Mr Steven Lee, Chairman, Singapore Aircargo Agents Association
Distinguished Guests
Ladies and Gentlemen
1 I am happy to join you today at this Singapore Aircargo Agents Association’s (SAAA) Rebranding Launch.
Pressing Need for Collaboration
2 The air cargo and logistics sector plays an important role in Singapore’s economy, and is an important factor that investors consider in setting up businesses in Singapore. Last year, Singapore was ranked first in the World Bank’s Logistics Performance Index.
3 However, the air cargo sector is undergoing a challenging phase in its development and has seen a contraction in volume in recent years. The International Air Transport Association (IATA) has largely attributed the contraction to the fall in the growth of world trade volumes, as well as a modal shift towards other transportation modes as shippers seek to reduce costs[1]. Singapore is similarly affected. In 2012, Changi Airport handled 1.83m tonnes of freight, a 2% decrease from the 1.87m tonnes the previous year.
4 Although IATA has forecasted an annual growth rate of 5.2% in this sector for the next 20 years[2], slow demand for air freight is expected to continue in the next few years. Business confidence remains low, especially in developing economies, due to continued lacklustre performance in global manufacturing.
5 Singapore’s own manufacturing sector is also transforming and moving towards products that are smaller and lighter, but of higher value. As volumes are down while capacity remains unchanged[3], freight margins have been squeezed. Higher fuel costs will also continue to exert pressure on air transport costs, demand and margins. We also face strong regional competition from other air hubs such as Hong Kong and Dubai, which enjoy geographical advantage to serve the emerging Asian giants of China and India. Another constraint is the rising manpower costs and the need to raise productivity.Such a challenging environment calls for greater urgency for the local air cargo industry to work even more closely together to maintain our competitiveness and to enhance our capabilities. The rebranding of SAAA is therefore timely.
A More United Industry Moving Forward
6 Trade associations have traditionally been a pillar of strength for the industry, playing a key role in fostering unity in the industry and working with various stakeholders to coordinate mutually beneficial partnerships and initiatives. More importantly, they represent the interest of their members to the authorities, lending greater voice to companies, who otherwise may not be able to make their individual views heard. This helps the whole industry to adapt to change quickly, tap on common resources, and forge strong partnerships to ensure that they stay ahead through difficult times.
7 Since its establishment in 1971[4], the SAAA has played a critical role in representing the interests of air cargo agents in Singapore since its establishment. The association has been a valuable partner to the Government through the years, and has contributed significantly to key initiatives such as the National Air Transport Facilitation Committee (NATFC) and the e-freight@Singapore initiative. The Association also provided valuable inputs on the industry that have helped the Government understand the industry needs better and improved our policies.
8 I am happy to note that the rebranded SAAA will now expand its membership base to encompass more partners from the air cargo industry. With more members coming on board, SAAA is set to become a more representative and inclusive community with a stronger voice for the air cargo industry in Singapore. I hope that the new members will also bring new ideas and energy to enhance the good work that SAAA is already doing. I am confident that SAAA will grow from strength to strength, partnering with stakeholders and the Government to advance the air cargo sector in Singapore.
Future Plans for Singapore’s Air Cargo Sector
9 The timing for the rebranding exercise is also opportune as we are currently making plans to boost the capacity of our air cargo industry to ensure that it can meet future growth, and remain competitive in the long-run.
10 In our Concept Plan options for the new development at Changi East, land has been set aside for aviation industry needs, including facilities for airfreight and air express operators. Terminal 5, which will be ready for operations in the mid-2020s, will present new modes of operation for the airport operator and government agencies, and other stakeholders including airlines, ground handlers and air cargo operators. We are currently undertaking a second round of stakeholder consultation to improve on the layout options, and SAAA has been invited to contribute and share its views.
11 With the rebranded SAAA, we can look forward to more engagement between government agencies and the industry to ensure that the long term land use plans for Changi East will not only provide for the future growth of the air cargo sector, but also incorporate insightful and relevant ideas to reinforce our status as an air cargo hub.
Conclusion
12 Singapore can be described as being at the Heart of Aviation today. The spirit of collaboration that SAAA encourages has enabled the industry to pull through many challenges in the past and has made Singapore the thriving and connected air cargo hub it is today. I am certain that SAAA will be able to enhance this role and steer Singapore’s air cargo industry to greater heights.
13 I congratulate the SAAA on arriving at this significant milestone. I wish all of you a very enjoyable evening. Thank you.
[1] Source: IATA Annual Review 2013
[2] Source: IATA Annual Review 2013
[3] IATA press release – “Passenger Demand Grew as Air Cargo Declined in 2012” – 31 January 2013
