Singapore Changi Airport set a record in March 2017 when it became the first airport in Asia to have a cargo community with the Center of Excellence for Independent Validators in Pharmaceutical Logistics certification from the International Air Transport Association, but the airport isn’t getting complacent.
“We’re obviously happy to be the first airport in Asia to have a CEIV-certified community, but we see that as just the first step because there are opportunities to broaden it,” says Ching Kiat Lim, managing director of air hub development at Changi Airport Group. “As a first step, there are only six partners involved. In the second wave, we want to bring on board more ground handlers to broaden the community. We also want to deepen the expertise. There are more things to do like exchanging best practices and learning from other similar communities. We’re also looking forward to more of such communities in Asia and we’re quite happy to form trade lanes with these partners.”
Changi is looking at the certification as a longer-term initiative, in which the airport’s role is two-fold. The first is rallying the community in a certain direction, while the second is focusing on building up capabilities in specific areas.
Changi Airport is also a member of Pharma.Aero, an organization created by Brussels Airport and Miami International Airport to improve the quality of pharmaceutical handling worldwide. The organization includes major pharma shippers such as Johnson & Johnson and Pfizer.
“The three airports regularly come together to really try and get more members on board,” says Jaisey Yip, associate general manager of cargo and logistics development and air hub innovation at Changi Airport Group. “Most importantly, we need shippers because this community is for them. In the last couple of months we’ve been very aggressive in talking to different pharmaceutical companies. The next milestone is to form project work groups because we want to understand whether there are still gaps and to see whether we can pioneer certain initiatives and innovations. Of course, along the process we will also work with IATA.”
One specific area Pharma.Aero is looking at, according to Yip, is what kind of solutions there are to address on-tarmac temperature excursions. The organization has set itself an internal target of six to nine months for each work group to complete the projects and share the findings across the community.
“Today, the shippers have certain KPIs for the forwarders, but the forwarders will tell the ground handlers something else,” she says. “There could be a communication breakdown in between. When they pass on to the airlines there might be another interpretation. We’re working with the shippers to come up with a common set of KPIs that is applicable across the entire supply chain. We’re also looking at the technology available that will enable real-time temperature-monitoring dashboards.”
Apart from pharmaceuticals, the airport is also very keen on further developing the e-commerce segment. Within the past year, Changi has seen the opening of the SingPost regional logistics hub, the DHL South Asia hub and, most recently, a SATS facility dedicated to e-commerce.
“We’re putting quite a bit of focus on e-commerce, but the additional challenge is that, while we all understand what it is on the ground, how it actually translates is quite different,” Lim says. “There’s no classification of e-commerce. I think regulators and governments are also trying to grapple with defining it. The key thing is for the airport and Singapore as a whole not to over-regulate this area and to adapt the business models fast enough because it’s changing very rapidly.”
The other industry vertical where Changi has made progress is perishables, which grew 8% year-on-year in 2016. According to Lim, Singapore is now the first third-party country to be certified to handle chilled meat products from New Zealand to the EU via an air-sea transhipment method, as opposed to the previous convention of transporting it by sea all the way to Europe.
“Together with SATS, we have been working with the regulators in New Zealand, Singapore and the EU to see how we can improve this flow,” says Lim. “After working for a few years, we’ve finally managed to obtain the certification and we’re the only country so far.”
With the all-sea method, the meat has a shelf life of about two weeks by the time it arrives in Europe. The combination of air and sea means that the new method costs about 50% less than direct air freight for the entire journey.
“The meat now comes into Singapore by air and goes out to Europe by sea, and takes advantage of Singapore’s advantages in terms of both an air and a sea transhipment hub,” says Lim. “The first batch just went out a couple of months ago. With this new method, the meat has a shelf life of about one month when it arrives. That represents immense value for the shippers. We constantly look for such areas where we can add a lot of value and really carve out a niche space.”
With the new CEIV Pharma certification as well as the developments in e-commerce and perishables, Changi can look forward to some solid growth in 2017. The numbers already appear encouraging, with tonnage growing 7.9% year-on-year in February, 10.2% in March and 4.4% in April. But Lim stresses that, while it was nice to be the first CEIV-certified airport in Asia, the real work is a never-ending process.
“The key thing is that while the airport takes the lead in coordinating the partners, partner involvement is very important,” he says. “As a community, we want to move ahead and we’re taking advantage of this small head start, but eventually there’ll be others.”
He adds that his own wish is to get a few projects going as soon as possible because such collaborative efforts are needed for a better understanding, which in turn leads to better products.
“So I think that is moving in the right direction, but the job is never done,” Lim says. “It’s a constant process of improvement.”
By Jeffrey Lee
Asia Cargo News | Munich
