Cainiao’s view on technology for inclusive and collaborative cross-border network
Estimated reading time: 10 minutes
After Alibaba Cloud’s successful KL Cloud Day Summit 2022, key reps from Cainiao share about how technology played a role in the organisation creating sustainability for itself and the logistics industry. These key reps are William Xiong, Chief Strategy Officer and GM of SEA, Europe, Cainiao Network, Ricky Xue, GM of SEA, Cainiao eHub, and Au Yeong Shong Kwong, GM of Cainiao eHub Malaysia.
EITN: What did you present about during KL Cloud Day Summit 2022? What are summary highlights of your presentation?
William Xiong:
At the summit, I shared about our commitment towards the development of a strong and sustainable logistics organisation, with a focus on globalisation and long-termism. The three key business pillars in 2022 are operations, globalisation and digitalisation. With a technology- and customer-centric approach, Cainiao will focus on five business areas to ensure quality growth and create value for stakeholders across the value chain.
Au Yeong Shong Kwong:
At the breakout session, I shared about Cainiao’s technology solutions and how it will play a pivotal role in the evolved eCommerce landscape. By applying smart logistics technologies into the business’ cross-border deliveries and supply chain management, merchants and brands will be able to achieve greater cost and time efficiencies, and also gain deeper insights and control over the full value chain.
EITN: Please share about what Cainiao does and what are Cainiao activities in Malaysia?
Au Yeong Shong Kwong:
Cainiao is a customer-centric global smart logistics company with a focus on operationalisation, globalisation and digitalisation of the logistics industry.
Our five core businesses supporting consumers, merchants and partners include domestic logistics and supply chain, global logistics and supply chain, consumer logistics, smart infrastructure and logistics technology.
Cainiao is a customer-centric global smart logistics company with a focus on operationalisation, globalisation and digitalisation of the logistics industry.
Au Yeong Shong Kwong
In Malaysia, our business activities are centered around: line haul (export/import/transit) with the Cainiao Aeropolis eWTP Hub at Kuala Lumpur as the Southeast Asia hub and regional fulfilment center, ehub; fulfilment/last mile delivery supporting cross-border merchants; supply chain solutions for brands/merchants to grow within Southeast Asia; implementation of Cainiao technology.
EITN: In one of your articles you share, “The global supply chain disruptions and shipping delays have demanded for a more efficient and transparent supply chain, one that optimises technology-enabled and sustainable practices to achieve a more inclusive and collaborative cross-border logistics network.” Can you share how technology is making supply chain more transparent and efficient?
William Xiong:
As a smart logistics company, we have set forth to apply new technologies along various nodes of the logistics value chain. Some of the technologies implemented include:
- Electronic shipping labels: The e-shipping labels serve as a standardised digital identification for each parcel, facilitating tracking throughout the delivery process which minimises human error and allows the detection of anomalies during the delivery process. It is a more transparent solution that provides real-time visibility as compared to traditional models using physical waybills.
In the area of last mile or eCommerce logistics, e-shipping labels allow real-time tracking of parcels for end consumers and merchants, further enhancing the efficiency and transparency of the industry.
- Smart route management using algorithm: On the ground, using smart routing, areas are also divided into zones to better manage courier demand and supply, allowing control center to allocate the most suitable resource using an algorithm that assesses the pick-up and delivery location, urgency, driver ratings, driver location and traffic conditions etc. Couriers on our platform will have access to smart routing system for route management that analyses the best routes to cut down travelling distance, time, cost and increase accuracy of delivery time. Our predictive algorithm also helps to predict the parcel volume and quantity to help courier companies to better manage their fleet resources.
- Digital customs clearance: We have partnered with over 50 customs clearance facilities to digitalize the process, leveraging electronic shipping labels which digitises each parcel to facilitate the seamless consolidation of parcel information required by customs. This information can then be submitted to customs clearance facilities digitally, sometimes even before they arrive at the destination port, allowing parcels to clear customs even before arrival.
- Next-generational digitalised supply chain management: To build greater resilience and readiness against potential disruptions in the future, Cainiao will be redefining how global supply chains can deliver value and building on traditional supply chain systems.
Parts of Cainiao’s current supply chain that are still supported by traditional systems will be digitalised. For one, the operations management capabilities of the traditional Warehouse Management System (WMS) will be improved upon to form the new Warehouse Operations Management System (WOMS). This is accompanied by a more comprehensive integration of control capabilities in the current Traffic Management System (TMS) to form the new Traffic Management and Control System (TMCS). Additionally, the Billing Management System (BMS) will also be integrated with the traditional Order Management System (OMS) to form the new operations management system for supply chain.
The series of enhancements will culminate in an end-to-end, state-of-the-art digital supply chain management suite that is distinctively Cainiao, and future-proof in the new era of smart logistics.
- Digital supply chain control tower to provide data-driven business decisions and risk management: To streamline business processes and drive operational efficiency across the supply chain, Cainiao’s new digital supply chain control tower will now serve as the backbone of supply chain management. This control tower equips management teams with enhanced visibility to prepare for any potential situations, and empowers operational teams on the ground by streamlining their workflows and increasing overall productivity.
On top of providing users with an overarching view of operations where anomalies can be detected in advance, the supply chain control tower is also capable of delivering intelligent diagnoses that guide strategic and data-driven decision making. Beyond this, the tower also acts as a consolidation tool by providing a myriad of situational analyses across each operational aspect in the value chain, from planning, procurement, production, storage to logistics. Effectively, this increases the competency and resilience of the entire supply chain for stakeholders, employees, and customers.
So far, Cainiao’s digital supply chain control tower has been implemented in numerous organisations in major industries, and adopted by Procter & Gamble’s largest global distributor, Yishang Yujie. The application of digital supply chain management within the business has empowered managers seated in headquarters to obtain full real-time visibility and status of their global operations spanning manufacturing, distribution and fulfilment. Additionally, they are also able to predict any potential risk factors based on the data collected at various nodes along the value chain.
- Smart warehouses: In Cainiao’s smart warehouses in China, we have incorporated agile automated warehouse solution to automate much of the parcel processing work. In Wuxi smart warehouse, we have over 1,000 AGV robots to process up to 200,000 parcels a month.
Cainiao has developed an agile automated warehouse solution that is easy to deploy and scale. Parcels are processed on fully automated assembly lines, equipped with robotic arms and more than 500 automatic guided vehicles man the floor, picking packages off carts and delivering them by the most efficient route to warehouse clerks for sorting and distribution.
The self-charging AGV robots are expected to reduce staff walking by an average 50,000 steps per working day, improving personnel efficiency by 30%.
- Autonomous vehicles for last mile deliveries: The pandemic has shifted consumer preferences for contactless delivery options. For logistics companies to continue increasing customer satisfaction levels, greater focus needs to be placed on last mile logistics. However, this is the most expensive element of the delivery journey. This can be attributed to the many facets involved, such as moving the parcel from the warehouse to the delivery vehicle, and from the vehicle into the customer’s hands.
But all is not lost — autonomous delivery can be the panacea for the costliness and timeliness of last mile logistics. And we are seeing traction when it comes to its adoption. Globally, the market is forecasted to be worth S$6.6 billion (US$4.9 billion) by 2030. Zooming into Asia, several markets such as Singapore, China, and Japan, have also adopted autonomous delivery to provide safer contactless services for consumers. In addition to saving time, autonomous delivery can also reduce overall logistics costs for the retail industry by up to 90 percent.
Today, Cainiao’s warehouse delivery model has reduced shipping costs by 50% compared to direct delivery, and helped merchants increase sales during Double 11 Global Shopping Festival by 600%.
Case in point, Cainiao’s deployment of over 350 autonomous robots in China during Alibaba’s Double 11 Global Shopping Festival 2021 delivered more than 1 million orders to consumers in a short time span.
EITN: What is your definition of a collaborative inclusive cross border logistics and how can tech enable this?
Ricky Xue:
With increasing globalisation and digital penetration, we envision the world of smart logistics to be one that is inclusive and collaborative. To achieve this, we announced the launch of Cainiao’s tiered logistics products and diverse range of export supply chain solutions at our company’s smart logistics summit last year.
The range of inclusive solutions aims to cater to the diverse needs of cross-border merchants and consumers by providing them with various optional logistics services which they can select from in order to meet their unique set of requirements and needs (such as shipping duration and cost).
Cainiao’s domestic and overseas warehouses, and international logistics capabilities, are driving digital transformation across the industry while continuing to provide cross-border businesses with more diverse export supply chain solutions.
Today, Cainiao’s warehouse delivery model has reduced shipping costs by 50% compared to direct delivery, and helped merchants increase sales during Double 11 Global Shopping Festival by 600%.
With increasing globalisation and digital penetration, we envision the world of smart logistics to be one that is inclusive and collaborative. To achieve this, we announced the launch of Cainiao’s tiered logistics products and diverse range of export supply chain solutions at our company’s smart logistics summit last year.
Ricky Xue
Today, Cainiao’s inclusive logistics solutions include “USD5 10-day delivery” logistics service that delivers to Spain, France, the Netherlands, Belgium, the United Kingdom, Germany and Portugal, with plans to cover 18 countries globally. Building upon the momentum of the “USD5 10-day delivery” offering, we have also introduced the “USD2 20-day delivery” service for deliveries from China to overseas consumers.
At the same time, smart consolidation have been introduced to 8 more countries including Switzerland, Latvia, Estonia, Finland, Denmark, Peru, Sweden and Malta, adding to the current list of 20 countries such as Spain and France. This helps to further boost time and cost efficiencies.
EITN: Of all the technologies that can be used, which is the top 3 for you?
William Xiong:
The top 3 technologies would have to be:
Warehouse automation such as automated storage and retrieval system, mechanical arm, automatic forklift, auto-packing machine, auto-labelling machine and auto-sorting machine, in addition to the AGV robots mentioned in the smart warehouse above.
Smart route management using algorithm: As mentioned above, smart route management allows control center to allocate the most suitable resource using an algorithm to assesses the pick-up and delivery location, urgency, driver ratings, driver location and traffic conditions etc.
Green logistics technologies: By marrying technology with green logistics initiatives, we can deliver greater impact on our ESG efforts. For example, our smart packing algorithm allow us to assign the most suitable carton size to each item to reduce the use of packaging material, thereby saving paper; our green logistics parks powered by solar energy helps to reduce carbon footprint; green fleet used in last mile deliveries help to reduce carbon emissions
EITN: Can you share about Cainiao’s future plans for Malaysia?
Au Yeong Shong Kwong:
Malaysia is a key market for Cainiao. Following the official launch of our eHub in Kuala Lumpur, we are aiming to drive import and export activities, and connect Malaysia to other countries and regions including China and the broader ASEAN.
By creating a stable and transparent cross-border logistics infrastructure, we believe it will play a key role in deepening regional cooperation and trade between countries and regions to spur economic growth in a digital era.
Beyond that, as we strive to digitalise the logistics industry, we look forward to supporting businesses, both large and small, by providing our technology know-how such as IoT and automation, to create more growth opportunities.
Malaysia is a key market for Cainiao. Following the official launch of our eHub in Kuala Lumpur, we are aiming to drive import and export activities, and connect Malaysia to other countries and regions including China and the broader ASEAN.
Lastly, as a company, we are also placing a strong emphasis on nurturing a safe and healthy workplace that cultivate a pool of global talent who can bolster the sustainable, long-term growth of the logistics and supply chain industry.