Alibaba’s Cainiao begins green vehicle program with Chinese car makers

Last-mile delivery in China is getting a shot in the arm from Alibaba’s logistics subsidiary, Cainiao Network, which announced a partnership with Chinese car manufacturers, including SAIC Motor and Dongfeng Motor, to manufacture 1 million green-energy delivery vehicles.

While the logistics business is decades away from anything resembling “green airfreight,” companies such as DHL, UPS and, now, Cainiao are looking to the last mile to reduce their carbon footprint, using low-emission vehicles and even human-powered delivery systems.

China is facing a critical pollution problem, and both state and private actors are pushing for solutions.

In a bid to set that process in motion, SAIC and Dongfeng have committed to producing electric delivery vans equipped with “computer hardware and software based on Cainiao’s advanced big data and algorithms, providing drivers with optimal delivery routes, based on real-time traffic and order information,” Cainiao president Wan Lin said. It is important to note that Cainiao has not said it will actually acquire any of these vehicles. Instead, it is working with manufacturers to develop vans equipped with its technologies, which will then be sold to its last-mile partners (large couriers like SF Express and YTO Express, and small regional players).

Cainiao’s route-planning system uses location tracking and artificial intelligence (AI), allowing drivers to interact with the software through voice-recognition technology. Cainiao says that its technology can cut vehicle use by 10 percent and reduce travel distances by 30 percent.

By adding 1 million of these AI-enabled vehicles on the road, China could see industry-wide savings of US$1.45 billion a year, Cainiao said. The logistics company wants to move fast, with Jack Ma, executive chairman of parent company Alibaba Group, telling a summit that, “In the next five to eight years, the number of parcels in China may surge to 1 billion per day.” Ma added that, “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.”