COVID-19 has given the air cargo industry the wake-up call it desperately needed to discover the benefits of digitalisation, observes Thelma Etim.
From the outbreak of the pandemic, the world’s airlines, airports, ground handlers, freight forwarders and many other businesses in the airfreight supply chain have been trumpeting with pride how they are progressing with bright new digital strategies.
Sadly, it has taken a deadly virus to convince the doubters that digital processes and more transparent relationships are the path to air cargo’s future.
Singapore’s Changi Airport is one such example, reveals Lim Ching Kiat, managing director of air hub development for the Changi Airport Group. “Digital transformation of our air cargo sector is a key priority for Changi Airport Group (CAG),” he admits. “The COVID-19 pandemic has demonstrated the fragility of the air cargo industry – and has underscored the importance of digitalisation and data-sharing through community collaborations.”
In a post-COVID-19 world, there will be even stronger pressure on air cargo communities to accelerate the industry’s digitalisation efforts and to share data to enhance supply chain visibility and efficiency, Kiat asserts.
The virus tore through Changi’s passenger business in 2020, as passenger figures plummeted from a milestone 68.3 million in 2019 to 11.8m last year, an 82.7 per cent year-on-year decline. Yet, Changi’s airfreight business was positively buoyant in the period. In the first four months of this year the Singapore hub, which operates more than 940 weekly cargo flights – including cargo-only passenger aircraft services and freighters – connects Singapore to more than 80 cities worldwide. It handled some 582,000 tonnes of cargo.
Meanwhile, the airport has numerous new projects in hand to further improve and augment its airfreight throughput, some of which are already bearing fruit. One of the group’s goals is “to facilitate digital collaboration” within the Changi air cargo community. Hence the June 2020 launch of the Changi Air Cargo Community System (ACCS), an “open ecosystem of collaborative and community-based applications underpinned by an information-sharing platform that aggregates data from all parties involved in the cargo handling process,” he explains.
One of its pilot projects is a digital portal for enhanced slot-bookings and management, which is aimed at streamlining cargo lodgement and collection procedures at the cargo handler’s airfreight terminals. “We believe this portal will reduce waiting times and smooth the facilitation for cargo pick-ups and deliveries, whilst providing greater insights to bookings and shipment details,” he adds.
The improvements will enhance resource optimisation for both truckers and cargo handlers. In addition, with reduced truck waiting times, it will result in a reduction in CO2 emissions, thereby promoting environmental sustainability. “As part of the Changi ACCS roadmap we plan to roll out more community digital-use programmes in the near term that will enhance supply chain visibility, optimise operational efficiencies and enable end-to-end digitisation of the air cargo supply chain,” Kiat emphasises.
In May, Jaisey Yip, general manager of cargo and logistics development at Changi, confirmed that building air cargo hub resilience and agility will remain its work priorities for the rest of this year. “My team will also continue to work with airline partners to restore and strengthen Changi’s air connectivity. In boosting resilience and the competitiveness of the Changi air cargo hub, we will continue to work alongside our air cargo community to accelerate industry digital transformation, such as advancing the ACCS roadmap,” says Yip.
COVID-19 has even inspired new multimodal solutions to mitigate aircraft capacity shortages and uncertainties. “Such solutions look to be here to stay and, overall, I think the attractiveness and relevance of Singapore as a logistics hub will be further enhanced with stronger multimodal connectivity.”
Attracting more cargo airlines
Not surprisingly the airport is also focused on luring more carriers, such as the likes of Tasman Cargo Airlines – which operates international scheduled and charter services on behalf of integrator DHL Express. Changi’s first Australia-based carrier has launched new five-weekly B767-300 freighter services on a bi-directional Melbourne-Darwin-Singapore rotation to capitalise on the e-commerce boom in the region.
Sydney-headquartered Tasman’s new service will facilitate the flow of increasing cross-border e-commerce shipments within DHL’s global and south-west Pacific network through its south Asia hub in Singapore, says a statement.
In 2020, Australia’s e-commerce purchases grew by a remarkable 57 per cent year-on-year, with Australians spending a record A$50.46 billion online, according to Rodney Boys, acting group chief executive and managing director of Australia Post. Lim Ching Kiat, managing director of air hub development at CAG, also notes: “Consumer spending patterns have since shifted with higher reliance on online shopping, accelerating the growth trajectory of e-commerce.
“With south-east Asia identified as a key region with huge e-commerce potential and with a population of over 600 million, it is projected to be worth US$172billion by 2025. We recognise that speed to market and supply chain visibility are increasingly crucial for e-commerce. So, despite the pandemic, we have worked closely with our airline partners to quickly restore our air connectivity and network,” Kiat adds.
Surge in cross-border e-commerce
In the past year, Changi Airport has also welcomed the reinstatement of Chinese cargo carrier SF Airlines’ scheduled flights and facilitated the commencement of Hangzhou-based YTO Cargo Airlines’ new operations in Singapore. Both cargo airlines provide services for Cainiao Network, Alibaba’s logistics arm, for the transportation of e-commerce airfreight shipments between Hangzhou and Singapore.
“These flights improve Cainiao’s stability and efficiency in achieving their goal of global delivery within 72 hours amid the surge in cross-border e-commerce orders, further fuelled by the growing frequency of online shopping festivals. In addition, global express integrators such as FedEx Express, DHL Express and UPS have established their respective regional hubs here in Singapore and they have continued to increase their network and connectivity in the past year,” KIAT adds. Other notable carriers operating freighter and cargo-only passenger aircraft services from Singapore to Australia include Kalitta Air, Qantas, Scoot and Sri Lankan Airlines.
In the meantime, working in close collaboration with its air cargo community, Changi received its first Pfizer-BioNTech COVID-19 vaccines transported by Singapore Airlines in December 2020 and, in February of this year, handled its first batch of Moderna vaccines. Kiat points out: “Singapore had targeted to vaccinate its citizens and residents by 2021 and the timely and effective handling of these shipments played a critical role in meeting this target.” As of March 2021, Singapore’s Ministry of Health announced that more than one million shots of vaccines had been administered in Singapore.
Beyond local demand, Singapore aims to be a regional conduit for COVID-19 vaccines distribution in the region. In February 2021, Singapore Airlines shipped more than 220,000 doses of Pfizer-BioNTech COVID-19 vaccines into Australia and New Zealand from Brussels, through the Changi air cargo hub. “The successful delivery of the first batch of vaccines into Australia and New Zealand respectively demonstrated Singapore Airlines’ and the Singapore air cargo hub’s connectivity and cold chain capabilities,” insists Kiat.
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