Cainiao, the logistics arm of Chinese e-commerce powerhouse Alibaba has expanded its contract with Atlas Air to increase delivery capability to South America.
Atlas Air’s flight schedule has increased from three times per week to daily, increasing Cainiao’s weekly cargo volume from China to Latin America by 144% compared to the start of service in October 2020, the companies said Monday.
Atlas Air (NASDAQ: AAWW) has deployed an additional Boeing 747-400 freighter between Hong Kong and Santiago, Chile, bringing Cainiao’s dedicated fleet to five. The service also flies to Brazil.
Cainiao said it now offers a 12-day delivery service in Brazil’s core metropolitan areas after the number of parcels shipped to Brazil in September increased by 200% compared to the same month a year ago. The company also plans to establish a distribution center in Brazil to offer next-day or even same-day delivery in partnership with local delivery firms.
“Our partnership with Atlas Air continues to strengthen our network between South America and other destinations around the globe as we further enhance Cainiao’s capabilities to support merchants worldwide efficiently and reliably,” said William Xiong, Cainiao’s chief strategist and general manager of export logistics.
For last week’s “Single’s Day” shopping event, also known as 11.11, Cainiao chartered more than 300 flights from various carriers to expedite delivery of goods from China to consumers around the world.
In Southeast and north Asia, Cainiao said it secured additional cargo space in over 1,350 flights with a total capacity of 4,960 tons, 210 sea freight trips with 1,170 containers and 150 trucks totaling 771 tons, to support cross-border deliveries for Tmall, Taobao and Lazada consumers for the entire month of November.
Ahead of Alibaba’s (NYSE: BABA) 11.11 Global Shopping Festival, more than 300 million international goods from 87 countries and regions were pre-stocked in China’s bonded warehouses, as well as overseas locations in anticipation of surging demand from Chinese consumers. In Japan, Cainiao said pre-stocking service helped to drive 286% growth in the volume of Japanese goods exported since September to China, where about 10 million items were shipped.
The e-commerce powerhouse operates in more than 190 countries and has plans to serve 2 billion customers by 2036.
Southeast Asia hubs
Cainiao has been aggressive in the past year building out its international supply chain and launching direct routes to major markets around the world even faster than Amazon is doing. During that period, it has established end-to-end logistics operations in Japan and South Korea to handle shipments from importers and exporters that don’t sell on its platform as it strives to become a comprehensive third-party logistics provider.
The Alibaba unit recently announced plans to establish a network of high-tech warehouses in Southeast Asia, including Vietnam, Indonesia, Malaysia and Singapore, to provide storage, distribution and cross-border shipping services.
Equipped with shipment tracking and data sharing systems, the Cainiao logistics parks are strategically located near key transportation nodes and manufacturing centers in the region.
Cainiao said its warehouse network and supply chain management services will significantly facilitate the growth of e-commerce and exports in the region, where direct-to-consumer sales are becoming more popular.
Features of the service include fulfillment and sorting for local deliveries, warehouse management systems, sensor tags, automation, and temperature-controlled logistics.
The COVID pandemic accelerated e-commerce growth in Southeast Asia, which expanded nearly sixfold between 2016 and 2020 and is set to grow at an annual rate of 22%, to $309 billion by 2025, according to Statista.
Last week, Cainiao announced the opening of its first e-commerce warehouse at Liege Airport in Belgium. The 32,300-square-foot digitized facility is divided into two parts: a cross-dock for rapid flow of air cargo and a parcel sorting center that distributes parcels around Europe.
The air cargo station is equipped with an automated material handling system that eliminates heavy lifting by workers. It also is equipped with radio frequency identification detectors so cargo can be automatically tracked as it enters.
Cainiao also recently launched national parcel centers in France, Germany, Italy and Spain, supported by logistics partners Cacesa, Sinotrans and 4PX. The four centers currently have a combined maximum sorting capacity of about half a million parcels per day, which is expected to double by the end of March.
Parcel shipments will be delivered to these centers from Cainiao’s e-commerce hub in Liege or nearby airports for processing based on their final destination. Consumers of AliExpress, the global retail online marketplace of Alibaba Group, will be the first to benefit from the new sorting centers, the company said.
Cainiao has strengthened its logistics infrastructure across Europe in recent years to support cross-border trade. The logistics provider’s European trucking network now spans 30 countries, with an average of 80 vehicles operating daily. The network was projected to expand to 3,000 vehicles during the 11.11 festival.
The express delivery company recently installed parcel lockers in Spain and France to improve last-mile delivery efficiency and meet customer needs. It has nearly 5,000 Cainiao-branded lockers in Europe and Russia now for contactless pickup, and is also partnering with logistics providers to include more third-party self-collection points and lockers.
Cainiao calls its facilities “smart” warehouses because of the extensive utilization of data-capture technologies and automation. All parcels are affixed with electronic shipping labels that provide real-time visibility during transit so handlers can respond to anomalies and minimize disruptions.
This year, Cainiao introduced smart order consolidation, which leverages AI technology to identify e-commerce purchases made by the same seller and group them into a single package for cross-border shipping, reducing the cost for merchants and consumers. The system has been applied in 50 countries so far.
More than 3.8 million parcels are processed daily using Cainiao’s smart order consolidation, with rules-based software that can make decisions for nearly 200 logistics scenarios, according to the company.
Cainiao also works with customs authorities around the world to enable digital customs clearance even before a flight has landed.