Cross-docking is a term that’s used in the logistics and shipping industries and applied to cargo that’s moved from one vehicle to another without the need for further handling. If you imagine a marathon where one athlete passes the baton to someone else so they can continue passing it on to the finish line, that’s a lot like what cross-docking operations look like.
Is cross-docking the right option for your business’s supply chain operations? What is the advantage of cross-docking, and why isn’t everyone else in the shipping industry doing it already if it’s really so great?
Is Cross-Docking Right for Your Business?
Here’s what to know about cross-docking, and whether this common shipping industry technique could be right for your business.
What’s Cross Docking?
Cross docking is when cargo gets overloaded from one vehicle to the next so that it can continue its journey uninterrupted. Cargo that has been transported via cross-docking is still going to reach the same destination, though may undergo changes – like sorting or further packing – at the cross-docking point.
Cross docking is done in the event that further assembly or instructions could be required for the cargo to move forward. Not all companies use cross docking, but those who have specific instructions for the final destination (such as art installations or combined orders from two providers) will require it.
Companies use cross-docking because it saves time and money. This is in turn good for the company’s customers, who receive their orders much faster.
Why Isn’t Everyone Doing It?
Not every business relies on cross-docking services because not all companies necessarily need them. Some orders go straight from the warehouse to the next destination or get carried over to another shipping provider.
Companies can benefit from cross docking when they notice many orders going to the same destination – but following different distribution channels, or facing delays in the shipping process (e.g. as a result of when they were ordered).
If you are a logistics company that could benefit from cross docking, then you might have already noticed that your current method of shipping costs you more time and money than it should.
For some companies, cross-docking facilities play an integral role in getting their orders to the next destination – though some other companies, might get their business done just fine without the need for cross-docking.
What Businesses Should Use Cross-Docking?
If you are a company that fulfills orders to the same location (but from different points in time), then cross docking becomes a quicker way to get these orders to their final destination. If you are facing additional shipping costs or hazards that another company is willing to take over on your behalf to carry the order to its final destination, that’s another example of cross-docking.
When products need to be repacked or combined in any way before they proceed to the next step in the logistics process, that’s also another practical example of cross-docking in action.
Cross docking is meant to be a quick process, which can facilitate your effectiveness as a shipping company in many cases.
What Are the Advantages of Cross Docking?
One of the biggest advantages of cross-docking is the fact that it gets most orders to customers quicker which in turn improves customer satisfaction. When orders can be combined into one single shipment (say, to one specific area) – the orders could very well be expected to reach their end destination in half the time or less.
One of the other advantages of cross-docking for a logistics company is that it can save them money on storage costs. The combination of orders means that it’s not just faster to see your products reach their end destination – but it may also very well be cheaper too.
Cost and speed are two of the big advantages in the logistics business. You can’t afford to lose out when there’s a good chance your competitors are already doing it!
MAI Fulfillment | 3PL Warehouse Chicago, Illinois
Established in 1981, MAI is a privately-held 3PL company in Chicago specializing in warehousing, fulfillment, and omnichannel contact services. As an experienced outsourced provider, we provide value-added solutions designed to help companies build and maintain relationships with their customers.
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