Summary: Supply chain productivity and speed is a pretty big factor for growth, and the use of a cross dock setup is becoming a popular strategy for boosting both in an organization. When this concept is implemented correctly under the right conditions, it can improve efficiency times and reduce product waste.

The Cross Dock Explained

Under a cross dock arrangement, products from a manufacturer’s plant or supplier are sent directly to a retail chain or customer with very little to no storage or handling time. This usually takes place in a distribution docking terminal with cross dock facilities in place.

In a cross dock facility, there are normally dock doors and trucks on two sides -inbound and outbound – with minimal space for storage. The “cross dock” name comes from the action of receiving products from an inbound dock and then moving them across to the outbound dock.

A simple example is a truck carrying products arriving at a terminal and going to the receiving side of the cross dock terminal. Once the truck is properly docked, its products can be moved directly to their destinations or unloaded, sorted and screened. After that is done, they’re moved to the cross dock’s other end using a conveyor belt, forklift, pallet truck or other means of transport to the outbound dock, where another truck is waiting. Once the outbound truck is loaded, the products are off to customers.

Where Cross Dock Services Work

A cross dock setup won’t meet the needs of every warehouse, so business owners need to research to decide whether it will boost their productivity, lower costs and improve customer satisfaction. One of the most significant factors in this decision is product type, Generally, this strategy works well for products like food, which might have shelf life limits or require temperature control. It can also make the transport of sorted and already packaged products, such as rices and syrups, to a specific customer more efficient.

While a cross dock setup can be used for a variety of reasons, some common ones include:

• To provide a main site for product sorting and the combination of similar products for delivery to numerous destinations in the most productive ways.
• To combine smaller loads of products into one transportation method to help reduce transport costs in what is commonly known as consolidation.
• To break down bigger product loads into smaller ones for transport to simplify delivery to the customer, which is known as deconsolidation.

Organic foods in particular can benefit from the use of cross dock services because freshness is key and no artificial preservation methods are used to prevent products from spoiling before they reach their final destination. The storing of organic foods is also more complicated than the storing of processed foods, and the use of a cross dock helps eliminate those potentially costly and possibly hazardous storage times.

The Food and Drug Administration has regulations regarding the storage and transport of products certified as “organic.” For example:

• Many organic foods can’t be stored with other non-organic substances or products because of the possibility of contamination.
• Organic foods must be stored in what are deemed to be “suitable” materials, and all storage containers must be clearly labeled with their contents and origin.
• Organic inventory records have to be kept separate from all of the other warehouse goods records.
• Non-organic product equipment cannot be used for organic products because of the contamination potential.
• Temperature must be monitored and records must be kept for goods that require temperature-specific storage. Failure to keep products at the correct temperature levels could lead to losses.

Cross contamination is a huge concern when it comes to organic products, and the longer the products are in storage, the higher the possibility of contamination. Products that are gluten-free, for example, cannot be stored near products containing gluten. A gluten-intolerant customer who consumes a contaminated gluten-free product could become seriously ill, and this can cause both the customer and the business to suffer. The business may be legally liable for damage caused to consumers by its contaminated products, and the incident could harm its reputation with customers.

One example of cross dock methods being used successfully for natural and organic goods is the rapid growth of the Rochester, New York-based Wegmans Food Markets Inc. Among the largest private companies in the United States, the grocery chain was an early adopter of the cross dock strategy, with the goal of moving fresh produce to its stores faster to increase sales and customer satisfaction. Inbound Logistics Magazine reports that the supermarket chain has actually had a cross dock system in place for around two decades.

Pamela Erb, Wegmans Vice President of Distribution, says that cross docking is used with regional suppliers and for almost the entire natural food selection found in the chain’s 80-plus stores across the country. About 80 percent of Wegmans’ natural foods are cross docked, with direct store delivery used as a supplementation. This system has helped the brand grow its international and organic food businesses, which are two of its fastest-growing areas.

Almost every Wegmans store department uses a form of the cross-dock system for new item launches, promotional support, or freshness. Each department has requirements for cross docking, such as the need for freshness or the case capacity. The chain doesn’t want to deter merchants from bringing in products, so Wegmans looks at item variety to make an informed decision about distribution methods. Technological improvements have also helped the brand tweak and improve its cross dock methods throughout the years.

Intelligent Logistics Matter

Food loss is a serious problem, with about one third of all fresh vegetables and fruits around the world tossed out annually, according to research from the University of Bremen that was published in the U.S. Library of Medicine. While care and concern should go into any distribution method decision, the cross dock method is certainly one to consider with fresh foods and products that need to get into customers’ hands faster.