What is Cross Docking?
Cross-docking is an order fulfillment strategy where products from a supplier or manufacturing unit are shipped directly to a customer or retail chain without any need for mid storage of goods in the warehouse. It is a process of receiving products through an inbound dock and then transferring them across the dock to the outbound transportation dock. It consists of trucks and dock doors in inbound and outbound sides with minimal storage space. The process starts when inbound products are arrived through transportation such as trucks/trailers and are assigned to receiving dock on one side of the cross dock terminal. The goods are sorted and screened to identify their end destinations and moved to the other end of cross dock terminal with the help of a forklift, pallet truck, and any other transportation medium. After completing the loading of goods at the outbound dock, the products delivered to the end customers.
Major Risks Related to Cross Docking
1. Implementing the cross-docking strategy in the warehouse required capital investment. This can translate into a warehouse redesign to save space for a conditioning area and/or the adoption or designing of a warehouse management system to assist with cross-docking tasks.
2. Cross-docking fully relies on a team to transfer items from inbound to the outbound dock, organizations need to be trustworthy of their suppliers’ ability to deliver the right products in right condition on time to the cross-docking terminal.
3. A number of Transport Carriers needed to take full benefits of the cross-docking system. A sufficient number of transport carriers will be needed for the delivery of goods. Since the operation is mainly dependant on trucking, there is an increased cost, need for parking space for trucks in the warehouse, and need for enough docks to implement the system.
4. It requires time for proper planning and execution: without coordination between supply and demand and proper planning, cross-docking is not suggested in the warehouse. Therefore, in the global computation, cross-docking should save enough time to cover its application in operational planning.
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The Request For Proposal
The “Request For Proposal” or “Request For Tender” in the logistics industry is designed to help shippers find the best 3PL providers to meet their needs. It is critical in the supplier selection process. A company seeking an outsourcing supplier will draft an RFP/RFT and send it to a shortlist of suppliers that appear to be suitable candidates for partnership. A logistics outsourcing RFP should be highly detailed and very concise in setting out the company’s requirements for service provision. In various ways, the logistics outsourcing RFP is the basis on which the partnership is built and its quality can make the difference between a successful or failed venture.
The “Must Have” Components of Logistics Outsourcing RFP
An RFP for logistics outsourcing services should comprise of the following components to provide suppliers with a basis for making informed service proposals.
1. A clear and concise overview of the issues driving the outsourcing decision
2. A description of the specific services needed
3. A detailed breakdown of the business requirements (this will make up the bulk of the RFP)
4. The service KPIs to be used for supplier performance monitoring
5. Specification for supplier pricing breakdown (all suppliers should provide pricing according to the prescribed specifications)
6. Specifications for the format of supplier proposals (as with the pricing breakdown, a standard format makes it easier to compare proposals)
7. Company contact details and instructions for submitting a proposal
8. Description of supplier selection criteria
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Multiple factors are involved in deciding how LTL and FTL shipping prices are defined.
On the basis of pick up and destination zip codes, carriers determine the distance freight must travel. After calculating the distance, they use the freight’s weight and class—based on NMFC codes—to determine the shipment cost.
2. Freight All Kinds
Carriers will also offer a discounted rate to customers who choose to combine their freight with that of other shippers. These discounts are usually provided by means of the carrier lowering the freight class of the items being shipped, so as to lower the price.
3. Accessorial Charges and Surcharges
The main factor in determining LTL shipping rates is the presence of accessorials. The term “Accessorials” are added services that shippers may need carriers to provide at the final destination in order to ensure that the product reaches the right hands shortly. Basically, these accessorials take time and slow down the delivery of other shipments, so carriers need to adjust their pricing accordingly. Some examples of common accessorials are Inside pickup, Residential service, Inside delivery, Fuel surcharge, and Arrival notification.
4. FTL Rates
FTL rates are easy to price out since an entire truck is being dedicated to one company’s shipment. FTL shipments rate determined by the cost per mile basis or based on a single door to door rate. FTL shipments are also subject to fuel surcharges.
If you would like to get started on shipping today and get the best freight rates, get an instant rate quote at Tenaxx Logistics today.
Related: LTL FREIGHT SHIPPING GUIDE