Cainiao Network, the logistics arm of Alibaba Group, has launched its first distribution center and trucking line haul route in South Korea.
This move was made to improve cross-border delivery services for Alibaba’s e-commerce platform, AliExpress. South Korean customers will now receive their parcels from mainland China in an average of five working days. In the near term, Cainiao plans to further expand its last-mile delivery network by adding more local courier partners and establishing a nationwide logistics network beyond South Korea’s capital city, Seoul.
Within an hour’s drive of Seoul, the 1,500m2 distribution center is situated near the local customs clearance checkpoint. It is equipped with innovative smart technologies such as automatic assembly lines and a smart distribution setup that can support high-volume small parcel sortation. These smart logistics facilities are expected to reduce operating costs by 10% and save more than 12 hours in processing and handling time for cross-border deliveries.
To accelerate delivery time, Cainiao has also established a trucking line haul route with a one-ton daily capacity, connected to the distribution center. Once packages are sorted and packed, they can be brought directly to the nearest courier station to be dispatched via last-mile delivery.
Cainiao is investing in logistics technology and a localization strategy to reinforce overseas infrastructural facilities that can safeguard the timeliness and cost-effectiveness of the value chain. Last year, the company launched a sea freight route between China and South Korea, with chartered ships operating six times a week. Furthermore, an MoU was signed with the Korea SMEs [small and medium-sized enterprises] and Start-ups Agency (KOSME) for Cainiao to be the official logistics partner for SMEs to support their exports.
Shawn Louis, executive general manager for Cainiao Global, said, “The launch of this distribution center and trucking line haul route is another key milestone for Cainiao’s business in South Korea, where we witnessed a 50% increase in sales volume over the past year. The localized logistics network, along with a cost-effective logistics solution, will enable cross-border merchants to continue meeting consumer demands and improve the overall shopping experience. By expanding our partner ecosystem and implementing smart logistics in the distribution center, we are able to optimize the efficiency of the entire value chain.”