Warehousing & Fulfillment

Cross-Dock Warehousing: The Basics and 3 Design Best Practices

Warehousing & Fulfillment
September 29, 2023
9 min read

Learn how cross-docking can increase delivery speed and efficiency for businesses of all sizes. This guide includes best practices, warehouse setup, and technology requirements.

Table of Contents

What Is Cross-Docking?

What’s the Difference Between Pre-Distribution and Post-Distribution Cross-Docking?

What Is a Cross-Dock Warehouse?

What’s the Difference Between Cross-Docking and Warehousing?

What Are Cross-Docking Warehouse Design Best Practices?

Many brands are incorporating cross-dock warehouses into their fulfillment operations for deliver on consumer demand for faster, more affordable ecommerce shipping without breaking the bank. 

Driven by Amazon Prime’s 2-day delivery guarantee, customers in today’s multi-channel retail environment have high expectations regarding selection, customer service, and shipment times across all offline and online storefronts. 

This has made cross-docking one of the most popular inventory management strategies for logistics managers, especially as part of an integrated freight consolidation strategy. Cross-docking provides numerous benefits when cross-dock warehouses are designed properly to move inbound cargo to the loading dock for outbound delivery as quickly as possible. 

Below we take a deeper dive into cross-docking and cross-docking warehouse design best practices.

What Is Cross-Docking?

Tactically, cross-docking involves shifting intact pallets from one form of ground transportation, like rail or truck, to another form of transportation with no storage time in-between. Cross-dock providers unload, sort, scan inbound less-than-truckload (LTL) shipments before they reconsolidate them with packages that have the same next destination.

Then, providers reload shipments onto outbound trucks or rail to continue their journey. They may break larger shipments down into smaller batches for cheaper and faster delivery. Similarly, they may be able to consolidate goods going to the same place into fewer last-mile vehicles, which also reduces carbon emissions

In other words, items are in and out in no time. Consequently, cross-docking works best for merchants selling the following types of goods:

  • Staple products with constant, predictable demand
  • High-quality items that don’t require quality inspections during transit
  • Perishable goods that require immediate shipment
  • Pre-picked and pre-packaged orders from another warehouse 

Looking at cross-docking more strategically, the goal is almost the same as that of a traditional warehouse – receiving, storing goods, order picking, and shipping. But, there’s one big difference: cross-docking is designed to eliminate costly storage and manual order-picking functions as goods move from the manufacturer or ecommerce shop to the end customer. 

Inventory inevitably loses value and incurs additional risk risk of loss every time it moves in the logistics process. Cross-dock warehouses are designed to reduce this waste. 

Utilizing business systems and other technology to create an integrated cross-docking network system creates a just-in-time (JIT) shipping process that reduces inventory costs, shortens transit times, minimizes the risk of damage, and improves quality of service. Done the right way, cross-docking is a win-win for merchants and customers that ensures fast, affordable on-time delivery

What’s the Difference Between Pre-Distribution and Post-Distribution Cross-Docking? 

Pre-Distribution Cross-Docking – This occurs when businesses already know the end customer. Thus, items leave the supplier and a fulfillment provider unloads, sorts, and repacks products at the cross-dock warehouse based on predetermined distribution instructions. 

Post-Distribution Cross-Docking – When businesses don’t know the end customer, they postpone sorting until they can choose the proper cross-dock facility and customers based on location and demand. In this scenario, merchandise spends less time at a cross-dock warehouse. But merchants will more than offset added storage costs by making informed decisions about where to most efficiently forward stock inventory based on demand forecasting data.

Need help knowing where your business should forward-stock your inventory? Try our free tool, NetworkVu.

What Is a Cross-Dock Warehouse? 

It may seem odd to see the terms cross-dock and warehouse together since the goal of cross-docking is eliminating the costs, delays and risks that come with traditional warehousing. However, while cross-docking aims to reduce inventory storage, it still requires a safe, enclosed space to unload and rearrange inbound goods for more efficient outbound shipment. 

Think of cross-docking warehouses or facilities more like a train station where passengers gather and wait briefly to board a nonstop commuter rail to the city.

Cross-docking stations are where providers sort and reorganize inventory for shipment to the same place.

What’s the Difference Between Cross-Docking and Warehousing? 

Cross-docking is often confused with transloading and traditional warehousing. 

Transloading involves sorting and re-palletizing inventory at each phase of intermodal shipping, while the primary function of warehousing is to keep stock on-hand until the brand sells it. 

On the other hand, cross-docking involves unloading goods directly from incoming transport onto outbound transport with little (ideally none) long-term storage in between. 

Retailers previously relied on multiple suppliers to bring product to individual retail stores, whereas cross-docking allows vendors to bring product to one central location. From there, the retailer receives, sorts, and then ships products to each store.

What Are Cross-Docking Warehouse Design Best Practices? 

In cross-docking many deliveries take place in a single day, so suppliers must utilize technology like Electronic Data Interchange (EDI) to stay informed in real-time about deliveries that must be made that day. Which cargo will arrive at which gate? Where should they transport goods? You can see why successful shops can’t depend on manual processes to plan shipments in precise time slots. 

Successful cross-docking requires perfect organization within the warehouse. Here are 3 facility design best practices to consider:

Shape of the Warehouse

Cross-docks come in a variety of formations based on the number of doors required and central space needed to move inbound items to the outbound area of the warehouse. Cross-docking demands tremendous efficiency and speed from equipment. From the instant forklifts arrive, goods must travel throughout the cross-docking facility via power pallet trucks and conveyor belts at the fastest pace possible.

Small-to-medium-sized cross docks usually are an I-shape or narrow rectangle to maximize the use of central doors. For larger docks, alternative shapes that expand the central area and make distant doors closer are preferable. For instance, an X-shape is best for docks larger than 200 doors and a T-shape is recommended for dock sizes between 150-200 doors. 

In the long run, the optimal shape of each cross-docking warehouse depends on freight flow patterns and factors like goods turnover, distance, gates, and buffer spacing. 

Number and Placement of Dock Doors

Keep in mind that more dock doors don’t necessarily correlate to more efficient cross-docking facilities. For example, placing dock doors on the opposite wall far away would lead to efficiency-killing congestion. This layout may make placing straight conveyor belts easier, but a better layout would be doors on only one wall or 90 degrees to each other. This allows high-speed mowers to travel between incoming and outgoing doors quickly. Plus, remember that ample space is needed for pallet staging activities near shipping doors and aisles should be oversized in high-traffic areas. 

Inbound and Outbound Transportation Schedule

For cross-docking to achieve its two top objectives – minimizing costs and maximizing productivity – inbound and outbound tracks must arrive and operate in the correct order. Otherwise, misalignment, such as outbound trucks arriving ahead of the goods they’re scheduled to deliver, leads to overcrowding and traffic jams in the dock. Accordingly, cross-dock facility design and organization must account for truckloads, transit times, and vehicle wait times. 

The Bottom Line

Besides possessing a well-organized cross-dock network, another core requirement for implementation is access to advanced analytics and real-time data that connects the ecommerce retailer, delivery driver and customer from order through the last mile and delivery. 

Without access to modern IT technology and acumen, the high degree of organization required to make cross-docking warehouses work effectively is impossible. For this reason, ecommerce SMB’s partner with fourth-party logistics (4PLs) providers to carry the heavy technology lift – and provide a nationwide warehouse network that can handle increased demand on equipment and facilitate nationwide 2-day shipping guarantees. To learn more about how Ware2Go can help you take advantage of cross-docking, please reach out to one of our fulfillment experts.

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