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What is Cross-docking Logistics (CDL)?

14 Jun 2024

By Martina Kao    Photo:CANVA


Cross-docking Logistics is an operation method that spans inventory. There is no storage and push. After the goods are sorted and loaded, they are transported and distributed directly. This transportation mode can help cargo owners save time and space costs, but it may require a higher level of operational capabilities and related equipment to cooperate with the operation, such as: high-speed camera tunnel. In-motion labeling, label verification machine, multiple receiving lines, transportation to shipping, In-motion weighting, Destination scan, Divert to shipping lane. Finally, multiple operating lines transport the items directly to the containers for distribution, but before that there are two final procedures, namely: Final verification scan and manual handling and sorting.


In other words, cross-docking operations still require a warehouse, but this warehouse is not a warehouse used to push items, but a warehouse used to distribute items. Therefore, this kind of operation warehouse does not require more space to arrange more logistics. Commodities can still efficiently deliver many items to their destinations to save many costs. These costs include warehousing costs for pushing items, timeliness costs of the goods themselves, and reduction of suppliers and sales points. The time cost of continuous communication, the handling cost incurred by reducing inventory, etc.


Of course, the types of cross-docking are divided into four major categories:

1. Manufacturing cross-docking: This type of cross-docking favors manufacturers to locate warehouses near factories, which facilitates simple classification of parts after they arrive at the warehouse and delivery to the workshop without requiring additional storage space.

2. Sales line cross-docking: Classify and package goods from different suppliers and deliver them to various retail locations of the same customer.

3. Cross-docking by transportation companies: Goods from multiple customers are packaged separately and concentrated by different logistics companies, and then packaged and delivered to different customers.

4. Retail line cross-docking: According to orders from retail locations, goods from multiple suppliers are picked separately, and then transported to the retail location according to the designated delivery location on the order.


There are some conditions for cross-docking operation, which may require investment in initial investment construction and equipment costs. Of course, in addition to the investment cost of the warehouse itself, this includes sufficient area for loading and unloading parking areas, operation line areas, and vehicle deployment areas. . In addition to the equipment costs listed in the first paragraph, there may also be initial construction and investment costs for pushers, cranes, warehouse trailers, etc.


In addition, during cross-docking operations, smaller goods may be merged into one larger goods; larger goods may also be dismantled into several smaller batches. But whether it is merger or dismantling, it requires a high degree of reliance on a rigorous warehouse management system. This is also a necessary early investment in logistics planning. In order for efficient dispatch to proceed smoothly, WMS (Warehouse Management System) will play an important role. role to ensure the correct entry and exit of all goods. This is the soul of the cross-docking model and ensures that goods can be deployed accurately and in a timely manner.


Finally, suppliers need to be able to coordinate sufficient supply volume in a timely manner so that trucks arrive at the warehouse at the correct time to avoid unnecessary confusion in receiving goods and moving lines. Therefore, this may also require a sufficient transportation fleet to maintain the volume schedule on the system or on the order.


Cross-docking is basically a logistics strategy that can significantly reduce costs and increase efficiency by eliminating the need for inventory. However, it requires a high level of operational expertise and specialized equipment. Companies that can successfully implement cross-docking will have the opportunity to reap many benefits, including reduced warehousing costs and risks, increased inventory turnover, and faster delivery times.

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