To Crossdock or to Transload. That is the Question. Oh, and What's the Difference?
Updated: Jul 6
Article updated 2020 by Dylan Nguyen
Logistics is a complex operation. Any good supply chain operation is focused on transporting some kind of product from A to B as fast as possible. Cross docking and transloading help supply chains operate effectively, by consolidating goods and eliminating long term storage.
Consolidating products and shipping directly to the final destination helps avoid extra costs and delays that can occur during transportation and storage. There are services that companies utilize to get their cargo delivered as efficiently as possible, while also reducing supply chain costs by saving on labor and storage. Both services aim to streamline delivery optimization, but they are two very different practices.
What is Transloading?
Transloading involves transferring cargo from one mode of transportation to another. It is a service utilized when more than one mode of transportation is required for delivery. For example, if your cargo needed to go from a truck to an airplane, then from an airplane to an ocean container, you would employ a transloading company to facilitate those transfers.
Transloaders help process shipping containers at facilities near international or local ports and direct them to destinations throughout the supply chain. Goods are moved from the main shipping container to a nearby facility. Once there, everything is packaged and palletized. Then, they are loaded onto a truck or container bound for delivery to the customer. Although transloading facilitates palletization and proper handling, it comes with some possible drawbacks.
Transloading could add unwarranted time to the original ETA and lead to delays. You could also experience theft or damages at the facility or with goods left in storage for an extended amount of time.
What is Crossdocking?
Crossdocking also aims to load and deliver goods in an innovative way. Products are moved from one inbound truck onto another outbound truck meant for delivery. It is called crossdocking because goods are transported to a central docking station. Incoming goods are received from one side, sorted in the middle area, and loaded on to an outbound vehicle from the other side.
Goods are immediately transferred from incoming vehicles and loaded into outgoing ones. With crossdocking you don’t have to worry about the costs and labor that comes with storing products.
Since products are transferred quickly, there is little or no storage required, which reduces the turnaround time between reception and shipment. Crossdocking sounds easy, but it can lead to unforeseen problems if there are any communication mishaps.
Efficient turnaround depends on perfect communication from start to finish. It relies on electronic feeds that must provide real-time, accurate data such as when the inbound cargo will arrive and the time of pickup. This service eliminates the potential for having your goods temporarily stored in a warehouse with the accompanying charge, but requires meticulous logistical planning to avoid coordination delays.
Both transloading and cross docking can be critical to maintaining a good supply chain operation. While both aim to streamline the supply chain by moving freight more efficiently, they serve different roles. These operations require effective communication from start to finish. Both supply chain management services come with their unique pros and cons.
If you need to move cargo from a truck to a plane, or vice versa, transloading could cut costs in storage and labor, but it could also delay your operation, which could lead to bigger problems. Crossdocking is useful as well. It reduces costs by processing the cargo for delivery the same day, but any mistakes in communication could cause the whole operation to fail. Deciding on the service that fits your logistics needs relies heavily on your particular industry, geographical requirements, commodity, and final destination.
CLN can help you make an informed decision on which of these two services are right for you. Feel free to contact us to see how your current process can be restructured in the most efficient manner possible. Regardless of your supply chain management needs, CLN Worldwide can help you plan, coordinate, and strategize a best practice methodology for your logistics needs.