Cross-docking is a logistics strategy where goods are received and transferred across a distribution terminal with little storage time between inbound and outbound transportation. This allows goods to be sorted and consolidated for delivery to multiple destinations from a central location in an efficient "hub and spoke" model. Cross-docking provides benefits like reduced inventory and transportation costs when implemented for stable, time-sensitive, or high-volume product flows. However, it requires an integrated logistics system and sufficient transportation capacity to function effectively with minimal risk of product damage or delays.

1. Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer
truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars,
with little or no storage in between. This may be done to change the type of conveyance, to sort
material intended for different destinations, or to combine material from different origins into
transport vehicles (or containers) with the same or similar destinations.
Cross-dock operations were pioneered in the US trucking industry in the 1930s[citation needed]
, and
have been in continuous use in less-than-truckload (LTL) operations ever since. The US military
began using cross-docking operations in the 1950s. Wal-Mart began using cross-docking in the
retail sector in the late 1980s.
In the LTL trucking industry, cross-docking is done by moving cargo from one transport vehicle
directly onto another, with minimal or no warehousing. In retail practice, cross-docking operations
may utilize staging areas where inbound materials are sorted, consolidated, and stored until the
outbound shipment is complete and ready to ship.
Contents
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 1Advantages of retail cross-docking
 2Disadvantages of cross-docking
 3Typical applications
 4Factors influencing the use of retail cross-docks
 5Cross-dock facility design
 6References
Advantages of retail cross-docking[edit]
 Streamlines the supply chain, from point of origin to point of sale
 Reduces labor costs through less inventory handling
 Reduces inventory holding costs by reducing storage times and potentially eliminating the
need to retain safety stock
 Products reach the distributor, and consequently the customer, faster
 Reduces or eliminates warehousing costs
 May increase available retail sales space
 Less risk of inventory handling
Disadvantages of cross-docking[edit]
 Potential partners may not have the necessary storage capacities
 An adequate transport fleet is needed to operate
 A computerized logistics system is needed
 Additional freight handling can lead to product damage
 Labour costs are also incurred in the moving and shipping of stock

2. Typical applications[edit]
 "Hub and spoke" arrangements, where materials are brought in to one central location and
then sorted for delivery to a variety of destinations
 Consolidation arrangements, where a variety of smaller shipments are combined into one
larger shipment for economy of transport
 Deconsolidation arrangements, where large shipments (e.g., railcar lots) are broken down
into smaller lots for ease of delivery
Retail cross-dock example: using cross-docking, Wal-Mart was able to effectively leverage its
logistical volume into a core strategic competency.
 Wal-Mart operates an extensive satellite network of distribution centers serviced by
company-owned trucks
 Wal-Mart's satellite network sends point-of-sale (POS) data directly to 4,000 vendors.
 Each register is directly connected to a satellite system sending sales information to Wal-
Mart’s headquarters and distribution centers.
Factors influencing the use of retail cross-docks[edit]
 Cross-docking depends on continuous communication between suppliers, distribution
centers, and all points of sale
 Customer and supplier geography, particularly when a single corporate customer has many
multiple branches or using points
 Freight costs for the commodities being transported
 Cost of inventory in transit
 Complexity of loads
 Handling methods
 Logistics software integration between supplier(s), vendor, and shipper
 Tracking of inventory in transit
Cross-dock facility design[edit]
Cross-dock facilities are generally designed in an "I" configuration, which is an elongated
rectangle. The goal in using this shape is to maximize the number of inbound and outbound
doors that can be added to the facility while keeping the floor area inside the facility to a
minimum. Bartholdi and Gue (2004) demonstrated that this shape is ideal for facilities with 150
doors or less. For facilities with 150–200 doors, a "T" shape is more cost effective. Finally, for
facilities with 200 or more doors, the cost-minimizing shape is an "X".[1]
References[edit]

3. Wikimedia Commons has
media related to Cross-
docking.
1. Jump up^ Bartholdi, John J.; Gue, Kevin R. (May 2004). "The Best Shape for a
Crossdock". Transportation Science. 38 (2): 235–244.doi:10.1287/trsc.1030.0077.
Speed and productivity of a supply chain has become an important factor of
growth for organisations. Cross-docking is just one strategy that can be
implemented to help achieve a competitive advantage. Implemented
appropriately and in the right conditions, cross-docking can provide
significant improvements in efficiency and handling times.
What is cross docking?
Cross docking is a logistics procedure where products from a supplier or
manufacturing plant are distributed directly to a customer or retail chain
with marginal to no handling or storage time. Cross docking takes place in
a distribution docking terminal; usually consisting of trucks and dock doors
on two (inbound and outbound) sides with minimal storage space. The
name ‘cross docking’ explains the process of receiving products through an
inbound dock and then transferring them across the dock to the outbound
transportation dock.

4. In simple terms, inbound products arrive through transportation such as
trucks/trailers, and are allocated to a receiving dock on one side of the
‘cross dock’ terminal. Once the inbound transportation has been docked its
products can be moved either directly or indirectly to the outbound
destinations; they can be unloaded, sorted and screened to identify their
end destinations. After being sorted, products are moved to the other end
of the ‘cross dock’ terminal via a forklift, conveyor belt, pallet truck or
another means of transportation to their destined outbound dock. When
the outbound transportation has been loaded, the products can then make
their way to customers.
When is cross-docking used?
The process of cross docking will not suit every warehouses needs, it is
therefore important to make an informed decision as to whether cross-
docking will increase the productivity, costs and customer satisfaction for
your specific business. Cross docking can advance the supply chain for a
variety of specific products. For one, unpreserved or temperature
controlled items such as food which need to be transported as quickly as
possible can be benefitted by this process. Additionally, already packaged

5. and sorted products ready for transportation to a particular customer can
become a faster and more efficient process through cross docking.
Some of the main reasons cross docking is implemented is to:
 Provide a central site for products to be sorted and similar products
combined to be delivered to multiple destinations in the most
productive and fastest method. This process can be described as
“hub and spoke”
 Combine numerous smaller product loads into one method of
transport to save on transportation costs. This process can be
described as ‘consolidation arrangements’.
 Break down large product loads into smaller loads for transportation
to create an easier delivery process to the customer. This process
can be described as ‘deconsolidation arrangements’.
Hopefully this blog assists you in understanding the concept of cross-
docking and why it is implemented into an organisations supply chain
process. The next part to this blog will detail the advantages and
disadvantages of cross-docking for a greater understanding of this
process.
WHAT IS CROSS-DOCKING?
In a competitive market like logistics, it is essential to satisfy your customer needs
and improve your competitive advantages and crosss-docking is one of the logistics
strategies that can help you achieve that:
Cross docking is a form of freight movement whereby raw, partial
components or finished products from a supplier or manufacturer are
distributed directly to the users, which include the next level
manufacturers, or end consumers, with minimal or no storage time.
When part of a global logistics network it allows for more competitive rates and to
thestreamlining of shipping.

6. As you may see from the graph below, inventory warehouses act as a buffer
against increased demand in a traditional supply-chain model.
Yet the advancement of technology enabling real-time information exchange and
analysis has made it possible now to shorten the cushion of supply inventory on
hand, such as just in time (JIT) stocking, which enhances a companies operations
and inventory efficiency–allowing for less capital to be tied up in inventory.

7. (image source)
Cross docking takes place in the cross dock terminal which is a minimal space that
consists of the inbound and outbound docks, usually in a warehouse environment.

8. Once the inbound transportation (semi-trailer truck, railroad car, etc) has been
docked, products can then be unloaded to the terminal; they then can be screened
and sorted to identify its end destinations; afterwards, products will be reloaded to
the outbound dock via forklift, conveyor belt, pallet truck or other means of tools
before trucks, trailers, rail cars or other means of transportation deliver the parcels to
customers. The products usually spend less than 24 hours at the terminal,
sometimes even less than an hour.
(source: ERAU)
In simpler terms, cross-docking could be thought of as a hub , or spoke and wheel,
network of distribution (see above image) like many airlines you may be familiar with
use, for example United Airlines in Guam, Cathay Pacific in Hong Kong both use a
hub and spoke model for their airline logistics.
The reason a hub airport is preferred by airline companies is because
it allows airlines to connect with the maximum amount of destinations
with the minimum number of routes compared with a point-to-point
model.
For the same reason, cross dock is a transportation-optimized solution that provides
significant cost saving for the company.

9. Advantages and Disadvantages of
Cross Dock Solutions
So how does a company decide whether cross-docking is the right fit for its logistics
strategy? Here is a list of advantages and disadvantages of cross-docking to assist
the decision process.
Advantages of Cross Docking Include:
1. Material Handling
o At the cross docking terminal, material handling will be streamlined and therefore efficiency
will be greatly improved (i.e. in-motion labeling, in-motion weighing, label verification,
destination scan, etc.)
2. No Need for Warehouse
o In many cases, the traditional warehouses will be replaced by the cross dock facility, which
is easier to construct and requires less square footage, and, hence–provides both variable
and fixed asset cost savings for a company. When using a 3PL for cross-docking, in a case
like Kickstarter or Indiegogo fulfillment, most cross docking companies maintain a dedicated
cross dock warehouse.
3. Packaging and Storing Cost
o The storing cost will be reduced because, well with this method inventory’s time in a
warehouse should be minimal, and the extra packaging cost will also decrease due to
automation practice in the cross-docking terminal.
4. Transportation and Distribution Cost
o Since products destined for a similar end point can be transported together, there will be full
loads for each transportation trip and thus drive down the transportation costs in scale.
Additionally, as the routing is now optimized (hub and spoke) with the elimination of
unnecessary processes like “pick-location” or “order picking”, less miles will be wasted and
therefore fuel and associated vehicle service costs will be driven down.
5. Products Screened More Quickly
o Products will be screened more efficiently with the application of streamline and automation
at the terminals, this can greatly reduced the time parcel spend in shipment.
6. Products Reach Customers Faster
o As a positive sequel to the accelerated screening process, there will be a high turnover of
products which means that products can now be delivered sooner to the customers.

10. 7. Less Risks for Inventory Handling
o Since a warehouse is no longer needed, concerns of inventory management risks are no
longer necessary.
However, besides the upsides of cross-docking, one should also consider the
relative risks and even prerequisites before steering your cross-docking strategy.
Below are a couple of risks that we have identified.
Disadvantages of Cross-Docking to Consider:
1. Partners May not Have Storage Capacities
o Cross-docking helps cut cost with the elimination of warehouse, yet if the company’s
potential partners do not have the necessary storage space, the inventory problem will be a
burden for effectively implementing cross dock.
2. Freight Handling May Cause Product Damage
o As the cross dock is well calculated in order to implement, any additional freight handling
may jam the system and cause damage amongst products.
3. Management and Attention Required
o Efforts to set up a cross-docking system cannot be overlooked. It takes time, planning and
money to design for it to work effectively. In addition, labour costs are also inevitable for the
moving and shipping of stocks at the terminal.
4. May not Deliver Right Product On Time
o Outbound users have to bear the risk that a supplier might not be able to deliver the right
product in its right amount on time due to a systematic error.
Apart from the risks associated with cross dock for the supplying company, here are
a few more prerequisites to check off the list:
1. Adequate Transport Carriers
o A sufficient amount of transportation fleet is needed in order for a cross dock to run smoothly
as a large amount of its process depends on its shipping.
2. Computerized Logistics System
o It is very important to have an intelligent integrated system enabling suppliers to keep
abreast of the latest point-of-sale information (i.e. sales activities and trends) which offers
insight of future orders. For instance, Wal-Mart with 85% of its merchandise using cross-
docking operation, is known to use a private satellite communication system to transmit its
real-time information to the users.

11. 3. High Volume to be Cost Effective
o Economies of scale also applies here. High amount of products can drive down costs
including operating costs and transportation costs.
WHEN TO USE CROSS-DOCKING?
 Stable Demand Inventory
o With a stable product demand, a consistent schedule and system can be set up to
accommodate the recurring delivery, and can be improved to cut costs further with effective
analysis once generated enough data. In addition, it eliminates the needs of surplus
inventory to be stored in case of out of stock situation.
 Time-Sensitive and Perishable Inventory
o Due to the sensitivity of time, the products (i.e. grocery) need to reach the users in a
reasonable remaining shelf time. Through bypassing the step of storage and delivering
directly through cross dock terminal, the time is reduced which gives more room for the
limited shelf time, provides the products with longer sales window, and potentially offers
better products and services for users.
 Crowdfunding and E-commerce Flashsales
o When a crowdfunding campaign that raised money for products, like many on Indiegogo and
Kickstarter, they are usually one off shipments to backers and the usual method of delivery
involves crossdocking. In the same vein, when an e-commerce store has a flash sale or any
big uptick in sales volume due to some special event–think Black Friday or Cyber Monday–
then cross docking in usually the most cost effective way to deliver the inventory to the end
user.
Are Cross Dock Operations Right for
Your Products?
Cross-docking remains an essential strategy for various logistics challenges.
For crowdfunding fulfillment, rewards are shipped to a campaign’s Indiegogo or
Kickstarter backers almost always via the cross docking method.
As the hub and spoke model shows, there are efficiency gains when shipping from a
hub location.

12. This is one reason Hong Kong maintains a strategic advantage as an e-commerce
distribution hub especially in the case of crossborder shipments out of China to the
rest of the world: Hong Kong is the world’s largest by volume air freight hub.
And moreover, it makes Hong Kong the best place for e-commerce merchants to
process, what–until recently–was Shenzhen fulfillment.
Learn More E-commerce and Shipping