Cainiao Network, the logistics arm of Chinese e-tailer Alibaba Group, broke several records following the Singles’ Day shopping rush on November 11, 2017. Not only did the company handle a record 812 million orders, up 23% compared to the previous year, but also delivered its first 100 million shipments after three days, half a day faster than it did in 2016.
Ben Wang, chief technology officer, Cainiao, said, “The frontline fulfillment centers, which were established in all tier one and tier two cities in China, played a key role. Alibaba leveraged its wealth of consumer insight to predict which products were likely going to be bestsellers in target areas. Goods were then shipped and stored in these locations early on, ensuring the fastest possible delivery times.”
Fast-moving consumer-goods were the main users of the fulfillment centers, which reduced shipping times to two hours in some cases. Even at their longest, goods still reached consumers in just two days. “Ultimately, we want to expand this concept overseas,” added Wang. “Predict which products would sell well in those markets and store them there ahead of time.”
Smoother cross-border shopping
This year, Cainiao started working directly with China’s top customs authority, the General Administration of Customs, to speed up what is seen as the slowest step in the entire logistics process. Cainiao extended its stress tests to include China’s customs facilities, which helped to make sure consumers had the same experience for cross-border purchases as those for goods shipped within China.
“Customs attitudes have changed from conservative to open in working with us,” said Wang. “This has to do with 11.11 (Singles’ Day) becoming an internationally recognized brand, but also because they realized working with us to conduct stress tests can help boost their own technical capabilities.”
AI-driven transportation planning
Artificial intelligence (AI) in transportation planning was also critical for ensuring smooth logistics as Cainiao used AI to spot congested roads and recommend delivery companies that could distribute products the fastest.
“The world is moving toward a future where decisions are driven by data, rather than experience,” added Wang. “That same AI, by processing vast reams of analytics, could help couriers save up to 30% on unnecessary transportation expenses and maintenance costs for unused vehicles.”
To continue to boost efficiencies, Cainiao wants to increase further automation across the board, such as duplicating its automated warehouse, complete with automated production lines, robotic arms and automated guided vehicles, which transport loads to freight sorters for packaging.
November 27, 2017