What Is the Difference Between Cross Docking and Warehousing?

Advantages of Cross Docking in Supply Chain Management

With cross docking, a business can become more competitive through a variety of ways. One is the reduction of square footage necessary in a warehouse. Because products are not stored for long periods of time, all costs associated with storage are also reduced or eliminated. Additionally, cross docking makes for a simpler shipping relationship because fewer parties are involved.

• Reduced Costs

  One significant benefit to cross docking is cost savings—and not only by avoiding long-term storage costs. Because the product is not stored for lengthy periods or passing through numerous hands, there is lower risk for the product to become damaged and require replacement.

• Decreased Shipping Times

  Saving money isn’t the only benefit to using cross docking in supply chain management. Shipping times are dramatically reduced. Your company can work more efficiently by eliminating the need for multiple business relationships. And just one team can handle the warehousing and expedited shipping.

• Improved Efficiency Through Better Inventory Management

  With cross docking, the risk of inventory surplus is reduced. Stock is picked and shipped directly to customers, thus decreasing the time to ship items. You don’t have to keep excess inventory on hand to meet fulfillment expectations because shipping time is reduced. Employees can also assess damage quickly during the unloading process to improve product quality.

Which Is Right for You?

There are several situations where cross docking is better than standard warehousing:

• Shipping temperature-sensitive products
• Early or late delivery
• Mixed freight on a trailer with varying priorities

• Intermodal transport
• Goods arriving on a container
• Product coming from multiple vendors

While these are the most common reasons for cross docking in supply chain management, they are not the only ones.