Cainiao demonstrates fast-growing logistics capabilities

Alibaba subsidiary handles record number of delivery orders during Chinese e-commerce giant’s 11.11 online shopping event while extending network in Asia and taklng a minority stake in cargo airline.

Cainiao Smart Logistics Network, the logistics arm of  the Alibaba Group, handled a record number of delivery orders during the Chinese e-commerce giant’s 11.11 Global Shopping Festival’ (Singles Day in China) last week.

The company has also been busy extending its distribution network in Asia as well as strengthening its presence in the air freight segment, taking a minority stake in Air China Cargo in association with other investors.

After handling 1.88 billion 11.11-related delivery orders last year, Cainiao demonstrated its fast-growing logistics capabilities with a 23%  increase in shipment volumes which totalled 2.32 billion orders – dispatched to destinations in China and overseas, according to a report on the Group’s Alizila news website.

This year, Alibaba split the online shopping bonanza into two parts over 11 days with an initial sales period at the start of November followed by the main event itself on 11 November.

Cainiao operated over 700 chartered flights to ensure fulfillment of cross-border product deliveries, and to speed up delivery of overseas goods to China, it worked with international merchants to move their products into seven Cainiao e-hubs. Cainiao also rolled out new self-service technology at its post stations to enable fast parcel collection by consumers.

During this year’s 11.11 pre-sales period, Cainiao’s smart logistics platform leveraged AI algorithms to assign and ship packages to with a certain range of consumers, explained Sun Jian, who headed up this year’s Singles Day logistics efforts. That meant that packages could be more-quickly dispatched to buyers once 11.11 officially started.

Moreover, the two shopping windows during this 11.11 allowed Cainiao to improve the delivery experience for consumers. In-between the two windows, Cainiao ramped up efforts to assist merchants in different international locations to assemble their stock for Chinese consumers.

Cainiao also got into the livestreaming game in a big way this year, introducing cameras at different shipping and collection points so consumers could check up on the status of their packages. Over 100 million consumers tuned into Cainiao’s livestreams, the report added.

Further expansion in Asia

In a separate development, Cainiao last week announced its launch into the Japan market.

“Japan has always been a key market for us. Our launch in Japan will allow us to provide a stronger logistics infrastructure to support Japanese businesses’ in their export and import needs, and to leverage technology to bring about greater efficiency and a more seamless operation,” said  James Zhao, general manager of Cainiao Global Supply Chain.

“This will ensure that regardless of business size, resources and overseas presence, Cainiao will be able to provide customized end-to-end logistics and supply chain solutions to facilitate international trade and increase revenue streams for businesses.”

In the area of B2B warehousing, the central warehouse in Yokohama spans 10,000 sqm while the one in Kobe is over 19,000 sqm. Both B2B warehouses are strategically located within 15 kilometres from the nearest port.

Cainiao’s B2C warehouses in Tokyo and Osaka span 20,000 and 13,000 sqm and are each located in close proximity to the main local airport.

For international shipping, Cainiao’s services include both air and ocean freight. Currently, there are 10 weekly ocean shipping services operating from Yokohama  and  Kobe  to  Ningbo and  Shanghai in China while there are daily cargo flights between Japan and China.

Cainiao added that is partnering Nippon Express, 4PX, Sinotrans, and Hongyuan Group for their trucking resources for first and last mile delivery and to facilitate and expedite customs clearance in Japan and China.

The foray into Japan follows the launch last month of end-to-end logistics and supply chain services for local businesses in South Korea, which aim to reduce delivery times to 5-7 days from the current 10-13 days.

The company is using 15,000 sqm of warehousing space near airports and sea ports in South Korea, and is using six ships and six freighters weekly for international shipping between China and South Korea.

Cainiao is now also offering same-day deliveries from China to 11 countries in South-East Asia after implementing a new logistics management IT system for its own operations as well as for partners.

Beyond Asia, the company highlighted its global ambitions as a logistics player in announcing last month a partnership with US air cargo group Atlas Air Worldwide Holdings, (AAWW) to launch a China-South America charter programme, “to enhance Alibaba’s extensive logistics network as cross-border trade between China and Latin America continues to expand.”

Cargo airline stake

Meanwhile, in another recent development, Cainiao, through wholly-owned subsidiary Zhejiang Cainiao Supply Chain Management and in association with other investors, is to  take a minorty stake in Air China Cargo through a share capital increase operation, according to a stock market filing issued last week.

“Through the capital contributions, Air China Cargo will diversify its shareholding base and implement equity holding by employees, enhance its capital strength, optimise its business structure and enhance its core competitiveness,” the filing stated. “Air China Cargo will seize the market opportunities of cross-border e-commerce and consumption upgrades in the PRC to become an integrated ‘e-commerce+logistics’ service provider with integrated capabilities in procurement, transportation, and sales.”

This summer, Cainiao and Air China Cargo started a new e-commerce freighter service to speed international deliveries between China and Europe with three weekly B777F frequencies operatIng from the capital of China’s Zhejiang province, Hangzhou, to Liege Airport in Belgium, with flights continuing to Madrid as a final destination.

For Air China Cargo, this represented its first direct cooperation with a cross-border e-commerce player.

It followed shortly after Cainiao had launched a new route with Russian cargo airline group Volga-Dnepr. linking Hong Kong and Madrid via Liege.

Beijing-based Air China Cargo has a fleet of eight B777-200Fs, three B747-400(FSCD)s, and four B757-200(PCF)s. It also has exclusive management of passenger airline Air China’s bellyhold freight capacity as well as its cargo terminal operations and ground distribution.

Source: Lloyd´s