Logistics and Robotics: Cainiao, DHL and SF Express Case-Studies

12/12/2018

Robotics changed the whole logistics game. While companies such as DHL bring robots at work, Cainiao already implemented its warehouses with AGV and AI. Today this trend is imitated by Western giant

 

Robots are among us. We are now used to benefit from robotics in our personal space while major companies introduce this new technology in the manufactory sector and supply chain in order to ease daily tasks and speed various processes.

However, the field that benefited the most by robotics is probably the logistics sector, where not only robots work in the warehouses helping to build a modern distribution market, but they could also be used to deliver goods directly to customers’ homes.

In fact, in the latest years, logistics had to face two challenges: a fast growth of online retail and the decrease of the available workforce. In this environment, the industry found in automation the perfect tool to grow the business and to optimize the operations.

Even though robots were at first not enough intelligent to face multiple tasks or, if they were, they were too much expensive, today, a new excitement together with the race for a hi-tech supremacy led robotics to reach unprecedented levels thanks to investments from government programs, venture capital and, last but not the least, from big international players.

 

According to researches, worldwide sales of logistics robots will reach $ 22.4 billion by the end of 2021 while robot units’ shipments will grow from 40,000 to 620,000 units per year.

 

Amazon is well-known for their automated distribution centers, but even if around 80% of warehouses are manually operated, other logistics companies have already taken larger steps towards robotics.

During the last and the greatest Global Shopping Festival, Alibaba-owned Cainiao Smart Logistics Network managed to handle 1 billion delivery orders in 24 hours for the first time thanks to advanced technologies.

Cainiao is a Chinese logistics company launched by Jack Ma’s company in 2013 but it became one of the largest Unicorn of the PRC just last year when its value reached over $ 14 billion.

 

logistics and robotics - cainiao box - smart locker - cifnews

© Alizila.com. Cainiao developed a smart locker that consumers can install outside their door for packages and food deliveries, called the Cainiao Box.

 

Since it opened the biggest automated warehouse in the Middle Kingdom, the company placed itself at the forefront of the logistics industry. Part of a broader Future Park, the 160,000-square meter complex is run by the Internet of Things (IoT) applications, big data, edge computing, and artificial intelligence (AI).

Although logistics in China still remains fundamentally based on physical labor, within the Future Park an innovative system allows Automated Guided Vehicles (AGV) to drive, load and unload products reducing the processes’ timing and improving the warehouse’s efficiency.

 

“The logistics industry of the future, I believe, has to be brainwork, driven by intelligence,” said Alibaba Executive Chairman, Jack Ma.

 

According to Alibaba, robotic arms and more than 500 self-charging AGVs robots “are expected to reduce staff walking by an average 50,000 steps per working day, improving personnel efficiency by 30%”.

Earlier this year, Cianiao also announced its strategic investment in Yiliu Keji, a smart logistics Internet company. Since it launched the IoT strategy, this investment will lead Cainiao to build a smart logistics network in China thanks to the Internet, AI and big data to provide truck drivers with intelligent cargo and thus improving dispatches and driving safety.

Thanks to forward-looking investments in advanced technology, Cainiao is helping logistics industry to enter the digital era. However, other companies are taking giant steps towards robotics in the delivery industry.

 

Founded in Germany in 1993, Deutsche Post DHL Group is an international courier service. The Express division expanded in over 220 countries becoming a large, world-wide company in less than two decades.

 

In an attempt to deal with a manual and labor-intensive process that can take several hours, in 2003 DHL worked to develop a new prototype – the Parcel Robot – to load and unload containers and trucks, which consists in a telescopic robotic arm, a 3D laser scanner, and a gripping system.

Moreover, in a DHL distribution center in the Netherlands, Fetch Autonomous Mobile Robots are currently deployed to help manage an entire logistics chain, from order intake to customer delivery. The Fetch system includes a mobile robot base, modular attachments, and a unique cloud-based software system for locating, tracking and moving inventory in warehouse and logistics facilities.

Although the company is already using robots since quite some time, in order to meet the demand for fast, efficient e-commerce order fulfillment, the German company then purchased several Rethink RoboticsBaxter robots: a first-generation collaborative model (cobots) that is designed to work safely around people.

 

logistics and robotics - dhl - cifnews

© DHL.it. Last November, DHL organized the second DHL Robotics Day 2018, which brought 250 customers and partners from all around the world to the company’s Innovation Center in Troisdorf, Germany.

 

In other words, thanks to its studies which looked into potential future scenarios in logistics called The Logistics 2050, DHL has been leading the way in looking at how logistics is and will evolve, especially for what concerns robotics industry. Not only it included innovative prototypes within its warehouse and logistics processes, but it also works to further implement the technologies.

 

Nevertheless, while robots now are widely used in warehouses and transportation, drone-delivery service is still very new.

 

In 2013, a video showing an Amazon delivery system designed to get packages to customers by drone became viral. However, although we thought we would have received our purchases by air very soon, Amazon Prime Air – as the service was called – faced too many flight limitations to take off.

In 2016 instead, Chinese delivery company SF Express has started trials on drone delivery, and after two years of limited service, this year it won the first drone operator license in the PRC.

Launched in 1993, SF Express is a Chinese supply chain company based in Shenzhen. It is the second largest courier in China, which provides domestic and international express delivery. The company has been building a drone network since 2017 developing models that can carry goods weighing up to 25 kilograms.

Recently, SF Holdings – a subsidiary of SF Express – was granted a license to operate drones last-mile deliveries in the country by the Civil Aviation Administration of China (CAAC).

 

The CAAC license is the first-ever of its kind and it allows the company to start to drop off products via drones in pilot zones designated by the Chinese aviation authority very soon.

 

SF Express said: “This means that China’s drone logistics distribution is entering the legal operation phase. It is a milestone in the development of China’s logistics drones and it is also a recognition of SF’s logistics distribution and operation capabilities.”

 

logistics and robotics - sf express - drone - cifnews

© China Daily. Leading courier SF Express displays its drone at an information technology exhibition.

 

SF Express intends to create a three-stage air delivery network. Firstly planes will transport large quantities of goods nationwide, then large drones will distribute goods locally and small-scale Unmanned Automated Vehicles will make deliveries to customers. Such a network would enable SF Express to send parcels to every corner of the country within 36 hours.

These drones will satisfy its own demands for delivery in remote cities, mountainous areas and even on islands but it will also coordinate delivery of many Alibaba’s orders. The company is, in fact, the largest delivery partner for Cainiao through which about one-fifth of SF’s total package is routed.

According to these logistics examples, businesses of all types have always been looking for ways to reduce costs and improve performances through automation and robots are what will bring enterprises to reach this goal. From what we have seen, the three companies analyzed are all at the forefront of introducing new technologies into the supply chain, and, in the meantime, they contribute to change the industry.

However, while DHL studies the evolution of robotics by implementing the technology in its daily tasks, Cainiao and SF Express tend to reach uncharted territories. Indeed, the Future Park as well as SF drones, both introduce a novelty in the sector.

Therefore, while the Made in China 2025 plan is quickly rewriting the global geography of hi-tech innovation, robotics is the key cog in the strategy. PRC’s robot-maker is going to dominate the domestic market, thus the plan’s goal is to supply 50% of local demand by 2025, rising to 70% by 2030.

Then, if robots and AI are the key cogs of the Chinese plan, logistics is surely the ground where they can both grow the most. From what we see, not only robots are among us, but they will also knock at customers’ doors very soon.

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