Cainiao launches first automatic distribution centre in the Middle East

Located strategically 30 minutes away from the Ben Gurion Airport, Israel’s main international airport near Tel Aviv, the distribution centre and overseas warehouse will play a key role in enhancing cross-border logistics fulfillment services. This is part of Cainiao’s ongoing commitment to strengthen its global logistics network and optimize end-to-end cross-border logistics offerings.

The distribution centre is equipped with intelligent sorting equipment, and Cainiao’s proprietary overseas digital intelligent sorting system to manage the entire value chain spanning first-mile pickup, last mile deliveries and numerous other logistics scenarios. To further optimize the distribution chain, Cainiao leveraged smart logistics technologies for delivery address analyses. With this technology, when overseas consumers choose to engage the self-pickup service, the package enters the last leg of the delivery process right after the first distribution step. This is estimated to optimize last-mile delivery time by about 25 percent and the entire value chain by nearly 10 percent, boosting overall delivery efficiencies. At present, cross-border parcels can be delivered to consumers in as fast as 12 days, which is expected to reduce over time.

As part of its logistics infrastructure development in the region and to further empower merchants both within and outside the Alibaba eCommerce ecosystem, Cainiao has partnered with U-Speed, an eCommerce logistics supply chain service platform, to operate its first overseas warehouse in Israel. The overseas warehouse is equipped with smart logistics equipment, and offers integrated warehouse and distribution services to facilitate parcel deliveries within three working days.

The launch of the overseas warehouse is estimated to reduce up to 10 % of logistics costs. Through smart logistics technologies such as Order Management System (OMS) and Warehouse Management System (WMS), Cainiao will establish greater visibility and control over product categories, inventory, distribution, and in turn, provide merchants with data-backed sales forecasts to reduce capital and inventory risks.

According to data from China Customs, the value of bilateral trade between Israel and China reached USD 22.8 billion in 2021, representing 28.9 percent year-on-year growth. It was also forecasted that eCommerce revenue in Israel alone will reach USD 7.84 billion in 2022, suggesting the immense growth potential of the eCommerce market. This indicates the opportunity to address the corresponding demand for logistics services, in order to better serve merchants and customers.

“The pandemic spotlighted the importance of stable and efficient cross-border logistics services, as more merchants shift online to tap on a wider overseas consumer base. Brands underwent an evolution to keep up with online demands, whether it’s traditional sectors or new and emerging businesses. In order to expand overseas, there is a need to streamline and digitalize logistics capabilities and services, as well as the cross-border supply chain,” said James Liu, General Manager of Cainiao Export Logistics. “Cainiao will continue its commitment in building a global logistics infrastructure and enhance end-to-end global fulfillment services to better support export merchants in their cross-border businesses.”