Leveraging Digital Technology to Empower Green Logistics
Author: Niu Zhijing, Vice President of Public Communications and Marketing, and Environmental Social and Governance (ESG) Initiative at Cainiao Group
With the bolstering of e-commerce growth worldwide and the demand for logistics continuing to rise, sustainable logistics is gaining traction as an increasingly prevalent and imperative approach. Moreover, it’s in line with consumers’ needs as well. As per a report from IBM Research Insights, 57% of consumers are open to altering their online shopping habits to more environmentally friendly delivery options to lessen their carbon footprint. Therefore, how to optimize environmental impact in operations to facilitate sustainable growth and achieve social and business value has transformed into a key topic that every logistics organization has to tackle.
Broadly speaking, green logistics encompasses any business practice that reduces the environmental effects of the logistics network and delivery. This entails actions such as effectively managing energy consumption, optimizing transportation routes to lower carbon emissions, embracing sustainable packaging, etc. To empower a green supply chain, it is essential to leverage the support of digital technology innovations in all links of logistics operations.
End-To-End Green Logistics Solutions
As the bridge between merchants and consumers, Cainiao is leveraging digital technology and smart algorithms extensively in crucial logistics processes such as ordering, packaging, transportation, and recycling to fuel a low-carbon operations model and fulfill the market’s needs.
Take Cainiao’s green actions as an example, in the ordering process, its electronic waybill has been applied to over 100 billion parcels in the last three years, saving 400 billion pieces of shipping labels. Cross-border parcels utilizing Cainiao’s smart order consolidation technology have significantly reduced packaging and secondary delivery.
In the packaging process, Cainiao’s smart packing algorithm recommends the optimal box type in less than a second, and has been widely applied in Cainiao warehouses to reduce packaging materials by 15% for over 300 million parcels annually, which is equivalent to reducing the use of 80 million cardboard boxes. Additionally, RFID (Radio-Frequency Identification) chips are embedded in Cainiao’s green recycling boxes, reducing the need for manual verification and significantly reducing loss during turnover. In the 2023 fiscal year, Cainiao’s green recycling boxes were used a cumulative 130,000 times. Moreover, Cainiao’s proprietary routing algorithm in vehicle dispatch has set 36 world records, significantly reducing delivery distances in logistics transportation through optimized route planning, with the aim of empowering low-carbon transportations.
With the increasing emphasis on green logistics among all participants in the logistics process, it’s significantly important that companies tackle it with a comprehensive organizational support to ensure all promises are fulfilled with actions that make impacts to the environmental well-being, while achieving market’s needs and consumers’ expectations.
Green Logistics As a Long-term Commitment
When technologies and innovations are paving the way for green logistics operations, it’s essential to take a long-term mindset and dedicate efforts to build a bigger social impact by continuously raising consumers’ awareness and influencing their actions. To achieve this goal, merchants, end consumers and logistics companies must act hand-in-hand.
Being an early advocate for green initiatives in the Chinese logistics industry, Cainiao has launched the nationwide “Green Action Program” in 2016, encouraging consumers to participate in packaging recycling at its post stations. With the support of digital technology, this green initiative has since evolved into the world’s largest recycling practice. In the financial year 2023, the number of returned boxes and old packaging shipments has reached 100 million times, with more than 10 million total participants.
While encouraging widespread consumer participation, Cainiao collaborates with numerous brand merchants to expand recycling initiatives across various categories, including old clothes, shoes, and books. Currently, Cainiao’s digital carbon asset management system has collaborated with seven provincial and municipal postal industries, nearly 100 universities in China, and more than 40 brand merchants.
Given its status as one of the major contributors to global carbon emissions, it’s a crucial time for companies to achieve full green logistics and its long-term strategic goal and to implement a proactive approach empowered by the innovation of technologies and collaboration with green partners to attain these objectives.