Which is Better, Cross Docking or Traditional Warehousing?

Which is Better, Cross Docking or Traditional Warehousing?

Posted by Ontario Container Transport | February 28, 2020 | Cross Docking
Cross Docking and Warehousing

Cross-docking and traditional warehousing are shipping processes that share the same goal: deliver goods to its end-destination with very minimal cost, damage, and time incurred.

What is Traditional Warehousing?

Traditional warehousing is a shipping procedure that sees a distributor carry stocks of a product, and have it ready to be delivered to various customers. 

What is Cross Docking?

Cross-docking is where products are unloaded from incoming transport and loaded to outbound transport with very minimal storage required.

Related article: Know the Benefits and Disadvantages of Cross Docking

What are the Benefits of Cross Docking?

Cross-docking has been described as a service that can help optimize the distribution of a product as well as a business’ fulfilment services. It will also help a company save money, decrease the possibility of damaged products and streamline the shipping process.

  • Improved efficiency is another benefit brought by cross-docking as it removes the need for numerous business relationships. A single team will be able to manage the intricacies of expedited shipping and warehousing.
  • Costs are also minimized when cross-docking is used. While warehouses allow businesses to store inventory in warehouses, rent payment is required in order to remain in a given space. In time, lengthy storage periods could incur additional costs. But cross-docking eliminates the need for storage by having items be shipped directly from the original location to its destination.
  • Inventories are easily managed and simplified. Cross-docking minimizes the need to stock large numbers of goods as these are quickly shipped off. Therefore, fewer hours are needed to manage existing inventory. Plus, less warehouse space is required thus giving you a competitive business edge. As a result, you’re free from large quantities of inventory and thus are more able to meet customer demands. When fewer items are taking up unnecessary space inside warehouses, the risk of goods being damaged, stolen, as well as the risk of fire and injury become significantly minimized. 
  • Product damage decreases. Despite the shipment speed brought by cross-docking, the risk of goods being destroyed is actually reduced due to less human intervention. Apparently, the inclusion of manual intervention in the cross-docking procedure decreases error specifically in transferring products in and out of storage. Due to cross docking’s ability to move items directly from incoming transport to outgoing trucks, the process is appropriately completed with the least amount of human intervention.
  • Shipment time is reduced. One of the advantages of cross-docking is the less time it takes to ship off items to its destination. The instance a product is ordered, it is immediately shipped. Once it arrives in the warehouse, it is moved from one transport to another in order to be delivered to the customer. 

What are the Benefits of Traditional Warehousing?

  • Traditional warehousing provides businesses with local expertise in new and different markets. It brings to companies new knowledge not otherwise available to outside entities attempting to infiltrate novel shipment demographics.
  • The total delivery cost for customers is drastically reduced. This ensures repeat business as customers see your company as 100% reliable.
  • Customer service improves via shorter shipment periods. Clients start to trust your business and eventually become their go-to entity anytime they need their shipment delivered timely and efficiently.
  • Inventory costs are reduced because of better management. 
  • Due to a large number of shipping discounts incurred, cost benefits are similarly experienced.
  • A core competency focus is achieved. Since goods are essentially taken care of in traditional warehousing and are placed safely in stock, businesses have more time, attention, and energy to engage in other aspects of their business. 

Related article: Helpful Tips on Moving a Warehouse

Conclusion

All in all, not many businesses comprehend the intricate differences between traditional warehousing and cross-docking. However, both have the same aim: to deliver clients’ goods with as little damage, cost, energy, and time incurred. It is highly advantageous for a company to be aware of both types of shipping procedures as doing so helps them manage, create or find a team that efficiently provides both services that will drastically improve their business as well as give customers 100% shipping satisfaction.

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