Belgium-Alibaba deal will introduce European SMEs to Cainiao Network

In a memorandum of understanding (MOU) between the Belgian government and Alibaba signed yesterday, the two parties agreed to promote  cross-border e-commerce trade between China and Europe by bringing Alibaba’s Electronic World Trade Platform (“eWTP”) to Belgium.

Trade promotion is expected to herald a major expansion of Alibaba’s Cainiao Network in Europe with a new facility at Liège Airport (LGG)  in a bid to cater to the small- and medium-sized enterprise (SME) market.

The project, which will be located on 220,000 square meters of greenfield property at LGG and will gradually phase in operations beginning in 2021, will include the construction of warehouse and sortation facilities that focus on the e-commerce needs of SMEs.

Beyond Liège, Belgium will also be the debut of Alibaba’s Electronic World Trade Platform (eWTP) in Europe. The loosely defined eWTP initiative seeks to unite governments and Alibaba behind the goal of removing trade barriers and improve SME participation in global e-commerce. Over the next five years, Alibaba said it is committed to importing US$200 billion worth of goods into China, as part of its “Gateway to China” project.

Cainiao’s investment at Liège is the network’s most significant infrastructure investment to date outside of Asia. As noted in our sister publication, Cargo Facts, LGG is just one of six sites Cainiao is developing in different regions of the world; the other locations are in Moscow, Hong Kong, Kuala Lumpur, Hangzhou, and Dubai.

In June, the company unveiled plans to invest US$1.5 billion in a joint-venture logistics center at Hong Kong International Airport, where it plans to construct a 380,000-square-meter facility adjacent to the airport. The facility is expected to commence operations in 2023 and will gradually ramp-up operations to ultimately handle “tens of millions of parcels every year” with cargo throughput of about 1.7 million tonnes per year, according to the company.

Cainiao also began building an e-fulfillment hub in Kuala Lumpur to facilitate storage, fulfillment, customs clearance, and warehousing operations for inbound and outbound parcels. Similar developments are expected at other sites around the world as Alibaba expands eWTP.

As these hubs continue to develop, the Cainiao Network’s reliance on airlift is expected to grow exponentially over the next few years. Wan Lin (pictured), president of Cainiao Network, recently told Air Cargo World  that, as today’s peak volumes become tomorrow’s daily norm, “global air routes will expand rapidly.”

Cainiao currently partners with several express and combination carriers for airlift, but will require far more capacity if eWTP becomes successful on a global scale. Cainiao is also exploring further collaboration with Emirates SkyCargo; similar agreements could eventually connect Alibaba volumes to carrier capacity, although it remains to be seen which carriers will ultimately handle the bulk of Cainiao’s volumes.

Those interested in learning more about the spread of the Cainiao Network in Europe are invited to join us at Cargo Facts EMEA, to be held Feb. 4-6, 2019, at The Westin Grand Frankfurt. Register before Dec. 14 to take advantage of early bird rates. To register or for more information, visit cargofactsemea.com.