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China Shipping joins Alibaba in e-commerce logistics platform

Jul.15--China e-commerce giant Alibaba will partner with state-owned China Shipping Group to set up an integrated and cross-border logistics platform to support the rapid growth of Internet shopping on the mainland.

  China Shipping Network Technology (CSNT), a provider of transport information products and subsidiary of China Shipping Group, at the weekend signed a framework agreement between and sister company China Shipping Container Lines (CSCL), the company announced.

  A CSCL spokesman told reporters that the companies would “cooperate on e-commerce logistics by contributing their own resources to jointly establish a shipping e-commerce platform.” No mention was made of the financial investment required.

  “They will put in resources to build an integrated service platform for international shipping which both China Shipping's clients and Alibaba's clients can use for online logistics price inquiry, online ordering, online settlement and online goods tracking", according to the announcement.

  The initiative has been under discussion since May when China Shipping chairman Xu Lirong and vice general manager Huang Xiaowen visited Alibaba Group chairman Jack Ma to discuss a partnership that could merge traditional shipping with e-commerce. Alibaba had announced plans in 2013 for a national e-commerce logistics network based on a consortia of retail and delivery companies with a $16 billion multi-year investment. In April JOC reported that international logistics firms like UPS, Fedex and DHL see big opportunities in the China e-commerce market but have yet to make gain significant traction in that market. 

  The Alibaba chief has been heavily involved in distribution in China as he tries to control the last-mile logistics, one of the most crucial areas in the supply chain. Last year, Ma corralled a host of express couriers and established the Cainiao Network. It will involve an investment of almost $50 billion to create a national smart logistics network by using the resources of Yintai Group, Fuxing Group, Fuchun Group, SF Express, Shentong Express, Yuantong Express, Zhongtong Express and Yunda Express.

  CSCL reported a net loss of $40 million last year and has been struggling to achieve profitability in an oversupplied market. 

  Alibaba is set to raise $1 billion in the New York Stock Exchange’s biggest technology IPO. Stocks are expected to start trading in the fourth quarter.