Payload Asia | June-July 2023

Hanoi, Vietnam

19 – 21 September 2023

IATA World Safety and Operations Conference

Leadership in Action: Driving Safer and More Efficient Operations

Join us this September at the first IATA World Safety and Operations Conference (WSOC) in Hanoi, Vietnam. This must-attend event will bring under one roof the previous Cabin Ops Safety Conference (COSC), the IATA Safety Conference and the Emergency Response Planning (ERP) Forum and the Aircraft Recovery Forum (ARF). This conference will tackle all issues related to safety, operations, and infrastructure. Expand your network, share experiences, and gain valuable insights from experts from all over the world.

Don't miss this unique opportunity to be part of the transformative conversations shaping the future of aviation safety and operations.

150 Orchard Road, #07-05

Orchard Plaza, Singapore 169206

EDITORIAL/PUBLISHER

Keen Whye Lee Publisher publisher@harvest-info.com

Giullian Navarra PLA Editor editor-pla@harvest-info.com

OPERATIONS

Mari Vergara Head of Operations manager-ph@harvest-info.com

MARKETING

Lali Singson Marketing Manager mktg@harvest-info.com

SALES

Simon Lee Hong Kong, Europe and Middle East sales@harvest-info.com

Chua Chew Huat Asia Pacific sales-sg@harvest-info.com

Matt Weidner North America mtw@weidcom.com

TECHNICAL SUPPORT MJ Magsalin tech@harvest-info.com

GRAPHIC LAYOUT

Tyrone De Los Santos ronds.creatives@gmail.com

EDITOR’S NOTE

Dear readers,

The cargo volume decline across the globe slowed down a bit in the month of June but the oversupply in capacity with the resumption of belly space has continued to put air freight rates on a downward trend. This is a ‘gloomy’ indicator for airlines and forwarders who are faced with route and pricing decisions, renegotiations and added pressure from shippers. With a few months left until the annual peak season, it’s hard to tell where the volumes will come from for air freight, and for some, e-commerce driven by shopping festivals and online purchases towards the end of the year could play a big role.

As e-commerce demands logistics service agreements that meet satisfaction ratings and budgets, operators are left with the task to digitalise and automate or join a network that will allow the same capabilities. Sharing his insights, Dr. Tian He, head of technology and data intelligence at JD Logistics, guides us into the world of JD.com where intelligent logistics rule.

In the C-Suite section, we talk to Li Yu, CEO for international business at SingPost, to discuss how his division was able to capitalize on growing demand for e-commerce logistics outside the city-state. Head to page 18 to find out more.

Despite how simple it may look, what happens behind the scenes after you click on your shopping app involves a complex logistics network just to provide endto-end shipping. On page 22, we catch up with Cainiao Group, to look back at the company’s last 10 years of evolving and building its smart logistics network across the globe, as well as its growing role in cross-border trade, transport and e-commerce fulfillment.

This issue also covers the latest industry news on carriers, airports, cargo handlers and forwarders, including a brief coverage of ICAO’s familiarisation visit in Singapore in June. There’s also an exclusive interview with Etihad Cargo on e-commerce and a brief Q&A with e-commerce logistics network group NeX. Buckle up for the next pages and enjoy it with your favourite drink, and look out for the next issue in freight forwarding come September.

Giullian Navarra Chief Editor

INSIGHTS

Cainiao Network’s 10 years: Mastering logistics, evolving with e-commerce

EVENTS

Singapore hosts ICAO Air Navigation Commission on familiarisation visit

Philippine Airlines confirms A350 order at Paris Air Show

IAG Cargo opens state-of-the-art facility at Heathrow

WFS opens new cargo terminal at Bengaluru airport

Hong Kong’s Hactl rolls out robots to enhance security

John

INSIGHTS

Shaping the future: Advanced technologies drive e-commerce deliveries

INSIGHTS

Cainiao Network’s 10 years: Mastering logistics, evolving with e-commerce

Shaping the future: Advanced technologies drive e-commerce deliveries

9 questions with Justus Klüver, CEO of NeX eCommerce

Etihad

Teleport inducts brand new A321 freighter

Australia Post opens new parcel facility in Western Sydney Embraer to set up P2F conversions in China

AfA reminds US shippers of rigid cargo screening

SingPost’s Li Yu on performance, Australia and e-commerce

Singapore hosts ICAO delegates on familiarisation visit

Texel Air unveils new B737 freighter in Auckland

Maersk Air Cargo strengthens growing network

Cargo makes moves to take e-commerce share

Dietrich to join FedEx as finance chief

Texel Air unveils new B737 freighter in Auckland

APC) in New Zealand since April under contract to NZ Post/Parceline Express, with domestic operations supported by flight crew and engineers from Bahrain.

Bahrain-based cargo airline Texel Air launched its Australasia spinoff, on 10 June, at Auckland International Airport with the unveiling of the latest B737- 800BCF. The arrival of ZK-TXE (registered MSN 29985), presented at the NZ Post Facility in June, marks the expansion of the airline into the

region, with now six aircraft in its fleet.

Apart from the new jet, Texel Air Bahrain operates Boeing 737 aircraft from Bahrain International Airport with two B737-700FC, two B737-800BCF and one B737-300F aircraft. It has been operating the B737-300F (A9C–

Boeing unleashes dashboard to monitor SAF supply

Boeing is providing more access to necessary data that will advance industry talks about decarbonization with the launch of a dashboard that can track the ‘expected’ sustainable aviation fuel (SAF) capacity over the next decade.

The tool counts the total SAF capacity based on announcements by suppliers from data collected by BloombergNEF. It can then filter anticipated supply by production pathway, location and other metrics.

Texel Air, established in Bahrain in 2013 by Chisholm Enterprises WLL, said it plans to expand its fleet to 10 aircraft by 2026. The group is anticipating the arrival of two additional B737-800BCFs to its fleet later this year (December 2023). The airline plans to primarily fly in Australia and New Zealand and between the two countries, offering ACMI services for the express, post and general cargo markets.

The tool, released by Boeing at the 2023 Paris Air Show, is expected to support discussion and action among industry stakeholders regarding the existing capacity and future production levels required to meet the commercial aviation industry’s goal of net-zero emissions by 2050.

The release of SAF Dashboard comes after Boeing in May launched the public version of the Boeing ‘Cascade’ Climate Impact Model, a data modeling tool that identifies the effects of a range of sustainability solutions to reduce aviation’s carbon emissions. Cascade and SAF Dashboard provide access to necessary data to advance the conversation on aviation decarbonization.

Cathay Cargo launches new marketing campaign

Limited’s hangar facility at Hong Kong International Airport on 21 June. A Boeing 747-8F was presented with the new Cathay Cargo livery, serving as backdrop for the occasion.

“magic” – that are central to Cathay Cargo.

Newly rebranded Cathay Cargo launched its first marketing campaign, “We Know How”, with a special ceremony held at Hong Kong Aircraft Engineering Company

Cathay Cargo is developing links in its extended home market of the Greater Bay Area, ahead of the anticipated three-runway system at Hong Kong airport, which is scheduled to start operations in 2024. The airline said the “We Know How” campaign focuses on the innovation, people, solutions and service – as well as the

Edward Bell, general Manager for brand, insights and marketing communications, commented: “Any shipment on a Cathay Cargo plane matters. It’s going somewhere because it’s needed quickly, or because it needs the protection and assurance of our specialist handling. There is a story behind each shipment that speaks to the magic of the goods we fly, and their importance to the people who receive them.”

Qatar Airways completes IATA CEIV certifications

Qatar Airways Cargo, along with Doha-based ground handling partner Qatar Aviation Services (QAS) Cargo, have now completed the suite of IATA CEIV certifications with the addition of the IATA Centre of Excellence for Independent Validators in Perishable Logistics (CEIV Fresh) certification.

The CEIV Fresh certification demonstrates Qatar Airways Cargo’s sustained commitment to the highest standards when handling and transporting perishable goods. The standard encompasses the entire supply chain, including both operational and technical aspects,

ensuring that perishable goods maintain their freshness, quality, and integrity throughout the transportation process.

With the latest certification, the cargo carrier becomes the first and only

Philippine Airlines confirms A350 order at Paris Air Show

Philippine Airlines (PAL) and Airbus have finalized a purchase agreement for the firm order of nine A3501000 aircraft, at the 2023 Paris Air Show held at La Brouget, France in June. The A350-1000 will fly on nonstop services from Manila to North America, including to the East Coast of the US and Canada. The new aircraft, able to accommodate 380 passengers in a three-class layout, will join two A350-900s already in service at the airline. Expected time frame for the first delivery was not mentioned.

Captain Stanley Ng, president and chief operating officer of Philippine Airlines, said the order will see PAL operating one of the youngest and most modern widebody fleets in

airline worldwide with its ground handler to have attained the complete suite of IATA CEIV certifications, namely, CEIV Fresh, CEIV Lithium Batteries, CEIV Live Animals, CEIV Pharma, IEnvA registered and United for Wildlife programme.

Asia. Airbus claims the A350 offers the longest range capability of any commercial airliner in production today and is capable of flying 9,700 nautical miles or 18,000 kilometers non-stop. For cargo, it has a payload of 68 tonnes and a capacity of 44 LD3 containers. So far, only a few carriers own an A350-1000.

Jettainer delivers fire-resistant ULDs to Lufthansa

Jettainer has rolled out the first batch of AMX fire-resistant unit load devices which were sourced from American ULD manufacturer Satco Inc. Lufthansa will be the first to use these fully certified fire-resistant containers, which were designed in accordance with the latest Technical Standard Orders (TSO) C90e specifications defined by the Federal Aviation Authority.

Manufacturer Satco said its main focus is to improve safety and one of the areas it has zeroed in is the transport of lithium batteries. The company recently opened its

own Air Cargo Safety Research Center, the world’s first manufacturer-owned full-scale burn test facility, to rapidly develop new designs and solutions.

The new AMX ULD design uses advanced materials to contain a fire for up to six hours, adding critical time for a flight crew to land the aircraft safely in a cargo fire incident. Jettainer said airlines can choose to use these new ULDs as an additional fire safety measure. The company has been providing Lufthansa Cargo with 50 AMX containers for this purpose since June.

IAG Cargo opens state-of-the-art facility at Heathrow

IAG Cargo opened the ‘New Premia’ facility in end-May, a 10,000-sqm handling facility at London Heathrow Airport, which will serve as a hub for handling premium loose shipments. IAG airline expects to see double the amount of cargo it will manage daily and has put significant focus on designing IT systems and systems integration to regulate freight movements and allocations.

IAG said the state-of-the-art facility has been designed to handle more cargo as efficiently as possible with

20 ‘break-and-build’ workstations and 11 rapid rise landside doors for faster loading and unloading. The company also introduced four ‘transfer vehicles’.

New Premia features a dedicated Constant Climate Quality Centre for the acceptance and storage of temperature-sensitive cargo like pharmaceutical and life-science products. IAG Cargo said the new facility is certified under the Good Distribution Practice WDA licence issued by the UK Medicines & Healthcare Regulatory Agency.

Brussels Airport wants net zero target by 2030

Brussels Airport Company has dramatically accelerated its ambition to achieve net zero carbon and is targeting to achieve it by 2030, which means under seven years, the airport operator aims to stop emitting all carbon dioxide (scopes 1 to 3).

The airport group said it has already been carbon neutral for its own emissions as airport operator since 2018. Green energy is used for all buildings and infrastructure managed by Brussels Airport Company, for its own operations as a company and for the fleet of company vehicles. The remaining emissions are offset by supporting green projects in Asia according to international golden

Anchorage airport to get digital uplift with NorthLink and Kale

Kale Logistics Solutions has signed a memorandum of understanding with NorthLink Aviation to build a ‘multilayered digital roadmap’ to create digital cargo infrastructure at its express freight and e-commerce

terminal at Ted Stevens Anchorage International Airport.

NorthLink’s objective is to grow Anchorage as a logistics hub for crossborder e-commerce by maximizing

standards. Brussels Airport Company had committed within the framework of ACI Europe to become Net Zero Carbon by 2050 at the latest (for scope 1 and 2), but that goal will now be significantly accelerated.

Brussels Airport Company said it is committed to accelerate its net zero carbon efforts to make the airport more sustainable and respond to today’s climate challenges. It plans to replace its central heating plant with a net zero carbon installation by early 2027, to provide the airport’s terminal buildings with completely CO2-free heating. Its buildings in the airport’s cargo area will follow by 2030.

the airport’s strategic location and combining infrastructure, technology, and service to increase profits for its customers.

NorthLink entered into a 55year concession agreement for a 120-acre property on the airport’s South Park campus and is developing infrastructure for aircraft parking, fueling, de-icing, and related warehouse and office space. The partnership with Kale will involve process automation platforms for e-commerce and cargo handling, a stakeholder collaboration platform, and other cross-border management tools.

Maastricht Aachen Airport inaugurates new runway

Maastricht Aachen Airport (MST) unveiled its newly renovated runway at a launch event held at the airport on 30 June 2023. The Netherlands’ second largest cargo hub has invested €35.3 million to upgrade the airstrip as part of a plan to extend its operational length to 2,750 meters by January 2025.

The 8-week renovation was part of Maastricht Aachen Airport’s overall infrastructure development plan to invest €100 million in the airport over the coming years. Sustainability

was the key theme of the ceremony, with an electric plane used to officially open the runway.

MST said cargo operations have already returned, with Turkish Cargo operating five flights a week out of the hub. Royal Jordanian and Emirates SkyCargo have also continued their operations at the airport, both running two flights each week.

WFS opens new cargo terminal at Bengaluru airport

Worldwide Flight Services, now a member of the SATS Group, has opened its air cargo terminal and cold chain facility at Kempegowda International Airport Bengaluru (BLR) in India. The ground handler was awarded the 15-year licence to operate the international cargo terminal and cold chain facility in June 2022 by way of a partnership with operator Bengaluru International Airport Limited.

WFS will be responsible for the development, operation,

management, and maintenance of the international cargo terminal and is also the exclusive operator of the dedicated cold chain facility at BLR airport. Plans are underway to double the terminal’s annual

throughput to more than 250,000 metric tonnes. WFS and BIAL will expand the capacity of the airport’s cold chain facility to 80,000 and 150,000 metric tonnes per annum over two phases.

Fraport closes contract to purchase more wind energy

Fraport continues to invest in new sources of renewable energy and has signed a new power purchase agreement (PPA) with Centrica Energy Trading A/S to procure more wind power. Under an initial 5-year contract, the European energy services and solutions provider will start providing Frankfurt Airport with annual wind energy volumes of around 63 gigawatt hours in July.

Fraport, which has expressed ruling out the use of offsetting measures in its climate protection strategy, is looking at shifting its energy mix

and has planned a 2026 target to convert to renewable energy sources. The airport group said the new PPA with Centrica will supplement a similar ‘smaller’ one signed in 2021, under which Fraport purchased wind

energy for the first time.

It added that the use of solar and wind energy will contribute to lowering the company’s carbon emissions at Frankfurt Airport to 50,000 metric tonnes by 2030. This represents a 78 percent reduction over 1990 levels, the base year under international climate agreements.

Hong Kong’s Hactl rolls out robots to enhance ground security

Hong Kong Air Cargo Terminals Limited (Hactl) is beefing up security at its SuperTerminal 1 facility, with the introduction of its own robot patrol. The first security robot is about to enter service and will initially patrol parking areas and export goods handling premises. It will mainly operate during the peak night-time period but could also be deployed during daylight hours as required, Hactl noted.

In addition to stepping up anti-theft measures and reinforcing awareness of its rigid security programme,

SATS Ltd, SingPost target faster

Hactl said the new security robots will monitor the condition of cargo throughout the company’s huge site, and will record any incidents of damage, to provide video evidence in the event of claims investigations.

The robot, which can operate on any paved surface, features a thermal imaging camera, a highresolution camera with a wiper for outdoor use, a LiDar technology sensor for navigation and multiple ultrasonic sensors for collision avoidance. Earlier in April, Hactl teamed up with Qatar Airways Cargo to trial the use of canine technical detection dogs to sniff out hidden lithium batteries in air cargo.

e-commerce trans-shipment

SATS Ltd and Singapore Post Limited recently signed a memorandum of understanding (MOU) on 4 July to explore a partnership that will potentially see a state-of-the-art e-commerce trans-shipment hub in Singapore. Under the agreement, the two groups have committed to providing ‘equal shares’ of resources to engage consultants for business case formulation, explore synergies and facilitate trial runs to capture essential data for a feasibility study.

Amsterdam Schiphol tightens ground security to counter theft

Amsterdam is responding to incidents of theft with tighter security requirements at its premises starting next year. Schiphol airport has invested in a ‘Secure Import’

information system which will allow a ground handler to advise a forwarder that a shipment is ready for collection. The forwarder can then direct a transporter to pick up

SingPost and SATS started joint trial operations in February 2023 and saw promising results with the potential to shorten cargo turnaround time by over 60 percent. This could mean deliveries within 1-3 days for items within Asia. Both companies said the proposed hub aims to streamline cargo logistics workflows by eliminating the need for transport between both of their facilities, minimizing the reliance on traditional cargo vehicles and further optimizing warehouse space.

the shipment, and the information system will check whether these are the correct parties for this particular shipment and provide information to the ground handler on who will be collecting it and when this will happen.

On 12 July, concerned parties signed a ‘best effort’ declaration in which they voiced their support for the new security system. A new feature of the system is it allows sensitive shipment information to be shared only on a ‘need to know’ basis, which can help prevent data manipulation by third parties, Schiphol explained. Last year all air cargo handling agents at Schiphol tightened the rules for access to their forecourts with all driver visits requiring notification via electronic registration.

Australia Post opens new parcel facility in Western Sydney

Australia Post has officially opened its newest parcel facility in Kemps Creek, NSW to provide services for Greater Western Sydney and the surrounding region. The 33,680-sqm facility, designed with future expansion in mind, is the second largest sorting facility in the network and will be located 15 kilometres from the future Western Sydney Airport. The modern purpose-built facility incorporates parcel processing, pick-up and delivery, as well as transport and linehaul operations.

Housing two large parcel sorters, the Kemps Creek Parcel Facility can process up to 200,000 large and small parcels per day, with the capacity to double in scale by means of installing a small parcel sorter, Australia Post noted. The company said it is committed to its 2025 sustainability roadmap and installed a 1,500-kilowatt solar roof system that can save up to 1,680 tonnes per annum. “Electric vehicle charging stations have been fitted, and we’ve taken additional measures including

Maersk plans Singapore facility for omnichannel fulfilment

A.P. Moller-Maersk (Maersk) is strengthening its omnichannel fulfilment capabilities in Singapore with a planned 1.1 million-sqft warehouse facility in Jurong West. World Gateway 2, as it is called, is expected to be one of the most productive warehouses in Singapore with extensive use of automation and robotic systems.

Slated to be completed in the first quarter of 2025, the facility will offer convenient access to Tuas Mega Port and Changi International Airport and industrial areas via the major highway

Ayer Rajah Expressway. It is also within proximity to World Gateway 1, which is currently Singapore’s largest automated and customs bonded warehouse.

Maersk said the new distribution centre’s automated storage and

Aramex Malaysia signs MoU with Global Systémes Asia

Aramex plans to expand its services to Malaysia and the wider Asia Pacific, as the Emirati logistics player signed a memorandum of understanding with Malaysian holding firm Global Systémes Asia. The deal will see Aramex Malaysia become the preferred logistics provider for GSA, as well as the joint promotion of express and logistics services to their networks in Asia Pacific and the Middle East.

Samer Hajjar, vice president for South Asia at Aramex, said the partnership

comes in line with plans to expand service offerings and presence across multiple Malaysian cities, starting with Penang.

GSA, who works closely in the aerospace and defence sector, said it is looking to expand its aviation

the installation of rainwater tanks to collect grey water and drip irrigation for native landscaping,” added Paul Graham, Australia Post chief and managing director.

retrieval system has capacity for 30,000 pallets, with a large floor plate of 160,000 square feet. Maersk added that the new Singapore facility is certified for its outstanding design and performance in environmental aspects. It will be equipped with motion sensor-LED lights, solar panels, composite panel façade system for building insulation, and building management system for energy efficiency.

maintenance, repair and overhaul (MRO) services in Asia Pacific and the Middle East to support the oil, gas and mining operations in these two regions. Aramex, who claims strong ties in the Gulf Cooperation Council; the Middle East, North Africa & Turkey (MENAT), and Africa regions, plans to expand in the region by building on GSA’s industry knowledge and market experience in the region, as well as Malaysia’s hub status in Asia Pacific.

Teleport inducts brand new A321 freighter

Teleport, the logistics venture seeded by Capital A, is looking to dominate Southeast Asia’s air freight market as it officially inducted its first Airbus A321 freighter (A321F) into its fleet on 12 July. The new cargo aircraft, based out of Kuala Lumpur, is the first of three aircraft to be delivered to Teleport

and it is expected to strengthen the company’s position in Southeast Asia, in terms of cargo volume.

Teleport said the A321F’s flight range gives it access to over 80 destinations across Southeast Asia and 80 more key cities in Asia Pacific. With 24

containerised positions on both the main and lower deck, the freighter can carry a maximum payload of 27 tonnes of various cargo, including e-commerce parcels, express/small parcels, large volume cargo, and dangerous goods. The second and third narrowbody freighters, due to be delivered in the fourth quarter and the first quarter of 2024, will have the flexibility to be based out of Kuala Lumpur, Bangkok, Jakarta, or Manila, the company said at the time of writing. Recent news states Capital A plans to dedicate some of this capacity in the Philippines.

Cainiao pushes global express service to 5 working days

Cainiao Network has set a new industry standard at its recent Global Smart Logistics Summit on 28 June, with the launch of the company’s ‘5day’ global express delivery service. The Alibaba logistics unit will partner AliExpress to provide this offering, which promises to deliver crossborder parcels within five working days. Cainiao said this will be achieved through full-chain operational optimization and streamlining of workflows across first-mile pick-up, line haul, overseas distribution, and last-mile delivery.

At the summit, CEO Wan Lin, said the next decade will unveil new development opportunities for Cainiao’s smart logistics. This includes establishing three long-chain logistics

networks encompassing domestic logistics, cross-border logistics, and overseas logistics, as well as three short-chain businesses in last-mile post stations, logistics infrastructure, and logistics technology.

Cainiao will focus on key logistics nodes in Europe, North America, and Southeast Asia, with plans to establish at least one local warehousing and distribution centre each year. At the main forum in Hangzhou, Wan provided an exclusive update on four business priorities this year, which include accelerating global express services, deepening logistics capabilities in key overseas markets, upgrading domestic express services, and developing tiered domestic supply chain products.

DTDC Express ‘super hub’ opens in Chennai

Indian express logistics company DTDC Express unveiled its new ‘super hub’ at Geethanjali Industrial Park, Velappanchavadi in Chennai on 28 June. The new facility spans over 175,000 square feet and has 38 docks to help optimize cross-docking efficiency. The hub is equipped with infrastructure to handle and process over 350 tonnes of shipments daily.

The facility features a state-of-the-art sortation system that can process up to 9,000 parcels per hour. Located along the Chennai-PoonamalleeBangalore highway, the new hub will offer seamless connectivity to urban

centers in South India. It will also serve as a link to Ahmedabad, Delhi, Mumbai, and Kolkata.

“Chennai is a crucial logistics hub in Southern India, and we recognize its immense potential. We are poised to streamline and strengthen our operations in the region and provide even more efficient and reliable logistics solutions to our valued customers across our express parcels, international and e-commerce verticals,” said Subhashish Chakraborty, chairman and managing director of DTDC Express.

Embraer to set up P2F conversions in China

Lanzhou Aviation Industry Development Group has become the launch customer for E-Jets P2F conversion in China after it signed a letter of agreement with Embraer for 20 E190F and E195F converted freighters at the Paris Air Show last June.

Embraer and Lanzhou Group plan to establish E190F and E195F conversion capability in the Chinese city of Lanzhou, which is expected to accelerate the introduction of the narrowbody E-Jet freighters in China. Lanzhou will serve as the base in China for Embraer’s P2F

conversions. The cooperation will be a starting point for both companies to leverage strengths, jointly promote the development of Lanzhou’s air transportation industry, and boost the economy around the airport.

The Brazilian aircraft manufacturer is confident about the booming

DHL Supply Chain to spend €500m in Latin America until 2028

DHL Supply Chain has announced a landmark investment of €500 million into Latin America over the next few years (until 2028) as part of a strategy to strengthen its capabilities in highdemand sectors like healthcare, automotive, technology, retail and e-commerce.

Projects in the pipeline include decarbonizing the domestic fleet through greener alternatives; building, developing and retrofitting real estate assets and warehouses in the market;

as well as significant investments into new technologies, robotics and automation solutions. DHL Supply Chain is confident in its plans for the region, citing its proximity to large consumer markets in North America as well as booming sales markets which make it attractive for industries to invest and therewith request additional logistics support.

The company has been growing its operations in Latin America with more than 240 locations. In Mexico

demand for cargo aircraft in China, given the tremendous growth of e-commerce and the consequent evolution of the logistics industry. Converted to their freighter versions, the E190 can handle a payload of 23,600 pounds (10,700 kilos) whilst the E195F can carry a payload of 27,100 pounds (12,300 kilos).

last year, it acquired NTA, a company focused on logistics services for the pharmaceutical industry. Following the announcement of the investment, DHL Supply Chain Mexico inaugurated a new center of excellence for electric vehicles to provide synergy to the automotive industry in the region.

Kerry Logistics boosts electronics after-sales service

Kerry Logistics Network Limited has expanded its after-sales services to a global technology and smart consumer electronics brand. The after-sales services encompass endto-end delivery from repair, software upgrade and hardware replacement to payment and value-added services for mobile phones and tablets.

A 3,000-sqft customer service centre was dedicated for the brand, which contains service counters, workstations and an experienced team of repair specialists. The company currently manages 20,000 square feet of repair centre

facilities for different electronics and technology brands in Hong Kong, and having a one-stop-shop approach will potentially shorten the after-sales service turnaround and give the brand a competitive advantage.

KLN has been providing regional distribution centre solutions for several international brands in the electronics vertical, including return merchandise authorisation service for a drone manufacturer, the installation of charging stations in commercial and residential for electric vehicle brands, and components management for leading electronic component

manufacturers. The company provides labelling, packaging, domestic distribution and export services.

NEWS - FREIGHT FORWARDERS

AfA

reminds

US shippers of rigid cargo screening

Airforwarders Association (AfA) Executive Director Brandon Fried has urged shippers to prepare for US air cargo security enhancements, which come into force in October affecting certain types of freight on international all-cargo flights.

The temporary Impracticable to Screen Amendment will come to an end on 31 October 2023, meaning cargo that cannot be screened using traditional methods due to size or volume restrictions will not be eligible for air transportation unless shippers are enrolled in one of Transport Security Administration’s authorised cargo security programmes. Shippers can join one of the programs on a voluntary basis to gain trusted status.

On 30 June 2021, TSA mandated that all air cargo originating in the United States and destined for non-

US locations be screened or secured before being loaded onto an all-cargo aircraft. This mandate addressed an international requirement that all cargo, including, but not limited to, unique items such as drums containing chemicals and large industrial equipment, be screened or secured against potential threats to aviation. “There will only be three options after October 31st; join one of the programs, use sea freight instead of air freight, or don’t ship cargo at all,” Fried told delegates at the CNS Partnership Conference in Miami in June.

Here’s ‘paperless’ way to ship on Europe-Asia corridor by air

A “paperless’ lane for air freight between Germany and Hong Kong has successfully been established by Lufthansa following the first few weeks of trials which resulted to 100 percent of general cargo shipments processed digitally. 100 percent means not only the electronic air waybill, but also accompanying documents and paper pouches.

This is the first of its kind in the air corridor between Europe and Asia, according to Lufthansa Cargo and Kuehne+Nagel, who are moving jointly forward in view of digitalisation and sustainability in air freight.

Both are encouraging industry players to join them in their efforts to eliminate unnecessary paper documents which can help optimise the entire air freight process.

Interested logistic companies are required to participate in the electronic air waybill (eAWB) single process and the selection of the eFreight Special Handling Code (EAW) for all general cargo when preparing the shipment and paperless delivery to the airline. Kuehne+Nagel plans to further expand the number of similar lanes to eventually build a whole ‘paperless corridor’ between Europe and Asia for general cargo.

India’s forwarders tap Kale to adopt e-FBL solution

Forwarders in India have deployed a new platform that could help transform the ease of doing business and reduce the logistics costs for the

country’s local players. The Federation of Freight Forwarders’ Associations in India (FFFAI) launched India’s first interactive electronic FIATA bill of lading (e-FBL) initiative hosted on the CODEX platform, developed by Kale Logistics Solutions.

The platform, launched on 9 June, will allow forwarders to issue a secured e-FBL through a one-click process. It is enriched with a smart QR code that allows users to establish the document’s integrity, security and accountability. Each FBL document is registered on an immutable ledger

and can be verified at any time by all stakeholders interacting with the document.

FFFAI members can generate the bill in three ways, including API integration, excel upload or using a machine learning interface that can pull data from scanned documents into the FIATA format with more than 95 percent accuracy. Vineet Malhotra, cofounder and director of Kale Logistics Solutions, explained that this will reduce nearly US$50 for each shipment with respect to documentation, courier and postage charges.

A.P. Moller-Maersk’ air cargo unit is strengthening its growing freighter network with increased regular flights in customer-backed air corridors and the introduction of additional aircraft. The move comes as the logistics operator is looking to plug a ‘connectivity gap’ between the world’s three largest markets for ocean shipping, North America, Europe, and Asia Pacific, with new solutions for time-sensitive and high-value cargo.

Maersk is doubling its weekly rotations from 3 to 6 on the Chicago Rockford International Airport and Hangzhou Xiaoshan International Airport route,

whilst weekly rotations between Greenville-Spartanburg International Airport in South Carolina, Incheon

Maersk Air Cargo strengthens growing network cargo.one joins forces with Eastern Air Logistics

767 freighter between Billund Airport in Denmark and Hangzhou Xiaoshan International Airport, which will increase its regular service from three to five weekly rotations. This is the fifth of initially six ordered aircraft of the same type that has been delivered to the integrated logistics operator.

Shanghai-based Eastern Air Logistics has taken its first steps into digital sales with the announced partnership with air freight digital marketplace cargo.one The landmark partnership will bring extensive capacity from both China Eastern Airlines and China Cargo Airlines to the real-time digital booking platform.

Eastern Air Logistics harnesses the scale of China Cargo Airlines’ dedicated Boeing 777 and 747 freighter fleet and the belly capacity in nearly 800 China Eastern Airlines passenger aircraft. Its network covers

of-the-art air cargo depot facilities at major Chinese air hubs in Shanghai, Beijing, Kunming, Xi’an and Wuhan, as well as a nationwide transportation network.

From Summer 2023, freight forwarders can book Eastern Air Logistics capacity using the cargo. one marketplace. Users can access important trade lanes between China and major regional hubs including Frankfurt, London, Budapest, Amsterdam in Europe; New York, Los Angeles, Toronto in North America;

GEODIS gains CEIV Li-batt certification in Hong Kong

GEODIS Hong Kong has secured the IATA Center of Excellence for Independent Validators Lithium Batteries (CEIV Li-batt) certification, demonstrating the company’s commitment to safety, security and compliance and positioning it to serve the growing demand for lithium batteries.

Geodis said Hong Kong’s proximity and ease of cross-border transportation makes it an ideal hub for global shipments in or out of China. Lithium batteries are increasingly being used in a wide

range of consumer goods, from laptops, mobile phones to watches, vehicles and other devices.

In 2021, GEODIS Hong Kong was accredited as an Authorized Economic Operator by the Hong Kong Customs and Excise Department. The AEO status recognises the application of excellent security and safety procedures within the supply chain industry. In Hong Kong, the company provides logistical support to businesses across key verticals such as high-tech, retail, FMCG and industrial goods.

and Singapore, Kuala Lumpur and Ho Chi Minh in Asia Pacific.

John Dietrich to join FedEx as finance chief

Ex-Atlas CEO, John Dietrich, is set to join FedEx as executive vice president and chief financial officer, effective 1 August. With more than more than 30 years of experience in the aviation and air cargo industries, Dietrich held several leadership roles at Atlas Air Worldwide since 1999, including as president and chief executive officer, and member of the board of directors from 2020.

Prior to Atlas Air, Dietrich was with United Airlines for 13 years. He currently serves as chairman of the National Defense Transportation Association, as a director on the board of AAR Corporation, as a board

member of the International Air Transport Association, and a member and former chairman of the National Air Carrier Association. Together with Dietrich’s appointment, FedEx also announced strategic shifts within the finance organization to further bolster its ongoing transformation.

Raj Subramaniam, president and chief executive officer at FedEx described John as ‘an accomplished and seasoned leader in the transportation industry whose unique combination of financial and operational expertise is a strong complement to the existing executive leadership team at this important time for the company.’

Jettainer appoints Svenia Iriarte as new finance chief

Jettainer, market leader in outsourced ULD management, has named Svenia Iriarte as its chief financial officer effective 1 June. She now assumes responsibility for finance, procurement, human resources and information technology operations.

Svenia started her career at KPMG and ventured into the airline world in 2003. The seasoned economist was initially a consultant for mergers and acquisition and later on saw global finances at Lufthansa Cargo. She also led the airline’s network planning and road feeder services and was most recently in charge of the cargo airline’s crew control division. Svenia succeeds Ingeborg Manz-Maier, who

has filed for early retirement effective July 1, after 14 successful years.

“Her extensive expertise in internationally oriented management tasks and her focus on sustainable growth and cost optimization make her a perfect fit to join our management team,” Jettainer CEO Thomas Sonntag remarked. “I would like to express my sincere thanks to Ingeborg Manz-Maier for her extraordinary dedication to our company over the past 14 years. With her as CFO, Jettainer has become the global leader in outsourced ULD management, a foundation on which we will continue to build,” Sonntag added.

DoKaSch targets China’s pharma logistics market

DoKaSch Temperature Solutions is strengthening its foothold in Asia and has appointed Emily Tang as sales and business development manager in China, one of the most important regions for the pharma and biotech industry.

Based in Guangdong in southern China, Emily will oversee the company’s operations in eastern China and Shanghai in particular, where most producers of pharmaceuticals, biotech materials, and active pharmaceutical ingredients are located. Prior to DoKaSch, she worked

at Catalent Solutions and cold chain logistics company World Courier. The new post in China complements the company’s ‘Asia strategy’ which saw the establishment of service stations in Beijing, Tokyo and Hyderabad.

“The APAC-Region and especially China is a strong growth market for pharmaceutical manufacturing. “Opticooler will play an important role in supporting the rise of the Chinese and Asia-Pacific pharma industry by providing reliable cold chains for biologics, vaccines, and APIs,” said Tang.

Payload Asia is set to release a special issue on the Americas to give an in-depth look at the leading individuals and companies that are setting the bar in this ever important market and trade partner for Asia Pacific.

We are calling on airlines, airports, freight forwarders, cargo handlers, logistics companies and valued service providers to leverage on the Payload Asia platform to enhance your messaging and branding whether you are based in North America, Canada, Mexico or anywhere in the world.

Get to promote your new products and services to a wider audiences through ad placements and advertorials, alongside editorial content on the following sections:

C-Suite

Company profile

Country/Market report

Special feature Insights

MATERIAL DEADLINE: 23 August 2023

9 brief questions with Justus Klüver, CEO of NeX eCommerce supply chain hub

NeX is an international group of experts focused on advancing the interests of the e-commerce supply chain logistics industry through tightknit networks and digital solutions. The platform was formed by Neutral Air Partner and ATEM Group back in May to serve as an ecosystem for shippers and stakeholders to engage with e-commerce logistics professionals and suppliers to the trade. In an interview, Payload Asia talks to Justus Klüver, CEO of NeX eCommerce to learn more about the group and its future plans.

Can you give us a brief background of how NeX eCommerce was formed? Has there been any interest since the group’s announcement?

NEX has been founded by the ATEM Group and Neutral Air Partner. We have 20 exclusive and very powerful e-commerce cross-border specialist companies as our founding members that operate globally. We have already

138 companies on the waiting list and counting. The interest is huge and bigger than we even expected.

Can you name some of the companies involved in the group?

The NET, Starlinks Global, AXCO, Bundle, Hurricane, Plusius, Reversegear, CCL, NG Terminal, Citi Logistics, Group Interlogixx, AMS, Van der Helm, Motion Supply, Packshak just to name a few.

Which key markets are you looking to start at? What are your prospects for Asia Pacific? We start global right away. The network of the shareholder is strong enough to go global right away. In Asia Pacific, we have members now in Singapore, China, Malaysia, Indonesia, Australia, New Zealand, Taiwan, India.

With highly fragmented and complex supply chains

and different stakeholders involved, how do you plan to simplify the logistics process for e-commerce players?

The key is technology. We did build the NEX hub, which is an open SAAS platform that connects the latest technology needed for a modern cross-border e-commerce supply chain process with the enterprise resource planning (ERP) systems of the members. The member can choose to connect his own system or use our own designed ERP which

The cargo owner should control the whole supply chain and that’s why an ecosystem like ours is so important. The cargo owner can decide who they want to use in the supply chain and not use an operator that white labels all activities.

covers everything they would need. The AI technology behind it allows the member to simplify their processes and optimise their shipping cycle.

Amongst the value-add services that the group can provide or guide with, which do you predict could see more demand and revenue? Is it in e-commerce fulfillment, reverse logistics or something else?

The reverse is for sure one of the key drivers to success in the near future as the market still grows and there are not many operators in it that are very experienced. Key bottleneck for all is and stays the customs bit. This also applies for the returns. We already have access to customs brokers in 170 countries and are very unique in this scenario. Here again, technology is the key. With a smart customs classification system that is connected to the warehouse operations, the processes getting more efficient and within the revenue stream stacks up.

To provide valuable end-toend deliveries and maintain a steady supply chain, what are key logistics decisions that a shipper or e-commerce player needs to make?

The key here will be the right partner. The cargo owner should control the whole supply chain and that’s why an ecosystem like ours is so important. The cargo owner can decide who they want to use in the supply chain and not use an operator that white labels all activities. If the retailer or e-tailer can measure the price and performance of every vertical of the supply chain and even has different options to choose from, he holds the key to a successful future operation.

What’s the group’s view on sustainability? Must have or nice to have?

Definitely a must have. By October, we will have a tool in the hub that will allow our members to measure

their CO2 output on the parcel level and by 2024 even on the SKU level if they want. In addition to that, we are working on a contract for sustainable consulting with one of the most known companies in that field from Switzerland.

Where do you see the biggest challenge for foreign e-tailers, entering the Asian market?

Clearly the fiscal part as well as the marketing. It is getting more and more cost intensive to enter a new market in Asia. Also the fiscal part is very time consuming if you are not using an agency for that.

Where do you see the biggest growth potential for imports into Asia to China?

For me the Latin American and South American trade lanes are interesting. While we see an ever growing part from China to the region, now the potential and numbers on export from that region back to Asia is stacking up.

RISE OF M-COMMERCE

60% of online purchases made via mobiles

73% of buyers downloaded a mobile shopping-app during the pandemic

Latin America has emerged as a fast-growing e-commerce market and trade partner for Asia Pacific and China, where the sector is estimated to reach US$200 billion by 2025. One of the more recent trends is the rise of mobile commerce in the region. In 2021, the percentage of online purchases made via mobile in Latin America reached 60 percent (Source: Americas Market Intelligence / HKTDC).

SingPost’s Li Yu on group performance, key markets and e-commerce logistics

Singapore Post announced dividends in May as the group posted a record revenue of S$1.9 billion for the financial year 2022/2023, with the international business contributing around 90 percent of the total. In an unpredictable market environment, SingPost’s logistics unit contributed 70 percent of the total operating profit, serving as a buffer for the decline in the postal segment. The postal group is on the verge of transforming into a global e-commerce logistics enterprise with its recent expansion in Australia, newly formed partnerships and the development of international cross-border e-commerce logistics. In this interview, Payload Asia catches up with Li Yu, CEO international at SingPost, to discuss the company’s performance this year as well as the Group’s strategy to capitalise on growing demand for e-commerce logistics.

What can you say about the company’s full-year performance?

The Group achieved a record revenue of S$1.9 billion for the financial year 2022/2023. Seventy percent was contributed by logistics versus just 38 percent back in FY2020. More importantly, logistics contributed 90 percent of the total operating profit. Our growth in the logistics segment has mitigated the structural decline of the postal segment, a trend that is prevalent globally.

The other key highlight is 86 percent of our revenue was generated internationally. With our expansion into Australia and the development of our international cross-border e-commerce logistics business, SingPost is transforming into a global e-commerce logistics enterprise and is well positioned in high growth markets across the Asia Pacific region.

Can you give us a rundown of your division’s top priorities? Where does e-commerce sit in your priorities and growth strategy?

According to McKinsey’s projections between 2023 and 2026, the Southeast Asian eCommerce market is expected to triple, boasting a compound growth rate of 22 percent. It is estimated that the market will reach approximately US$230 billion in gross merchandise volume. In a separate report from June 2022, Statista’s forecasts underlined significant growth in the ecommerce market across Asia, Australia, and the Americas.

At SingPost, we will continue to build on our strengths and establish ourselves as a leading eCommerce supply chain and logistics provider within the 4PL space across Asia Pacific region. Internationally, we have expanded into offering our

global customers inbound Australia services, expanding the China/ Hong Kong to Singapore lane with efficiencies and offering Europe to Asia services with direct line-haul, and establishing a dual hub system using Hong Kong alongside Singapore to facilitate seamless e-commerce delivery.

Strategically, we are focusing on three growth drivers. First is enhancing our digital capabilities and leveraging the 4PL model as a supply chain orchestrator, to support the continuous eCommerce growth across Asia Pacific. Second is expanding our hubs in Singapore, Hong Kong and Europe to shorten delivery times and better serve e-commerce flows and delivery into, out of and within Asia. One of the recent partnerships is with SATS to address a growing demand for e-commerce transshipment by leveraging our combined expertise. Third is expanding our infrastructure in domestic markets through pick-up, drop-off (PUDO) network growth to provide convenience and efficiency to our merchants and users, handling the increasing volume of eCommerce parcels

International business contributed an enormous 86 percent of the Group’s overall revenue? Can you share more about your business in Australia? What makes this market special?

Australia is the major contributor to our transformation and growth of the logistics business. Over the last 3 years we have seen the business grow three times in size. The logistics business we have built down under caters to both the B2B and B2C segments. The move to go big in logistics is already underway. In December 2020, SingPost took a 28 percent stake in Australia’s Freight Management Holdings (FMH) for A$58.9 million. The stake was eventually raised to 51 percent just over a year later and to a further 88 percent this March. The acquisition of FMH places 4PL (fourth-party logistics) technology at our core. We intend to expand with this assetlight approach in mind, powered

by the 4PL digital platform. FMH has performed outstandingly since our initial investment and is a key growth driver in the group’s logistics business.

Besides FMH, SingPost also owns CouriersPlease, a first and last-mile delivery courier network covering 90 percent of Australia’s population. FMH’s digitally enhanced logistics capabilities, together with our CouriersPlease last-mile delivery network allows us to provide technology-driven, fully integrated logistics solutions for both businessto-business and business-toconsumer operations in the Australian market.

Does it make sense for big e-commerce players to enter logistics or at the very least insource it? What’s your take on this move?

There are always two sides of a coin. By undertaking their own logistics, big e-commerce players may gain more control over their supply chain and enjoy more seamless operations. However, substantial initial investment costs are required to set up the logistics systems and infrastructure. Expertise in logistics management, time and resources will need to be devoted to manpower training and technology to provide high-quality logistics services. Fluctuations in e-commerce volumes would also call for the ability to scale their operations efficiently. The decision to establish in-sourcing of its logistics should be based on a thorough analysis and alignment to the company’s long-term growth and strategic objectives.

In many cases, it is more practical and cost-effective to establish partnerships with reliable logistics providers, increasingly to a 4PL player. Merchants gain immediate access to advanced technologies, established networks, and scalable operations. This allows them to focus on core business functions while the 4PL handles day-to-day logistics tasks, reducing operational burdens.

The 4PL’s global reach also facilitates international expansion and efficient

cross-border shipments, enhancing overall supply chain efficiency, improves customer service, and contributes to the merchant’s business growth in a cost-effective manner.

With your recent MoU with SATS, what kind of services or enhancements are you looking to unveil in Singapore based on your recent trials in February?

The partnership with SATS is designed to harness our unique strengths in order to meet the changing demands of e-commerce companies. With a cutting-edge transshipment hub facility, we aim to decrease delivery times and lower operating expenses and labour requirements. By eliminating the need for transportation between SATS and SingPost facilities, we will streamline cargo logistics workflows, reduce reliance on conventional cargo vehicles, and optimise warehouse space usage.

Based on a 3-month joint operations trial with SATS, we achieved a remarkable 60% reduction in the time taken from arrival to departure. The new approach cut the initial processing time of 21.8 hours to just 8.5 hours. With our extensive air connectivity and flights in Singapore, logistics players who partner us can expect an expedited delivery of products to Asia within a total timeframe of 15.5 hours. The Global eCommerce Hub is poised to disrupt the eCommerce logistics industry by enabling end-to-end delivery within 1-3 days in Asia.

Li Yu, CEO for international business at SingPost

The decline of year-on-year global cargo volumes stayed at -1% in June

‘Jumpy’ market forces airlines, forwarders to deal with ‘FOMO’

The decline in global air cargo volumes softened again in June but the ‘fearof-missing-out’ or FOMO has formed an ‘irrational’ market for airlines and freight forwarders with general spot rates down 41 percent from last year to US$2.31 per kilo, according to CLIVE Data Services, part of freight market intelligence Xeneta.

Whilst this may be good news for shippers, this leaves a jumpy mess with market sentiment at a somewhat gloomy state for transport and logistics providers. “Airlines and forwarders are getting jumpy because of falling rates, not so much the volumes. It’s the fear-of-missing-out that is driving the aggressive drop in cargo rates because no one wants to lose volumes, and they also want to get more of the cargo that’s in the market. We can see forwarders taking big risks,” said Niall van de Wouw, chief airfreight Officer at Xeneta.

Air cargo capacity across the globe was up 8 percent year-over-year in June but despite this availability, the chargeable weight was down 1 percent, repeating the previous month’s performance. In its ninth month of continuous decline which started in September last year,

spot rates were down 41 percent yearon-year to US$2.31 per kilo.

Sentiment on the seller side of the market appears to remain pessimistic with some operators of all-cargo aircraft undertaking major reviews of their route and capacity strategies, given the pre-pandemic return of demand due to the recovery and availability of belly capacity.

Meanwhile, freight forwarders still ‘handcuffed’ by high rates under blocked space agreements with airlines, are also facing growing pressure from shippers pushing to negotiate freight rates down to the new level, no thanks to aggressive pricing policies from other forwarders trying to gain their volumes.

“The air cargo market is a toxic mix at the moment. We see some forwarders agreeing to 12-month fixed rates with shippers, including fuel, that are lower than the rates we see in the market overall. That is nearly ‘going to Vegas’ in terms of risk, but forwarders are anxiously looking to secure volumes in the face of fierce competition. Shippers we are talking to are, in general, not looking for a massive overhaul of their

supplier base, but they do want to see a benefit because rates and market conditions are so much lower than they were 6-9 months ago,” explained Niall.

Looking ahead, Xeneta predicts the summer months will likely remain muted for air freight in terms of growth, given the prevalent market uncertainties. If no peak season happens for ocean freight, it believes this would provide a boost to air cargo’s recovery later in the year should shippers need urgent transport or consumer spending suddenly pick up. But any airfreight peak will be short-lived.

“The big question now for carriers is do they go for margin or volume? No one wants to be flying empty, and even the most respected airlines seem to be recognizing they have to join the game because if they keep their rates at a high level, they just won’t get the volume. Two years ago, airlines were asking ‘what am I going to do with my belly aircraft’ and now it’s a case of ‘what am I going to do with my freighters?’ It’s going to be a long summer for airline cargo departments, and it looks as though it will take a few quarters for the market to move away from the current irrational pricing environment,” van de Wouw added.

Global air cargo volume, capacity, load factor andn freight rate developments

INSIGHTS

Cainiao Network’s 10 years: Mastering logistics, evolving with e-commerce

Cainiao turned 10 this year and has evolved from plugging existing gaps in the industry using proprietary technologies, to one that prioritizes customer-centricity. At the company’s recent global summit in June, the company pledged a new benchmark global delivery service, one that will take five working days across the smart logistics network that it is progressively building. The move is rightfully so given the influence of online shopping and e-commerce on logistics players and the need to deliver the overall customer experience. In this interview, William Xiong, Senior Vice President, Cainiao Group, looks back on the group’s evolution in e-commerce logistics and gives his take on the company’s growing role in cross-border trade and transport.

Congratulations on turning 10 this year. Can you share more about Cainiao’s journey? How has e-commerce logistics evolved over the last decade?

We were founded in a time where there were multiple challenges to address, including rising eCommerce trade and surging consumer demands both

domestically and internationally. Our mission was to bolster eCommerce growth with efficient local and crossborder deliveries, deliver superior customer experiences, and support global trade flows through industrywide digitalization. This was achieved with our innovative business model that leverages technology to aggregate industry resources across our partners in order to optimize, streamline and increase overall visibility and transparency of workflows, and in parallel building a global logistics network to increase connectivity and resilience.

The rapid and continuous expansion of the sector is a motivating factor for our growth, and moving ahead, we strive towards greater transparency and visibility across the value chain by capitalizing on our proprietary technologies and logistics capabilities, as well as to continuously enhance customer experiences. All these, in line with our goal to drive impactful change within the industry, and eventually across the entire value chain, is our priority going forward.

To enhance customers’ shopping

experience amid today’s eCommerce boom, we launched international express courier services last year to upgrade our end-to-end logistics solutions. At our annual Global Smart Logistics Summit this June, we announced upgrades and improvements to this offering, along with a premium service, Cainiao Express. Not only does this allow doorstep delivery in key markets, but it also offers half-day delivery and night-time pick-up services to cater to different groups of customers.

What does 5-day express delivery mean for Cainiao Network? Will this entail more investments in technology and manpower across the value chain?

The express delivery service, launched globally, is a demonstration of our commitment to providing quality delivery services at scale. With cross-border parcels being delivered within 5 days, it will exceed current industry standards by 30% and bring about greater efficiencies and cost effectiveness for customers and merchants.

This builds on our ongoing efforts to bring about faster delivery services, which began with US$10 5-day delivery services in Europe and the United States. This new service is piloted in collaboration with eCommerce platform—AliExpress, to support their cross-border shipments. Here, Cainiao and AliExpress will progressively deliver cross-border parcels within five working days by streamlining its first-mile pick-up, line haul, overseas distribution, and lastmile delivery.

To deepen our logistics capabilities outside of China, we will be focusing on key regions such as Europe, North America, and Southeast Asia with a target to establish one to two local warehousing and distribution centers a year.

Beyond that, we have consistently

invested in technology and innovation to empower our partners, customers, and stakeholders across the value chain. We recognize that there are limits to scaling up by ramping up manpower capacities alone, so apart from hiring more personnel, we also prioritize the overall digitalization of operations and network development such as the adoption of automated equipment and infrastructural setup with warehouses and distribution centers, to keep up with the seasonal surges in demand, particularly around peak shopping periods.

What has been a key issue in terms of managing inventory and supply chains for e-commerce? Do you see any new trends arising as a way to counteract potential disruptions?

Warehouse management has always been a widely discussed issue. Common issues include challenges with addressing ongoing issues due to bottlenecks in other parts of the supply chain, as well as inventory management due to the large volumes of goods and parcels. Increasingly, industry players are acknowledging these issues and creating solutions to address them head-on. To address these issues, we have launched a proprietary pallet shuttle to augment warehouse operations alongside our automated guided vehicles (AGVs) and supply chain control tower that enables enhanced visibility across the supply chain.

While automation has made things easier for manpower in the warehouse, there are several nodes of the supply chain that require a little more than automation alone. Recently, the use of artificial intelligence (AI) has exploded across various industries, and supply chain is not an exception. With advanced analytics and AI, many legacy processes in the sector can be replaced, and humans can be deployed for more meaningful work surrounding customer experience..

By utilizing AI, the supply chain industry can expect to drive transformative change, and make

more informed business decisions through predictive analysis and bring about more reliability in service offerings. Generative AI, a booming subset of AI today, is able to provide even more fine-grained control over existing data and insights by complementing existing AI functions.

Where do you see the most potential in terms of e-commerce growth? Why so?

Categories like F&B, beauty, fashion, and FMCG have always been popular among international audiences. Increasingly, consumers are purchasing these goods via eCommerce platforms, and we recognize the urgency to bring about quality yet affordable and efficient delivery services.

There is potential for the eCommerce industry to enhance their data and analytics capabilities – more than has already been done—to allow more personalized engagements with brands and merchants. With more digital transactions, eCommerce platforms now have visibility across the customer journey, including browsing behavior, time to purchase, cart abandonment, and more. There is an opportunity to strategically leverage these data to deliver more personalized and timely interactions and boost customers’ buying journey. Of course, this would require heightened transparency from logistics partners such as ourselves, to share live and relevant updates on delivery statuses.

Can you tell us more about the air cargo centres that the company has planned? How do you see e-commerce logistics evolving in the next decade?

The Shenzhen air cargo center was officially launched earlier this year, in partnership with Shenzhen Bao’an International Airport. The air cargo center aims to support the expanding cross-border eCommerce parcel volumes from China to Latin America by streamlining parcel sorting and customs clearance processes for import and export goods at the airport. This is further reinforced with the use of Cainiao’s proprietary technology equipment, the hand-

held LEMO PDA, digital customs clearance system and warehouse management system.

New flights, operated by Atlas Air between Shenzhen, China and São Paolo, Brazil, will operate twice a week with a loading capacity of more than 220 tons per round-trip. This builds on Cainiao’s plan to launch nine more distribution centers in seven Latin America states up until 2025. Statistics show that China became the second-largest trading partner for Latin America, and with eCommerce estimated to reach US$200 billion by 2025, it is an up-and-coming market. This presents vast areas of opportunity for the eCommerce logistics industry, cementing the value of investing in the Latin America market.

Industry players need to leverage partnerships to develop and apply smart logistics solutions, in order to safeguard against external disruptions. Our purpose-driven mindset will ensure that we remain a leader in propelling growth and innovation, and ensuring agility in our operations. Slowly but surely, we will move towards a more resilient supply chain.

60 percent of Cainiao’s revenue in 2022 came from external customers. In a fast-paced industry like e-commerce where you can lose business instantly for a breach or incident, what has been the secret in maintaining old and gaining new customers?

Consistency is key. Over the years, we have prioritized the delivery of superior customer experiences for our partners, customers, and endconsumers. Since then, we have moved away from evaluating our performance using metrics such as parcel volume and instead adopted a more long-term customer-centric lens with the aim of enhancing experiences. With that, our initiatives in technology innovations, partnerships and network development have revolved around the need to continuously improve customer experiences and foster customer loyalty to achieve sustainable growth.

Shaping the future: Advanced technologies drive e-commerce deliveries

Words by Dr. Tian He, ACM & IEEE Fellow, Vice President of JD.com and Head of Technology and Data Intelligence at JD Logistics

A novel, even transformative, online shopping experience is quickly becoming the norm in China: products ordered and paid for during large-scale promotions like Single’s Day reach your doorstep within the same day or even a few minutes posttransaction.

The country’s express delivery service has witnessed an astronomical 30-fold growth in the last decade, handling over 100 billion parcels in 2022 alone. Serving as a tangible manifestation of the explosive ecommerce boom, spearheading companies like JD.com are propelling this evolution through investment in intelligent logistics.

On June 1st, China’s largest mid-year shopping festival, ‘618’, broke all previous records. Items purchased on JD.com (also known as “Jingdong”)

not only surpassed the entire count from the previous year but left the warehouse for delivery in record time. As one of the largest ecommerce companies globally, JD.com now successfully manages same-day or next-day delivery for over 90% of retail orders, pushing overall inventory turnover days close to 30.

The backbone supporting these milestones is JD.com’s investment in advanced technologies. By integrating algorithms and robotics, JD.com improves customer experience, often subtly enough that they might not even realize it.

Machine learning in warehousing

High-demand shopping festivals such as 618 Grand Promotion generate tens of billions of dollars

in transactions, stressing logistics systems and retailers alike. Since initiating its own logistics network in 2007, JD.com has progressively shifted from manpower-driven to automation and machine learningbased operations.

To illustrate, JD Logistics employs ‘digital twin’ technology, simulating real scenarios, predicting order volume, refining algorithms and making decisions about efficiencyimprovement. In mere minutes, this technology simulates the status of hundreds of millions of packages at every fulfillment stage, facilitating accurate management of personnel, facilities, and vehicles well before the promotion kicks off. Real-time data access alerts about potential issues, saving millions in costs. Historical data consistently demonstrates an impressive alignment of over 90%

between simulation predictions and actual data.

JD Logistics also harnesses big data and machine learning algorithms to predict product popularity and correlations, optimize product storage locations, and minimize cross-area picking for multi-product orders. AI-driven models create efficient pickup paths and guide packers to use optimal packaging materials, reducing waste and cost.

Complementing this systematic intelligence is JD’s deployment of robotics and automation technologies. JD’s integrated warehousing system consolidates software and hardware systems like high-speed sorting lines, AGVs (Automated Guided Vehicles), and AS/ RS (Automated Storage and Retrieval System) for maximal efficiency. Userfriendly design enables operation management via PC and mobile terminals.

Business intelligence in transportation

With rising consumer expectations for swift ecommerce services, consumption and transportation have become intimately linked, impacting urban planning and

sustainability. Addressing this link, JD Logistics uses algorithms combined with comprehensive road network information and real-time traffic conditions to accurately plan and optimize route solutions for single or multiple shipments. Intelligent routing can accomplish in two minutes what manual methods might take hours or even days to achieve.

During the pandemic, JD.com’s smart supply chain system analyzed the warehousing network’s status with updated epidemic information in real time, recalculating and reallocating inventory distribution across the network in response to transportation restrictions and road closures. This capability not only enhances fulfillment efficiency but also offers valuable insights to industry partners and customers.

Logistics big data gives enterprise users a city-wide view of the economic situation, population size, purchasing power, preferences, commercial infrastructure, and transportation facilities, enabling superior business planning.

Leveraging the insights gleaned from logistics big data, enterprises

can rapidly gain a comprehensive understanding of a city’s economic situation, population size, purchasing power, preferences, commercial infrastructure, and transportation facilities. Such a holistic, city-wide perspective empowering businesses to strategize more effectively and make informed decisions.

Automation in last-mile delivery

With labor costs on the rise and the need for reduced social logistics costs, intelligent last-mile delivery is an inevitable trend. On the last Single’s Day, JD Logistics deployed 600 autonomous outdoor delivery robots and 100 indoor delivery robots to provide last-mile delivery services, marking one of the first commercial applications of autonomous driving vehicles at scale. These vehicles, using AI models to integrate information from sensors, can recognize and avoid obstacles with a 98% accuracy rate for small items like traffic cones and fences.

The application of robots provides flexible delivery options for customers and satisfies consumers’ demands for instant delivery at a time when the ondemand retail market is skyrocketing.

In the landscape of global commerce, advanced technologies are reshaping our reality, paving the way for an era of unprecedented efficiency and convenience. The same- and next-day delivery paradigm we’ve achieved at JD.com is more than a testament to our technological prowess. It represents our dedication to elevating the customer experience, a commitment reflected in our continued pursuit of advanced logistics solutions powered by AI, machine learning, and robotics.

As we journey further into this exciting era, we embrace the responsibility to play a leading role in the industry, remaining steadfast in our quest to pioneer an efficient, sustainable, and consumer-centric future in ecommerce logistics. It’s not just about staying ahead; it’s about setting the pace, creating trends, and defining the future of the industry. At JD.com, we’re not just preparing for the future of logistics - we’re creating it.

Etihad Cargo stretches ‘express’ moves to prepare for next e-commerce wave

With cargo volumes way below what the industry saw over the last 2 years, airlines, logistics players and other stakeholders are trying to figure out which sectors could likely drive back more shipments moving by air. One of those that could be a driving factor is e-commerce, particularly exports coming from Asia. With operations between Abu Dhabi and China, Etihad Cargo is well aware of this trend and has been a step ahead in maximising the opportunities. In April this year, it added a fourth Chinese gateway in Hubei and offered a weekly freighter service. The airline also partnered with leading cargo carrier SF Airlines to further establish its presence in China. Leonard Rodrigues, head of revenue management and network planning at Etihad Cargo, shares his insights on e-commerce, the Chinese market and more in this interview.

Can you share more about your operations between Abu Dhabi and China?

Etihad Cargo operates seven freighter

scheduled flights to mainland China per week and additional ad-hoc charters to meet capacity demand. In addition to our freighter network that serves Guangzhou, Shanghai and the Hubei Province, we also offer additional belly capacity on board ten weekly passenger services to Guangzhou, Beijing and Shanghai. Via the carrier’s growing road feeder services network in China, Etihad Cargo also offers customers and partners access to 25 domestic destinations, providing seamless connectivity across the Chinese market.

How important is e-commerce in driving the demand in this particular corridor?

There has been a phenomenal global increase in online shopping and cross-border trade between e-commerce businesses. Crossborder e-commerce has always been a key component of Chinese exports. In the current environment, where passenger capacity in and

out of China is still lower than preCOVID, e-commerce represents a large proportion of freighter demand through dedicated charter programmes.

Etihad Cargo has identified e-commerce as a critical market for cargo growth, further driving Etihad Cargo’s focus on building a portfolio of cargo products that enable the smarter and faster management of air cargo. In e-commerce terms, Etihad Cargo’s air cargo services offer the speed consumers and businesses need and expect to answer the growing demand. Etihad Cargo will continue to develop agile business models in response to the evergrowing needs of e-commerce and fully supports the development of Abu Dhabi as a logistics and express hub for the region.

What type of synergies are you looking to unlock with your partnership with SF Airlines?

Etihad Cargo has continued to

invest in partnerships, both here in Abu Dhabi and globally, to expand our capabilities at our hub and internationally to further expand our network and product offering. Etihad Cargo’s partnership with SF Airlines is based on a reciprocal block space agreement. We exchange capacity on both networks, providing Etihad Cargo with additional connectivity in China, with greater accessibility to 25 domestic mainland China destinations via SF Airlines’ road feeder services trucking network, and SF Airlines with additional access to destinations across Etihad Cargo’s expanding global network.

We are now gaining familiarity with each other’s hub, and we recently welcomed senior leadership from SF Airlines to our Abu Dhabi hub and will be visiting SF Airlines’ hub in China very soon. We are exploring additional synergies and opportunities for mutual growth, and we are confident both sides have a lot to offer.

Following the success of our recent agreement with SF Airlines to connect our Abu Dhabi and Hubei Province mega hubs, we are also exploring further partnerships that will benefit not only Etihad Cargo’s customers but also further position Abu Dhabi as a global logistics and express hub.

What can you say about Abu Dhabi’s, or the Middle East, appetite for e-commerce?

A unique aspect of Etihad Cargo’s Abu Dhabi hub is its location, which provides the perfect link between the East and West, and the Government of Abu Dhabi’s clear vision of becoming a major global hub for air cargo and specifically e-commerce. Etihad’s shareholder, ADQ, also owns Abu Dhabi Airport and other key logistics investments and is facilitating Abu Dhabi’s vision. For example, a dedicated, state-of-the-art facility with e-commerce and express logistics capabilities is in the works, and specific free zones are being developed for fulfilment centres.

What are some of the trends that you think will drive more e-commerce shipments on planes?

In terms of trends that are driving more air cargo e-commerce shipments, a change in purchasing

patterns is having a significant impact, but these trends are not always easy to anticipate. During the pandemic, online shopping led to a huge surge in e-commerce. Now we’re in the post-COVID era, and after a period where e-commerce fell somewhat, it is again increasing due to a paradigm shift in the garment sector. New market entrants based in China are using e-commerce to offer even more choices and buying options to customers, leading to a boost in e-commerce sales and demand. An interesting trend to look out for is new crowdfunded products being marketed and sold through social media. Volumes are still limited at this stage, but their supply chain relies totally on the e-commerce process, so this could be more impactful in the future.

Aside from China, where do you see the most potential in terms of e-commerce growth? Can you share more about the direct services to Chennai?

China is among our top origins for e-commerce, with other top origins including Vietnam, the United Kingdom, the Netherlands, Spain, Australia and the US. India is also witnessing an e-commerce boom. According to the latest data from Redseer Research and Analysis, gross merchandise value (GMV) of India’s e-tailers has risen by 22 percent over the last year and reached $49 billion in 2022. Despite COVIDrelated disruptions and supply chain disruptions, e-commerce sales have increased by 140 percent since the end of 2020, and despite losing momentum since the peak in 2021, are still two and a half times higher than pre-COVID levels.

To meet increased capacity demand and reinforce our commitment to both Chinese and Indian markets, Etihad Cargo reinstated a twice-weekly freighter service from Shanghai to Abu Dhabi via Chennai in 2022, providing additional capacity into two key global markets. While we have always served that demand, through continuous evaluation of our network, Etihad Cargo identified the need for a direct service, and we will continue to review our network, adding destinations and frequencies, and optimising freighter utilisation to

support key trade lanes and customer demand.

How do you see e-commerce logistics evolving in the next decade?

The sector will likely see more partnerships between airlines and e-commerce players. Airlines are already focusing more on the delivery of their airport-to-airport service, as this is their core expertise. These services will then be commercialised by freight forwarders that provide the full 3PL experience. When it comes to e-commerce, this setup will work well in the case of full flights. However, for smaller shipments, this can prove to be inefficient, leading e-commerce logistics to rely heavily on integrators. If we project a trend where the share of e-commerce continues to grow, airlines will see value in developing partnerships that address that need.

What are key logistics decisions that a shipper or e-commerce player needs to make?

When it comes to air cargo, the key logistics decisions that need to be made will continue to relate to rate and capacity. When compared to other modes of transportation, the cost of air cargo is almost always higher. Therefore, for shippers or e-commerce players relying on air cargo, there needs to be a choice between securing long-term capacity that protects a growth in volumes for their business, weighed up against the risk of paying a small premium and wanting to procure capacity at the lowest rate based on the ad-hoc market, with the risk of that capacity not being available. When the share of e-commerce was small, gaps in availability could be used at competitive rates, for example, through the use of standby mail. However, with the share of e-commerce increasing, this trade-off must be evaluated fully.

Express cargo, and express options for other types of cargo, will continue to be a focus for Etihad Cargo in the next decade and e-commerce logistics will further evolve. Etihad Cargo will invest in our product offering so we can offer quick, reliable and efficient transportation solutions across our global network, supported by our extensive road feeder service network to connect with offline stations.

Inaugural Super Terminal Expo in Hong Kong set next year

Super Terminal Expo is set to hold its inaugural edition in Hong Kong in November next year, as the airport authority announced that it will be a strategic partner for the upcoming event. The event will take place at Hong Kong’s Asia-World Expo and will bring professionals from the aviation, ports, railways and cargo logistics industries to talk about collaboration and innovation.

The expo will provide insights into the latest trends and best practices for cargo and passenger terminals through panel discussions, keynote speeches and seminars. The event will also exhibit cutting-edge solutions and technologies for the transport and logistics industries.

Hong Kong’s airport authority confirmed it will support one of the landmark conferences and exhibitions featuring smart airport technovation, as well as collaboration with airports in China and around the world.

Singapore hosts ICAO Air Navigation Commission on familiarisation visit

The Civil Aviation Authority of Singapore hosted the ICAO Air Navigation Commission for a 3-day familiarisation visit in Singapore from 26 to 28 June 2023. During the visit to Singapore, the CAAS shared plans to rebuild the Singapore air hub, raise safety standards and transform the provision of air navigation services.

The visit is part of ICAO’s programme to familiarise members with civil aviation developments in member states. The ANC, composed of commissioners qualified in the science and practice of aeronautics, serves as an independent advisory body of the ICAO Council on air navigation technical matters, playing an important role in advancing safety and efficiency in aviation.

CAAS also hosted technical visits to the Singapore Air Traffic Control Centre, which houses the Air Traffic Management Research Institute, one of the research institutes funded by CAAS to build future air navigation services (ANS) capabilities. Representatives from Singapore have held commissioner positions in the ANC since 2006, including being selected as president in 2010 and 2011.

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