What is Cross-Docking?
The practice of cross-docking in the logistics industry dates back to the 1930s and is now a key factor that enables the practical implementation of the Just-In-Time (JIT) delivery philosophy in full-truckload and groupage transportation. What does it involve, and why is it an attractive solution for shippers and their logistics partners?
Maximizing efficiency and minimizing costs are priorities for any company participating in the global supply chain. Cross-docking allows for effective optimization of logistics processes, reduced delivery times, and lower warehousing costs.
How does Cross-Docking work?
In the full-truckload and groupage services offered by Coyote Logistics, cross-docking involves transferring cargo from one mode of transport to another directly or after a very short period of warehousing. In other words, the transported loads are unloaded from the trailer at the logistics center and immediately redirected to the next stage of transport. This means that the time they spend in the warehouse is significantly reduced, leading to lower operational costs related to storage and a shorter time required to complete the entire delivery process.
Cross-docking is therefore one of the key elements that enable operations in the JIT model. This solution is used in a “Hub and Spoke” distribution approach, where cargo is brought to a central point, then sorted and redirected for delivery to various destinations. Cross-docking also supports efficient operations in a hybrid model, where smaller shipments from shippers are consolidated into larger loads, transported to a location where they are deconsolidated and transported to final recipients.
Main Benefits of Cross-Docking
- Cost reduction: In cross-docking, cargo stays in the warehouse for a short time—just a few hours, up to a maximum of 24 hours. This means that warehouse space rental costs and all expenses associated with warehouse operations and staffing are lower.
- Reduced need for warehouse space: The need for large warehouse facilities is reduced, as cargo circulates so quickly that extensive warehouse space simply isn’t necessary.
- Shorter delivery time: By quickly redirecting cargo from one truck to another instead of storing it in a warehouse for an extended period, the entire delivery process is significantly shortened. For the final recipient, this means receiving their shipments faster, while for shippers, it leads to greater efficiency and effectiveness in logistics processes managed by the logistics partner.
- Lower risk of cargo damage: Cross-docking minimizes storage time in the warehouse and reduces the number of handling and storage operations. Each handling step carries the risk of damage, so with cross-docking, the risk of cargo damage is significantly reduced, providing another benefit for shippers.