What is Crossdocking? Benefits and features

What is crossdocking in logistics?

Crossdocking is a logistics strategy in which products are received at a distribution center or warehouse and then shipped directly to their final destination with minimal handling and storage time.

Crossdocking is particularly useful in situations that require fast and efficient delivery of products, such as last mile routes, where end-to-end delivery to customers is critical to customer satisfaction.

What is crossdocking? Definition

Crossdocking is an efficient reloading process that allows goods to move directly from an inbound vehicle to an outbound vehicle without the need for long-term storage.

The crossdocking process involves receiving, sorting and preparing products for shipment without long-term storage. This is achieved through careful supply chain planning and effective coordination between suppliers, distribution centers and customers. The use of advanced systems such as a TMS Software o Transportation management system or a route optimizer, ensure that products move quickly and efficiently through the supply chain.

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How does crossdocking work?

This operation is based on the efficient coordination of activities within a distribution center or warehouse and the accurate planning of transportation activities. The process is explained step by step below:

  1. Reception of the product:
    • Products are received by suppliers or manufacturers at distribution centers.
    • Products are unloaded from the vehicle and entered into the inventory management system. 
  1. Product classification:
    • Incoming products are sorted according to final destination and customer requirements.
    • Products that can be shipped directly to the final destination and products that must be combined with other products are identified.
  1. Preparation for crossdocking:
    • Products are labeled ready for shipment and placed directly in the crossdocking area.
    • Los productos que requieren integración se envían al área de preparación para crossdocking indirecto.
  1. Transportation of products:
    • With direct cross-docking, products are transported directly from the receiving point to the shipping point, without intermediate storage. 
    • Indirect crossdocking involves mixing and matching products with other products before transporting them to the shipping area.
  1. Vehicle loading:
    • Products ready for shipment are loaded onto vehicles such as trucks or vans.
    • Efficient loading systems are used to optimize vehicle space and ensure product safety during transport.
  1. Shipment to final destination:
    • Vehicles leave the distribution center and head to their final destination.
    • The tracking system is used to monitor delivery progress and ensure timely delivery.

Characteristics of crossdocking

This logistics strategy has several key characteristics that make it efficient and useful for companies.

  • Reduction of storage times:  this operation reduces product storage time in distribution centers or warehouses. It reduces storage costs and reduces the risk of product obsolescence by transporting products quickly to their final location instead of storing them in a warehouse for long periods of time.
  • Supply chain optimization:  optimizes the supply chain by increasing product flow efficiency by eliminating intermediate storage and reducing transit times.
  • Improved operational efficiency: cross docks streamline logistics operations by reducing product handling and storage requirements.
  • Minimization of storage costs:  helps reduce warehousing-related costs, such as space rental, labor and storage costs, by reducing storage time and space needed to store inventory.
  • Maximizing customer satisfaction: this operation helps to increase customer satisfaction by speeding up the delivery process and responding more quickly to market demands, thus reducing lead times and increasing product availability.

Benefits of cross-docking in logistics

Crossdocking offers several important benefits for enterprise logistics management:

  • Efficiency in inventory management: the operation shortens product storage time to ensure fast inventory turnover.
  • Reduction of operating costs:  helps reduce operating costs associated with product warehousing, such as space rental, labor costs and insurance costs.
  • Improved delivery time: accelerates the product delivery process, providing faster response times to market demand.
  • Storage space optimization: allow a more efficient use of your warehouse, reducing the need for space.
  • Flexibility in supply chain management: this operation provides more flexibility in supply chain management, allowing us to respond more quickly to changes in demand or market conditions.

Types of crossdocking

Crossdocking is a versatile logistics strategy that can be adapted to a wide range of supply chain management requirements. This strategy can be implemented in a variety of ways, depending on the specific needs of the company and the characteristics of the products processed. In this section, we will look at the two main types of crossdocking: direct crossdocking and indirect crossdocking.

Direct crossdocking

Direct cross-docking is an efficient method of supply chain management that moves products directly from the point of receipt to the point of exit without storing them in a distribution center or warehouse for an extended period of time. This method reduces product storage and processing times, allowing for faster and more efficient delivery to the end customer.

Indirect crossdocking

Indirect crossdocking is a logistics strategy that sorts, combines and bundles products received at a logistics center or warehouse with other products and then transports them to the delivery area. Unlike direct crossdocking, this method involves additional processing to group products and prepare them for shipment.

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Examples of crossdocking

Imagine a beverage distribution company that supplies products to a variety of outlets, including restaurants, bars and supermarkets. The company uses crossdocking to speed up product delivery and meet demand efficiently.

  • Reception of products: the company receives bulk beverages at its distribution centers from a variety of suppliers. These beverages may include bottled water, soft drinks, beer and spirits. The truck unloads the products directly at the receiving location.
  • Sorting and preparation for shipment: upon receipt, beverages are sorted by product type and current order. For example, alcoholic beverages are separated from non-alcoholic beverages and orders are grouped by customer and destination. Products are labeled and ready for immediate shipment.
  • Direct transfer to shipping areas: sorted beverages are transported directly to the delivery area using loading equipment such as forklifts or conveyor belts. The products are loaded onto special trucks following the planned delivery route.
  • Fast delivery to customers: delivery trucks leave the distribution center and travel to multiple locations for deliveries. Thanks to cross-docking, beverages reach customers quickly, maintain freshness and optimize branch inventory management.

This example shows how a beverage distribution company can use crossdocking to facilitate receiving, sorting and delivering products to customers quickly and efficiently.

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