Cross docking is when inbound products are sorted, distributed, and loaded into outbound trucks to be distributed with little or no storage time in between. Oftentimes, companies will have a hub and spoke model for cross docking. All the products are brought to one central location where they are immediately divided and dispersed to other locations. This is a timely process because products are immediately redistributed instead of sitting in storage until they are needed.

There are many benefits to cross docking. Because you are moving products from truck directly to another, there is no need for a large storage center to hold products, and you don’t need a large building which can reduce your company’s impact on the environment by having a smaller footprint. And without a large storage center, you don’t have to pay for shelving, conveyor belts, boxes, or any of the other expensive equipment and materials that are necessary for warehouses to run efficiently.  Since goods don’t need to be stored and located in a warehouse, products will move faster from the manufacturer to the customer. This is especially beneficial for items like produce or food that has a limited shelf life.

Traditional storage facilities need a large staff to search through shelves to find the items for each order. With cross docking you will still need staff to move products from one truck to another, but not nearly as much as you would with a traditional warehouse model. This greatly reduces labor costs. If your routes are optimized, your company can also reduce transportation costs.