Cross-Docking Vs. Warehousing: What’s The Difference?October 28, 2020
When it comes to planning logistics for your business, there are many factors to consider. From organizing your warehouse layout to choosing an effective picking method, there are many ways to make your fulfillment operation more efficient. One way you can improve your fulfillment service is to understand the difference between cross-docking services and warehousing. We’ll explain the difference between these two logistical strategies to help you decide which is more beneficial for your business.
What Is Cross-docking?
Cross-docking is a logistical strategy where products originating from a manufacturer or supplier are distributed directly to a retail chain or customers with little to no storage or handling time. Cross-docking occurs in a distribution docking terminal. This typically consists of trucks and dock doors on an inbound and outbound side with minimal storage space. Products are received on the inbound dock through transportation like trailers and trucks, and they are then moved to their assigned outbound dock. Once the products are loaded onto outbound transportation, they can then be delivered to customers.
Warehousing is different from cross-docking in that their system requires distributors to have stocks of product to ship while a cross-docking system uses the best technological systems to create a JIT (just-in-time) shipping process. A cross-docking system can also help avoid the need for any long-term storage.
The Benefits of Cross-Docking
If you’ve found that warehousing simply will not work for your stock, cross-docking may be an option for you. Here are a few of the benefits of cross-docking:
- Cost Reduction
Storing inventory in a warehouse takes up square footage. When you store inventory long-term, you are renting out this square footage from your logistics partner. Although sometimes it may be necessary to invest in this storage, you can often avoid these costs by shipping items immediately after they are ordered and using cross-docking to get them to their destination quickly.
- Reducing the Risk to Your Products
Contrary to popular belief, the increased speed of cross-docking reduces the risk your product will be damaged in the shipping process. When humans are involved, cross-docking eliminates two parts that might cause operator errors: moving product into storage and out of storage. As your product moves in an organized manner from incoming trucks to outgoing trucks, it will pass through fewer hands.
- Eliminate Time Consumption
Many shipping processes take time. Preparing your materials for shipping, packaging materials, delivering materials to your shipping agency, waiting for your delivery to happen, and staying in touch with customers all require time and attention. Cross-docking when combined with services like packaging and re-packaging, warehousing, pick-up and delivery, removes stress and time issues so you can focus on your business.
Cross-docking is also useful in reducing delivery time. When an order is requested, your product is shipped immediately, it reaches the warehouse, moves smoothly and safely from one truck to another, and ships to your customer.
Find Your Strategy
Cross-docking is just one of the many logistical strategies available to ecommerce businesses today. If cross-docking sounds like the right decision for your business, great! Just be sure to thoroughly vet and research all your options before deciding on a fulfillment strategy.