There are various transshipment methods for goods in the shipping area. One of these types of handling is called ‘cross docking’. What is special about this type of handling is that warehousing is no longer necessary. Instead, the goods are already pre-picked by the supplier or sender. Delivered items are not put into storage, but are assigned directly to the corresponding outgoing goods and shipped.

A traditional supply chain requires a warehouse that acts as a link between seller and buyer or between supplier and consumer. However, this link is also the interruption in the path taken by a product. Supply and demand are not synchronized, which is why it is necessary to store goods until they are needed or ordered. Storage interrupts the flow, which is mitigated or prevented by means of cross-docking, since there are no storage processes and associated activities in cross-docking. This leads to a reduction in warehousing costs and the number of process steps (and thus potential sources of error).

Cross docking offers advantages by creating shorter throughput times, timely delivery, reduced inventory, minimized storage space requirements, avoidance of storage and retrieval processes, and reduced warehousing costs.

Overview of the three cross-docking variants

There are three variants, or systems, of cross docking:

  • single-stage
  • two-stage
  • multi-stage

The single-stage variant requires pre-picking by the supplier based on the final recipient. The goods are forwarded unchanged to the recipient via one or more transshipment points. For successful implementation, it is necessary that the sender marks the goods with the name of the addressee beforehand, which is usually done directly on or at the goods. Another term for single-stage cross-docking is pre-allocated cross-docking (PAXD).

In the two-stage system, the goods are only forwarded unchanged to the transshipment point. From there, the transshipment into new units and their addressing and subsequent delivery to the corresponding recipients takes place. Two-step cross-docking is also called break-bulk cross-docking (BBXD) or, more commonly, transshipment.

Multi-step cross-docking involves further process steps in addition to the actual reconsignment, which are so-called ‘value added services’. Examples include the possible repackaging of items or the labeling of goods.

Advantages of cross docking over traditional warehousing

Warehousing ties up more capital and requires more resources, such as time and labor, than the cross-docking process. However, for cross-docking to work efficiently, transporters, warehouse keepers, suppliers and even end customers must be optimally aligned and work together in a coordinated manner. To achieve this, not only the manual processes must run smoothly, but also the information flows between the parties involved. Finally, the process steps of traditional warehousing are eliminated: receipt and storage, inventory, as well as picking and packing.

The cross-docking process skips traditional warehousing operations.

A prerequisite and at the same time an advantage of cross-docking is therefore timely delivery: since goods from the incoming goods department only make their way to the outgoing goods department in order to be transported further in a timely manner, they must not “eventually arrive” and “stand around somewhere”, but must be processed immediately, which in cross-docking only works together. Therefore, all parties involved in the supply chain must be permanently integrated into the process and the flow of information during cross-docking.

This requires IT solutions that meet very high standards, since the exchange of data and information must take place in real time, so to speak. Criteria for this are, for example:

  • Correct master data
  • Current transaction data
  • Synchronization of goods and information flows
  • Integration of third-party systems, software and hardware
  • Transparency of data

An example of the cross-docking process

The range of a company with several branches includes trousers and belts. The trousers are produced by the company itself, while the belts are bought in. Classic warehouse logistics would now look like this: both the trousers and the belts are stored together. When the branches order these goods, both the trousers and the belts are picked, packed and prepared for dispatch. With cross-docking, on the other hand, only the trousers from your own production would be stored; the belts, on the other hand, would be delivered to the cross-docking point by the supplier in good time and processed immediately in the shipping area (for example, re-picked, re-packaged, labeled) so that they could be shipped to the stores immediately; together with the trousers from the warehouse that had already been transported to the cross-docking point. docking point. Cross-docking is therefore also an adequate means of avoiding partial truck loads and maximizing the use of the loading area; in other words, to achieve FTL (full truck load) and avoid LTL (less than truck load) shipments.

Summary

Cross-docking is a type of transshipment in which incoming goods are not put into storage, but are assigned to the corresponding outgoing goods and shipped. The term cross-linking and the alternative spellings cross-docking and cross-docking are also common. The goods are pre-picked by the sender or supplier, which ultimately reduces warehousing costs and throughput times. There are single-stage, two-stage and multi-stage variants of cross-docking, which differ in the corresponding activities – from simple pre-picking to re-picking to further process steps such as re-packaging or labeling. The storage points in the supply chain that are used for cross-docking are also called cross-docking points. Usually, this is a central warehouse of a retailer or a terminal of a logistics service provider. Cross-docking is particularly suitable when large and plannable quantities are involved, where all parties in the supply chain work together in a coordinated manner and an optimal flow of information is ensured.

For more information on goods handling, see the article handling logistics.