Warehouse loading docks

What Is Cross-docking? Everything You Need To Know

June 13, 2023

What Is Cross-docking? Everything You Need To Know

Read about cross-docking, learn what it is, and discover some of the best ways to implement it.

Read about cross-docking, learn what it is, and discover some of the best ways to implement it.

If you’ve been looking at transportation management solutions, then you have probably come across our logistics page that showcases the various Covenant services available.

However, if you have heard of cross-docking and are still wondering how it fits into your transportation needs, then this article is for you. Let’s take a look at what it means to cross-dock.

The Basic Cross-Dock Meaning

In a nutshell, cross-docking means eliminating the “storage” element of your supply chain. What this looks like in real terms is that once your products arrive at their first destination via truck or rail, they are unloaded and then reloaded directly onto the next outbound truck or rail car – instead of being loaded into a warehouse to sit.      

Before being loaded onto their outbound mode, items can be grouped according to their destination, meaning fewer vehicles would be necessary. If you have a larger shipment, the delivery can be simplified by separating it into smaller shipments.

Choosing the right approach can be tricky, but Covenant can help you to choose the option that will be most cost-effective and suitable for your needs. Whichever option you choose, you’ll be improving your supply chain’s efficiency.

However, there is more to the meaning of cross-docking than that. Cross-docking is made up of two categories: pre-distribution and post-distribution.

Pre-Distribution Cross-Docking

This type of cross-docking sees products unloaded, sorted, and reloaded in line with pre-agreed instructions for distribution. In short, this means that the final destination is known prior to the products leaving the supplier.

Pre-distribution cross-docking results in your products being stored at the cross-dock warehouse for less time. It is the preferred option for retailers with their own warehouses and overview of their supplier and customer relations.

Post-Distribution Cross-Docking

With this option, a cross-docking facility will be necessary to house your products while they are sorted based on demand.

Withpost-distribution cross-docking, products might end up spending a little more time at a cross-docking warehouse than with the pre-distribution option.

However, this does allow retailers and suppliers a little more time to analyze inventory, sales projections, and trends to make better decisions in the long run.

The Benefits Of Cross-Docking

Put simply,cross-docking helps suppliers consolidate. Let’s look at this in a little more detail.

●      Cross-docking means lower inventory costs since less warehouse space will be required.

●      Your supply chain will be optimized, resulting in speedier delivery.

●      Track trends in real-time to quickly adapt to fluctuations in demand.

●      Fewer shipments will lower the financial and environmental cost of transportation.

●      Low to no inventory handling and storage costs.

●      Retailers will be able to stock your products more quickly.

●      Less manual handling will mean greater accuracy.

Less Manual Handling Can Mean Less Damage

Cross-docking reduces the risk of product damage by minimizing manual handling. Traditional warehousing operations involve multiple touchpoints, especially by humans, increasing the chances of mishandling, dropping, or improper stacking.

Cross-docking eliminates or minimizes these touchpoints by transferring goods directly from the inbound dock to the outbound dock, reducing human error and physical damage, as well as complaints.

That can make a huge difference in your supply chain, as damaged freight can cause a myriad of problems, including delays in delivery, increased costs for replacements or repairs, customer dissatisfaction, and potential disruptions to the overall supply chain flow.

In the ecommerce space alone, PMMI, the Association for Packaging and Processing Technologies, estimates that replacing a damaged product can cost an e-commerce store up to 17 times what they paid for the shipping in the first place. This can mean 4.4% in lost revenue for returned items that need to be discounted or binned.

However, the impact of damaged freight extends beyond e-commerce, and in other industries it can pose an even greater problem, as it can lead to significant financial losses  and compromised customer relationships.

If you’re still wondering what cross-docking means in a warehouse, Covenant is a specialist in the field of logistics cross docking and we can guide you to the best solution.Here are just 3 of the methods we can help you with.

1. Continuous Cross-Docking

By using continuous cross-docking you will benefit from having your products flowing continuously via a cross-docking facility. This cross-docking warehouse may process outgoing inventory and also accept incoming supplies.

The great thing about continuous cross-docking is that your products will not be waiting around for long. There should be only a short while before your products are unloaded and reloaded. If you have transport vehicles arriving and leaving at different times, this is a very practical option.

As a multiple-logistics solution provider, Covenant is in a position to offer you a range of options - something which gives us an incredible advantage over most of our competitors.

2. Consolidation

Arranging a consolidation consists of bringing together a range of smaller consignments and forming them into a bigger load before it is distributed. The advantage of consolidation is that it allows you to cut costs. Sending out one largershipment can be more cost-effective than sending out a multitude of smaller ones from your cross-docking warehouse.

Going for a consolidation arrangement does mean that it will be necessary to store your products at your cross-docking facility. The idea is that you will be sending out a larger consignment, so that means waiting for enough orders to be ready to send out a full truck. Your products may need to be stored for a little longer in your cross-docking facility, but this should ultimately result in reduced shipping costs.

3. De-Consolidation

The third method we can recommend is a de-consolidation, which, as you probably guessed, is the opposite of consolidation. So, instead of your products waiting at your cross-dock warehouse for enough orders to come through to fill a truck, your products will continue their journey a lot more swiftly.

De-consolidation will see your large shipment separated into smaller loads which can be rerouted to customers with greater speed. This might result in higher shipping costs, but it is mostly used for e-commerce stores that supply their products directly to consumers.

In Covenant, you have found a genuine logistics partner. As specialists in distribution,cross-docking is part of our logistics expertise and we are here to help implement the most practical solutions for your business. Reach out below to discover how we can help you.