Understanding Cross-Docking in Warehouse Logistics

October 21st, 2020

Managing a 21st century supply chain boils down to four words — more volume, less time. Cross-docking has become an increasingly important part of warehousing logistics, getting goods in and out of a distribution hub quickly. It has led to the emergence of synchronized supply chains, wherein inventory and demand are totally in tune with one another. 

But what is cross-docking exactly? And why are cross-docking facilities starting to replace traditional warehouses?

What is cross-docking?

In essence, cross-docking is turning inbound shipments into outbound shipments as efficiently as possible. It's not quite a game of hot potato — it's much more controlled and systematic — but the idea is to not let inventory go cold. 

Instead of being stored for weeks or months, incoming raw materials or finished goods are moved to a staging or temporary holding area where they are screened, sorted, and loaded into outgoing vehicles in another dock. It's not unusual for goods to spend less than 24 hours in a cross-docking facility; sometimes they're in and out in under one hour. 

Types of cross-docking

All cross-docking facilities operate under the same premise, but there are a few different ways to go about the process.

Basic cross-docking

  1. Inbound shipment(s) arrives at the unloading dock
  2. Shipment(s) are either consolidated (combined into a larger load) or deconsolidated (separated into smaller loads) in the staging area. During sorting, freight is inspected for damages.
  3. Outbound trailers are loaded up with the newly consolidated or deconsolidated shipments for distribution. 

Opportunistic cross-docking

  1. A shipping door is designated as the unloading dock and staging area. Adjacent docks accommodate outbound trailers. 
  2. A warehouse management system (WMS) tells pickers the location to pick from, as well as where the items are going.
  3. Following the direction of the WMS, the products are loaded onto the appropriate outbound trailer.

Flow-through cross-docking

  1. Receiving inspects inbound freight for accuracy and damages, prepares for release.
  2. Goods are tagged and loaded onto a conveyor system that carries them throughout the facility.
  3. A code reader scans the tag and directs the item to the corresponding outbound lane, where it is then loaded onto the trailer. 

stacked shipping crates

Cross-docking prerequisites

Now that we know what cross-docking is, how can we take advantage of it in our warehousing logistics processes? Can anybody profit from this system? 

Not quite. In order to get the most out of cross-docking, your supply chain should possess:

  1. A well-stocked pool of carriers: The idea is to redirect goods to several different destinations quickly. You can't do that without the carrier capacity to get them there. 
  2. Computerized logistics system: There are a lot of moving parts here, and they need to be in alignment. A computerized logistics system keeps track and ensures everyone is on the same page.
  3. High volume: Running a cross-docking warehouse is not cost-efficient without an adequate volume of freight passing through.

Who benefits the most from cross-docking?

Building a cross-docking facility, planning and streamlining processes, and negotiating partnerships takes time and money. However, great cost savings can be realized in the long run. Not to mention the reduced carbon footprint cross-docking warehouses leave versus traditional warehouses — less inventory being held at shorter intervals means smaller facilities that require less energy to run.

The biggest beneficiaries of cross-docking tend to be:

  • Shippers with stable demand inventories; cross-docking keeps goods moving consistently.
  • Shippers of time-sensitive or perishable goods; refrigerated storage is expensive, especially long-term. 
  • Ecommerce or online businesses that may need to respond to a sudden surge in demand due to a flash sale or promotion. 
  • Shippers of valuable items with tight deadlines; cross-docking helps play into the expedited freight shipping model

Cross-docking warehouses have become an indispensable asset for 3PLs and their partners, enabling a level of efficiency that modern supply chains demand. National Logistics Network's 30,000 square-foot facility was designed to cater to the needs of a  21st century warehousing logistics operation — high standards and efficiency will always be our mutual goal. 

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