Game changer for cargo players

SEPANG: Malaysia Airports Holdings Bhd’s (MAHB) newly launched Cainiao Aeropolis electronic world trade platform (eWTP) hub has positioned KL International Airport (KLIA) as a preferred cargo hub for regional distribution centres (RDCs) in Asia-Pacific.

MAHB, the airport operator, had entered into a 30:70 partnership with Alibaba Group’s logistics arm Cainiao Smart Logistics Network to establish the hub that commenced operation in November last year.

Transport Minister Datuk Seri Dr Wee Ka Siong, who officiated at the launch of the hub here yesterday, said the rise of e-commerce in recent years has proven to be a boon to air cargo growth, noting that it is the single-largest catalytic driver for the air cargo sector.

“The Cainiao Aeropolis eWTP Hub will be a game changer for Malaysia as the Asia-Pacific hub for RDC and e-commerce logistics.

“It greatly benefits from being in a free commercial zone with airside access to value-added activities such as break bulking and light assembly as well as 24-hour customs operation using smart technology that enables end-to-end multi-modal customs clearance,” he added.

Given the increased cargo volume, Dr Wee applauded the Royal Malaysian Customs that has put in place a customs clearance system that will only take 1.5 hours to complete, compared to 24 hours to 48 hours previously.

As such, he said the logistics sector would be able to handle greater volumes of freight, speed up the time taken to deliver goods across the supply chains and lower the cost of delivery.

Latest offering: Dr Wee visiting the Cainiao Aeropolis eWTP Hub during the launching ceremony in Sepang. The facility, a partnership between MAHB and Alibaba Group, provides operators with a faster turnaround and value-added services.Latest offering: Dr Wee visiting the Cainiao Aeropolis eWTP Hub during the launching ceremony in Sepang. The facility, a partnership between MAHB and Alibaba Group, provides operators with a faster turnaround and value-added services.

“All these benefits will serve to attract global operators such as freight forwarders, contract logistics companies and global monobrands to establish their RDC within the hub.

“The hub is a growth engine for Malaysia, with projections to generate a cumulative gross domestic product (GDP) of RM4.2bil in the next 10 years and support over 35,000 jobs during this period,” noted Dr Wee.

The Malaysian freight and logistics market is expected to grow to US$55bil (RM228.3bil) by 2026 from US$37.6bil (RM156.09bil) in 2020.

Meanwhile, MAHB managing director Datuk Iskandar Mizal Mahmood said the hub’s warehouse space, spanning a massive 1.1 million sq ft, has welcomed several cargo logistic operators as contract logistic players, providing space for their end-customers such as cargo operators and retail electronics company.

“Now operators will make this place as their RDC for the entire region, therefore bringing new volumes in for us.

“The hub provides operators with a faster turnaround and value-added services such as new light-manufacturing, assembly, repairs and return logistics,” he told reporters on the sidelines at the launch.

Given that e-commerce has been instrumental in driving cargo volumes, Iskandar had forecast that the new facility would be able to increase volume by an additional 600,000 tonnes per year, and in turn double KLIA’s present volume to 1.3 million tonnes per year by 2029.

“The expected increase in belly cargo volume will have a beneficial impact on airline route profitability.

“KLIA will also be an attractive proposition for cargo airlines to expand their connectivity thus preventing market erosion to hubs in other neighbouring countries.

“The spillover effect for the entire logistics value chain is expected to boost Malaysia’s economic growth,” he said.

For the first nine months of this year, MAHB’s network of airports in Malaysia recorded around 726,800 tonnes for total cargo operations, an increase of 24% from the same period last year.

For September 2021, MAHB’s entire network of airports in Malaysia recorded a 24% month-on-month increase in total cargo tonnage to about 86,200 tonnes.

The Cainiao Aeropolis eWTP hub is eyeing to get on board 10 new operators, especially from the vertical market of retail electronics, automotive, pharmaceuticals, telecommunications, sporting goods and the fast-moving fashion segment.

The hub is expected to facilitate 24-hour delivery within Malaysia for e-commerce operators, with the ultimate goal of enabling 72-hour delivery to the rest of the world.

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