What is cross-docking?
Cross-docking involves loading goods from an inbound transport directly onto an outbound transport. Thanks to cross-docking, stockholding can be kept to a minimum and the company can save a lot of time and money.
In this article we look at what cross-docking is, how it works, advantages, disadvantages and who can use this type of logistics solution.
Tip: on our Logistics main page you will find more articles on modern logistics solutions and much more!
What does cross-docking mean in practice?
Cross-docking is a kind of distribution system based on the more or less direct re-sorting of a delivery for onward dispatch to the recipient. With cross-docking, goods are usually repacked from one means of transport directly to another. Unlike traditional warehousing, products are usually identified not by item number but by order number.
There are different types of cross-docking. In the case of cross-docking, it may be possible to combine two or more consignments into a single delivery to the final customer. It is also possible to redistribute several large consignments so that they go to different geographical destinations. Cross-docking can be an important part of a company's supply chain management.
How is cross-docking carried out?
The exact process of cross-docking varies. A fairly typical solution is that two or more trucks arrive at a logistics terminal and goods are transferred between them without the need for intermediate storage. The same can happen between truck and train or between plane and truck.
In the retail sector, cross-docking can also be done by unpacking, sorting and possibly repacking incoming goods and then sending them off again to the final customer, more or less immediately.
Several advantages of cross-docking
There are several advantages to cross-docking:
- Faster transport: The transport of goods from supplier to distributor and on to the end customer is much faster. Less waiting means more satisfied customers.
- Reduced risk of errors: You minimise the risk of errors when sorting and labelling goods.
- Fewer transports: Every truck does not have to visit every store or e-retailer when goods are consolidated in a distribution centre.
- Reduced inventory costs: The reduced need for warehousing means that inventory costs are minimal.
- Lower handling costs: You pay less to handle your company's goods, including through lower staff costs.
- More space: When the need for warehouses is reduced, more space is available for shops or offices.
- More quality control: You get a continuous check on the quality of the goods.
Risks of cross-docking
At the same time, there are also some risks associated with the concept of cross-docking:
- You need the right logistics partner: Not having the goods in stock places higher demands on your carrier.
- Digitisation required: You need a good digital system to manage all logistics.
- Risk of damaged products: An increased number of transhipments of goods also increases the risk of goods being damaged.
- Not always big savings: Part of what you save in personnel costs through inventory management may be spent on increased logistics costs.
- Risk of error: If you don't have a logistics partner who is up to the task, there is a risk that deliveries will be split into several parts, leading to a poor buying experience.
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Who can use cross-docking logistics?
Many companies that sell goods of any kind can benefit from using cross-docking in their logistics. For it to be profitable, a certain turnover is usually needed so that the cost is offset by the savings in inventory.
Businesses that place particularly high demands on logistics may be those that benefit most from cross-docking. These include the food, automotive, retail and chemical industries.
