Cainiao launches its first China-Hungary cargo flight
Cainiao, a Chinese logistics company and part of the Alibaba Group, has announced today that it has launched its first direct cargo flight between Zhengzhou in China and Budapest in Hungary.
This is in response to surging demand in Eastern Europe, with the company saying it “expects a 30% growth in its cross-border e-commerce volume” between the two countries by the end of 2021.
The company says that the flight will be able to transport up to 17 tonnes of goods each day, with customers receiving their parcels in China within 10 days.
Eastern Europe, one of Cainiao’s fastest-growing regions, has “witnessed a booming demand” from local consumers purchasing items in the fashion industry from China. Items also include electronic accessories and home appliances.
Cainiao’s trucking network
As an extension to the company, Cainiao’s trucking network has expanded to cover ten countries in Eastern Europe as it directly transports Chinese goods from Budapest Airport, Cainiao says. This is achieved with the help of Hungarian Post and Polish, which are local partners of Cainiao. This allows the overall delivery time to be reduced by 20% and expenses to be reduced by 5%, Cainiao claims.
Chris Dinsdale, CEO of Budapest Airport, said: “The cooperation with Cainiao is a significant milestone for the Budapest Airport. We are committed to elevating the bi-literal trade between the two countries, making Budapest an important cargo hub gateway for Central and Eastern Europe by leveraging the country’s unique strategic location and Cainiao’s global parcel network”.
William Xiong, Cainiao's Chief Strategist and General Manager of Export Logistics, added: “Hungary has a strategic geographical advantage in Eastern Europe. Cainiao’s parcel volume to the region in April rocketed 53.7% compared to the same period last year. We are committed to improving the efficiency of international transportation between China, and Central and Eastern Europe, as well as building digitalised logistics infrastructure and services with our local partners”.
“It is expected that Cainiao's cost-effective logistics offerings such as USD5 for 10-day delivery service will be available in Central and Eastern European countries soon”, he said.
Cainiao has also developed a digitalised customs clearance system which, it claims, is able to process a “massive” amount of information such as orders and payments to digitalised data. According to Cainiao, this means that the clearance process can be completed even before the flight lands. “The current system has shortened the average offline clearance time of 1-2 days to an average of 6 hours, making Hungary the first country in Eastern Europe to be equipped with a digitalized customs clearance system”, the company said.
Currently, Cainiao’s 10-day delivery service covers Spain, France, the Netherlands, Belgium, the United Kingdom, Germany, Portugal, and other European countries, and it expects to cover over 10 more countries globally this year.
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.