Singles Day, or 11.11, began as a cynical response to traditional couples-centric festivals such as Valentine’s Day, but has now grown to be one of the world’s largest online shopping days. In 2021, 1.16 billion parcels were transported in China during the November 11 event according to Statista, creating a logistical challenge for operators like Cainiao, the logistics arm of China’s e-commerce behemoth Alibaba.
Cainiao has not disclosed its total parcel volume for the 2022 11.11 festival. However, chief strategy officer and general manager of Southeast Asia and Europe, William Xiong, says that in line with the company’s goal to ‘improve customer experience by focusing on expanding doorstep delivery service and coverage’, Cainiao delivered more than 200,000,000 packages to consumers’ doorsteps in mainland China during the event.
To achieve these goals, the company is continuing to invest in digital technologies and automation systems that will help it build “business resilience and readiness in the face of potential disruptions, enabling us to nimbly expand our capabilities to meet today’s consumer expectations”, according to Xiong.
“Our distribution centers have advanced features such as automated sorting technologies, as well as Cainiao’s proprietary warehouse management system leveraging artificial intelligence (AI), the cloud and automation to manage the entire value chain spanning first-mile pickup, sorting and distribution in warehouses, last-mile deliveries and numerous other logistics scenarios.”
Cainiao is equipping its warehouses with enhanced billing and order management systems, a warehouse operations management system (WOMS) and a traffic management and control system (TMCS) to provide greater visibility and control for inventory management. Xiong explains, “Data and insights generated by these systems are updated in real time, allowing warehouse employees to quickly attend to sections and inventories that are causing bottlenecks, whether it is sorting product categories, inventory counts or distribution preparation. The efficiency gains help merchants minimize capital and inventory risks.”
The use of automated guided vehicles (AGVs) in those warehouses is improving storage accuracy and pickup efficiency by reducing the distance traveled by employees. Furthermore, the company’s proprietary pallet shuttle optimizes entire pallet storage shelves by adapting to warehouse layouts as needed, which effectively reduces operational inefficiencies. “Operated in tandem with Cainiao’s proprietary scheduling algorithm, we are able to address the efficiency of storage solutions in dense spaces,” Xiong adds.
In March 2022, Cainiao partnered with Flash Express on the creation of a 20,000m2 smart warehouse in Thailand with 100 AGVs that enabled Flash Express to eliminate 90% of the distance traveled by warehouse employees and obtain an overall accuracy of 99% in sorting parcels, according to Xiong. “These systems and solutions come together to ensure maximum operational utility, enabling our warehouses to efficiently handle high parcel volumes, no matter the time of the year,” he adds.
Improved operations and sustainability
For Xiong, investing in automation systems is a no-brainer, and the implications of those technologies can be far reaching. “From optimizing resources to driving efficiency for merchants and consumers and generating more income for farmers in rural communities, the possibilities of automation are endless,” he enthuses.
In fact, the almost limitless benefits of automation technology are driving the value of the APAC sortation systems market, which is currently expected to grow by a compound annual growth rate (CAGR) of 5.86% between 2021 and 2026, according to Mordor Intelligence.
Xiong believes that continuing labor shortages and increased economic uncertainty in APAC and around the world are catalysts for increased automation investment. “Companies must strengthen their business resiliency and bolster the logistics industry by actively investing in digitalization efforts – this includes reviewing their sustainability goals – to reap the long-term benefits of decarbonization, such as lower utility costs.
“Beyond augmenting the existing workforce, automation and predictive technology such as robotics and AI-driven systems can supersede skilled workers in areas such as interactive customer engagement (via chatbots) and even forklift operations. As the existing workforce focuses on customer experience and satisfaction, such smart technology platforms can not only increase overall warehouse efficiencies but also reduce manpower costs in the long run,” he explains.
Automation technology is also coming into play in the sustainability arena. With the transportation industry being one of the largest carbon emitters in the world – it accounted for 7.2Gt of CO2 emissions or roughly 21% of the global total in 2020, according to McKinsey & Company – the logistics sector must find ways to reduce emissions and achieve its commitment to net zero, Xiong urges. “Cainiao’s carbon asset management system helps merchants forecast carbon emissions by offering carbon rating reports and accounting statistics in real time. Automating the analysis of carbon emissions within the supply chain
enables executives to pinpoint issues and areas for improvement.”
The company is “committed to strengthening our green logistics capabilities” and will continue to
invest in innovations to “further our sustainability efforts across our end-to-end supply chain capabilities, including those of our warehouses”. These efforts include implementing an AI-based smart packaging algorithm to accurately determine the optimum carton size for each parcel, and more strategic partnerships with key stakeholders in the sector “to raise awareness on how technological innovation can drive greater sustainability”, Xiong explains. “As the supply chain continues to digitalize, we will continue to take a data-driven approach to supply chain management and innovate in this area to better predict supply chain changes in real time.”
With so much technology available, how do operators like Cainiao decide on the right solutions to invest in? Xiong believes that customers and employees are key considerations when deciding on new technologies to deploy.
“We want to be intentional when we implement new technologies,” he explains. “Employees need to understand how the technology reduces manual labor, allowing them to dedicate more time and attention to higher-quality work that delivers greater value in the long run.
“As a digital-first company with many digital natives, our employees appreciate the growing digitalization across our business as they make the necessary shifts to undertake more strategic and analytical work. A concerted approach is then taken to ensure that productivity is maximized when the automated solutions are deployed.”
He concludes, “The logistics industry is ever evolving and, as we have seen during the pandemic, prone to immense disruptions. There is thus no one-size-fits-all solution or automation technology that will effectively meet the requirements of today and in the future. As such, Cainiao prioritizes automation systems that are secure and scalable so that we can deploy these technologies quickly to meet the needs of our customers.”
Automation supplier case studies
Beumer’s modern approach to pouch system technology helps CEP companies solve the problematic handling of duty parcels for cross-border customs inspection. With the continuing surge in cross-border e-commerce, the number of parcels passing through distribution centers requiring appropriate inspection and duty payment is becoming a growing problem for CEP businesses.
Many consumers buying online from abroad have little or no knowledge about the potential customs inspections and duties they may have to pay as soon as their parcel crosses the border. Typically, customs officials ask CEP companies about the source of parcels and request inspection of those coming from certain regions or countries. That inspection can occur at any time over an indefinite period that varies from minutes to weeks, so during that entire time the distribution hub needs to store and have fast and easy access to the parcels to be able to release them for inspection or to the recipient when the duty has been paid.
Most of today’s e-commerce parcels are small, and most CEP companies establish separate parcel storage areas at each of their distribution centers. For many, this will be simple racking that may or may not include precise tracking of parcel positions. Others have one central storage space that services all their centers so that customs can deal with all the parcels in one place. Either way, storage affects the business’s capex and occupies space that could be used for sortation operations.
A further financial impact is due to the labor cost of manually handling duty items using traditional storage solutions, which adds to the business’s opex. In addition, customs authorities set the deadlines for duty payments according to local regulations, and if the recipient fails to make the payment on time,
the parcel is returned to the sender at the CEP company’s expense.
What is the answer to this logistical and potentially expensive problem? Beumer has redesigned its BG Pouch System for CEP hubs. This overhead storage and sortation system uses pouches to store, convey and sort parcels that weigh as little as 20g – one pouch for each parcel. It is fully automatic and maintains a complete inventory to real-time control every parcel in the system.
Beumer has now made the solution even more versatile to offer a new approach to the duty parcels challenge for the CEP sector. Parcels enter the sortation system as usual, and those that are identified as attracting customs duty are diverted either to immediate customs inspection – if customs officers are
on duty – or to duty storage.
Those selected for duty storage are automatically inducted into the overhead pouch system, which occupies no floor space in the distribution center. Each parcel is placed in its own pouch and married to the pouch’s RFID, effectively creating a customs storage inventory. The RFID technology means that the system can deliver 100% accurate tracking and parcel identification, with access at any time to any parcel in the system.
A parcel can remain in the pouch storage until customs clears it, at which point the pouch can be brought down and the shipment released seamlessly into the parcel flow for final sorting and distribution. If customs officers wish to physically inspect the parcel, the pouch can easily be released.
The pouch system is an ideal solution for CEP operators looking to reduce the complexity of handling duty parcels. By moving them directly into the BG Pouch System, the distribution center can eliminate labor-intense storage and most of the manual handling costs without requiring additional floor space. It gives customs inspection officers direct and immediate access to any parcel with no additional manual handling, and removes several touchpoints that are costly and disturb the flow of the parcel operation.
With an ever-increasing flow of small parcels, many postal companies are looking for ways to handle them. These small parcels come in many shapes and sizes, which means they cannot be handled by the standard letter sorters that are widely used in most postal operations. Furthermore, they often cause flow slowdowns and disrupt operations.
With the supply of small parcels (mixed mail) growing rapidly for one large post and parcel company due to the increase in e-commerce, the need for a new sortation solution was high. This is where EuroSort came to the rescue.
Some of the customer’s key challenges included:
• Increased parcel volume: Sharply increasing volumes across the entire product range required increased throughput;
• Changing product mix: Traditional sorting equipment was unsuitable for the increased amounts of round and irregularly shaped items as well as polybags that needed to be processed;
• High accuracy requirements: The quality and efficiency of sorting needed to improve, and the number of touches needed to decrease;
• Small available footprint: The solution had to fit in with existing operations and the available footprint was very limited.
There were other ergonomic and maintenance requirements that also had to be met. EuroSort performed extensive analysis on which solution would fit best and it quickly became apparent that the Split Tray Sorter, with its unique features, was the best solution for this customer.
The variety of product shapes and materials fitted perfectly within the trays of the sorter and, by dropping the items underneath the sorter, the footprint was small enough to meet the requirements. Furthermore, with a capacity of 14,000 trays per hour, the increased volumes could easily be handled.
To reduce the number of touches, the emptying of the inbound containers was also mechanized through tippers. These drop the parcels on a conveyor system that feeds the induction stations of the sorter. This also means that the operator is never without parcels to sort, further increasing the efficiency of the process.
The exits are designed in such a way that they can handle multiple types of product carriers such as totes, but also postal bags and roll containers.
The induction stations were designed with maximum operator comfort in mind, so there is as little stress as possible on the operator. In combination with an operating noise of around 62dB, the operators enjoy working at this sorter.
The customer has rolled out the EuroSort solution in multiple sites and it is running to the full satisfaction of the management as well as the operators. The sorter has a proven record of minimal maintenance and
a high degree of availability, resulting in a low total cost of ownership.
In the field of express parcel sorting, Wayzim’s automation equipment has withstood the challenges of the market, and its core automation technology has been applied in SF Express’s General Integration Project, helping the logistics company reduce staff and increase operational efficiency. According to
the design requirements, the main line speed is 2m/s and the handling capacity of a single main line is more than 6,000 parcels per hour.
The 60,000m2 facility includes 10 main lines of rough distribution and unloading, two parcel return lines, two irregular parcel return lines, 12 main lines of fine distribution and loading, and two double-layer small parcel sorters. The whole site is equipped with automatic equipment such as Wayzim’s conveyor belt line, pivot wheel sorter and loading chute. The total length of the conveyor belt line is around 10,000m. The project also includes Wayzim’s crossbelt five-sided code reading system, which uses intelligent logistics visual technology that can achieve a code reading recognition rate of more than 99.9%; the error rate generated during manual sorting is about 1%, according to Wayzim.
SF Express’s General Integration Project has a daily average handling capacity of about 650,000 parcels. During peak e-commerce periods such as 11.11, the system can handle 1,300,000 parcels per day. Wayzim’s fully automated sorting equipment is designed to handle at least 96,000 parcels per hour. In the past, the parcel sorting mainly relied on manual work, averaging about 500 parcels per hour, and it took around 200 people one hour to sort 96,000 parcels.
The application of automation equipment in labor-intensive industries not only saves labor costs but also helps customers reduce error rates and improve work efficiency.
Wayzim’s automation equipment has been exported to Thailand, Indonesia, the Philippines, Singapore, Europe, North America, South America and other countries and regions.
This article was originally published in the March 2023 issue of Parcel and Postal Technology International magazine