Alibaba's (NYSE:BABA) logistics arm Cainiao Network just recently announced that around one million smart logistics vehicle would be added to its delivery operations to help make its artificial intelligent technology deployment stronger.
Cainiao, which was founded in 2013 has reportedly raised around 10 billion yen last year from investors like GIC and Temasek Holdings. The company is also known for having a large China logistics sector database. 81% of items and products sold on Alibaba and its other sites were said to have been delivered through Cainiao’s network.
Cainiao is also a smart supply chain provider to both small and medium brands that helped the company build an extensive delivery network.
This would allow the company to expand their delivery volumes by 1 billion each day in the next ten years. The vehicles are manufactured as smart logistics by automobile companies such as Dongfeng Motor Group Co Ltd (OTC:DNFGY) and SAIC Motor Corp Ltd (SS:600104).
The couriers will be optimized with a delivery route based on Cainiao’s advance big data and algorithms according to Cainiao Network president Wan Lin in Hangzhou on Monday at a logistics forum.
The company introduced the latest smart vehicles in Shenzhen and Chengdu as a part of a trial program to which a lesser travel distance and air travel rates has been shown. This could save the logistics arm around 10 billion yuan per year after the rest of the vehicles has been deployed in the coming years.
Cainiao is set to continue pushing forward the limits of its initiative for smart logistics due to the fast and rising evolution of consumption in China. This will also encourage the entire industry of logistics to upgrade its operations and efficiency according to Wan.
Meanwhile, Alibaba group executive chairman Jack Ma announced at the logistics event that other firms in China should invest further in both people and technology to address the increase in delivery volumes in the country from the current number of 100 million each day. From last year, parcel deliveries have reportedly grown to 31.3 billion in China alone.
Cainiao’s current same day and next day deliveries are now available in more than 1,000 districts in China and will be expanded further soon to China’s western parts.
Ma expects the number in the next five to eight years to hit 1 billion each day which will prove as a challenge to the logistics industry.