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Alibaba to support small Korean exporters with logistics services

Cainiao network growing into full outsourced logistics provider

Armstrong forecasts double digit drop in US 3PL revenue next year, but off highly elevated levels (Photo: Cainiao Smart Logistics Network)

The logistics arm of Chinese e-commerce platform Alibaba Group has signed a deal with the Korea SMEs and Startups Agency (KOSME) to serve as a third-party logistics provider for affiliated small and midsize exporters shipping to China, furthering its efforts to extend logistics services to merchants outside the Alibaba ecosystem.

Cainiao Smart Logistics Network said Tuesday that it will be KOSME’s official logistics partner for companies covered under the agency’s logistics subsidy program, which is providing up to $13,000 in temporary subsidies to cover their e-commerce export expenses while trade continues to recover from the COVID pandemic.

Last year, KOSME’s program facilitated the logistics for more than 3.7 million online exports and reduced small businesses’ logistics costs by an average of 48% compared to market rates for express package delivery in 10 major countries, according to Cainiao.

SMEs will be able to tap Cainiao to provide comprehensive logistics services, including warehouse inventory management, order fulfillment, delivery status, billing and resolution of shipping delays.

Cainiao is aggressively extending end-to-end logistics services beyond its own delivery needs to companies that need to outsource their logistics functions. It is taking on traditional logistics service providers and growing this side of the business even faster than U.S. rival Amazon (NASDAQ: AMZN), which offers ocean consolidation services but hasn’t yet opened up its air or warehouse network to third-party shippers beyond sellers on its platform that contract for fulfillment services.  

Alibaba launched bundled import/export services in South Korea last October for trade with China. It offers more than 161,500-square feet of warehouse space, as well as ocean and airfreight service, cutting shipping times in half compared to traditional options. In November, Cainiao expanded the concept to Japan. 

Cainiao has plans to offer logistics services in all key markets. Earlier this year it launched an air and sea booking service for cargo in 50 countries that it claims offers cheaper, faster transit.

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, he was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at [email protected]