Cross Dock Solutions
Within the international freight forwarding community, cross docking is a logistics practice of unloading material from an inbound conveyance (i.e. truck, aircraft, ship) and subsequently reloading on an outbound conveyance for distribution and delivery to end customers. Cross docking is traditionally used for sorting material intended for different destinations or combining material from different origins going to the same destination or customer. This process is normally accompanied by cost reductions since the put-away and retrieval processes that are typically associated with distribution services are no longer necessary.
At Expeditors, we have been performing cross dock functions on behalf of numerous customers for many years as part of our core competencies. Recently, we introduced additional automation and integration into the cross dock process, which now provides customers with even more supply chain solutions.
This newly enhanced solution allows us to more effectively reuse the data that is entered at origin for inbound hub operations, outbound hub operations and delivery carrier operations. This new process likewise includes an upstream planning report that enables our hub operation to merge deliveries from multiple origins consigned to the same end users. Additionally, this report is used to assist the hub operation with managing the carrier selection process for deliveries.
What do these changes mean for our customers? - A solution via a single portal with order level, end-to-end visibility.
How does this process work? Let's use a fictional customer who has manufacturing facilities in Dongguan, China and Chicago, Illinois and distributors located throughout the European continent.
All orders from both the Dongguan and Chicago origins are consolidated at predetermined intervals under a single house air waybill, per origin, and consigned to Expeditors Amsterdam. The initial order information is uploaded via EDI or manually entered by Expeditors' origin operations.
Since the origin data includes final delivery information for each order, Expeditors' origin export system automatically recreates the deliveries in Amsterdam's export system. This then automatically triggers an upstream planning report that Amsterdam uses to begin managing and coordinating final deliveries. All of these key events happen before the shipments even arrive at the inbound airport.
Coordinating the shipment data also includes merging deliveries (from the same or multiple origins) consigned to the same destination or end user and determining which service provider to use for the deliveries. Service provider selection is based on customer requirements (transit times, service levels, costs) and can be dynamically adjusted as needed. Service providers can range from local cartage companies to regional LTL truckers and integrators. In many cases, delivery information is transmitted electronically to the service providers. As the shipments are delivered to the end user, selected event codes are transmitted back to Expeditors and immediately populated in our visibility tool, exp.o®.
While this enhanced cross dock solution represents significant productivity enhancements for Expeditors, the main benefactors are our customers.
Automated cross dock benefits include:
- Elimination or reduction of DC costs (facility, manpower, inventory)
- Reduction in handling costs and operating costs
- Ability to merge deliveries based on customer requirements
- Flexibility to use multiple delivery carriers in a dynamic environment
- Improved cross dock hub throughput and faster transit times to end customers
- End-to-end visibility at the order level
- Elimination or reduction of minimum charges for multiple order deliveries to the same end customer
- Improved product availability
- Increased customer satisfaction
Who are the ideal customers for a cross dock solution? Any company that operates a "Build to Order" supply chain model (product allocated at origin) and that requires no value-add functions prior to delivery. If this supply chain model also includes multiple manufacturing locations servicing the same end customers, additional benefits can be achieved.
Cross dock target industries:
- High technology
- Retail
- Consumer goods
- Pharmaceuticals
Although our recent cross dock automation and functionality can be implemented virtually anywhere around the globe, the most popular applicability is in the Benelux region (especially the Netherlands) for European distribution. The features that make the Benelux ideal for European supply chain activities are: central location within the European continent, excellent airport and seaport facilities, advantageous tax and customs legislation, and a highly educated workforce.
Cross dock is one of three solutions within Expeditors' suite of direct delivery products. These solutions are designed to provide our customers with options, including quicker order-to-delivery cycle times, while simultaneously offering opportunities for reducing existing supply chain costs.
For more information on cross dock and our other direct delivery solutions, contact your local Expeditors representative.
Lance David
Global Air Product Development
