Many competencies within the supply chain are synonymous. Supply chain management, supply network management, procurement, purchasing, logistics, operations, sourcing, contract manufacturing, distribution … the list goes on. Though not all functions have the same capabilities, they are all parts of the bigger picture. Hence some of the confusion that surrounds transloading and cross-docking.
Though both competencies work to reduce costs, they are quite different supply chain strategies. Let’s take a closer look at the differences to determine which function is best for your business. Or, as is the case for most 3PLs, how to use both strategies together.
What is transloading?
Transloading refers to the process of moving shipments between locations using more than one mode of transportation. This service involves moving shipments via rail or water for the first part of the trip and then switching to trucking services for the last-mile delivery.
It seems like a straight-forward process, but in reality, transloading is an intricate technique that requires detailed tracking and planning. During the transloading process, products are transferred from one container, often 20 or 40-foot shipping containers, to pallets or truckloads. Amid the possibility of damage, delays, and even theft, shippers find the highest cost savings during the transfer from shipping containers to trucks headed to warehouses and distribution centers.
What is cross-docking?
Cross-docking is the practice of loading and unloading materials between modes of transportation with little or no storage in between. Companies may choose this approach to change the type of conveyance or route materials from different origins into vehicles (or containers) with similar destinations.
With cross-docking, there is little storage involved. Shipments unload and reload in a tight window, usually under 24 hours. This quick turnaround involves highly organized partners and excellent communication. Technology can also help with tracking data on delivery times and potential delays or disruptions.
The difference is in the details
The goal of both strategies is simple: saving money. Using transloading and cross-docking facilities allows 3PLs, carriers, and shippers to easily manage freight, cut costs, and accelerate fulfillment dates.
Transloading provides shippers and carriers the ability to consolidate freight in an organized and timely manner. They can manage fuel and transportation costs and many other cost savings opportunities. Transloading offers more options on how the shipment can safely reach the destination by allowing businesses to pick the best method based on available transportation routes.
Cross-docking also creates cost savings opportunities. Reduced material handling, labor costs (no need for packaging or storing), and warehouse space add up to larger margins for your business. Fuller loads and faster turnover of products means more immediate delivery for your customers.
Supply chains often use both processes for more efficient and timely deliveries. However, it’s vital that businesses have a deep understanding of each piece of the shipping process to plan their logistics strategies and avoid disruptions.
Utilizing both strategies allows shippers and carriers more transparent fulfillment, easy management of freight, and tracking options to keep deliveries on schedule. These processes mean faster, more accurate deliveries, ultimately improving customer satisfaction and cutting costs.
At WSI, we use transloading and cross-docking in your logistics operations to allow you to strategize transportation routes and leverage your supply chain capabilities. This ensures deliveries arrive on time and under budget. You can pick the method that allows your freight to move easily, using consolidation practices based on size and weight throughout the transportation process. Learn more about our solutions by contacting WSI today.