Warehousing With Crossdocking and Transloading
Learn the importance of the crossdocking and transloading processes and how they impact warehousing business logistics and supply chains
Types of Crossdocking
Transportation crossdocking is most often used by 3PLs and shippers to consolidate freight from several origins into a load going to a single place. This form of crossdocking is most effective at reducing shipping costs by decreasing the number of vehicles needed to deliver products.
Distributor crossdocking is when a company receives products from various suppliers and loads them onto trucks based on retailer orders. Real-time communication between the retailer and distributor is crucial, so the correct products are loaded onto the right truck.
Manufacturer crossdocking happens when raw materials are delivered directly to an assembly line without being stored. This form of crossdocking is effective at reducing material handling costs.
Example of Crossdocking
A retailer needs to ship 40 pallets of product from New York City to destinations in Colorado, Arizona, and Florida. The pallets are first shipped to a third-party crossdocking warehousing facility in Chicago, Illinois where they are received, stored for a short amount of time, and loaded onto other trucks. 12 hours later, 20 pallets are sent to Colorado, 15 pallets are sent to Arizona, and 5 pallets are sent to Florida.
Like crossdocking, transloading services were impacted by the COVID-19 pandemic. Transloading is frequently used by logistics service providers to facilitate the transportation of products to different locations. It gives shippers the capability to combine multiple forms of transportation to get products to their destinations.
Without transloading, many overseas shipments would not be possible. In addition, domestic shipping would require more time and money if only one form of transportation were used to move products across the country. Transloading can be implemented at any time during the transportation process to make sure that products reach their destination on time.
Transloading is not only reserved for moving products from suppliers to warehouses, but also to move raw materials and products:
- Between job sites
- From warehouse to warehouse
- From warehouse to end-customer
Although transloading is most often thought of as a process that moves ocean freight from ports to transloading facilities and then to other forms of transportation, it can also involve shipments beginning via rail or air that switch to trucking services for last-mile delivery. The process can also be used in truck to truck, rail to rail, and ship to ship freight movement.
Transloading can help companies save on shipping costs by consolidating cargo from multiple shipping containers into one trailer. Instead of shipping multiple smaller shipments, products can be consolidated at transloading facilities and transferred to trucks for faster and more efficient delivery. Using rail service for part of a transportation route can also lower fuel costs because rail cars use up to four times less diesel fuel than trucks.
The process of storing products is also utilized in transloading. Because cargo shipped to a transloading facility may not always be ready for immediate delivery upon arrival, it will require storage. Supply chains from retail to raw material benefit from transloading because companies can store their products and ship them as needed. This can improve a company’s inventory management capabilities resulting in better order fulfillment.
Once cargo arrives at ports or railyards, it can be transported in shipping containers by truck to a distribution center to be broken down and delivered to consumers or pallets can be taken to a transloading facility. Once arriving at a transloading facility, cargo can be unloaded, sorted, palletized, shrink-wrapped, and put into storage or transferred to a truck or rail car for outbound shipment. Some transloading facilities also offer value-added services such as freight weighing and customs management. These services can help expedite the delivery process.
If products are located at multiple sites but must go to the same destination, trucks can drive to transloading facilities located along the railroad line. Products can be placed into rail cars as trains move along their routes, stopping at each facility so products can be consolidated into a single rail car on their way to their destination.
Popular Materials Transported with Transloading
Transloading is a useful process in the supply chains of several industries because there are no material restrictions. Some of the most common types of products shipped via the transloading process are:
- Construction materials – Lumber, metals, bricks, gravel, natural stones
- Warehouse merchandise – Palletized freight, shipping containers, appliances, clothing
- Oversized cargo – Military equipment, aerospace components, heavy machinery
- Specialized freight – Hazardous chemicals, climate-controlled products
Example of Transloading
Six suppliers of raw materials, two in South Africa, two in China, and two in Thailand, ship a years-worth of cargo to a third-party logistics transloading facility in Savannah, Georgia. The cargo is received at the Port of Savannah and transported to a transloading warehouse where it is stored until needed. At a given time, the third-party logistics provider can pick the raw materials up as needed, consolidate them into shipments, and transport them directly to different warehousing facilities via truck, rail, or even plane.
The transloading and crossdocking processes are crucial to the success of nearly all logistics and supply chain operations. While both processes are beneficial, the main differences in transloading and crossdocking is that transloading begins with container cargo that can require warehousing and storage for a long period of time. Although the crossdocking process can utilize warehouse facilities, it is not used to store inventory long-term.
International, overseas, or cross-country shipments are best transported with transloading services. Cargo that undergoes transloading usually requires products to be palletized, while products that undergo crossdocking are typically already palletized. Already having products palletized makes managing inventory simpler for warehouse managers because it enables companies to move products faster.
Crossdocking can improve the occupational safety and health of workers because workers are not required to perform pick and pack tasks that are necessary for order fulfillment at distribution centers. This can streamline warehousing logistics, making crossdocking a useful warehouse solution.
Both transloading and crossdocking offer services that are intended to reduce costs and increase supply chain efficiency. Based on the shipment needs, sometimes both services are required. The choice of which process to use depends on how the products are shipped, where they are coming and going, and the speed they need to be delivered.
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