Cainiao, the logistics arm of leading Chinese e-commerce platform Alibaba Group, hosted the 2018 Global Smart Logistics Summit (GSLS) in Hangzhou on May 31st. Speaking at the event, Alibaba founder and executive chairman Jack Ma called for tens of billions of US dollars in investment to build a national internet-based intelligent logistics backbone in China.
According to a 2017 Intelligence Research Group report, “sorting” is the costliest of transit centre warehouse operations, ranking ahead of packing, weighing, etc., and consuming 40 percent of total logistics costs. To meet rising online shopping demand, e-commerce retailers like Alibaba, JD.com, and Suning.com must find tech solutions for lowering such costs. Amazon has reduced its storage center costs by more than 10 percent over the past decade.
Along with sorting, labour and transportation costs must also be reduced at transit centers. Ma predicts courier companies will face overwhelming challenges in the next 5 to 10 years, when total daily package deliveries may hit one billion. And so it made sense that Alibaba would use the third GSLS 2018 to promote tech development in the logistics industry, and showcase Cainiao’s intelligent warehouse center, mobile office and container processing system.
Many global logistics companies attended the summit, including intelligent warehouse suppliers, leading courier service providers, retail giants and supply chain management experts, etc. Although services such as special cargo logistics, multimodal transport and cold chain logistics play important roles in the logistics industry, these are handled by local companies and so went underrepresented at GSLS, where the focus was on express shipping and warehousing technology.
Cainiao’s efforts are being applied to advancing new technologies in warehousing and package delivery, where the Alibaba company has tech, innovation and funding advantages. Cainiao also showcased its warehousing robots at GSLS — a workflow demonstration saw its automated guided vehicles (AGVs) perform moving, fixed-point delivery and cargo transfer using barcode scanning and localization technologies.
Technical solutions for low-cost delivery are still at a relative early stage of development globally, and product performance (e.g. unmanned logistics vehicles) in China is comparable to that in other countries.
Alibaba’s Cainiao E.T. Logistics Lab began on-road testing of its self-developed unmanned logistics vehicles in Hangzhou this April, and brought its new robotic vehicle G Plus to GSLS. The vehicle has an imaging system with three LiDAR sensors and eight monocular/binocular cameras and is capable of dealing with difficult weather conditions. (See also Alibaba and RoboSense Announce First Solid-State LiDar-Driven Logistics Robot Cart)
Rather than operating a self-owned logistics system like JD.com, Cainiao aims to become a top provider of customized unmanned logistics vehicle services to courier companies for package delivery.
Regarding cost reduction for package delivery, a Cainiao E.T. Logistics Lab engineer told GSLS attendees, “Creation of our unmanned logistics vehicles is to compete with package delivery drivers. As long as the vehicle is cheaper and more efficient than labor costs, courier companies will make more profits.”
Improvements in autonomous delivery vehicle performance will emerge from tech driven by strong R&D. Hupan University Academic Dean Ming Zeng told the summit audience, “The operation of logistics must be changed from traditional management and control mode to social collaboration mode, to meet industry expectations in the future. All technology changes will ultimately promote the development of the logistics industry from a closed-loop supply chain to an open social collaborative system.”
Hupan University is a small public non-profit business school so-founded by Jack Ma that aims at cultivating a new generation of entrepreneurs.
Localization: Tingting Cao | Editors: Meghan Han, Michael Sarazen