In anticipation of strong growth in the region, DHL intends to invest US$102.3 million in a new, 24-hour express hub for South Asia at Singapore’s Changi airport, which is scheduled to open in the first quarter of 2016.

Occupying a land area of 26,200 square metres inside the Changi Airfreight Centre and a total floor area of 23,600 square metres, the planned facility will feature a fully-automated express parcel sorting and processing system, which will be able to handle more than 628 tonnes per day and process 14,000 shipments per hour. This will boost the integrator’s throughput by three times and give a sixfold boost to processing speed over its current set-up at the airport.

“The DHL Express South Asia Hub reinforces our global multi-hub strategy by leveraging the unmatched regional connectivity provided by Changi Airport and Singapore,” commented Jerry Hsu, CEO of DHL Express Asia Pacific. “With the continued growth of the Asia Pacific economies, the South Asia hub will provide the necessary logistics capabilities to support the growth of trade within the region.”

Singapore has been a strategic hub for DHL Express for years, consolidating and distributing traffic to and from South and Southeast Asia. In addition to regional connections, it offers links to Germany (via India) and Oceania (over Australia). With the expanded hub, the integrator will be able to support up to five times more flights in Singapore.

DHL’s air network in the region utilizes over 40 aircraft covering 40 countries and territories, in addition to lift on some 690 commercial flights per day in the Asia Pacific region. The integrator’s network is built around four regional hubs – Shanghai, Hong Kong, Bangkok and Singapore – with links to over 70 DHL Express Gateways throughout the area.

In a separate move last December, DHL underscored Singapore’s importance in its set-up with the announcement that it would establish a US$7.3 million innovation centre at the city-state’s Tampines LogisPark. According to the company, this will aim to invest in capabilities in analytics, e-commerce and last mile solutions for Asia Pacific markets.

The centre will also host innovation workshops, events and forums, sharing best practices between customers, innovation partners and industry experts.

CEVA Logistics is also ramping up its footprint in Singapore. In March it opened its West Hub, which occupies over 4,460 square metres of warehouse and office space and its new headquarters for Southeast Asia.

Simultaneously, CEVA announced the launch of its City of Energy, a dedicated hub for the warehousing, cross-docking, flow management and handling of oil and gas products and services. Located at the West Hub, with easy access to Jurong port and major highways, it covers 26,000 square metres of warehouse space and over 5,000 square metres of open yard space for clients from the energy sector.

Singapore is poised to see logistics traffic rise after its government signed a free trade agreement with the European Union last December. Additional stimulus could come from the planned integration of ASEAN, although few observers expect this to make significant headway in the near future.

“The economic integration of ASEAN provides an opportunity for intra- and extra-ASEAN trade and investment, which will in turn stimulate airfreight volumes across the region. With Singapore’s strategic geographical location, Changi Airport is well positioned to serve as the preferred port of entry to the region, as well as a cargo hub,” a spokesperson for the airport commented.

Changi has had a promising start into 2015. In the first two months of the year its cargo throughput rose 3.9% over the corresponding period in 2014. According to the airport authority, traffic to and from South Asia grew by five percent in January, with large growth from India and Thailand recovering by 22% for the month.

Last year saw little change in Changi’s throughput, with tonnage inching up 0.3% to 1.8 million tonnes. One bright spot was traffic to Japan, which went up 7.5%, largely thanks to the launch of B767 freighter service to Okinawa by ANA.

Last summer the airport rolled out a stimulus package to attract more freighter operations to its doorstep. It included a 50% rebate on aircraft parking fees as well as incentives to handlers and other operators to boost their productivity.

Moving forward, Changi has started planning the 1,080 hectare Changi East project slated for completion in the mid-2020s, which will encompass a new fifth terminal and third runway. Land is being set aside for airfreight and express operators, as well as MRO activities.

By Ian Putzger

Air Freight Correspondent | Toronto