Cross docking is a logistics process where products received from a supplier or manufacturing plant are distributed directly to a customer or retail chain with minimal to no handling or storage time. It involves unloading items from an incoming lorry or railway wagon and loading these items directly into outbound lorries, trailers, or railway wagons, with no storage in between. This method reduces the need for warehouse space, lowers handling costs, and accelerates the delivery process.
How It Works
The cross docking process begins with the receipt of goods at a docking terminal. These goods are not usually stored but are immediately sorted and prepared for redistribution. Sorting can involve breaking down the received items into more manageable shipments and arranging them for delivery to their next destination.
There are typically two main types of cross docking:
- Pre-distribution cross docking: Goods are pre-assigned to final destinations as soon as they arrive, usually based on orders already received.
- Post-distribution cross docking: Goods are sorted at the dock based on real-time demand and inventory requirements.
Efficiency in this system is achieved through precise timing and coordination. The success of cross docking relies heavily on the integration of transport and logistics systems, such as automated tracking and real-time information sharing among all stakeholders.
Benefits of Cross Docking
Reduced Costs: By minimising warehouse storage and reducing handling, companies can significantly cut costs. This saving can come from a lesser need for physical space and reduced labour costs.
Speedier Delivery: Cross docking streamlines the supply chain, allowing products to be delivered to customers faster. This is particularly beneficial for high-turnover products and perishable goods, where freshness is crucial.
Decreased Risk of Damage: Since goods are handled fewer times, the risk of damage during storage and handling is minimised, ensuring products reach customers in the best possible condition.
Inventory Management: Cross docking helps companies operate with lower levels of inventory, which in turn reduces the risk of overstocking and related costs.