Changi Airport set to see express and e-commerce cargo grow

Changi Airport

Australia, China and Hong Kong are the top three performing air cargo markets at Changi Airport in the first four months of 2016.

Changi Airport Group (CAG) senior manager in the cargo and logistics development division, Phau Hui Hoon explains in the period, cargo shipments increased 4.3 per cent to reach 629,670 tonnes, compared to the same period last year, noting: “The growth is attributed to the surge in transshipment volumes, outweighing a decline in exports and imports.”

Hui Hoon says perishables are an important cargo segment to Changi, contributing to 13 per cent of total cargo throughput, while in 2015; perishable volumes grew 8.4 per cent year-on-year, mainly driven by strong growth in imports and transshipments.

She also explains there is a pharmaceuticals focus: “Changi continues to ramp up its efforts to strengthen pharmaceutical handling capabilities with the pursuit of the IATA CEIV Pharma certification.”

As industry conditions remain weak, CAG has rolled out a package of support measures totaling $14 million Singapore ($10 million) for its cargo partners, which include a one-time special assistance package (SAP) for cargo agents and the extension of a landing fee rebate for scheduled freighter flights for a year from 1 April 2016.

Hui Hoon says the hub hopes that this will provide the sector with cost relief and serve as a source of optimism in light of the slowdown.

But what is the biggest operating challenge for Changi?

“One of the key challenges in the air cargo industry is the management of cargo capacity. In recent years, to fulfill passenger demand, there has been a large injection of passenger flights leading to the addition of significant belly capacity. This has in turn led to an oversupply of capacity on certain trade lanes,” Hui Hoon says.

The gateway expects to welcome more bellyhold routes to its network compared to freighter routes, but one was all-cargo success story has been AirBridgeCargo Airlines – which launched a route into Changi in September 2015 and after six months started welcoming a third weekly service.

Hui Hoon notes: “Through AirBridgeCargo’s Moscow hub, Singapore is directly connected to major European cargo gateways including Frankfurt, Paris, Amsterdam and Milan as well as to US freight markets served by ABC’s international route network.”

Infrastructure will be expanded and CAG and DHL Express are to build a 24-hour express facility at the Changi Airfreight Centre that will be completed later this year to support the express cargo segment.

Hui Hoon says this will increase DHL’s throughput by three times and processing speed by six times, and further anchors Changi’s position as a key cargo and logistics hub in the region.

SATS is also investing in an e-commerce Hub at Changi with Singapore Post (SingPost) as its anchor customer and the new facility will improve efficiency and space utilisation, and enhance the consignment handling capabilities for both SATS and SingPost.

Hui Hoon adds: “SATS will be the first ground handler in the world to own such an airside facility. The expected completion date is end of the year.”

As for the future, cargo is set to get a boost as Runway 3 at Changi, now used by the military will be extended from 2.75km to 4km and converted to a joint civil-military use and the extended runway will be able to handle larger commercial aircraft.

Hui Hoon says: “At the same time, as part of the Changi East development, which involves the development of a new Terminal 5, Changi is developing a three-runway system to connect Runway 3 to Changi’s current airfield.

“Scheduled for completion in early 2020s, the three-runway system will allow Changi to handle more flights, particularly during the morning and evening peak hours, which are preferred for express operations and will further reinforce Changi as a major express air cargo hub in the region.”