Double-digit pharma growth drives Changi upwards

Changi Airport

With global trade slowing, Changi Airport’s operator, Changi Airport Group is focusing on niche industry sectors such as pharmaceuticals to continue growing.

Changi Airport Group senior manager, cargo and logistics development division, Phau Hui Hoon (pictured) tells Air Cargo Week that in 2015 the airport saw volumes increase by 0.5 per cent to 1.8 million tonnes, but pharmaceuticals saw double-digit growth.

She says: “Changi Airport is among the world’s top 10 airports for international airfreight movements. Pharmaceuticals was one of the best performing cargo segments at Changi Airport last year, growing 45 per cent year-on-year, albeit on a small base.”

So far this year, January saw four per cent growth to 158,000 tonnes and Hoon says February was steady, dipping by 0.1 per cent to 135,900 tonnes, compared to 136,000 tonnes in February 2015.

Despite a good start to the year, Hoon says the industry is facing weak conditions but Changi is doing what it can to help its cargo partners. “With the slowdown in global trade due to the weakness in the Euro area, China’s rebalancing and slower-than-expected recovery of the US economy, air cargo volumes are likely to remain flat.”

“In light of the weak industry conditions, Changi Airport Group has rolled out a package of support measures totalling S$14 million [$10 million] for its cargo partners, which include a one-time Special Assistance Package for cargo agents and the extension of a landing fee rebate for scheduled freighter flights.”

She says: “We remain cautiously optimistic that air cargo volumes will recover by the end of the year, with the establishment of the ASEAN [Association of South East Asian Nations] Economic Community and the ASEAN Open Skies policy expected to enhance regional trade and connectivity.”

Pharmaceuticals remain a small business area, though they are growing strongly, and to strength its capabilities, Changi is pursuing International Air Transport Association Center of Excellence for Independent Validators (CEIV) on Pharmaceutical Handling.

The pioneer companies are Singapore Airlines Cargo, dnata Singapore, Global Airfreight International, Expeditors Singapore, CEVA Logistics Singapore and Schenker Singapore. Changi will be the first airport in Asia to launch a community of cargo partners to pursue certification, covering a carrier, a ground handler, and freight forwarders.

Elsewhere, perishables and express and e-commerce are increasing. Hoon says: “Perishables are an important cargo segment to Changi, contributing 13 per cent of our total cargo throughput. In 2015, perishable volumes at Changi grew 8.4 per cent year-on-year mainly driven by strong growth in imports and transhipments.”

“Express and e-commerce are also expected to do well in line with global trends and the commensurate investments by our airport partners.”

To cater for these growth areas, Changi is planning a number of expansion projects this year, including working with DHL Express on a 24-hour express facility at the Changi Airfreight Centre to be completed later this year. Hoon says: “This new facility will increase DHL’s throughput by three times and processing speed by six times, and further anchors Changi Airport’s position as a key cargo and logistics hub in the region.”

Ground handling company, SATS is investing in an e-commerce hub with Singapore Post (SingPost) at Changi, which is expected to be completed by the end of the year.

Hoon says: “The new facility will improve efficiency and space utilisation, and enhance the consignment handling capabilities for both SATS and SingPost. SATS will be the first ground handler in the world to own such an airside facility.”