Retail Logistics Services

Warehouses are a critical component of logistics operations, but sometimes it’s best to keep products moving. With the right set of supply chain characteristics, companies can leverage a cross dock strategy to speed factory-to-store-shelf cycle time and reduce distribution costs up to 50%.

The accompanying graphic shows that savings derive primarily from freight and inventory carrying costs. In a typical cross dock, items arrive from dozens, even hundreds, of retail suppliers and, after a brief stop off, go directly to the store.

This allows retailers to:

• Reduce distribution costs by more than 50% on the items being cross docked.
• Reduce facility operating costs. Cross dock facilities are smaller and simply cost less to operate than full-fledged distribution centers.
• Reduce inventory. When the volume and timing of supply can be managed to precisely match demand, the need for large safety stocks is eliminated.
• Reduce transportation costs. Transport mode shifts from high-cost LTL to consolidated truckload shipments that get there faster.
• Increase retailer efficiency. Retailers receive fewer, precisely timed shipments, requiring fewer dock doors and receiving staff.
  
  

Cross docking is a proven retail strategy, but many retailers don’t use it because, frankly, it’s hard. You need tight planning and coordination among manufacturers, carriers and 3PL partners, as well as the systems to synchronize inbound and outbound flows.