What Are The Advantages of Cross-Docking?

• • Reduces storage space: On average, businesses spend $6.53 per square foot of warehouse space. Reducing storage space contributes to cost savings and the reduction of your company’s carbon footprint.
  • Reduces inventory costs: Inventory management ties up much-needed capital. It costs money to store, manage, count, secure, and insure inventory. Moreover, money is lost when excess inventory spoils or gets damaged. Cross-docking reduces the amount of goods held over the long term.
  • Reduces material handling: Cross-docking minimizes the movement of goods around the warehouse either manually or automatically. Traditional warehouse operations consist of significant inventory handling, such as sorting, storing, picking, and packing.
  • Increases product quality: While staging products (temporarily keeping them on the dock while processing them before shipping) workers can easily inspect products for damages from transport vehicles. This reduces the number of damaged products shipped to customers, saving money on returns and maintaining customer satisfaction.
  • Reduces labor costs: Labor is one of the most challenging costs to control. Cross-docking helps reduce the number of people needed to manage inventory, and those savings can be passed on to customers or put into other process improvement projects.
  • Reduces damage from material handling: Sometimes damage is due to material handling, not bumpy transport vehicles. As the movement of goods decreases, the likelihood of damaged goods decreases as well.
  • Reduces delivery times: Cross-docking facilities are often located in areas near the client’s final delivery destination, thereby reducing delivery times.
  • Increased service levels: Minimizing product damage, lowering the cost to consumers, and reducing delivery times all lead to improved service levels. This is especially important in a B2B environment with specific service level agreements.
  • Reduce transportation costs: By using the best possible route, transport vehicles travel fewer miles, therefore reducing overall transportation costs.
  • Reduces overall fixed costs: In addition to storage space, there are other fixed costs (e.g. equipment, utilities) that exist within large warehouses. Reducing the amount of storage space also reduces the amount of money spent on lighting, heating, equipment, and more.