The Latest Logistics Industry Trend: Sustainability + Digitalization

Driving technology-enabled green logistics initiatives to foster sustainable growth in the logistics and eCommerce sectors

E-Commerce industry has experienced rapid growth and advancement in recent years. From the point of selecting the goods to purchasing and receiving the parcel, the entire online shopping process can be completed within half an hour to an hour. In addition to relying on a comprehensive online shopping system, a strong and well-integrated logistics also plays an indispensable role in achieving this feat.

Amid the pandemic, the implementation of measures such as lockdowns or stay-at-home orders has also accelerated consumers’ shift to online shopping, with more consumers choosing to purchase daily necessities using online platforms. The role that logistics plays within the eCommerce sector has only gotten more essential.

At the same time, with the rapid development of online shopping and logistics, Cainiao, as a logistics network, also attaches great importance to the proper handling of packaging and reducing waste — issues which have a significant impact on environmental sustainability.

Cainiao Network, Alibaba’s logistics arm, was founded in 2013 to establish an ecosystem to support the evolving needs of the global logistics industry. The ecosystem comprising logistics companies has since undergone a digital transformation to bring about greater efficiency and cost reduction along the value chain, while enhancing the resilience of the supply chain to ensure a smoother flow of goods.

As a technology-enabled logistics company, Cainiao has partnered 3,000 domestic and foreign logistics players and 3 million couriers, including the top 15 logistics companies in China and the top 100 companies globally. The implementation of cutting-edge technologies has facilitated the gathering of real-time data from various companies and routes which support merchants to adopt the most economical and efficient delivery method to suit their business needs.

Technological Innovation in the Last Mile: Smart Route Management to Reduce Carbon Emissions

China’s eCommerce sector is experiencing phenomenal growth but the fragmented logistics network has become a major challenge to improving delivery efficiency. In various cities and counties in China, it is a common sight to witness courier personnel digging through a mountain of parcels on the street, and rushing to deliver them.

So how does Cainiao revolutionize the logistics industry in a more environmentally friendly and sustainable way? The answer lies in digitization. Cainiao has developed an open platform that provides a full suite of technology-enabled logistics services for global companies, ranging from electronic shipping labels to digital customs clearance.

There has also been numerous technology innovations made in the last mile logistics which are not only good for the environment, but also enhances customers’ experience. For example, using machine learning, Cainiao can predict and analyze consumer demand, thereby setting up a logistics network in the location closest to the consumers which reduces the transportation distance and time In addition, leveraging the Internet of Things and big data, algorithms are used to provide couriers with the best delivery route to reduce carbon emissions and improve delivery efficiency.

Recently, a 1.5-meter-long, 0.9-meter-wide logistics robot “Little G” has become one of Hangzhou’s attractions. After receiving the parcels from a Cainiao Post station, it automatically drives into a nearby community for delivery. Using a 360-degree sensing device to avoid crowds and obstacles, consumers only need to approach Little G and enter the pick-up code to collect their parcels. Here, Little G demonstrates how technology innovation has real-life applications to directly improve consumers’ daily lives.

This doesn’t end here. The digitalization of the entire logistics industry is inevitable as the global economy and companies prepare for Logistics 4.0 era. Growing internet and smart device penetration meant that warehouses can become smarter with autonomous robots, smart sorting systems; vehicles can be more energy-efficient and equipped with GPS position for better data collection and route management; parcels can be affixed with electronic shipping labels for real-time tracking end-to-end. The possibilities are endless.

Cainiao plans to digitalize every aspect of logistics from end-to-end. This will have the potential to bring about impactful changes to support China’s US$2.09 trillion eCommerce market.

Leveraging Industry Partnerships to Amplify Sustainability Initiatives

Sustainability has become a key issue in logistics in recent years. In 2017, Cainiao launched a recycling program and partnered with industry players and charity organizations to carry out the recycling of packaging materials in China. According to the industry survey released by CBN Business Data Center, the collaboration between Cainiao, Alibaba merchants and consumers during Double 11 in 2020 resulted in the following results:

• At approximately 80,000 Cainiao Post stations in China, more than 100 million parcel packaging were collected within 14 days for reuse or recycling;
• Cainiao’s electronic shipping labels helped to save more than 2.2 billion sheets of paper during the sale period from November 1 to 14. Over the past five years, it has saved 400 billion sheets of paper;
• Cainiao, together with more than 500 Chinese and overseas merchants, used about 4 million biodegradable boxes, which is estimated to reduce the use of 79,000 kilograms of plastic;
• Using the smart packing algorithm to reduce packaging materials for more than 12 million packages;
• Shipping in the original box or using “zipper boxes” to reduce the amount of sealing tape used, the total length of sealing tape saved exceeded 86 million meters, which is enough to circle the earth twice.

The global logistics market is massive. With the rapid development of the eCommerce market, the demand for domestic and cross-border logistics is rising sharply. To ensure the continued and sustainable development of the industry, there needs to be a conscious focus on driving technology-enabled green logistics initiatives. This will ensure that we are making economic advancements and improving the ease of doing business while also caring for the overall well-being of the community and environment.

Adapted from Cainiao’s article in Hong Kong Economic Times

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