Over the course of the past decade, China’s logistics industry has experienced rapid growth. Package volume surged from 2.3 billion units in 2010 to 108.3 billion units in 2021, and has only continued to increase since then as Covid-19 triggered an explosion in ecommerce. However, like other countries, China’s unique challenges have opened the doors for much-needed innovation. In the same period of ten years, as demand has increased the working-age labor force available dropped by 50 million, and this in combination with supply chain issues exacerbated by global means that logistics and ecommerce companies alike must be smart in how they approach things moving forward.
JD.com, China’s largest retailer both online and offline, is both. It has been an ecommerce company since founder Richard Liu made the decision to move his chain of electronic stores completely online in 2003, and since 2007 has had a fully in-house logistics network. Currently, JD.com’s business has expanded across retail, technology, logistics, health, insurance, property development, industrial technology, private label, international business and more.
In order to provide the level of customer experience Liu desired, the company has focused heavily on research and development, utilizing cutting-edge technologies across the company but especially in logistics.
In recent years, the company has placed a large focus on combining smart technologies such as big data, artificial intelligence, and the internet of things and putting them to use in the development of automated warehouses and autonomous vehicles. JD Logistics, the publicly-traded logistics arm of JD.com, has made a number of technological breakthroughs that have led to the implementation of smart warehouses and autonomous delivery vehicles at a scale unrivaled globally.
Utilizing automation allows for the reallocation of workers time and energy, releasing them from the repeated, exhausted and inefficient task of picking or delivering packages door to door and providing them with opportunities for building skills in other areas such as maintenance of the systems and providing peak customer service. Additionally, autonomous technology greatly improves efficiency and helps JD achieve same- to next-day delivery on 90 percent of its retail orders.
Below, we explore JD’s history in autonomous technology, as well as just a few of its most recent endeavors.
JD.com’s application of autonomous technology
JD Logistics debuted its first autonomous delivery vehicle in 2016, and since then it has become the first company to commercially apply Level-4 autonomous driving vehicles at scale. Unlike other businesses such as auto companies who have sought to transform existing vehicles into driverless ones, JD’s fleets have been designed to be driverless from the beginning. Thanks to the company’s investment into researching smart technologies, its driverless vehicles have been developed to use artificial intelligence models to integrate information from sensors such as laser radar and computer vision cameras to recognize and avoid obstacles.
The technology also allows the vehicle to travel in tunnels and over bridges, as well as through a number of adverse weather conditions. It also has the ability to intentionally plan routes when in the face of complicated traffic intersections. JD also researched a cloud simulation platform which accumulates historical operations data and is able to discern how the robot should behave in numerous traffic scenarios, improving the vehicle’s ability to drive safely on open roads. Its autonomous delivery vehicle management platform can enable one staff member to supervise as many as 50 vehicles in operation at the same time.
Although JD Logistics had already been developing autonomous vehicles for a number of years before 2020, the coronavirus pandemic kicked operations and rollout of the technology into hyperdrive. When Wuhan was first placed on lockdown back in February of that year, JD’s autonomous delivery robots were sent to the epicenter to provide contactless delivery to hospitals and residences. One single robot deployed in Wuhan traveled over 6,800 kilometers and delivered over 13,000 packages.
Customer-facing applications of autonomous technology
Today, autonomous vehicles have been fully integrated into JD Logistics’ business model, and the scale of their usage continues to grow exponentially. During Singles’ Day 2022, JD Logistics operated 600 autonomous outdoor delivery robots and 100 indoor delivery robots across China for providing last-mile delivery services. When compared with the same day for Singles’ Day 2021, orders fulfilled by robots increased 300 percent overall.
Additionally, JD Logistics has also begun to extend the use of these vehicles beyond direct orders from JD.com. Its robot delivery system has been deployed by some Sam’s Club and 7FRESH grocery stores to fulfill on-demand orders, reducing the need for couriers overall while improving omnichannel results.
In September of 2022, JD Logistics began working with Shunyi Zhongguancun Garden to utilize autonomous vehicles on public roads in the Shunyi district of Beijing. In Beijing’s Shougang Industrial Park, a key venue for the 2022 Winter Olympics, last-mile delivery robots and mobile retail robots that are equipped with cold storage systems are both in operation. Finally, indoor delivery robots are used in malls and office buildings in over 10 cities including Beijing and Shanghai.
Warehouse smart technology and robotics
In addition to the use of autonomous vehicles to deliver packages and other products to customers, JD Logistics has also fully implemented robotics into its warehouses as well. Just a few months ago, over 100 5G-powered automated ground vehicles (AGVs) were deployed at JD Logistics’ “Asia No.1” logistics park in Changsha. The implementation of 5G technology serves to further enhance an already efficient model, and the area of the warehouse utilizing AGVs is now able to manage over 110,000 items a day.
According to data, AGVs have helped increase the moving efficiency of JD Logistics’ logistics parks by 200 percent. 5G has only further improved the impact AGVs have on efficiency, solving problems related to network delays while also better securing its order processing ability during high-pressure sale periods such as Singles’ Day or Chinese New year. JD Logistics found that when compared with a traditional Wi-Fi connection, 5G helps lower the average number of connection timeouts by 70 percent.
Robots play a significant role in securing the fast and agile fulfillment of hundreds of millions of orders across more than 1,500 warehouses. JD Logistics’ Shanghai logistics park is able to handle as many as 1.3 million orders a day thanks to the application of advanced robots and automation technology. Such robots have also been applied in JD’s overseas warehouses in the United States, United Kingdom, Australia, Poland, and the Netherlands amongst others.
The future resides in autonomous vehicles
Currently, JD Logistics has over 400 patents in the field of unmanned delivery, covering aspects such as environment sensing, high-resolution mapping, simulation, operating systems, and design amongst others. Historically, profit margins in the logistics industry are not very high – Richard Liu himself was criticized when he first announced JD would be developing its own in-house logistics in-part because it was assumed it would cut significantly into the company’s profits. However, the introduction of autonomous technology has allowed for the vast improvement of the structure and margins in recent years.
In fact, it was JD’s status as a massive ecommerce brand that has helped the company develop its technologies so quickly. Utilizing the data and scope achieved by JD.com, artificial intelligence technologies were able to learn quicker. Additionally, China’s uniquely complicated road conditions allowed for vehicles to learn more, faster, than they would have at a similar distance in other countries.
Autonomous vehicles are the future for not just logistics, but practically every industry. They will become a vital part of the infrastructure of cities at a global level, and, as usual, JD is ahead of the curve in the transformation of the urban supply chain.