Warehouse logistics can get complicated, particularly as the shipping industry responds to unpredictable challenges. Port congestion, truck capacity, economic inflation, and volatility in market forces are to blame. Shipping companies must streamline their services to meet the growing standards and customer expectations for efficiency and on-time delivery. Now, shippers and retailers gain control and visibility over their supply chains.
The rising popularity of e-commerce has forced shipping companies to evolve towards a standardized expectation for efficiency with their on-time delivery of goods. That’s why shippers and retailers want true visibility over middle mile logistics. However, companies that partner with third-party transportation providers to handle their middle or last mile solutions sometimes feel they are sacrificing visibility and control over how their parcels are sorted and delivered. In addition, any delays in middle mile sortation can affect last mile delivery, which could affect B2B partnerships.
Retailers may want to consider alternative strategies to establish one or more designated sortation centers and cross-docking facilities that are separate entities positioned away from their warehouses. Dedicating space explicitly used to maximize throughput speeds helps companies optimize handling and delivery performance. In addition, these sortation centers can be customized and arranged to specific dimensions of your product orders. More importantly, you can ramp up or shut down these facilities as needed. Finally, unlike a traditional warehouse, deploying a cross-docking facility allows the shipper to create a critical touchpoint of the delivery without excessive handling, which may lead to product damage or delays.
Controlling source and destination facilities are vital because it leads to a more efficient supply chain. Adding sortation capacity in the middle mile ensures that customer orders are routed to the last mile carrier more efficiently, improving on-time delivery for your customers. This article will discuss the importance of sortation centers in the middle mile as a viable strategy for shippers looking to optimize their throughput and meet customer demands.
In the past decade, as global consumers have embraced online shopping as a standard delivery method to obtain their goods, retailers and manufacturers everywhere have responded in kind by incorporating online shopping into their business models. As a result, businesses are now under pressure to ship faster, more frequently, and directly to the customer’s doorsteps. Whether you run a small store or are a significant retailer, customers expect that businesses should provide an online shopping method. As a result, E-commerce has forced companies to transform their traditional supply chain network in favor of “fragmented” networks strategically located near the final delivery.
Depending on your budget and overall business model, sortation centers can provide companies with a strategic solution to keep up with the growing demands of e-commerce. The initial investment can be costly, though, as throughput sorters range in size and efficiency. Larger throughput sorters can cost millions of dollars. Additional labor expenses are also required to run and operate sorting centers. However, the advantage comes from the savings in middle-mile and last-mile logistics and improved on-time delivery. Typically, sortation facilities cost less than investing in large warehouses and distribution centers, often located farther away from the final delivery destination.
There are plenty of good reasons for shipping managers to find cost-effective options to help optimize their middle-mile delivery. For example, many are considering the advantages of using cross-docking services. Cross-docks help retailers quickly replenish popular store items while eliminating the need to spend costs on traditional warehouse space. Cross-docking also reduces overall linehaul and detention costs while simultaneously reducing “stem distance,” or the distance traveled to deliver goods. The last mile remains one of the most expensive costs in total freight budgets, so it’s not difficult to see why shippers use cross-docking as a practical method to optimize their supply chains.
Amazon is the most prominent and most notable example of how to successfully optimize the middle mile using a network of sortation facilities. Of course, it’s also helpful to have unlimited cash to fund things like Amazon’s Middle Mile Research Science Optimization department. The Amazon approach to the middle mile goes something like this: a customer places an order online, and a local fulfillment center gets a PO notification. A worker locates the product, which gets sent to a sortation center. The package gets sent to a delivery station and placed on a route truck. The system is designed to ensure that customers obtain their orders within 24-48 hours and within an hour of the estimated delivery time.
Like the benefits of cross-docking services, sortation centers can provide shippers and retailers with a range of advantages to help improve efficiencies within their supply chains. The benefits include:
A higher rate of packages can get processed and sorted quickly to their final mile destinations.
Shippers can use sortation centers as a means to reduce the reliance on additional warehousing to stock overflow merchandise. Popular store items can get consolidated and processed in advance to anticipate consumer demands.
E-commerce continues to transform the logistics industry into adopting methods that improve on-time deliveries for their customers. Adding middle mile sortation centers can help companies improve their handling and delivery performances.
Shippers must continually evolve their businesses to stay competitive and profitable within the global consumer market. Logistics optimization starts with recognizing that certain aspects of your supply chain need improvement. Whether it’s to lower transportation costs or improve operational performance, it’s essential to find solutions that are right for your business. Finding the right cross-docking service or sortation facility for the future of your middle mile logistics can be difficult, especially since most companies are just trying to fulfill the orders they have today. As a result, more and more businesses are turning to WARP to solidify their middle mile. WARP is the only tech-enabled provider that offers a vast network of cross-docks and carriers specifically built around the unique middle-mile needs of their customers. Gain visibility and control over your middle mile and connect with an expert from WARP today.