Transloading and cross-docking are common concepts in the LTL trucking industry in Houston, TX. They refer to freight services and cargo handling. Most businesses use both types to customize freight management to their needs. Read on for an explanation of cross-docking and transloading, and how these methods work for freight.
Definitions of each
Transloading involves unloading and unpacking inbound freight. Workers sort the contents and re-palletize them for outbound shipping. For example, imagine five suppliers send a year’s supply of auto parts to a warehouse. The warehouse receives the parts, and workers organize and shelve them. As manufacturers and car repair shops need these parts, they order them from the warehouse, which sends out the parts in a shipment.
Cross-docking involves inbound freight arriving at a warehouse or terminal. Once it arrives, it sits there for a short time until another truck picks it up. Contents remain on pallets until they arrive at their destination. Basically, a manufacturer creates 20 pallets of products and sends them to a third-party warehouse. From there, four pallets ship to Florida, for example, six go to Arizona and the final 10 head to Washington. The warehouse acts as a transfer hub rather than storage.
When they’re used
Transloading and cross-docking depend on a third-party warehouse and offer many benefits. Depending on the nature of your business, you may use one or both methods.
Cross-docking reduces smaller LTL shipments and creates larger full-truckload shipments. There is no need to keep goods in stock, and with constant movement, companies reduce damage and theft risks by carrying less inventory. You also pay less for storage fees and warehouse management and focus on what your business does best.
You will likely benefit from cross-docking if you sell uniform products but ship them nationally. Without cross-docking, you create small shipments, and if product demand increases, this becomes inefficient. If you cross-dock, you only need to get the product to one place, and from there, the warehouse or terminal sends it on to the final destination. It’s a more centralized way to manage shipments.
Transloading is an excellent option if your customers are manufacturers. You can store parts and inventory near production centers, which reduces their shipping and delivery time. Just as with cross-docking, you can avoid multiple small shipments and instead ship parts to a central location. You outsource storage and logistics to the third-party warehouse, which takes another responsibility and expense off your agenda.
Generally, cross-docking works best for manufacturers sending out finished products, and transloading is an excellent option for suppliers. Both approaches allow better customer service and cost savings than employing several smaller LTL shipments.
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Categorised in: LTL Trucking Company
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