The Benefits of Cross Docking

Cross-docking – the practice of receiving product and immediately shipping it out without putting it in a 3PL warehouse – is increasingly valued by companies in fast moving industries, because it allows products to reach destinations faster and more economically. It’s also used by industry leaders, who have recognized the roll cross-docking can play in delivering just-in-time services.

Cross-docking is on the rise, according to the 2011 Cross-Docking Trends Reports. More and more companies are finding added value in the practices ability to lower costs, manage inventory, accommodate customer’s demands, and increase transportation efficiencies.

There are several methods of cross-docking. For instance, products can be received and then immediately loaded outbound without being placed in the 3PL warehouse. They also can be received and staged on the dock, and then be loaded outbound later. Another approach is to receive products, reconfigure the shipment, and then stage on the dock for an outbound later.

By eliminating the put-away process, companies reduce 3PL warehouse requirements and inventory levels. They also consolidate freight to reduce transportation costs and improve product availability. Given that demand is increasingly volatile, it comes as no surprise that cross-docking continues to gain favor. Indeed, companies increasingly implement cross-docking as a means to reduce costs, manage inventory levels, increase efficiencies and accommodate unpredictable customer demand,

Cross-docking has increased significantly in the past three years. The survey completed by The Cross-Docking Trends Reports shows an increase of 16.5% in three years. 68.5% of the companies surveyed are currently cross-docking. Cross-docking is a viable strategy for adapting to current economic times.

The biggest benefits of cross-docking are reducing transportation costs, consolidating shipments, and overall improvement in service. More and more companies are recognizing the value and are looking to outsource the cross-docking service.

There are considerable savings for those doing the cross-docking. Since products aren’t actually put-away, companies reduce on 3PL warehouse labor. Furthermore, by consolidating LTL shipments into full loads, companies are able to improve transportation efficiency and reduce their fuel costs.