Warehousing & Fulfillment

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

Warehousing & Fulfillment
June 7, 2022
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.

Consumer preference for ecommerce shopping and fast, inexpensive shipping has led businesses to incorporate cross-dock warehouses into their fulfilment process to deliver on those preferences without breaking the bank. 

Long gone are simpler times where buyers only flocked to physical stores. 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 is why cross-docking has become 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 is the shifting of intact pallets from one form of ground transportation, like rail or truck, to another form of transportation with no storage time in-between. Inbound less-than-truckload (LTL) shipments are unloaded, sorted, scanned, and reconsolidated with packages that have the same next destination.

Then, they’re reloaded onto outbound trucks or rail to continue their journey. Larger shipments may be broken down into smaller batches for cheaper and faster delivery. Similarly, goods going to the same place can be consolidated 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. 

Any time products are stored, companies lose value and introduce additional risk into the logistics process. Cross-dock warehouses are designed to avoid 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 the customer is already known. Thus, items leave the supplier and goods are unloaded, sorted, and repacked at the cross-dock warehouse based on predetermined distribution instructions. 

Post-Distribution Cross-Docking – When the customer isn’t known, sorting is postponed until the proper cross-dock facility and customers are chosen based on location and demand. In this scenario, merchandise is more likely to spend a short amount of time at a cross-dock warehouse. But the added storage costs will be more than offset 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, a safe, enclosed space is still required 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 items are sorted and reorganized 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 is the sorting and re-palletizing at each phase of intermodal shipping, while warehousing is designed to keep stock on-hand until it’s purchased and needs to be delivered. 

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

Retailers previously relied on multiple suppliers bringing product to individual retail stores, whereas now 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 do the goods need to be transported? Myriad questions like this exist, which is why successful shops can’t depend on manual processes to plan shipments in precise time slots. Otherwise, the cross-dock warehouse will quickly become congested. 

Further complicating the process, the quality of every delivery must be pre-defined since there’s no time for quality checks at reception. 

As such, 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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