Advantages of cross-docking or transshipment
Cross-docking is in fact a method of organizing order picking that does not require a storage period. The goods are distributed directly to the end consumer. Cross-docking can be adapted to any situation and any type of goods.
Definition of cross docking
To better understand cross-docking, we should know the role of the warehouse.
In traditional logistics, the warehouse is used to link supply and demand. In effect, it is the link connecting suppliers to consumers. In other words, products wait in the warehouse until there is a demand. In this case, it is then necessary to have a good stock management.
However, over the past several years, supply management has improved to become more efficient and effective. Cross-docking comes into play in the sense that it manages to coordinate all the players in logistics well: from suppliers to end customers via, warehousemen and carriers.
Advantages of cross-docking
Gain an advantage over your competitors by boosting shipments to your customers. This is possible with cross-docking, which is designed to be a fast process for distributing your goods. Indeed, the method ensures to simplify and streamline your loading and unloading systems to quickly move goods from one truck to another.
Reduction of storage costs
Cross docking can dramatically reduce your inventory costs.
In reality, your goods are transferred directly from one truck to another so there is virtually no inventory. You can hold a few items while you wait for a truck, but if they are in your cross docking warehouse, that means they will leave as soon as they arrive.
When you cross dock, you simply receive the products, scan them, and then ship them. No inventory to worry about becoming obsolete. No restocking. No out-of-stock situations. No inventory loss.
Reduction of labor costs
With cross docking, you no longer need to pick and put away stock.
This equates to a significant reduction in labor costs. It requires less labor which means fewer workers are needed.
Reduction of delivery times
Reducing turnaround time is an important benefit of cross docking.
Your products move faster and more efficiently, which means they reach your customers faster.
This improves your customer service and reputation for fast delivery times.