While running an eCommerce fulfillment business, keeping a tab on the cost of logistics, is integral. A huge chunk of the costs is related with labor; however, this is significantly reducible. Cross-docking is an efficient logistics system that can cut down on labor and hence logistics costs, expedite the receipt of pipeline inventory in particular and the entire eCommerce fulfillment process in general. This article will discuss the basics and importance of cross-docking, the role of a third party logistics (3PL) provider in facilitating its implementation, and reaping the associated benefits.
What is Cross Docking?
Cross-docking is an efficient strategy that expedites the transfer of finished products to the customers. With barely any need for storage in an eCommerce warehouse and minimal requirement for material handling, it’s a practice well suited for contributing towards a lean supply chain. While quick inventory replenishment serves the business well and saves on shipping and storage costs, faster order fulfillment pleases the customers.
For ensuring lesser need of warehouse storage and providing faster shipping, the distributed inventory approach is opted. To lessen the need of storing the finished products in a retail warehouse, they are unloaded from the supplier’s vehicle, and immediately sorted, integrated and loaded onto the delivery vehicle, straight from the cross-docking terminal. Hence, cross-docking saves the need for extra labor, and cuts back on costs while ensuring faster eCommerce fulfillment.
Why is Cross Docking Used?
Conventionally, goods from the manufacturers or suppliers are unloaded at the warehouse, stored there for quite some time, and then loaded back onto vehicles for being shipped to customers. The traditional warehousing costs extra labor, time, and money, while cross-docking is a leaner system that cuts out redundant and inessential tasks and increases the pace of fulfillment. It is used to save both time and money. The cross-docking strategy is particularly helpful for businesses that deal with multiple suppliers or sell fragile and perishable items.
What is the Purpose of Cross-docking?
Being an ideal practice for ensuring a lean supply chain, cross-docking is a great choice for businesses looking for ways to increase their productivity and profitability and improving their order fulfillment services.
Cost-Efficiency
Cost is the number one most important factor for businesses and consumers alike, making entrepreneurs warmly embrace cost-effective solutions. As businesses need to bear inventory carrying costs, packing and shipping costs, and labor costs among others, cross-docking is an ideal choice of a practice for cutting down on these costs. Cross-docking enables a more optimized supply chain and faster inventory replenishment. By dealing with bulk orders and reduced storage times, businesses making use of cross-docking don’t need to invest in extensive eCommerce warehousing and logistics.
Efficient Shipping
With faster and well-planned operations to unload, sort, and reload goods the need for labor is reduced extensively and the packing and shipping process is significantly expedited as well. Opting for the deconsolidated cross-docking approach results in even faster shipping as it involves breaking down larger freight loads into smaller shipments.
Less Material Handling
Cross-docking enables a high inventory turnover and by resulting in a lesser requirement for material handling, it speeds up the operations. This means there is lesser need to manage, store, and monitor goods. Businesses dealing in perishable and shorter shelf-life items such as food and beverage, beauty and health products, and fragile items greatly benefit from this, as there’s a lesser likelihood of product damage during picking and packing.
Types of Cross Docking
Depending on the nature of your business and the requirements of your existing and potential customers, there are three main ways of using cross-docking.
Consolidation Cross-docking
In this method, goods are consolidated into larger loads before being shipped out to the customers. It requires temporarily storing goods in the warehouse until a shipment volume sufficient for a truckload is gathered. This method saves on shipping costs.
Deconsolidation Cross-docking
This approach is entirely opposite of the consolidation approach, as it involves breaking down a larger shipment load into smaller batches. This method focuses on faster order fulfillment by cutting down the delivery time.
Continuous Cross-docking
This approach involves a direct and continuous flow of inventory from inbound to outbound shipments. It focuses on ensuring that the waiting periods between unloading and loading of shipments are kept brief.
How Can ShipBots Maximize Your Fulfillment Logistics?
Maximizing your output and profits requires leaner supply chain practices and greater transparency and visibility of operations, all of which requires collaborating with a trusted third-party logistics that has expertise in eCommerce fulfillment. ShipBots specializes in optimizing supply chain operations and employing the use of best practices such as cross-docking for reducing the input of resources while generating quality output and enhanced profits. E-commerce solutions offered by ShipBots for thoroughly maximizing the efficiency of your fulfillment operations include:
- Strategic eCommerce warehousing and logistics
- Data-driven customer demand forecasting
- Frequent warehouse inspections for ensuring compliance with SOPs
To benefit from our services, you can contact us and get a quote here.
