Survey says crossdocking is a popular distribution practice
Corinne Kator -- Logistics Management, 5/29/2008
Crossdocking, the practice of receiving products and then quickly shipping them out without putting them in storage, is becoming a common practice.
Third-party logistics provider (3PL) Saddle Creek Corp. recently conducted a survey of distribution professionals and found that 52% of them currently crossdock and another 13% plan to begin crossdocking in the next two years.
Benefits of crossdocking
When asked to identify the single biggest benefit of crossdocking, 23% of survey respondents chose “improved service levels.”
According to the survey report, crossdocking improves service by allowing products to reach their destinations more quickly, ensuring products are on the shelves when needed. The practice can also be used to get the right mix of products to a customer—for example, suppliers can ship store-ready orders to a crossdock facility where they can be routed for delivery to individual stores.
The second biggest benefit survey respondents identified is reduced transportationcost. A common way to reduce freight costs, the report says, is to use a crossdock facility to consolidate LTL shipments into full loads.
Challenges of crossdocking
When asked about the challenges of crossdocking, survey respondents identified unpredictable customer demand as the biggest challenge.
“Companies often overlook the need to have their customers committed to working in a crossdock environment,” the report authors say. “Crossdocks are a demand-driven model, but the demand needs to be predictable. In a warehouse situation, for example, if a customer wants to delay a shipment, there’s space for it. But in a crossdock there’s nowhere to put it.”
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