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Keynote Address by Senior Minister of State Dr Lam Pin Min at Singapore Aircargo Agents Association (SAAA) – International Air Transport Association (IATA) Air Cargo Day 2019

08 Nov 2019 Speeches

Mr Steven Lee, Chairman, SAAA@Singapore
Mr Glyn Hughes, Global Head of Cargo, International Air Transport Association (IATA)

Distinguished guests,
Ladies and gentlemen,

1.     Good morning. It is my pleasure to join you today for the Air Cargo Day 2019.

Introduction

2.     Air cargo is an important contributor to Singapore’s economy. A well-connected air cargo hub has several key benefits.

a.     First, it provides Singapore businesses access to raw materials and intermediate goods in source markets, and allows our companies to reach customers in end markets.

b.     Second, it helps Singapore attract new investments, especially in manufacturing and logistics which form a vital part of global supply chains.

c.     Third, it enhances the resilience of our industry by allowing our companies to plug into different trade corridors around the world.

3.     Our domestic air cargo industry has inevitably been affected by the slowdown in global trade over the past few months. We are not alone – many cargo hubs around the world have also seen their volumes decline. For Singapore, our air cargo volume in the past 12 months has fallen 5% to 2.05 million tonnes, as compared to the preceding 12 months.

4.     The Government is watching the situation closely, and stands ready to help companies if things take a turn for the worse. At the same time, it is important that the industry positions itself to seize new opportunities. I will outline three ways that the Government and industry can work together to further develop the air cargo sector.

Building our competitive edge at Changi Airport

5.     First, we must continuously build our competitive edge at Changi Airport.

6.     In the area of service delivery, IATA has been driving the Cargo iQ initiative to develop and implement an air cargo shipment planning and performance monitoring system. Cargo iQ members undergo three-yearly audits to validate that they uphold the highest quality standards of cargo reporting and service delivery to end customers. I am pleased that SIA was re-certified in Sep 2019, which reaffirms the Singapore Hub’s commitment to service excellence.

7.     We should also enhance our capabilities to be the hub of choice for high value goods such as pharmaceuticals, electronics and time- and temperature-sensitive perishables. With a rising middle class in Asia, we can expect growing demand for such goods. Furthermore, given our geography and good network connectivity at Changi Airport, we are well-placed to tap on these growth opportunities. We should continue to develop our value proposition to capture more of these flows to and from our region.

8.     Singapore is one of the largest pharmaceutical exporter in ASEAN, with a market share of 49% of all pharmaceutical exports. To enhance Singapore’s position as an air logistics hub for Pharmaceuticals, the Civil Aviation Authority Singapore (CAAS), Workforce Singapore (WSG) and Changi Airport Group (CAG) had jointly supported the establishment of Asia Pacific’s first IATA Centre of Excellence for Independent Validators on Pharmaceutical Handling (or CEIV Pharma)-certified community. This will benefit the pharmaceuticals supply chain ecosystem, which includes logistics service providers, ground handlers and airlines.

9.     Pharmaceutical manufacturers can use Changi Airport as the trusted air cargo hub for consolidation and distribution of pharmaceuticals into Asia. This has helped to position Changi Airport as a certified corridor in the global pharmaceuticals handling chain. The local workforce which underwent the certification and capability development will also benefit from an expanded job scope and better career prospects.

10.    With a total of 10 companies1 certified by IATA under the CEIV Pharma programme, Singapore has the largest number of CEIV Pharma certified companies in Asia.

11.    Today, we will add perishables to the CEIV certification list with the launch of the Centre of Excellence for Independent Validators for Perishables, or CEIV Fresh in short.

12.    The CEIV Fresh will ensure that Changi Airport has the proper operating procedures to handle the air transport of perishable products reliably, ensuring that these delicate and short shelf-life products reach the customer with minimal waste and loss. This will give shippers of perishable products greater confidence to use Changi Airport as a hub for perishable products that are time and temperature sensitive.

13.    The CEIV Fresh certification programme will be administered by SAAA and supported by CAG, CAAS, WSG, and Enterprise Singapore (ESG). Singapore Airlines, SATS and dnata will be pursuing the CEIV Fresh certification by mid-2020.

Developing new trade corridors to capture growth opportunities

14.    Second, in tandem with our efforts to raise the capabilities at Changi Airport, the Government is also committed to working with the industry to develop new trade corridors.

15.    One example is the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity (CCI). To facilitate trade declarations and smoothen trade flow for businesses, our respective customs authorities have agreed to link up both countries’ National Single Window systems. We have also recently signed an MOU on China-Singapore (Chongqing) Customs Twinning Cooperation to optimise customs clearance along the CCI’s New International Land-Sea Trade Corridor.

16.    Singapore is also on the lookout for new opportunities in emerging markets. We recently signed a new free trade agreement (FTA) with the Eurasian Economic Union (EAEU). When the FTA comes into force, EAEU member states will reduce tariffs on 90% of goods exported by Singapore to their markets, and this will increase to 97% over a ten year period. The FTA’s terms also provide for goods to be cleared at Customs within 24 hours so that they can reach the market faster.

17.    These are examples of how the Government is helping our businesses look for new external opportunities, and I hope that our businesses will be able to leverage these developments to find new areas for growth and diversify our trade portfolio.

Transforming through technology to achieve greater productivity and innovation

18.    Third, to stay ahead of the competition, our companies will need to transform to become more innovative and more productive. I am heartened that we are constantly exploring ways to leverage new technology to enhance service delivery and efficiency.

19.    I am pleased to note that SAAA will be digitising their membership and training operations by early 2020 through their new system, AIRSMART. AIRSMART will assist companies to keep track of their staff’s training requirements, especially for courses which staff need to renew their training in, and will even notify staff when their examination results are available.

20.    To overcome our long term manpower constraints, we need to raise efficiency by redesigning our air cargo operations and processes. One example is SPEEDCARGO, the world’s first artificial intelligence (AI) powered robotic system, to build-up and breakdown cargo pallets.

21.    SPEEDCARGO was developed by TUM CREATE Ltd under CAAS’ Aviation Challenge 2 (AC2). It comprises the CARGOEYE2 , CARGOMIND3 and CARGOARM4 sub-systems, and is able to handle non-standardised cargo shipments of different shapes, dimensions, weights and materials.

22.    Since AC2 concluded in 2017, TUM CREATE and SATS have installed the SPEEDCARGO prototype and are testing it in a live environment. I am pleased to learn that CARGOEYE has achieved 99.9% accuracy for the measurement of cargo dimensions during cargo acceptance, and there are plans to operationalise it soon. The automatic capture of cargo shipments’ sizes and shapes will save time for cargo acceptance staff, enabling them to focus on other acceptance checks.

23.    I am also heartened by the progress made for CARGOMIND and CARGOARM during testing. l look forward to the time where the full SPEEDCARGO system can be operationalised to take over the manual and physically demanding aspects of cargo build-up. Other than improving our cargo handling productivity, SPEEDCARGO will also fundamentally re-design cargo handling jobs and allow cargo handlers today to work even longer into their careers. I will leave Suraj from TUM Create to share more on the project during the innovation session later.

Conclusion

24.    Despite the current headwinds, I believe that the long-term fundamentals of world trade and air cargo remain strong.

25.    To position ourselves better for the future, we must strengthen our capabilities at Changi Airport so that we remain a hub of choice for flows of high-value goods. We must also press on with our industry transformation efforts to raise our productivity, efficiency and service delivery. By working together, we will be well-placed to not just safeguard our current position in existing supply chains, but also seize new economic opportunities in emerging regions around the world.

26.    I wish all of you a fruitful day ahead.

1The ten companies are SIA Cargo, SATS, dnata, Bollore, CEVA Logistics, DHL Global Forwarding, Expeditors, Global Airfreight, Kuehne + Nagel and Schenker.
2CARGOEYE produces a detailed and accurate digital fingerprint of incoming cargo in real-time, using the most advanced 3D camera system for acquisition of geometry and image.
3CARGOMIND is an AI-based software solution that guarantees optimal packing plans at all time. It ensures all aviation safety regulations are met and provides tools to optimize for different planning objectives.
4CARGOARM is the actuating system for reliable handling of high-mix and high-volume cargo shipments. It is a gantry robot with a suite of advanced grippers to safely handle different types of cargo.