Cross Docking

Cross Docking

The term cross docking originates from English and is also known as “X-docking”. Trading companies are constantly looking for economical and cost-saving ways to store goods, because handling should be as efficient as possible. This goal can be achieved with cross docking, the storage concept without stock on hand. Here, intermediate storage of goods in a depot is dispensed with, saving storage space and storage costs. These price advantages, together with fast delivery times, can also be passed on to the customer, thus stabilizing the company’s position in the relevant market segment.

Efficient storage and delivery through cross docking

Cross docking or X-docking can be roughly translated into German as cross storage or cross coupling. The origin of this word can be explained by the traditional processing of goods deliveries. At the transshipment point, there are two ramps facing each other. While goods are unloaded on one ramp, loading for subsequent delivery takes place on the opposite ramp. If this traditional form of goods transshipment location is extended spatially, then with cross docking there is only one loading and one unloading location, the transshipment location for intermediate storage is completely eliminated, the entire logistics is simplified and thus competitiveness is increased.

The variants of cross docking

With cross docking, the goods are picked by the supplier, and there is no need for the warehousing process or for an inventory warehouse. Three different variants of cross docking are practiced in companies. In the single-stage system, the goods are pre-picked by the supplier. This means that the order quantities have already been compiled in relation to the recipient. The deliveries are forwarded to the recipient via one or more transshipment points. Another term for this process is “pre-allocated cross-docking”. In the two-stage system, transshipment, the goods are picked with reference to the transshipment point, and at the transshipment point, splitting takes place with reference to the end customer. Finally, there is a multi-stage system in which even more logistical steps are integrated.

Cross docking in e-commerce

Cross docking has been used in goods logistics since the 1990s, initially mainly for fresh produce. E-commerce has also long since discovered cross docking for itself. Many online stores use this direct delivery route, thereby reducing their costs and also their risk. For example, purchasing and storage are no longer necessary for goods that are only requested infrequently, and inventories and the liquidity capacities that are blocked as a result are reduced or eliminated completely. For a cross docking concept to work, careful planning must be done in advance. When the system is up and running, there are hardly any disadvantages for the supplier, retailer and customer, but there are numerous advantages.