Robots changing face of China's delivery industry

Unmanned delivery vehicles at a showroom inside e-commerce giant JD.com's headquarters in Beijing last month. Online retailers such as JD.com are also investing in drone programmes they hope will one day perform so-called last-mile deliveries, especi
Unmanned delivery vehicles at a showroom inside e-commerce giant JD.com's headquarters in Beijing last month. Online retailers such as JD.com are also investing in drone programmes they hope will one day perform so-called last-mile deliveries, especially in hard-to-reach rural areas.PHOTO: BLOOMBERG

Technologies being developed at fast pace as parcel volumes soar amid staff shortages

SHANGHAI/BEIJING • At Beijing's sprawling Renmin University of China, two shiny new couriers dart through throngs of students to deliver parcels throughout the day.

But they are not typical Chinese deliverymen. Bright red, grey and black, they are the robot postmen of the future, and are controlled from a command centre 40km away by e-commerce giant JD.com.

The robots are among technologies revolutionising China's vast delivery industry, which is struggling to keep pace with 50 per cent annual growth in parcel volumes amid staff shortages, tight competition and declining margins.

China's top delivery firms such as S.F. Express, Best Inc and ZTO Express have begun testing robots and automated sorting lines ahead of Singles' Day today - an annual online discount shopping extravaganza that could see 1.5 billion packages shipped around the country.

"Wages are going up and the technology cost is actually going down," said JD Logistics strategy director Bao Yan. JD Logistics manages parent JD.com's logistics network.

To be sure, the robot revolution is not unique to China. United States online retailer Amazon has staffed warehouses with thousands of robots since 2014, helping cut operating costs and delivery times.

However, Chinese industry executives say they are leapfrogging Amazon as they make use of and develop these technologies at a faster pace, with many investing proceeds from stock market listings last year.

"The adoption rate among Chinese firms is extremely fast. The economy develops so fast, so everyone's rushing to compete, to keep up," said Mr Johnny Chou, chairman and founder of Best.

The experiments taking place across China are wide-ranging. Best and Kaola, an e-commerce unit of video games publisher NetEase, are using robots that can shift goods weighing up to 1,000kg across warehouse floors to help human packers.

Online retailers Alibaba, JD.com and S.F. Express are investing in drone programmes they hope will one day perform so-called last-mile deliveries, especially in hard-to-reach rural areas.

Beijing has encouraged the fragmented logistics industry to modernise. The "Made in China 2025" initiative to upgrade the country's manufacturing base has also spurred growth in robots. But the government maintains tight control of its airspace, holding back the widespread introduction of drones.

Still, industry executives predict more parts of the supply chain will see machines replace human workers. "We may not even need 10 years to achieve completely unmanned warehouses and unmanned distribution," said Best's Mr Chou. "Developments are happening just too quickly."

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 11, 2017, with the headline 'Robots changing face of China's delivery industry'. Print Edition | Subscribe