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The Difference Between Cross-Docking and Drop-Shipping

Robert Rogulic

The president, founder, and CEO of Tri-National, Inc. (TNi), a premier NAFTA transportation provider, Robert Rogulic provides his company with seasoned guidance. Under the leadership of Robert Rogulic, TNi offers customers in the United States, Canada, and Mexico a variety of services, including cross-dock operations.

There are two terms that are frequently used in warehouse operations: cross-docking and drop-shipping. Both terms refer to how items are shipped, received, and stored, but they are still two very different operations.
Cross-docking is the most popular activity of the two and focuses on decreasing how much time inventory sits in a warehouse. With cross-docking, products are shipped to a warehouse and offloaded. These products are then sorted and assembled into orders before being reloaded onto another truck for delivery. Other than the time needed to be sorted, products do not sit in a warehouse, thus decreasing storage and administration costs.
Meanwhile, instead of reducing the need for a warehouse, drop-shipping decreases the need for a distributor. When items are drop-shipped, manufacturers send products directly to customers. This places the burden of shipping on manufacturers while still allowing retailers to track orders and keep their customers updated.

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