"We're seeing the actual progression of the well known concept — you want to have the least amount of inventory that you can and keep the commitments that you have to your customer in terms of fill rate," says Bob Lilja, vice president of transportation for Weber Distribution, a third party logistics provider (3PL). He's talking about cross-docking, but not quite the conventional definition. The dock he's working from faces an ocean.
Need and capability have recently come together on the U.S. West Coast as port congestion and interrupted rail service have increased the demand for transload facilities near the port. Capitalizing on the information accuracy and visibility on inbound shipments created by new customs and homeland security regulations, the operations Lilja describes are truly cross-docking, not simply deconsolidation of ocean containers and reconsolidation into trailer loads.
The key to fast movement through the facility is to make sure you've identified the product that is inbound, Lilja explains. Before current customs and security regulations, it was vague, he continues. Now, every ship has to have complete documentation of items onboard. "There are very few surprises any more when we open something up." Accuracy extends right down to the piece count. That allows Lilja to plan labor around the inbound shipments. He has the information days before the containers arrive and he has near real-time ETAs for the containers. Knowing the estimated time of arrival helps avoid being understaffed. It also helps plan the outbound.
As important as it is to know what's coming and when, you can't do cross-docking without a destination for the outbound product, says Lilja.
If there's a challenge for organizations doing cross-docking, it's in the change of mindset around what the sales department can commit to customers. Change is hard for some people, says Lilja, but a lot of logistics managers are recommending this kind of environment, envisioning an optimal logistics environment based on what the company's culture can handle.
With an on-water report identifying container numbers, packing lists and some sort of allocations for the cargo before the container arrives, Lilja can plan for outbound trucks and has a better idea of the velocity — the amount of product and how quickly it's going out. There are no more blind tallies; he receives against the packing list. In cases where radio frequency identification (RFID) or automatic identification are used, he's able to provide Internet visibility on the cross-docked shipments.
In many cases, consignees can't afford the time lag for rail shipments into the interior. What used to be landbridged to the Midwest by rail is now deconsolidated at the port and can be loaded by distribution center or customer order for direct shipment, says Lilja.
