JD.com to Study Underground Urban Parcel Delivery Network

Chinese e-commerce giant JD.com has unveiled plans to study an underground urban parcel delivery network which may be justified by the high costs of providing last-mile fulfillment
services in urban settings, the company said.

In an announcement at the company’s recent 2018 Global Smart Supply Chain Summit in Beijing, JD.com unveiled plans to launch an “Urban Smart Logistics Institute.”

JD.com's underground urban parcel delivery network.
JD.com’s underground urban parcel delivery network.

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The institute is charged with developing plans for urban logistics hubs, top-level design for urban logistics systems, and big data and cloud computing platforms for logistics.
As announced by JD.com, USL will work with business and academic figures from Nankai University, the Institute of Comprehensive Transportation at the National Development and Reform Commission,
Beijing Jiaotong University, Beijing Wuzi University, Shanghai Maritime University, Sinotrans & CSC, and Shanghai Municipal Engineering Design Institute.

Beating trucking services
According to JD.com, the institute will first determine whether underground logistics systems can make use of subterranean tracks and integrated municipal pipe corridors and while the concept
might sound far-fetched, it may be justified by the high costs of providing last-mile fulfillment services in urban settings, the company said.
Research papers show that freight trucks already make an outsized contribution to urban traffic emissions and can take up as much as a third of road capacity and China’s rapid urbanisation will
only exacerbate those effects, causing intense changes to the environment, creating pollution, and disrupting people’s lives, JD.com said.

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Fighting the plague of plastic materials
The concept, which mirrors plans earlier announced by Tesla Motors founder Elon Musk to build subterranean tunnels for freight transport, is the latest ambitious project from JD.com, which is
already operating a string of unmanned convenience stores; fleets of outdoor, autonomous delivery robots; and a fully automated warehouse.
Just last week, JD.com announced plans to introduce ‘green boxes’ made of recycled plastic materials to combat the excessive use by e-commerce companies of packaging materials in their shipments
to customers. The reusable green boxes can be used about 10 times for small- and medium-sized parcel orders.
JD.com said its reusable packaging programme will be introduced in Beijing, Shanghai, Guangzhou, Shenzhen and Chengdu. It plans to add another five cities to the network by the end of October and
10 more between November and the end of the year.

One million convenience stores targeted
Meanwhile, China’s second-largest e-commerce company will increase efforts to diversify its revenue streams as its domestic online retail sales growth slows, a report by Nikkei said.
Apart from launching an online storefront in the U.S. following on the heels of its official launch in Thailand, JD.com is also pushing forward with a plan to open 1 million convenience stores in
its home market by 2021. Near-term the company’s target is to open 1,000 convenience stores a day by year-end, a spokesman was quoted as saying in April. According to local press reports, the
company this month recruited five executives from 7-Eleven to assist with the launch of a minimart chain. JD.com declined to comment on that report.

Nol van Fenema

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Source: Cargoforwarder

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