Dive Brief:
- China e-commerce giant JD.com is opening a third self-operating warehouse and distribution center in California as it looks to grow its U.S. logistics arm, according to the company's corporate blog.
- The new facility will add more than 300 jobs and grow JD.com’s warehouse footprint to 1.3 million square feet throughout the state. In addition to the three warehouses in California, it operates two facilities in New Jersey and one in Georgia.
- JD.com said it is “replicating elements of its world class logistics operation in China and bringing those capabilities to address supply chain challenges in North America.”
Dive Insight:
JD.com has been rapidly growing its logistics unit by focusing on warehousing growth, including in international markets.
“We continue to invest in building global logistics infrastructure that better leverage our core capabilities and explore online retail business opportunities in other markets,” CFO Sandy Ran Xu said on the company’s Q4 earnings call.
In its corporate blog, the company said it hopes to one day grow two-day delivery to cover the entire United States. The e-commerce provider touted its ability to serve merchants with self-operating warehouses, saying its automation capabilities allow it to extend the order cut-off time by an additional hour.
At one California warehouse that utilizes a container transport unit system, goods are offloaded onto automated conveyors where they get scanned, sorted and stored by self-operating robots. The company said system improved operating efficiency by 300% and increased the number of storage units from 10,000 to 35,000 as robots are able to make full use of the height of the warehouse.
“Demand has shifted from the major e-commerce platforms to smaller independent operators, which has led to fragmented supply chains, adding further complexity and challenges to supply chain management,” Gordon Lu, general manager of JD Logistics United States, said in the blog post. “This is a challenge JD Logistics is uniquely equipped to solve.”
