Shippers everywhere are under pressure to optimize their supply chains. There are many externalities that are creating this push towards optimization, most notably economic inflation, the persistence of the Covid-19 pandemic, rising fuel costs, and the global consumer trends in e-commerce. Customers expect that their favorite products are on the store shelves when they shop and arrive on time when they order from home. One of the ways that shippers ensure that their stores are fully stocked is by using cross-docking services. Shippers and logistics managers are likely familiar with cross-dock services but might not understand the full range of advantages they can offer their business. Cross-docking helps keep stores stocked with inventory, lower transportation costs, and reduce shipping delays. This article will discuss some of the reasons why shippers use cross-docking services as a cost-effective option to help streamline efficiencies within their supply chains.
Cross-docking is a shipping process where a specialized distribution facility serves as a staging ground for inbound and outbound materials. At cross-docks, an inbound truck will arrive and back into a door dock where workers can then arrange and transfer freight from one truck to another. Cross-docking services help shippers arrange their truckloads more efficiently; they can consolidate their products into a single trailer and deliver directly to their customers instead of having multiple trucks make multiple deliveries. Some cross-docks are temperature-controlled environments, allowing companies in the food and fresh produce industries to quickly sort and transport products faster. Cross-docking services, when used effectively, can drastically reduce the need for additional warehouse space.
Many different types of shippers regularly use cross-docking services. In general, cross-docking companies are used by shippers with high-demand products that need constant replenishment. Any company that has a steady volume of inventory should consider using a cross-dock: the food and beverage industries, fresh produce companies, clothing stores, e-commerce businesses, and the pharmaceutical sector are the sectors that would benefit most from the loading strategy.
Shippers looking to reduce their expenditures, reduce inventory costs, and increase the productivity of their supply chain should consider the following reasons to use cross-docking services for their next loads.
Shippers who depend on long-haul carriers know that truck drivers can only legally drive 14 hours a day before they are legally forced to rest. Cross-dock services can drastically reduce loading time, providing drivers with more available hours of service (HOS) for use on the highway. In other words, shipments will get delivered faster because drivers won’t have to burn their hours waiting on products to be ready.
Businesses usually depend on available warehouse space to store their overflow merchandise, especially popular inventory that needs fulfillment. As companies grow, store managers might consider using more warehouse space to cover the need for more inventory. However, warehouse facilities have storage costs, which can add up quickly. Cross-docking services offer a solution to rapid store fulfillment by reducing the need to store extra inventory on popular items.
Shipping managers with multiple stores can use cross-docks as staging grounds to organize their loads more efficiently. Loads that require multiple pickups and multiple drops with trailers full of mixed merchandise are a perfect example. In these situations, shippers can utilize cross-docking companies to help break down and repackage pallets so that each truckload services a single store. By consolidating loads into a single shipment, this process eliminates the need to pay carriers for extra drops.
Here’s a totally plausible and hypothetical situation where a shipper could drastically reduce their transportation expenditure using a cross-docking service. In Salinas, California, a prominent vegetable company decides that instead of having their long-haul drivers wait around for hours until the product is packed and ready, they’d hire a local driver to haul finished truckloads to a cross-dock facility. This cross-docking strategy offers two major advantages. First, it eliminates the need for the vegetable company to pay detention or layovers to long-haul drivers when the product isn’t ready. Instead, the long-haul driver gets called the moment the load is built and ready to load. Secondly, using a cross-docking service improves the shipper-carrier relationship, as any carrier in the produce business would be happy to have their rigs loaded as soon as they arrive on site.
Shippers looking to streamline their last-mile deliveries might want to consider what some logistics experts refer to as “stem time” or “stem distance.” According to a Forbes report, the last mile is the most expensive part of logistics transportation costs. The final mile—or the distance traveled to deliver consumer goods to their final destination—is sometimes referred to as the stem distance. This mathematical theory calculates the total operating costs of a final-mile delivery. The formula factors in deadhead miles of the truck, the total distance traveled between the shipper and receiver, and the total cost for such a delivery. Why is this important? According to an article published by two professors at the Cranfield School of Management, reducing the stem distance of each shipment can help lower freight costs and speed up delivery times, improving operations in the supply chain as a whole. For shippers who cannot afford to invest in drones, electric vehicles, or by building micro-hubs, as the article suggests, cross-docking companies could easily suffice as an option to reduce your overall stem distance.
Cross-docking is an efficient solution for retailers looking to optimize their supply chain. However, the service is often underutilized because shippers lack the visibility to see exactly what inventory has arrived or when it has been loaded and gone. The lack of dependable and affordable technology to help shippers ensure their cross-dock shipments are fulfilled correctly is a problem. Fortunately, WARP has built cross-docking technology that empowers shippers with total control over their final-mile deliveries. WARP makes choosing cross-docking companies easy and accessible, no matter what size company you have.