The Cross-Dock: Things You Need to Know

Supply chain productivity and speed are factors for growth, and the use of a cross-dock setup is becoming a popular strategy for boosting both in an organization. When this concept is implemented correctly under the right conditions, it can improve efficiency times and reduce product waste.

What is a Cross-Dock?

Under a cross-dock arrangement, products from a manufacturer's plant or supplier are sent directly to a retail chain or customer with very little to no storage or handling time. This usually takes place in a distribution docking terminal with cross-dock facilities in place.

In a cross-dock facility, there are normally dock doors and trucks on two sides - inbound and outbound - with minimal space for storage. The "cross-dock" name comes from the action of receiving products from an inbound dock and then moving them across to the outbound dock.

A simple example is a truck carrying products arriving at a terminal and going to the receiving side of the cross-dock terminal. Once the truck is properly docked, its products can be moved directly to their destinations or unloaded, sorted and screened. After that is done, they're moved to the cross-dock's other end using a conveyor belt, forklift, pallet truck or other means of transport to the outbound dock, where another truck is waiting. Once the outbound truck is loaded, the products are off to the customers.

Where Cross-dock Services Work?

A cross-dock setup won't meet the needs of every warehouse so, business owners need to research to decide whether or not it will boost their productivity, lower the costs and improve overall customer satisfaction. One of the most significant factors in this decision is product type. Generally, this strategy works well for products like food, which might have shelf life limits or require temperature control. It can also make the transport of sorted and already packaged products, such as rice and syrups, to a specific customer more efficiently.

While a cross-dock setup can be used for a variety of reasons, some common ones include:

Organic food, in particular, can benefit from the use of cross-dock services because freshness is the key and no artificial preservation methods are used. This prevents the products from spoiling before they reach their final destination. The storing of organic food is also more complicated than the storing of processed food. Therefore, the use of a cross-dock helps eliminate those potentially costly and possibly hazardous storage times.

The Food and Drug Administration has regulations regarding the storage and transport of products certified as "organic." For example:

Cross contamination is a huge concern when it comes to organic products. The longer the products are in storage, the higher is the possibility of contamination. Products that are gluten-free, for example, cannot be stored near products containing gluten. A gluten-intolerant customer who consumes a contaminated gluten-free product could become seriously ill and this can cause both the customer and the business to suffer. The business may be legally liable for damage caused to the consumers by its contaminated products, and the incident could harm its overall reputation.

One example of cross-dock methods being used successfully for natural and organic goods is the rapid growth of some of the major grocery chains in the USA. Among the largest private companies in the United States, some of these grocery chains were an early adopter of the cross-dock strategy, with the goal of moving fresh produce to its stores faster to increase sales and customer satisfaction. Inbound Logistics Magazine reports that these supermarket chains have actually had a cross-dock system in place for around two decades.

Experts have often said that such cross-docking is used with regional suppliers and for almost the entire natural food selection. About 80 percent of the natural food produced by such companies are usually cross-docked, with direct store delivery used as a supplementation. This system has helped these brands grow their international and organic food businesses.

Almost all the store departments of such grocery chains use a form of the cross-dock system for new item launches, promotional supports, or for keeping the freshness of the products intact. Each department has requirements for cross-docking, such as the need for freshness or the case capacity. These chains don’t want to deter merchants from bringing in products so, they look at the item variety to make an informed decision about distribution methods. Technological improvements have also helped these brands tweak and improve their cross-dock methods throughout the years.

Intelligent Logistics Matter

Food loss is a serious problem, with about one-third of all fresh vegetables and fruits around the world being tossed out annually, according to research at the University of Bremen that was published in the U.S. Library of Medicine. While care and concern should go into any distribution method decision, the cross-dock method is certainly the one to consider as it helps these various organic food suppliers provide its customers with fresh food and products much faster.