Lim Ching Kiat, managing director, air hub development at Changi Airport Group, explains how Changi Airport is helping maintain Singapore’s air cargo supply chain and spearheading its recovery from COVID-19.
COVID-19 has gravely impacted the global aviation industry and cargo volumes at Singapore Changi initially proved no exception, with throughput down due to the significant reduction in belly-hold capacity on passenger flights.
Indeed, in the earlier months of 2020, international border restrictions severely weakened air travel demand forcing many airlines to reduce frequencies or cease services altogether.
The situation meant that Changi Airport Group (CAG) had to work closely with its airline partners to close air cargo capacity gaps and minimise disruptions to supply chains.
Together, we tripled our weekly cargo flights and welcomed five new scheduled freighter operators into the Changi airline family in 2020. The new services helped Changi Airport handle 1.54 million tonnes of air freight in 2020, a year-on-year decrease of 23%.
Our air trade (comprising imports and exports), on the other hand, was fairly resilient with a much lower contraction rate of 10% year-on-year. Despite the contraction in overall air cargo volumes, we saw bright spots in verticals such as pharmaceuticals and semiconductors.
According to Seabury, Singapore’s air trade (imports and exports) for pharmaceuticals and semiconductors registered a 16.1% and 6.2% year-on-year growth respectively in 2020 in terms of air tonnage.
COVID-19 vaccines will play a critical role in the global recovery from the pandemic, and the efficient and safe distribution of these vaccines by air is vital to support global vaccination efforts.
Given the time and temperature sensitivity of the vaccines, there is a need to ensure that the air cargo supply chain has adequate cold chain capabilities.
In preparing our air cargo community for the COVID-19 vaccine distribution, CAG, together with the Civil Aviation Authority of Singapore, established a local public-private partnership taskforce – the Changi Ready Taskforce – to ensure the safe, reliable and efficient handling and transportation of vaccine shipments into and through Singapore.
On the global front, Changi Airport co-led Project Sunrays, a global joint initiative between The International Air Cargo Association (TIACA) and Pharma.Aero.
Singapore successfully received its first batch of Pfizer-BioNTech Covid-19 vaccines and Moderna Covid-19 vaccines in December 2020 and February 2021 respectively. In addition, Singapore Airlines supported the delivery of Australia and New Zealand’s first batch of Pfizer-BioNTech vaccines earlier this year.
The successful import and transhipment of COVID-19 vaccines is testament to Changi air cargo hub’s connectivity, as well as its cold chain capabilities and reliability.
Looking ahead, there are still uncertainties due to continued trade protectionism, as well as vaccine availability, accessibility and adoption. Notwithstanding this, the World Trade Organization has forecasted that the global merchandise trade will recover by 7.2% in 2021. The recent above 50 reading in the Global Manufacturing Purchasing Managers’ Index (PMI) signals expansionary manufacturing activities in the near-term.
The growth trajectory of B2C e-commerce is likely to be accelerated due to the structural change in consumer purchasing behaviour to higher reliance on online shopping.
Semiconductor demand will remain strong as a result of home-based work and learning personal computers, smartphones and home equipment, as well as the recovery of the automotive sector.
In addition, global demand for pharmaceuticals will be boosted by the distribution of COVID-19 vaccines and therapeutic drugs over the next one to two years.
In this regard, we are cautiously optimistic that cargo verticals such as e-commerce, pharmaceuticals and semiconductors will remain resilient.