What is Cross-Docking and When Should it Be Used?
With each step along the retail supply chain, goods are subject to fees and one of the most expensive areas of the supply chain relates to storage and warehousing costs.
Labour is expensive and unloading, stocking, and picking and packing are all extremely labour intensive. But what if there was a way to get around these costs? This is where savvy shippers utilize cross-docking services.
What Is Cross-Docking?
Cross-docking helps to trim down your supply chain to only the essentials by eliminating most of your shipments’ handling.
Rather than arriving at your warehouse and unloading, scanning, and moving into storage, shipments transitioning from manufacturers or suppliers to retailers or consumers are taken off inbound trucks, sorted, and consolidated directly at the dock before being loaded onto outbound trucks.This leaner shipping model circumvents storage fees and most of the labour costs associated with handling your product and getting goods out to their final destination quicker while saving you money.
Who Can Benefit from Cross-Docking?
Cross-docking might not be for everyone.To benefit, your company should have relatively consistent demand and high product turnover. However, even companies operating in less predictable industries can find ways to leverage cross-docking as part of a leaner supply chain model.
What industries do these companies operate in? Examples of businesses that stand to gain the most from cross-docking services around Vancouver include companies selling goods with a short shelf life and those whose products come from multiple suppliers. In these cases, cross-docking can help maximize the sales window by reducing the amount of time the goods lay in waiting and increasing efficiency by quickly sorting and combining loads received in separate shipments.
Ways you Can Make Cross-Docking Work for Your Business!
While this may all sound great, how does cross-docking work in practice? There are three types of cross-docking- continuous, consolidating, and de-consolidating.
With continuous cross-docking, products move nonstop through the docking area from inbound to outbound trucks with minimal delay. This method of cross-docking works when your products don’t require any consolidation or breaking down before they move on to their destination.
Goods coming off multiple trucks that need to be unpacked and combined into a new larger shipment is known as consolidation cross-docking. In this case, goods will be held temporarily in a staging area until all the loads have arrived, been combined, and your shipment is ready to go. The maximum time that a warehouse will allow you to keep goods in the docking zone is typically 72 hours.
De-consolidation cross-docking is essentially the reverse of consolidation cross-docking. This cross-docking method takes goods arriving in large shipments and breaks them down before loading them onto outbound trucks. De-consolidation cross-docking is typical of direct-to-consumer goods.