Cainiao races on in digitalisation of China logistics

Cainiao helicopter
Cainiao unveiled its new unmanned helicopter, which recently completed a 32-kilometre test flight between the southern provinces of Hainan and Guangdong in about 25 minutes.
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Cainiao Smart Logistics Network wants to speed up the digitisation of China’s logistics industry and to help make that happen, the Alibaba affiliate is rolling out a slew of technology, including its new Internet of Things (IoT) platform.

Cainiao hopes that by working with industry partners, the further digitalisation will unlock some RMB 50 billion (USD 7.25 billion) in efficiency gains for the industry over the next three years.

The IoT platform allows partners and developers to share information and establish standard protocols to help logistics firms deploy IoT solutions at scale. Cainiao aims to connect 100 million smart devices to its IoT technologies in three years, including its connected devices, warehouse and delivery robots and algorithm-backed management systems.

“Only through building the digital infrastructure for logistics can we truly enable and push the industry forward,” Daniel Zhang, Alibaba Group CEO and chairman of Cainiao Smart Logistics Network, said at Cainiao’s fifth annual Global Smart Logistics Summit in Hangzhou.

Daniel Zhang
Daniel Zhang, CEO Alibaba and chairman Cainiao.

Zhang cites the example of the e-shipping labels which have helped its partners digitally manage the flow of parcels, the real opportunity lies in digitising all components of the logistics value chain, Zhang says.

Of the nearly 50 billion parcels handled in China last year, some 30 billion used Cainiao’s e-shipping label, greatly increasing efficiency as well as providing simultaneous track and trace functions, according to Zhang.

But he added: “Digitising parcels is not enough. We are working with partners to digitise warehouses, equipment, transportation vehicles [and] warehouse pickers’ handheld devices.”

In fact, the sector is already on the next level, moving from being pure digitally driven to intelligence-driven, Zhang highlights.

Warehouse technology was also showcased at the summit. Cainiao has been developing solutions in this area for some time, with the aim of more-efficiently connecting orders with equipment and workers, such as warehouse and delivery robots powered by image-recognition, near-field sensing or acoustic-photoelectric systems.

Digital efforts will also focus on the improvement of services available to consumers. This includes further development of its package-tracking and shipping-services app, ‘Cainiao Guoguo’, to enhance the ordering and delivery experience.

Currently the app allows consumers to automatically fill out shipping details and track parcels in real-time on their smartphones. They can also book package pickups for shipping, with couriers, on average, arriving in an hour. The company is also looking to increase the number of shipments per year through Cainiao Guoguo, by more than 1 billion.

Cainiao Guoguo benefits couriers, as well, sending them alerts when consumers near them process shipping requests. The more orders the couriers deliver, the more commission they earn from express-shipping companies. And the easier it is for consumers to send and receive goods, the more likely it is that these companies will see an uptick in business, Cainiao says.

Cainiao will also continue to expand its ‘Cainiao Post’ pick-up stations, jointly rolled out with express-delivery partners, to cut down last-mile delivery costs. Located within communities – in schools and residential areas, while others are attached to convenience stores and China’s ubiquitous fruit shops – the pick-up stations offer free storage and simple package pick-up using the Guoguo app.

Wan Lin, Cainiao president.
Wan Lin, Cainiao president.

Cainiao Posts currently processes about one in every 10 packages generated on Alibaba’s e-commerce sites Taobao and Tmall each day, with Cainiao saying it will expand the pick-up stations to 100,000 locations within three years.

As with everything it does, Cainiao continues to optimise its pick-up locker designs with high-tech features, with a prototype design which uses artificial intelligence (AI) to automatically adjust each locker space according to the size of the parcel, to maximise overall storage efficiency. The overall locker housing can accommodate up to 60 per cent more parcels in the same space than previous pick-up locker units, the company says.

Consumers can access the service by entering a code, or through facial recognition, and they can have parcels brought to them, instead of needing to find and walk to the designated locker.

And for the first time, Cainiao unveiled its new unmanned helicopter, which recently completed a 32-kilometre test flight between the southern provinces of Hainan and Guangdong in about 25 minutes.

“Innovation drives exponential growth,” says Wan Lin, president of Cainiao. “This can include the innovation of business models, services or technology.

“By further enhancing our consumer services, last-mile and IoT technologies and capabilities, we hope to help China’s logistics sector to deliver on a larger scale while reducing costs and impact on the environment,” he added. “This will not only benefit the logistics industry, but also offer an enhanced customer experience.”

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