8 takeaways from Cainiao’s 2024 ESG Report

At Cainiao, we’re on a mission to redefine logistics with a strong focus on responsible innovation. Our vision goes beyond just improving efficiency; we're dedicated to creating a sustainable ecosystem that benefits our planet. We’re committed to going green every step of the way—from order generation and warehousing to packaging, delivery, and recycling. It’s a challenge, but we’re facing it head-on, one step at a time. Our dedication is reflected in our progress: we’ve cut down emissions across our operations and value chain by 458,000 tonnes in FY 2024. Here are some highlights from this year’s ESG report, particularly focused on the green logistics initiatives:

1.Increasing the use of clean energy at Cainiao Parks

We are committed to investing in clean energy for our logistics and industrial parks. In FY 2024, we have installed PV systems with a total capacity of 47.9 MW across 13 parks, providing clean power for our operations and tenants. Clean electricity now accounts for 54.1% of our total electricity consumption. As a result, we have reduced carbon emissions from our operations and value chain by 298,000 tonnes through our use of clean energy.

2.Scaling the use of new energy vehicle in delivery fleet

Transportation is a leading source of greenhouse gas emissions, so we’re focused on reducing our carbon footprint. By the end of FY 2024, 99% of Cainiao Express's self-operated urban delivery fleet were made up of new energy vehicles. We’re also piloting hydrogen-powered trucks in cities like Beijing, Hangzhou, and Jiaxing this fiscal year. Our eco-friendly last-mile delivery strategies are making their way to Spain and other parts of Europe, where we're using electric bicycles and motorcycles for select deliveries. Additionally, we’ve delivered over 41 million parcels with our smart unmanned delivery vehicles on campuses by the end of the FY 2024.

3.Improving transportation routing to drive efficiency

Our advanced Transportation Optimization System improves carrier selection and route planning by factoring in traffic conditions and resource availability. This approach significantly reduces fuel consumption and carbon emissions from idling vehicles. Moreover, by consolidating related goods in the same warehouse, we shorten travel distances during order fulfillment, lowering deadhead rates and ultimately reducing both carbon emissions and shipping costs.

4.Promoting shipping products in their own packaging

Why use extra boxes when you don’t have to? Many products can be shipped safely with shipping labels attached directly to their original packaging, eliminating the need for additional boxes. To reduce waste, we promote shipping in original packaging whenever feasible. In FY 2024, we shipped over 430 million parcels in their original boxes, effectively minimizing reliance on traditional packaging materials like cartons and foam.

5.Reducing plastic packaging and prioritizing recyclable materials

When additional packaging is necessary, we choose lightweight, recyclable materials tailored to the specific parcel type. We‘ve minimized our use of air pillows and other plastic cushioning materials, reduced the number of cardboard layers, and switched to narrower tape. In FY 2024, we simplified the packaging for around130 million parcels.

6.Right-size packaging through AI-driven algorithms

Our AI-driven box packing algorithms recommend the optimal box type, size, and layout according to specific items and shipping requirements, minimizing waste. This technology not only assesses box fill rates to ensure the best fit for multi-item orders but also reduces vehicle space requirements for shipments. By optimizing shipments, we lessen the number of vehicles on the road, contributing to a greener future.

7.Collaborating with merchants on recycling and circular solutions

In our warehouses, we systematically sort, recycle, and reuse cardboard boxes. In FY 2024, we reused 47.558 million cardboard boxes in our warehouses. Our green campaigns, such as the "Box Home-Coming Project" launched in 2016, have evolved into a robust system that encourages consumers to send parcels with used boxes at our “pick-up, drop-off” stations. In FY 2024, these stations significantly contributed to reducing carbon emissions, leading to a total reduction of over 21,000 tonnes through the recycling and reuse of cardboard boxes. Additionally, we partner with merchants to transition from cardboard to reusable boxes for B2B shipments, providing comprehensive services that include recycling planning and box supply. More than 130,000 reusable boxes were offered to merchant warehouses in FY 2024.

8.Promoting efficiency and resource conservation through e-waybills

We innovate in various technologies to digitalize the order placement and related processes. In 2014, Cainiao became the first company in China to successfully introduce a standardized e-waybill system to all express delivery companies and merchants, assigning digital IDs to parcels to improve logistics efficiency. This initiative reduced paper usage from five-part waybills to just one, saving four sheets per parcel. In FY 2024, our e-waybills have been applied on more than 42 billion parcels.

Looking ahead

The shipping process is long and complex, but as we move forward, we remain committed to staying on our sustainability path and working closely with stakeholders across the value chain for the benefit of our clients, employees, partners, and society at large.