Before METRO Cash & Carry introduced Cross Docking in 1996 all goods orders were executed by general cargo. This meant that forwarders picked up shipments from manufacturers and delivered them to the stores or outlets of the retailing group. This however was not done directly, but included a number of stops in-between. These are broken down into pre-carriage, on-carriage and post-carriage.

Example: Metro Cash & Carry orders goods from a manufacturer in Kiel (Germany). The forwarder picks up the goods and drives them to the terminal in Hamburg (pre-carriage). The order is then split into different regions. Let’s say that three full trucks leave the terminal, one each bound for a warehouse in Recklinghausen, Frankfurt and Leipzig. The goods again reach a terminal. They are then prepared for the final recipient, i.e. Cash & Carry stores (on-carriage). The ordered goods now have to be delivered. This time the forwarder drives to every single store (post-carriage). Conclusion: Conventional general cargo demands three process steps for transport and two steps in terminals.

Cross Docking is different: It saves one step in transport and one in the terminal. Delivery times are shorter. A further advantage: Pooling order bypasses the problem of minimum orders. Minimum orders force stores to order more goods than needed and reserve corresponding storage capacity. Cross Docking helps to plan stock levels much better.

Thanks to the delivery process being better coordinated goods availability in stores increases. Cross Docking also reduces the need for warehouse capacities in distribution centers and stores by doing without stock-keeping. And because hardly anything has to be stored the risk of goods becoming worthless due to expiry dates being exceeded is reduced. Cross Docking is an especially efficient system if deliveries are made in the evening. Goods can be put out overnight and are ready for the customers the next morning.

The advantages for the retailer are complemented by the advantages achieved to the benefit Cross Docking creates for vendors. Vendors no longer have to process every single order from every single store. In the case of Metro Cash & Carry that means that 60 orders are pooled into one large order. As a result the manufacturer has significantly less organizational and administrative work, because only one invoice is written compared to 60 invoices written before. In addition less time has to be invested for picking the goods because large parts of the orders are already on "one-product" pallets or packed in corresponding layers, significantly reducing the overall transshipment process. And finally: Manufacturers can plan their production much better because they always receive their orders at the same time.