Regardless of the shape or size of your business, transportation and storage costs are likely to be one of your most significant overheads. On top of this, warehousing costs have continued to soar across America.
If this is eating into your margins, you might be on the lookout for a smarter approach to logistics.
By changing your shipping method to the cross-docking approach, you can save time, money, and resources. Here are the answers to the essential cross docking questions you need to know before you get started.
1. How Does Cross-Docking Work as a Shipping Method?
Put simply, cross-docking is the process of moving products from suppliers to manufacturers to the end customer without any storage being involved at all.
This all happens at inbound docks at warehouses.
Inbound goods are sorted on the spot by workers and shipped immediately to their final destinations. At no point are products stored on-site, eliminating the need for any warehousing space.
This also allows for a continuous supply chain flow, as goods are not held up anywhere for any period of time, but are nearly constantly on the move.
2. What Are the Different Types of Cross Docking?
It’s important to know that there are multiple different ways to approach cross-docking.
The most common of these is called retail cross-docking. With this, suppliers all ship their goods to one central warehouse. These can then be loaded onto designated vehicles to be delivered to specific stores.
With opportunistic cross-docking, a company will ship goods from the production site straight to its distribution center.
From here, a courier service can deliver individual goods to customers according to demand.
Then there is manufacturing cross-docking. Here, your company receives goods from another company. Cross-docking is then used to move those goods to the manufacturing plant for the final assembly stage.
3. How Does Cross Docking Reduce Costs?
While cross docking costs vary widely according to the type of product and the transportation demands, the whole process is designed to save you money.
With cross-docking, you can eliminate all of your warehouse storage costs in one fell swoop. Meanwhile, you can also save on a wide range of labor costs.
Costs for manpower, inventory cataloging, and warehouse auditing can be massively reduced. On top of this, the time saved through cross-docking is time that can be reinvested in growing your business.
4. What Products Are Best Suited for Cross-Docking?
Some products are more suited to the cross-docking method than others.
The best products are those that are perishable or are already prepared for sale. This is why supermarkets often use cross-docking when transporting foodstuffs.
Products that do not require strict inspections are also well-suited for cross-docking. If your products do require such inspections, you might need warehouse space to accommodate this.
Smarter Shipping for 2022 and Beyond
By making cross-docking your shipping method, you can save time, money, and energy now and in the future.
Now that we have answered your essential cross-docking questions, it’s time to get started.
For more information on how cross-docking can boost your business, and how you can implement it today, do not hesitate to get in touch with our friendly team.