RFID Penetration in Collection Bags
The current penetration of RFID tags in the express logistics industry is primarily focused on collection bags, with each bag typically containing around 20-30 express items. Upon placing an order for a single product package, it is dispatched from the merchant's warehouse to a transit warehouse. Subsequently, the bags are collected and transported to the sorting warehouse at the destination.
Following the completion of sorting, they are further transported to secondary or even tertiary sorting points via baggage mode. Ultimately, the single package is delivered to the resident's post station or express locker by the area courier through the package bag.
The collection bags feature RFID tag placement areas, container horizontal lines, and general packaging label affixing areas. Although the structure of different collection bags may vary slightly, the RFID tag is predominantly a necessary area on the collection bag, making it the largest scenario for RFID tag shipments in express logistics. It is estimated that there are approximately 5 billion collection bags in stock annually, with a loss of 200 million per year.
Transportation Asset Management
The management of transportation assets primarily focuses on the collection and circulation of materials in warehouses, such as turnover boxes and pallets. Similar to package bags, these assets serve as transportation tools for integrated packages. Currently, most express logistics companies utilize turnover boxes with RFID; however, due to the low consumption of tags, the overall scale of this market is not substantial.
Exploratory Applications
Other scenarios for RFID applications are currently in an exploratory stage, including RFID cold chain management, large-ticket commodity management, and special express delivery management. However, there is no significant large-scale application in these areas yet. The selection of these fields is also associated with the nature of the express delivery company, such as SF Express's cold chain business, JD.com's large-ticket logistics business, Postal Service's special security business, and Cainiao's overseas commodity business.
Industry Demand Characteristics
The introduction of RFID for item-level package management in express logistics can yield numerous benefits, which is a consensus in the logistics industry. However, the market is still constrained by costs and various operational factors, hindering the widespread application of RFID at the item level. The evolution trend from paper orders to barcodes to RFID signifies the inevitable development direction of the industry. Here, we will briefly outline the demand pain points of the express logistics industry to elucidate the role of RFID in this field.
Challenges in Express Delivery Information Uploading
For the express delivery industry, there are still shortcomings in express delivery information uploading. Data is currently transmitted in units of bags, enabling the circulation of express parcels. While information can be updated in a timely manner, issues such as mispackaging and missing packaging persist, leading to potential misdeliveries. From the customer's perspective, lost items are significant and can result in considerable loss. The process of after-sales and compensation for lost goods is cumbersome, adding time and financial costs for customers. From the viewpoint of an express logistics company, express delivery information cannot be fully visualized. Frequent loss of items may have a negative impact on goodwill and potentially affect stock prices and reputation.
Cost Constraints
The cost issue has been a significant barrier to the application of RFID tags on packages. Research indicates that the income from single express parcels has stabilized at around 10 yuan, with a profit of approximately 60 cents per package. Substituting barcode labels with RFID would squeeze the profit margins of express delivery companies. This cost constraint has impeded the widespread adoption of RFID in the industry.
Industry Evolution
The evolution of the industry from paper orders to barcodes and then to RFID is evident. Initially, multi-part carbon paper was used for express delivery orders, and with the development of barcode technology, it transitioned to electronic manifests in 2012. In 2021, companies like JD.com and SF Express began experimenting with QR code waybills to enhance customer information protection and transparency in the circulation process. As RFID technology continues to develop, its application to products such as bags and warehousing assets has paved the way for further evolution. Ultimately, it is only a matter of time before RFID is used for item-level tags.
In conclusion, while challenges such as cost constraints and operational limitations persist, the potential benefits of RFID penetration in the express logistics industry are undeniable . As technology continues to advance and costs become more manageable, it is expected that RFID will play an increasingly integral role in revolutionizing item-level package management within express logistics.
