Red robots and rapid deliveries: CJ Logistics' Incheon hub has an efficiency revolution

Industry

Published: 12 Nov. 2023, 10:05 Updated: 12 Nov. 2023, 13:51

Red robots and rapid deliveries: CJ Logistics' Incheon hub has an efficiency revolution

At the Incheon Global Distribution Center (GDC) of CJ Logistics, 140 robots in the AutoStore system lift bins filled with products ordered by customers and deliver them to the outbound station where workers are ready on the opposite side. [CJ LOGISTICS]

INCHEON — Within the confines of CJ Logistics' Incheon Global Distribution Center (GDC) on Wednesday, 140 small red robots deftly navigate a 16-tiered storage space filled with neatly stacked bins.

These robots briskly move across the facility, lifting a cube-shaped basket filled with items like propolis and vitamins and swiftly delivering them to a stationed worker. Then they elegantly move on to retrieve another basket, ready to fulfill additional orders.

This is part of how products ordered through the U.S. health care goods retailer iHerb embark on a journey to reach customers in four APAC regions, including Japan, Singapore, Kazakhstan and Australia.

As the global market for cross-border shipping surpassed the 100 trillion won ($75.5 billion) mark, logistics firms are proactively pushing to seize the growing volumes of overseas direct and reverse purchases. The logistics arm of CJ Group has recently expanded the capacity of its Incheon GDC, going beyond mere international shipping, and enhancing services like product storage, inventory management and fulfillment.

In the expanded space, CJ Logistics introduced the AutoStore warehouse robots, which the company says boasts the capability to increase the same-day maximum shipments by 1.5 times, elevating the figure from 20,000 to 30,000 boxes. Simultaneously, it enhances storage efficiency fourfold.

Consumer orders are fulfilled by 140 picking robots inside CJ Logistics' Incheon Global Distribution Center. The AutoStore robots pick real-time ordered products and, at the same time, autonomously arrange high-demand items at the top. [CJ LOGISTICS]

Robotics and data boosting same-day shipments

The robots employ a Goods-To-Person (GTP) method, responding in real-time to consumer orders.

Workers are presented with optimal box sizes on screens, streamlining the packing process. AutoStore can also autonomously manage inventory, placing frequently requested items at the top for quicker retrieval.

Using the QPS (Quick Picking System), boxes containing order details travel along the conveyor belt to reach the workers. After confirming the order information, the workers simply place the products into the box in front of them. [SEO JI-EUN]

As robots are required to move the products, the automation of tasks is limited for large items with heavier weight. In response to that constraint, CJ Logistics has employed another approach — the Quick Picking System (QPS), wherein boxes containing order information come to a stop in front of workers along the conveyor belt.

“Previously, workers would search for items and put them in boxes. But now, the items themselves seek out and reach the workers, enhancing both logistics efficiency and operational convenience,” said Lee Kyung-jin, head of the Cross Border E-commerce Business Operations Team, during a press tour on Wednesday.

The automation process extends beyond order fulfillment. Smart packaging, 3-D scanning for optimal cushioning, automatic box sealing, and invoice attachment are seamlessly integrated into the process. The Wheel-Sorter then meticulously classifies boxes by destination.

CJ Logistics' Incheon GDC, located in the Free Economic Zone of Incheon International Airport [CJ LOGISTICS]

Asia's largest logistics hub

Spanning 20,000 square meters (215,280 square feet), the Incheon GDC, which is located in the Free Economic Zone of Incheon International Airport, is the largest logistics center in Asia with the capacity to store more than 5 million products.

When customers from four Asia-Pacific nations — Japan, Singapore, Australia, and Kazakhstan — place orders through the U.S.-based iHerb shopping mall, CJ's Incheon GDC springs into action, with logistics robots and automated systems navigating the intricacies of the process in just 20 minutes. Following this, the packages embark on a journey aboard large-edge vehicles to Incheon International Airport and then onto cargo planes, reaching customers' countries.

This operational model not only improves cost efficiency but also cuts down delivery times. Foreign platforms like iHerb pre-store items at the Incheon GDC. When orders are placed from the within Asia, they are immediately shipped from the Incheon logistics center.

According to research by Transport Intelligence (TI), the global cross-border e-commerce logistics market is anticipated to reach 178 trillion won by 2026, which is an 83.5 percent growth from 97 trillion won in 2021. TI further reports that the Korean market is expected to witness a 21.4 percent growth from 1.1 trillion won in 2021 to 1.3 trillion won by 2026.

A CJ Logistics cargo aircraft prepares for the international dispatch of products. [CJ LOGISTICS]

Strategic selection of Incheon

Industry experts view the expansion of GDC operations as a driving force in the thriving cross-border e-commerce logistics market. Unlike the past trend of global e-commerce giants investing heavily in direct entry into foreign markets, the focus has shifted to efficient GDC operations in countries serving as transportation hubs.

“iHerb's selection of Incheon GDC’s attributes to geographical advantages vis-à-vis Japan and Singapore is coupled with Incheon Airport's excellent cargo infrastructure,” said Kim Je-hyun, head of the Incheon GDC. “Compared to other Asian locations like Hong Kong and Singapore, Incheon offers additional logistics center sites due to its abundance of potential areas around the airport and seaport.

"[With the added capacity] in the expanded space, we will establish relevant systems to facilitate deliveries to more Southeast Asian countries,” he added.

Leveraging its domestically largest GDC operation as a catalyst for growth, CJ Logistics is intensifying efforts to capture the global cross-border e-commerce logistics market. Collaborating with iHerb, the company is also establishing a GDC in Saudi Arabia to manage orders and deliveries from nine Middle Eastern countries, including Saudi Arabia, the United Arab Emirates and Kuwait.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]