How Warehousing Automation Improves In-Transit Inventory

Visibility issues and costs make in-transit inventory one of the most expensive inventory categories in logistics. Some warehouses still implement many manual processes and struggle to synchronise dispatch, transport and enterprise resource planning systems (ERPs) and/or warehouse management systems (WMSs).

All is not lost though. Warehousing automation can bridge the gap between warehouse and in-transit inventory. Below we look at what in-transitory inventory is and why you should track it, and at warehousing automation and how it streamlines operations with in-transitory. We’ll also discuss how automated loading fits into the picture.

Warehousing automation improves in-transit inventory by increasing visibility, reducing dispatch errors and shortening loading times. By integrating WMS, TMS and automated loading systems, businesses can track goods in real time and reduce the costs and risks associated with goods in transit.

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What is In-Transit Inventory
Why Tracking In-Transit Inventory Matters More Than Ever
What is Warehousing Automation?
How Warehousing Automation Improves In-transit Inventory
Manual vs Automated Warehousing
How Automated Loading Fits Into Warehouse Automation Strategy
Frequently Asked Questions (FAQ)

what is in-transit inventory

‘In-transit inventory’, also known as ‘goods in transit’ or ‘pipeline inventory’, describes goods that a supplier or warehouse has dispatched but which haven’t reached the recipient yet. This could be a distribution centre, store or customer.

This is different from ‘warehouse inventory’, the process of controlling goods and monitoring the stock and materials in a specific facility at any time. This detailed list includes the number of items and their location in the warehouse.

Common examples of in-transit inventory include:

a shipment moving from a factory in Asia to a warehouse in Europe;
cross-dock freight awaiting onward transport;
pallets dispatched but not received;
trailers waiting at yards or ports.

In-transit Inventory Financial Impact

In-transit inventory has a significant financial impact on businesses:

The goods may be in transit, but they’re still part of the inventory and tying up capital;
Insurance can reduce risk resulting from potential in-transit accidents, theft, natural disasters, derailing, sinking or accidental damage;
Delays lengthen lead times, slow down order fulfilment and cause customer dissatisfaction.

Inventory carrying costs typically range between 20-30% of total inventory value annually, meaning goods in transit represent a significant hidden cost for businesses. Supply chain delays can increase logistics costs by 15-25%, particularly when visibility into in-transit inventory is limited.

In-Transit Inventory Cost Formula

At a high level, the cost of in-transit inventory can be estimated using the following formula:

Inventory Value × Transit Time × Cost of Capital

This formula highlights how goods in transit continue to tie up working capital until they reach their destination. The higher the inventory value, the longer the transit time, or the greater the cost of capital, the more expensive in-transit inventory becomes. By reducing transit times and improving flow through automation, businesses can significantly lower these hidden costs while improving overall supply chain efficiency.

why tracking in-transit inventory matters more than ever

As challenging as it is, tracking in-transit inventory is crucial for several reasons:

Continuous supply chain flow: smooth supply chain performance depends on knowing how much inventory is in transit. In-transit inventory tracking is vital to ensure products reach sales points and to calculate on-time in-full (OTIF) metrics, the calculation of a supplier’s ability to fulfil its delivery promises.
Accurate inventory valuation: failing to track in-transit inventory causes businesses to order too much inventory or too little.
Improved forecasting and planning: operators can forecast potential delays, plan for demand, plan loading and schedule dispatch accurately.

what is warehousing automation?

Warehousing automation refers to software and computer-controlled hardware usage to automate repetitive, time-consuming, difficult or dangerous warehouse tasks. Warehousing automation keeps operations flowing and materials moving through the warehouse in a timely manner.

YPE X Joloda Hydraoll Automated Loading Slipchain

Categories of warehouse automation

There are 4 main types of warehouse automation:

Basic automation: simple technology that helps people with tasks that would need more manual labour, such as conveyors that move inventory from one point to another.
Warehousing system automation: employs machine learning, software, robots and data analytics to automate tasks and procedures, like a warehouse system reviewing orders for fulfilment and having users pick all similar items all at once.
Mechanised warehouse automation: robotic equipment and systems support workers with tasks and procedures.
Advanced warehouse automation: mechanised robotics and automated systems combine and replace labour-intensive, human workflows.

Core Warehouse Automation Technologies

Some automation technologies are common in warehouses because they play a vital role.

Conveyors: conveyors are a goods-to-person (GTP) style of automation that ramp up efficiency and safety when handling pallets and are especially handy for transferring goods to dispatch areas.
Automated racking systems: these systems, also called automated store and retrieval systems (AS/RSs), store and retrieve goods in different parts of the warehouse and from them.
Automated loading systems: automated loading systems reduce manual handling by loading pallets and non-palletised items into trailers, containers and cargo bellies or out of them.
WMS / ERP integration: integrating WMSs with ERPs synchronises data entries and creates a unified foundation of data across businesses. This integration connects warehouse management, order management and procurement all in one flow, which saves time and reduces errors.

how warehousing automation improves in-transit inventory

Warehousing automation has powerful benefits for in-transit inventory:

Real-time inventory tracking: automation helps keep track of inventory in real-time, even at dispatch, and ‘phantom’ inventory issues: stolen, missing or damaged inventory unaccounted for in assets, disappear. The risk of human error during dispatch decreases.
Better data integration with transport and ERP systems: automation synchronises WMS, transport management systems (TMSs) and ERPs. Systems confirm load completion.
Faster processing and shorter dwell time: automated loading reduces waiting times from hours to under 10 minutes, and quickens turnaround times. Departure windows become easier to predict.
Lower risk and greater security: automation ensures less damage during loading, and the inventory is tracked from point to point, so there are fewer untracked handover points.
Lower operational costs: automated loading allows operators to lower labour costs, by reducing manual labour by up to 80%, and claims for delayed deliveries.

manual vs automated warehousing

Impact on In-Transit Inventory Comparison Table

Factor	Manual Warehousing	Automated Warehousing
Dispatch accuracy	Higher risk of human error, misloads and incorrect shipments due to manual checks and processes	Highly accurate, with system-driven validation, load confirmation and reduced human intervention
Dwell time	Longer loading and unloading times, leading to delays and unpredictable departure schedules	Significantly reduced dwell times through faster, consistent loading and streamlined workflows
Inventory visibility	Limited, often reliant on manual updates and disconnected systems, creating gaps in tracking	Real-time visibility enabled by integrated WMS, TMS and ERP systems, ensuring accurate tracking at dispatch
Cost per shipment	Higher due to labour costs, inefficiencies, delays and potential rework	Lower through reduced labour dependency, faster turnaround and optimised resource utilisation
Risk exposure	Greater risk of product damage, loss and untracked inventory during handling and transit	Reduced risk through controlled, repeatable processes and improved tracking from origin to destination

how automated loading fits into warehouse automation strategy

Warehouse managers must work with increasingly tighter budgets, make processes more efficient and reduce costs wherever possible. Loading is one area where there is room for extra efficiency, cost-cutting and automation.

Automated Loading Solutions That Reduce In-Transit Risk

Automated loading reduces the risk of damage to in-transit inventory. Warehouses can plan loading, keep it consistent and remove the need for forklifts and manual loading. We offer a range of automated products for smoother loading:

LoadMatic

The LoadMatic, is a fully automated loading system for nonmodified trailers and can handle palletised and non-palletised goods, such as cement bags, fertilisers and petrochemicals. It’s perfect for handling industrial goods. Operators in the fast-moving consumer goods (FMCG) and drinks industries also use the LoadMatic.

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benefits of LoadMatic

Automating your product loading reduces the chance of accidents or damage.

Streamline your supply chain

With LoadMatic, you get reliable loading slot times in advance and guaranteed loading times of 7 minutes or less. Rapid live loading of standard trailers or containers improves your outbound material flow.

Improve work safety

When load handling involves manual work, there is a high risk to safety in each step. When you automate the process, you reduce that risk.

Save on machinery investment and maintenance

LoadMatic significantly reduces your fixed asset costs, replacing a fleet of forklifts with one loading machine. Plus LoadMatic will last 20+ years, longer than any forklift.

Boost eco-efficiency

LoadMatic generates additional savings by reducing energy consumption. It runs on electricity, eliminating harmful emissions. The total cost of energy is up to 60% less than electric forklifts.

Save over 80% in labour and handling

Automation eliminates unnecessary work in load handling. Instead of a team of lift truck operators, one operator can run several LoadMatic units.

Prevent handling damage

Eliminate damage to your products or vehicles during the loading process. A reliable automatic loading solution keeps your products intact and your end customers satisfied.

LoadMatic Lite

The LoadMatic Lite is perfect for manufacturers and distribution centres that want to increase their handling volume beyond what they can achieve with manual forklift handling and lower their costs. This automated loading system increases productivity, throughput and efficiency by loading trailers in just 10 minutes, allowing businesses to load more trucks per day. This system requires little to no dock modifications, resulting in the initial investment being lower than other automated loading systems

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