Alibaba’s logistics arm Cainiao to develop 1M smart vans, invest $7.3B

Chinese ecommerce giant Alibaba Group’s logistic arm, Cainiao Network Technology has announced a partnership with two of the largest Chinese automotive companies SAIC Motor and Dongfeng Motor. According to the partnership, Cainiao Network will work with its partners to manufacture 1 million AI equipped delivery vans. It will also work with Ant Financial, Alibaba’s venture affiliate firm, to invest $7.3 billion for logistic firms and delivery drivers participating in the plan.

According to the company, apart from AI the carmakers will be producing green-energy vans, which will be based on Cainiao’s big-data and big data and algorithms. This computer hardware and software from the logistic company will provide drivers with optimal delivery routes based on real-time traffic and order information.

Founded in 2013, Cainiao and a group of delivery companies created a logistics information platform that links a network of partners, warehouses and merchants. All this data collected by Cainiao and its partners is applied to make package deliveries faster and more efficient.

The company’s route-planning system will be utilizing GPS, AI and voice recognition technology that the driver can interact with, for real time updates and planning. The project has already had a trial run in April in Shenzhen and Chengdu, where Cainiao claims to have seen a 10% reduction in vehicle use and 30% reduction in travel distance.

Considering the reduction in operational costs, energy consumption and air pollution, the company states that the logistics industry could save $1.45 billion a year if a million of these co-manufactured smart vans hit the market in the next 10 years.

According to AliResearch, China’s logistics industry has grown by more than 50% YoY for the last 6 years and about 80 million parcels are delivered every day, adding up to 31.3 billion a year. According to a report on Alizila, Jack Ma, Executive Chairman, Alibaba Group stated that, in the next 5 to 8 years, the number of parcels in China may surge to 1 billion per day.

“This surge will bring with it huge challenges to every logistics company. The only solution to this challenge is to invest in cutting-edge technology and cultivate young talent, and all of us need to work together collaboratively.”

According to Cainiao, more than two thirds of shipments in China use its algorithms to plan delivery routes. The company plans to provide more than 10,0000 SMEs with supply chain solutions which include cloud computing services and affordable smart devices in the logistics industry.