The Government of Belgium and Alibaba signed a Memorandum of Understanding (MOU) today, to promote cross-border e-commerce between China and Europe by bringing Alibaba’s Electronic World Trade Platform (“eWTP”) trade hub to Belgium.
A major component of the deal includes significant investments in physical infrastructure by Alibaba’s Smart Logistics platform Cainiao, which inked a contract to lease 220,000 sq. meters of land at Liège Airport. Cainiao will develop the greenfield site by constructing warehouse and sortation facilities aimed at incorporating small and medium-sized enterprises (SMEs) into Cainiao’s global logistics network. The planned Liège facilities will commence operations gradually, with the first phase expected to be operational in early 2021.
As Alibaba’s online platforms increasingly look outward beyond China to integrate global merchants and source and sell products globally, Cainiao has responded to the anticipated onslaught of cross-border volumes by developing logistics hubs at six sites in different regions of the world. Apart from Liège, Cainiao projects are in various stages of development at the other sites in Moscow, Hong Kong, Kuala Lumpur, Hangzhou, and Dubai.
Cainiao’s investment at Liège is the network’s most significant infrastructure investment to date outside of Asia. 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 sq. 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.
Regarding eWTP, the loosely defined initiative seeks to bring governments and SMEs to the table, along with Alibaba, and work to remove trade barriers and improve SME participation in global e-commerce. Over the next five years, Alibaba is committed to importing US$200 billion worth of goods into China as part of its “Gateway to China” project.
Looking ahead, the Cainiao network’s reliance on airlift is expected to grow exponentially over the next few years as the company’s logistics hubs become operational. Wan Lin, President, 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 a number of express and combination carriers for domestic and international airlift but will require far more capacity if eWTP becomes successful on a global scale. Cainiao is exploring further collaboration with Emirates SkyCargo, and similar agreements could eventually connect Alibaba volumes to carrier capacity. It remains to be seen which carriers will ultimately handle the bulk of Cainiao’s volumes, but the network does have some options at its disposal.
For more on Air Cargo World’s interview with Wan Lin, see Crossing borders at Cainiao.
Those interested in learning more about e-commerce and its disruptive impact on air freight are invited to join us Cargo Facts EMEA, to be held 4-6 February at The Westin Grand Frankfurt. Register before 14 December to take advantage of early bird rates. To register or for more information, visit www.cargofactsemea.com.