Cainiao weaving global smart logistics network

Cainiao Network Technology Co Ltd, the logistics arm of e-commerce giant Alibaba Group Holding Ltd, has trained its sights on international delivery of goods through overseas warehouses and international freight.

According to estimates from eMarketer, with cross-border e-commerce - both exports and imports - projected to hit $157.7 billion in 2020, the logistics expert is following surging demand for high-quality foreign products.

Cainiao's latest efforts include leading a $1.5 billion investment to build a logistics center at Hong Kong International Airport in June.

The hub will cover a gross floor area of 380,000 square meters and have the capacity to handle tens of millions of parcels and add 1.7 million metric tons of cargo volume per annum.

Slated to begin operation in 2023, the hub will include an air cargo processing center, a sorting center and an order-fulfillment center. It will feature automated warehousing technology and automated temperature control, the company said.

The new facility will complement another three exist-ing fulfillment centers operated by Alibaba's partners in Hong Kong. Cainiao has already unveiled plans to open five hubs around the world, in Hangzhou in Zhejiang province, Dubai, Kuala Lumpur, Liege in Belgium and Moscow.

Apart from the warehouses, the logistics specialist has wasted no time placing chips on cross-border transportation. It opened an airfreight route between Hong Kong and Belgium in July, the second international route set up for e-commerce parcels after opening one between Hangzhou and Moscow earlier this year.

But to handle cross-border logistics requires more than just hardware input. Cainiao's approach is to partner with local logistics providers and empower them with Cainiao's software and online networks that deploy algorithms and big data.

"We are not a traditional logistics company," said Cainiao President Wan Lin in a previous interview. "We are definitely tech-driven."

Cainiao currently uses 266 partner warehouses in countries such as the United States, the United Kingdom, Germany, Australia, Japan and South Korea, as consolidation centers where it helps gather parcels from the country of origin and then ships them to China.

"If it's something that can be done by our partners, we will leave it to our partners," Wan said.

The company is striving to achieve 72-hour global delivery in the coming five years, so that it can empower small and medium-sized enterprises locally and globally to more readily tap the benefits of more inclusive globalization through cross-border e-commerce.

To beef up such capabilities, the company has pledged to invest 100 billion yuan ($14.6 billion) in data technology research and development over the next five years to promote the development of smart warehouses, intelligent distribution and global super logistics hubs.