Cainiao Network (Cainiao), announced the launch of its first automatic distribution centre and overseas warehouse in Israel amid surging cross-border trade between the two countries.

The logistics arm of Alibaba Group Holding Limited said this is its first automatic distribution centre in the Middle East and tenth globally.

"The distribution center and overseas warehouse will play a key role in enhancing cross-border logistics fulfilment services," Cainiao said, adding that this is part of Cainiao's ongoing commitment to strengthen its global logistics network and optimize end-to-end cross-border logistics offerings.

The facility is located 30 minutes away from the Ben Gurion Airport, Israel's main international airport near Tel Aviv.

Cainiao noted that the distribution centre is equipped with intelligent sorting equipment, and Cainiao's proprietary overseas digital intelligent sorting system manages the entire value chain spanning first-mile pickup, last-mile deliveries and numerous other logistics scenarios.

To further optimize the distribution chain, Cainiao said it also leveraged technologies for delivery address analyses.

"With this technology, when overseas consumers choose to engage the self-pickup service, the package enters the last leg of the delivery process right after the first distribution step," Cainiao pointed out.

"This is estimated to optimize last-mile delivery time by about 25% and the entire value chain by nearly 10% boosting overall delivery efficiencies. At present, cross-border parcels can be delivered to consumers in as fast as 12 days, which is expected to reduce over time," the Chinese logistics company added.

Expanding China-Israel cross-border trade

Cainiao added that it has partnered with U-Speed, an e-commerce logistics supply chain service platform, to operate its first overseas warehouse in Israel.

"The launch of the overseas warehouse is estimated to reduce up to 10% of logistics costs," it added.

According to data from China Customs, the value of bilateral trade between Israel and China reached US$22.8 billion in 2021, representing 28.9% year-on-year growth.

Cainiao said in its announcement that it's also forecasted that e-commerce revenue in Israel alone will reach US$7.84 billion in 2022, suggesting the immense growth potential of the e-commerce market. 

"The pandemic spotlighted the importance of stable and efficient cross-border logistics services, as more merchants shift online to tap on a wider overseas consumer base," said James Liu, general manager of Cainiao Export Logistics.

"Cainiao will continue its commitment to building a global logistics infrastructure and enhance end-to-end global fulfilment services to better support export merchants in their cross-border businesses," Liu added.