How is Cross-Docking Beneficial?
Cross-docking is a fast-track process that eliminates the need for warehouse storage space, providing a cost-effective and quick method of transporting goods from one place to another.
How Does Cross-Docking Work
Cross-docking involves items being transported to a central area, or docking station, via rail, truck or trailer (and in some cases, aircraft and sea vessels). Traditionally, docks are narrow, long buildings, with loading bays on either side. To simplify the loading process, incoming materials usually arrive on one side of the building, are sorted in the middle area, and then reloaded and dispatched from the other side.
Generally speaking, the main focus of cross-docking is to get the items unloaded and then reloaded as quickly as possible, reducing the need for warehouse storage space. The majority of materials landing in a cross-docking facility are immediately re-packed and reloaded onto outbound transportation. However, some are temporarily staged on the dock waiting for the later arrivals of trucks, for consolidation (combining different products to make up a full load, or merging those bound for the same destination) or deconsolidation (where pallets are broken up for easier distribution) to take place. Cross-docking can also be used when the method of transportation needs to change, for example, from rail to truck.
The Benefits of Cross-Docking
Cross-docking provides many benefits for businesses, namely offering a more streamlined, efficient operation, resulting in a reduction of expense across the board. Here we look at the main advantages the system offers:
By streamlining and simplifying consolidation and loading systems, cross-docking facilities are able to provide a fast-paced environment, with a quick-turnaround, swiftly moving goods through the process. The end result is that products reach their destination (often the customer) quickly, allowing businesses to retain a competitive edge.
Implementing cross-docking is often an extremely cost-effective way to handle the transportation and distribution of goods. It eliminates the need to carry out typical warehouse tasks such as picking and inspection, which positively impacts on labour costs. However, the biggest reduction in expenditure comes from eradicating the need to store items for long periods of time; substantially reducing, or even eliminating entirely, the need for dedicated warehouse space. In addition to this, there are savings to be made with regards to transportation costs. Gathering products at one central point to then reload and ship to one destination removes the need for using several vehicles.
Using cross-docking means that materials are in and out, reducing the need to hold on to large volumes of stock. This leads to fewer labour hours required to oversee the management of the inventory, and also has an impact on the need for warehouse space (as highlighted above). This is particularly valuable in an ever-competitive world where it is important to have an edge over business rivals; cross-docking means that businesses aren’t tethered to contracts for large warehouse space, and are not bogged down with tons of inventory, making it easier to adapt and change to meet current demands. Another benefit of not having stockpiled up in warehouses is that it limits the likelihood of accidental damage, fire, or theft occurring.