The Practice of Cross Docking Within the Transportation Industry Part 2

By eliminating the put-away process, companies reduce 3PL warehouse requirements and inventory level when using cross docking.  In addition, these firms reap the benefits of consolidating their freight.  This lowers transportation costs while improving product availability.
Successful implementation is dependent on continuous communication between all members of the supply chain including: manufacturers, wholesalers, distributors, and retailers. This can and should ideally include logistics software integration between all members of the supply chain, including the ability to track inventory in transit.
The savings in time and money from the use of this procedure can be significant depending on a variety of factors.  These include the handling methods used, the complexity of loads, freight costs for the commodities being shipped, the costs associated with inventory in transit, and the customer/supplier geography.  These factors can be particularly important when a client has numerous branch locations, distribution centers, and/or retail locations.
Cross docking services save companies time and money.  Cross docking service are defined as having the ability to receive the product and immediately ship it out without putting it into a 3PL warehouse.  When implemented properly this practice has many advantages, especially in the areas of lowering costs and saving time.
5 Key Advantages of Cross Docking Include:
  • Reduced handling and operating cost
  • Less storage of inventory
  • Fewer warehousing costs
  • Reduced fuel costs from consolidating LTL shipments into FTL
  • Streamlined supply chain resulting in products moving quicker from manufacturers to distributors to consumers
Before initiating the use of cross docking services, you should be sure that all potential partners have the necessary storage capacities.  In addition, partners should also have an adequate transport fleet to operate cross docking as well as an adequate IT system.
Some products are better suited to cross docking other than others.  Here is a short list of six types of materials that are well suited to this procedure:
  • Perishable goods requiring immediate shipment
  • High quality items that do not require quality inspections during the receiving process
  • Products that are pre-tagged, pre-ticketed, and ready for sale to the customer
  • Promotional items and items being launched
  • Staple retail products with a constant demand and/or low demand variance
  • Pre-picked, pre-packaged customer orders from another production plant or warehouse
Cross docking has continued to increase in popularity over the years.  A survey that was recently conducted showed an increase of 16.5% over the last three years with 68.5% of the companies surveyed are using it within their supply chain.
Three typical scenarios where cross docking is well suited:
  • Deconsolidation: Where large shipments such as railcar lots are broken up into smaller lots for ease of delivery
  • Consolidation: Where a number of smaller shipments are combined into one larger shipment for more economical transport
  • Hub and Spoke: Where good are transported to one central location and then sorted for delivery to various other destinations
With its flexibility, efficiency, and ability to accommodate unpredictable customer demand, cross docking is seen as a winning strategy.  Allowing companies to adapt to the current economic environment and business conditions we face in 2017 and beyond.
Learn more about Matrix Transportation and the transportation services they offer including: dedicated truckloads, JIT truckloads, less than truckload (LTL), same day expedited FTL and LTL, full truckload, warehousing, cross-docking, and trailer rentals at www.matrixtransportation.com  To contact one of our trucking experts call toll free 888.896.2405 today.

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