JD.com unveils plans to study underground urban fulfillment network

Many logistics industry observers agree that Tesla Motors founder Elon Musk's plan to build subterranean tunnels for freight transport faces steep hurdles to widespread adoption, but the Chinese e-commerce giant JD.com said today that it is working a similar plan for underground, urban parcel delivery.

In an announcement at the company's 2018 Global Smart Supply Chain Summit in Beijing, JD.com unveiled plans to launch an "Urban Smart Logistics Institute" charged with developing plans for urban logistics hubs, top-level design for urban logistics systems, and big data and cloud computing platforms for logistics.

The institute will be stocked with business and academic figures from Nankai University, the Institute of Comprehensive Transportation at the National Development and Reform Commission, Beijing Jiaotong University, Beijing Wuzi University, Shanghai Maritime University, Sinotrans & CSC, and Shanghai Municipal Engineering Design Institute.

And the first item on their agenda is to determine whether underground logistics systems can make use of subterranean tracks and integrated municipal pipe corridors, according to JD.com. While the concept might sound far-fetched, it may be justified by the high costs of providing last-mile fulfillment services in urban settings, the company said.

Freight vehicles already make an outsized contribution to urban traffic emissions, and can take up as much as a third of road capacity, according to research papers cited by JD.com. And China's rapid urbanization will only exacerbate those effects, causing intense changes to the environment, creating pollution, and disrupting people's lives, the firm said.

If JD.com can succeed in building an underground delivery network, it says the system could allow urban logistics operations to be more efficient and environmentally friendly, while preserving aesthetically pleasing aboveground space that would otherwise be occupied by traditional logistics systems.

"The most effective smart cities are the ones that make best use of all available space and resources," the director of the Chinese Academy of Engineering, Chen Xiangsheng, said in a release about the new research institute. "The use of underground space to build three-dimensional smart logistics system is an industry game-changer. It will alleviate traffic problems, environmental problems, and save urban space."

The concept is the latest ambitious project from JD.com, which is already operating a string of unmanned convenience stores; fleets of outdoor, autonomous delivery robots; and a fully automated warehouse.