Cainiao launches its first automatic distribution center in Israel

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Cainiao Network, the logistics arm of Alibaba Group Holding, has launched its first automatic distribution center and overseas warehouse in Israel.

Located 30 minutes from Ben Gurion Airport in Israel, the distribution center and overseas warehouse are intended to strengthen the company’s network and end-to-end cross-border logistics. The distribution center is equipped with intelligent sorting equipment, and Cainiao’s proprietary overseas digital intelligent sorting system to manage the entire value chain spanning first-mile pickup, last-mile deliveries and other logistics scenarios.

To improve its distribution chain, Cainiao leveraged smart logistics technologies for delivery address analyses. With this technology, when overseas consumers choose to use the self-pickup service, the package enters the last leg of the delivery process right after the first distribution step. The company has estimated that this will improve last-mile delivery time by about 25% and the entire value chain by nearly 10%, boosting overall delivery efficiencies. At present, cross-border parcels can be delivered to consumers in around 12 days, which is expected to reduce over time.

As part of its logistics infrastructure development in the region and to further empower merchants both within and outside the Alibaba e-commerce ecosystem, Cainiao has partnered with e-commerce logistics supply chain service platform U-Speed, to operate its first overseas warehouse in Israel. The warehouse is equipped with smart logistics equipment and offers integrated warehouse and distribution services to facilitate parcel deliveries within three working days.

The launch of the overseas warehouse is estimated to reduce logistics costs by up to 10%. Through smart logistics technologies such as an order management system (OMS) and warehouse management system (WMS), Cainiao will establish greater visibility and control over product categories, inventory, distribution and, in turn, provide merchants with data-backed sales forecasts to reduce capital and inventory risks.

According to data from China Customs, the value of bilateral trade between Israel and China reached US$22.8bn in 2021, representing 28.9% year-on-year growth. It was also forecast that e-commerce revenue in Israel alone will reach US$7.84bn in 2022, indicating the immense growth potential of the e-commerce market and the opportunity to address the corresponding demand for logistics services to better serve merchants and customers.

James Liu, general manager of Cainiao Export Logistics, said, “The Covid-19 pandemic spotlighted the importance of stable and efficient cross-border logistics services, as more merchants shift online to tap on a wider overseas consumer base. Brands underwent an evolution to keep up with online demands, whether it’s traditional sectors or new and emerging businesses.

“In order to expand overseas, there is a need to streamline and digitalize logistics capabilities and services, as well as the cross-border supply chain,” he added. “Cainiao will continue its commitment in building a global logistics infrastructure and enhance end-to-end global fulfillment services to better support export merchants in their cross-border businesses.”

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