Good Morning Ladies and Gentlemen

I am pleased to be with you this morning for the official opening of the fifth Cargo Agents Building at Singapore Changi Airport.

Some of you might remember that when Changi Airport was first opened in 1981, there were only two Cargo Agents Buildings, CAB A and CAB B. They had only one level of warehouses and two levels of offices.

As cargo traffic at Changi grew, more cargo agent buildings were added. They were not only bigger but also better designed to handle increasingly complex operations.

In 1995, CAAS decided to build Cargo Agents Building E, or CAB E for short. This building is CAAS’ largest investment in warehousing facility to-date. Costing $73 million, it houses more than 17,000 square metres of warehouse space and 13,000 square metres of office space. This is equivalent to a 35% increase in warehouse space and 20% increase in office space within the Changi Airfreight Centre. There is now more room for cargo agents to expand their operations.

Over 40 of the 200 freight forwarders operating at the Changi Airfreight Centre today are already located in Cab E. They can enjoy the benefits of being located at the Changi Airfreight Centre, such as the 24-hour Free Trade Zone, proximity to the airfreight terminals of SATS and CIAS and good security. It is the first CAB with three levels of warehouses. It is designed to facilitate cargo operations, with a vehicular ramp all the way to the third level so that vehicles can directly reach the upper warehouses. It also features larger warehouses, greater sheltered areas for loading and unloading as well as two levels of offices and a basement carpark.

Up till last year, Changi Airport was experiencing strong growth. In 1997, Changi Airport handled 1.3 million tonnes of air cargo and was ranked 4^th in the world in international air cargo. However, circumstances have changed. As you all know, the air cargo industry has not been spared from the effects of the regional economic crisis.

Cargo volumes have shrunk. There is also increased pressure from all sides to cut freight costs. Earlier this year, the government responded with off-budget measures to reduce business costs. On its part, CAAS has moved to lower rental costs. At the Changi Airfreight Centre, rental rates have not changed since 1995. From July this year, CAAS started giving its tenants a rental rebate of 15%. CAAS is also passing on the Government's property tax rebate to tenants in full, bringing the total reduction in monthly rental to about 21%.

Despite the economic downturn, CAAS will continue with its policy of constantly looking for improvements to support development of air cargo industry.

To ensure that the airport is not caught short in air cargo handling capacity, CAAS will continue to invest in infrastructure. CAAS’ masterplan for the Airfreight Centre would include future cargo agents buildings, airfreight terminals, purpose-built facilities for express cargo, and a new air mail transit centre.

Just a few hundred metres from here, SATS is constructing a new airfreight terminal. The new terminal will increase the cargo handling capacity at Changi from the current 1.7 million tonnes to 2.5 million tonnes per year.

In addition, CAAS will re-develop the existing Cargo Agents Building at CAB B. The aim is to optimise land use at Changi Airport as well as to introduce better design features. The future CAB B will be quite different from the existing CABs, as the main concept is to facilitate much larger throughputs of cargo. For example, there could be raised truck docks to facilitate cargo transfer to/from trucks. The warehouses may be larger with higher ceilings to facilitate the use of advanced storage systems.

As Changi Airfreight Centre grows, CAAS has plans for a wider range of facilities to cater to different categories of users, big or small. CAAS may even explore new concepts, such as the possibility of building a logistics centre at the airport.

Besides infrastructure, cargo procedures and systems will be improved. One example is the Air Cargo EDI System, or ACES in short. ACES was implemented earlier this year through the close cooperation between CAAS and the Singapore Aircargo Agents Association, TDB, Customs, SATS, CIAS and Cargo Community Network, the software supplier. With ACES, the matching of trade permits and cargo manifests is now done electronically. Both cargo agents and ground handlers gain from the resulting higher productivity.

In a downturn, cutting costs is important. But it is just as important to look for ways to add advantage and exploit new opportunities. The air cargo community should therefore use this period to take stock of the situation, and to prepare for the upturn.

Supported by world-class port and airport infrastructure, Singapore is the ideal location to develop into a total logistics centre. Singapore is also developing infrastructure for electronic commerce. New opportunities for growth will be created as we move into these new areas. For example, as e-commerce opens up new markets, there would be increased demand for physical movement of goods. The air cargo community in Singapore must be well positioned to respond to such developments and see how it can support and add value to Singapore as a logistics and e-commerce hub.

Through the hardwork of the air cargo community here, Changi Airport was voted Best Airport in Asia for the past 12 years as part of the annual AirFreight Industry Awards by Cargonews Asia. I hope this does not lure us into complacency, but instead motivates us to work harder to maintain Changi Airport’s leading position in the Asia-Pacific.

On this note, I wish all tenants of this building, and all users of these facilities, success in your business.

It is now my pleasure to declare the Cargo Agents Building E of Singapore Changi Airport officially open.

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