Alibaba Logistics Arm Cainiao Boosts ECommerce Shopping Festivals with Technology and Green Logistics Innovations
By: William Xiong, Chief Strategist and General Manager for Export Logistics, Cainiao
The pandemic has revealed vulnerabilities in the logistics and supply chain ecosystem, while at the same time, shed light on its fundamental and infrastructural importance to economic growth and trade flows. In 2020, the logistics sector grew by 27 percent, primarily led by the eCommerce boom during the pandemic. The last two years has seen accelerated technology and sustainability practices to align with consumer expectations, and this trend is here to stay.
The global supply chain disruptions and shipping delays have demanded for a more efficient and transparent supply chain, one that optimizes technology-enabled and sustainable practices to achieve a more inclusive and collaborative cross-border logistics network. At the same time, consumer demand for sustainable eCommerce has grown greater as green consumerism gains traction around the world. Global eCommerce sale events such as the 11.11 Global Shopping Festival this year served as a litmus test, by using technology to demonstrate the viability of a tenable co-existence and growth of eCommerce logistics and sustainability. Through the adoption of new technologies, advancements in our supply chain operations and greater standardization in last mile logistics, we are working towards reinforcing the entire value chain to become more resilient and agile.
Building a robust smart logistics network globally
ECommerce logistics is seeing a surge in customer demand, with an estimated 8.6 percent compound annual growth rate between 2020 and 2025. Smart logistics will play an increasingly pivotal role in allowing businesses to deliver cost-effective e-fulfillment while continuing to expand its reach to a global customer base. In this regard, Cainiao has established smart hubs near key transportations nodes such as international airports, ports and rail network, to create a seamless regional logistics network. These smart hubs serve as gateways into the respective regions to improve air freight stability. Goods could be moved directly to the hub to shorten overall processing and cross-border delivery time.
To streamline cross-border logistics services and accelerate distribution flows for the region, we recently launched a regional smart hub in Kuala Lumpur International Airport in Malaysia, the Cainiao Aeropolis eWTP Hub, to strengthen the region’s logistics ecosystem. This translates to more efficient clearance systems and an increase in air cargo volume, smoothening the overall delivery processes of eCommerce purchases within Asia Pacific. ECommerce goods designated for Southeast Asia can be first transported to the KL eHub before they are sent to the respective countries in the region. This process streamlines air freight, and increases stability of cross-border logistics services.
In preparation for the 11.11 shopping festival this year, we secured additional cargo space in over 1,350 flights with a total capacity of 4,500 tons, 210 sea freight trips with 1,170 containers, and 150 trucks totaling 700 tons, to support cross-border deliveries for consumers in Southeast and North Asia for the entire month of November.
We also implemented smart order consolidation in our warehouses, a proprietary data intelligence technology that identifies various eCommerce purchases made by the same consumer and groups them into a single package for cross-border shipping. This effectively leverages economies of scale to allow expedited shipping services without additional costs for consumers and merchants. Simply put, the more items the consumer purchases, the faster their deliveries. Today, over 3.8 million parcels are processed daily using Cainiao’s smart order consolidation, involving over a billion decision-making processes which culminated in the formulation of nearly 200 decision-making frameworks based on various cross-border logistics scenarios.
Additionally, to minimize disruptions, all parcels are affixed with electronic shipping labels which offer full-chain real-time visibility to detect anomalies and allow quick responses from the ground.
Beyond operational efficiency enhancements and cost savings, technology plays an instrumental role in fostering a greener ecosystem and the sustainable co-existence of logistics and eCommerce. We continuously embrace technology to pave the way forward for a sustainable logistics and supply chain management that supports eCommerce growth.
Cainiao adopts a highly nuanced approach to driving green logistics initiatives and applying technology innovation at various points of the value chain. Electronic shipping labels were affixed on 1.6 billion parcels during the shopping festival this year, which reduced the use of paper and saved an equivalent of 3,700 square meters of forest area.
At the same time, smart packaging algorithms allows us to sort products into right-sized boxes and minimize waste from overpacking. We have also embraced eco-friendly packaging — nearly 100 percent of the packaging shipped from our warehouses were biodegradable. During this year’s shopping festival, the smart packing algorithm was able to reduce up to 15 percent of packaging materials for 250 million parcels in China. Over 90 million eco-friendly packages were shipped out from Cainiao warehouses as well, including parcels in original boxes, plastic-free “zipper boxes”, biodegradable and recycled packaging, which saved the use of 84 million meters of plastic tape.
With the precise and tailored implementation of green technology, we reduced potential carbon emissions by 53,000 tons during this year’s shopping festival and amassed a total of 1.8 billion eco-friendly actions from merchants, consumers and the supply chain pipeline. All in all, we were able to harness the efforts of our merchants and consumers to effectively deliver a ripple effect for our green initiatives.
This year’s festival marks a new chapter for 11.11. The success of the green initiatives indicates strong willingness from consumers, merchants and partners across our ecosystem to shift towards sustainable eCommerce. We have shown that with technology, it is absolutely viable for the sustainable co-existence and growth of eCommerce logistics.
About Cainiao Network
Founded in 2013, Cainiao Network (“Cainiao”) is a global smart logistics company and the logistics arm of Alibaba Group. As part of its commitment to create customer value, it adopts a collaborative approach to logistics that aims to improve efficiency and customer experience for all players along the supply chain. It carries forward Alibaba’s mission of making it easy to do business anywhere by aiming to deliver anywhere in China within 24 hours, and across the globe within 72 hours.
About the Author
William Xiong is Cainiao’s Chief Strategist and General Manager for Export & Global Logistics, responsible for strategic planning, global expansion and supply chain innovation. He is dedicated in establishing the global smart logistics network, help global merchants to better serve oversea consumers. He has over 18 years’ experience in strategy development and transformation in global logistics and supply chain, covering business portfolio planning, globalization, digital supply chain, innovation and business development.