According to the American Trucking Association, in the US alone, trucks move 72.6% of the nation’s freight by weight. That surmounts a total of 11.46 billion tons of goods moved by trucks in 2022. In this massive web of operations, the role of transloading and cross docking cannot be understated. Transloading involves changing modes of transportation, while cross docking focuses on rapid goods transfer; the better of the two depends on the conditions and needs.
In this blog, we’ll examine both of these strategies and study their differences, positive points, and limitations. By the end of this blog, you will easily be able to pick one of the two based on your situation and needs.
What is Transloading?
Transloading refers to the process of moving goods from one mode of transportation to another. This is done at various intermediate checkpoints and is aimed at optimizing the overall operations in a supply chain.
To put it into perspective, imaging a parcel being delivered from the UK to the US. First, it must be delivered to the closest shipping dock, and that can involve multiple intermediary warehouses and storage facilities. The parcel is transported via trucking to the dock, where it will be packed and moved across the ocean via a cargo ship.
This transition between trucking and shipping represents an example of transloading and is done to optimize the movement of goods. However, this is just one of many ways transloading can be done; others include:
- Changing the type of container of the package
- Changing the packaging itself
What is Cross Docking?
For the longest time, we used warehouses and storage facilities to act as an exchange medium for the goods to be delivered. So, continuing with our previous example, the parcel is received at a port in the US, which is then stored at a warehouse. The following day, a truck transports it to a different city where it is stored again in a warehouse and its journey will continue like this till it reaches its final destination.
Cross docking omits these storage points in the middle, and shipping services optimize their logistics in a way that there is minimal need for these storage points, so the goods can be directly handed to the next transporter in the supply chain without any delay. In simpler words, the incoming shipment is directly driven to the outgoing shipment, omitting the need for storage. Its primary aim is to reduce storage time and speed up the delivery of goods in the supply chain.
There are several types of cross docking, depending on the logistics of the shipment. However, the two main types are:
- Pre-distribution Cross Docking: Rapid distribution of goods at the beginning of the supply chain. (e.g. manufacturers to retailers, etc.)
- Post-distribution Cross Docking: Rapid distribution of goods at the end of the supply chain. (e.g. central locations for customers, etc.)
Read More: What is cross-docking in logistics and why do you need one?
Cross Docking vs. Transloading: What are the Key Differences?
Transloading and cross docking are two very distinct strategies, both aiming to curtail different problems and gaps in the supply chain and shipping industry. For a better understanding, let’s break down for you the difference between transloading and cross docking.
Cross Docking limits storage time, while Transloading does not
Transloading involves switching modes of transportation or types of packaging. This often involves temporary storage and resources, which can delay the time it takes to deliver the goods.
In contrast, cross docking directs shipment from an incoming shipment to an outgoing shipment right away, significantly cutting down on extra time. They’re more suitable for businesses whose main goal is fast delivery to their customers.
Cross Docking decreases storage space requirements, whereas Transloading does not
Similarly, transloading increases the use of storage spaces, requiring greater space in the warehouse. Cross docking, on the other hand, omits the use of extra storage spaces and thus reduces money and resources spent on maintaining one.
Cross Docking minimizes handling of the goods, while Transloading increases
Once packaged, cross docking does not touch the packaging or the container of the goods. They minimize handling and maintain the original packaging of the shipment, reducing the damage done to it.
Transloading is more centered on modifying the package to optimize the shipping process. This introduces several complexities to the shipment, increasing the modifications to streamline delivery, but also adding potential risks that can undermine the quality or integrity of the shipment.
Transloading has a broader scope, whilst Cross Docking does not
In the various intermediate points in a supply chain, implementing transloading strategies is far more viable as compared to cross docking. For instance, there are numerous places where shipping services could change the packaging or mode of transportation to adjust accordingly. For instance:
- Insulate packaging that is temperature sensitive and is being transported in a region of cold/hot temperature climate
- Convert bulk transport into manageable sizes to distribute to customers/retailers
- Consolidate different shipments heading to the same place to save resources
- Applying quality control checks before delivery
These are just a few of the actions taken in transloading and numerous more exist, indicating the great scope of transloading.
Cross docking can only happen at particular points in the supply chain and usually needs to be preplanned. Since they aim to connect inbound and outbound shipments, there is usually one point where this could happen, which limits its scope of action.
Transloading is more versatile, being applicable in more industries as compared to Cross Docking
Transloading is a highly flexible strategy and can be applied in various ways across many industries, unlike cross docking where application is very limited.
Industries where transloading can be used are:
- Any shipping involving a change of mode of transportation (from jets to trucks, or ships to trucks)
- In the Agricultural and Food Industry, fresh produce needs to be managed with care when being transported (refrigerated and unrefrigerated transportation)
- Any supply chain industry with customer-specific requirements
Cross docking is just focused on the speed of product delivery and has one application: save time. Retailers mainly use it for fulfilling orders.
Pros & Cons of Transloading
| Pros | Cons |
|---|---|
|
Facilitates intermodal transportation |
Additional storage facilities and space |
|
Adaptable to changing supply chain needs |
Time and costs associated with handling |
|
Optimize transportation costs |
Increased handling may lead to damage to the product |
Pros & Cons of Cross Docking
| Pros | Cons |
|---|---|
|
Lowers costs since no need for warehousing and storage |
Requires special logistics and docking facilities |
|
Streamlines order fulfillment and speeds up delivery |
Requires a high level of synchronization and coordination |
|
Reduces contact with the product, ensuring a higher degree of product integrity |
Not suitable for every type of product |
Transloading vs. Cross Docking: Which is Better?
The answer to the question of which one is better boils down to your own specific requirements and situations. However, logistically speaking, transloading does sound like the better option of the two, but there are many situations where cross docking is more beneficial. Let’s neatly summarize them.
| When to Opt for Transloading | When to Opt for Cross Docking |
|---|---|
|
For time-sensitive products |
International shipping |
|
For customers requiring urgent delivery |
When products need to be processed |
|
Retail and e-commerce industries |
When goods need to meet specific regional standards or requirements |
|
Bulk transport without processing/packaging |
Temperature sensitive product |
Conclusion
Both, transloading and cross docking are highly efficient ways to increase the productivity of your business. Since both are highly distinct and work for very different business models, there cannot be an all-rounder or a single winner between the two. By using our guide, you should be able to weigh the positives and negatives of both the strategies for your business model and meticulously calculate which one works for you.
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