a cross-docked location and sorted by its driver. The product will be moved to the other end of the ‘cross dock’ terminal via forklift.
With the help of cross-docking, products are received from various locations and directly transported to the outbound dock. Using a cross-docked system, perishable goods do not need to be stored in warehouses for extended periods, and customers can easily see the product they purchased. They can be bought in bulk and sold at a lower price than in a single location. It is important to understand the benefits of cross-docked cargo.