Why Cross-Docking: Cross-Docking favors timely distribution of freight. Its particular advantages reside at the minimization of warehousing and the consolidation of freight in outbound flows, resulting in significant reductions in cost. It applies mainly to these industries: Retail, Manufacturing, Distribution and Transportation.
For retail, cross-docking concerns receiving products from multiple suppliers and sorting them for outbound shipments to retail stores and distribution centers. The world's largest retailers, ship apprximately 85% of their merchandises using a cross-docking system.
For distribution warehouse management, cross-docking can be used to consolidate inbound products from different suppliers which can be delivered when the last inbound shipment is received. The costly inventory function of a distribution center becomes minimal, while still maintaining the value added functions of consolidation and shipping. Shipments typically spend less than 24 hours in the distribution center, sometimes less than an hour.
For manufacturing, cross-docking can be used to consolidate inbound supplies, which can be prepared to support just-in-time (JIT) assembly.
For transportation, cross-docking involves the consolidation of shipments from several suppliers(often in LTL batches) in order to achieve economies of scale. For International Transportation, the freight carriers from each country can meet at the cross dock location to transfer merchandise from one carrier to the next, for easier border crossings and more efficient freight movement.