Cross DockingSupply Chain

Rates are Rising. Cross-Docking May Help.

Between the supply chain labor shortage, the fluctuating port availability, the limited air cargo capacity, and enormous fluctuations in consumer behavior patterns all set off by the pandemic, there is a deluge of critically high costs for shipping. Many businesses are panicking because these costs will be felt by their customers, but there are still opportunities to adjust your supply chain costs that could help make ends meet. Here’s how:

Fewer Warehousing Costs

In case you don’t know, cross-docking is a practice where instead of shipping products to your warehouse and holding them until they’re purchased, you’re able to time incoming and outgoing freight so that the product can be immediately distributed once it is ready. As such, you’re not taking up as much space in a warehouse somewhere. That’s naturally going to decrease the costs on your product over time.

Reduced Mileage

Because cross-docking allows your business to distribute your product without storing it first, you’re able to bypass the trip from the manufacturer to the warehouse entirely. That means you can choose more direct routes from the manufacturer to your end users, thereby reducing your fleet’s wear and tear. This will increase your supply chain’s efficiency in ways that compound to save your business big over time.

Less Fuel Needed

One of the compounding effects down the line with cross-docking is how much less fuel it takes to get your finished products from manufacture to end user. Fewer checkpoints for your supply chain mean less wasted fuel to get them there. Not only that, you’re able to encourage current and prospective clients with your business’ reduced carbon footprint.

Decreased Labor Hours

Just like fuel efficiency, reduced labor hours have a compounding effect on your supply chain. Not only are there fewer man hours needed from your truck drivers, you’re decreasing the time spent handling product as well. By transferring product from one point of distribution to another, you’re cutting out the time spent storing and retrieving it from the warehouse organizational system. It can save a lot over time!

Shorter Turnarounds

In addition to rates rising, we’re also seeing longer shipping times for products. But the more direct shipping routes afforded by cross-docking helps limit this as a factor. Even though they don’t directly relate to decreasing costs for you, decreasing turnaround time helps alleviate tension with impatient clients who aren’t weathering these increases well. Offering this service where you can may make a difference in their ability to work with your business through this difficult time.

We get it. Rates are rising quickly, and you want to do everything in your power to limit the impact on your clients. Cross-docking offers a lot of advantages to both expediting your supply chain and limiting costs, but there can be a lot of pros and cons to it. Learn more about if cross-docking is right for your supply chain by talking with one of our team members. We’re here to help you provide the best experience for your clients possible during these difficult circumstances.

Tags: Cross Docking, Supply Chain