How Specialized or Extended Cross-dock can Help Reduce Your Logistics Expenditures for Satellite Operations in Canada
Cross-dock has been around for decades and it is a great way to reduce costs under certain circumstances. One area where it works well is when suppliers want to reduce the need of duplicating inventory by closing down satellite warehouses or avoiding their need altogether in the first place. In this scenario there is the opportunity for major savings in facilities/space, staff and their respective impact on profitability and working capital. Large scale transportation savings are also a potential opportunity depending of the distribution characteristics.
Improvement in operational metrics such as distribution fill rates are also a potential outcome associated with the reduction in duplicate inventories. One case study saw the elimination of a 50k square foot facility and its full operational staff being replaced with a 3PL at a fraction of the original space and staff to handle compounding growth in volume.
There are several types of cross-dock operations relative to producers working with a 3PL partner in order to maximize their supply chain efficiency. Some of these include:
1) Full Pallet: Producers pick their orders either at the full pallet level where applicable, or at the case level and complete the orders for final destination. The product is then shipped to the cross-dock facility who then separates the load by destination and ships the product to the final destination.
2) Case or Break-Bulk: In this case the producer either maximizes the cube of the truck or container, or maximizes it’s pick efficiency by picking in bulk, or the equivalent of a wave pick, and ships the load as is to the strategic cross-dock partner. The cross-dock partner then breaks the bulk shipment into orders for final distribution to the customer.
3) Hybrids: Our experience shows that hybrids of the above coexist frequently as do hybrids between inventorying of goods; for example for slower moving goods, temporary staging of goods to maximize inbound efficiency and matching due dates; temporary staging to allow for consolidation to the consignee destination; through to pure cross-dock to name a few.
ASL’s direct experience has shown that cross-dock can work great in many areas including high volume or high cube volume products, regular replenishment orders, short shelf-life / perishables, back orders and even specialized fulfillments for new store or location openings. Consumer goods as well as manufacturing are prime candidates for specialized or extended cross-dock.
A few final comments relative to cross-border cross-dock: There is a major opportunity for savings of international LTL rates through this process. Truckload rates can be utilized to bring the goods into Canada and then domestic LTL rates can be utilized for final distribution. As well, many foreign producers may not be familiar with the nuances of the local customer requirements. Even major retailers have different compliance requirements from country to country, whether it is different label requirements (i.e. MH10 versus UCC128), differerent price ticketing requirements in Canada versus the US, through to different type of CHEP pallets. Cross-docking into the Canadian market allows for the producer to focus on their expertise for their domestic market and leverages the experience of the 3PL in the local market to know and execute what the local consignees require.
ASL has been performing specialized cross-dock for over four decades. If you feel that this type of service may benefit your organization, then our experienced team would be honored to speak with you.