Speech by Minister S Iswaran at the official launch of SATS eCommerce AirHub

​SPEECH BY GUEST OF HONOUR MINISTER S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY) AT OFFICIAL LAUNCH OF SATS ECOMMERCE AIRHUB, 13 APRIL 2017, 3.20PM

Ms Euleen Goh, Chairman of SATS,

Mr Alex Hungate, President & CEO of SATS,

Distinguished guests, 

Ladies and Gentlemen, 

Good afternoon

Opening remarks

1.            I am pleased to join you this afternoon at the opening ceremony for the SATS eCommerce AirHub.

2.            This new automated facility will integrate SATS’ and SingPost’s airmail consignment operations under one roof, improve their operational efficiency and consignment handling capabilities.  It will also enhance Changi Airport’s attractiveness as a leading e-commerce hub for the region.

Singapore is well-positioned to capture opportunities from the growth of e-commerce in the region

3.            Southeast Asia is the world's fastest-growing Internet region.  Its Internet user base is expected to grow from 260 million users today, to around 480 million users by 2020.  Driven by a growing base of Internet users and e-commerce customers, the Internet economy in Southeast Asia is projected to reach US$200 billion by 2025[1].

4.            Singapore is an ideal gateway for companies seeking to tap on the region’s burgeoning e-commerce market.  E-commerce shipments tend to be time sensitive, and are reliant on air transportation for faster delivery.  Companies can leverage our strong air connectivity to the region and the world, as well as efficient airport infrastructure to serve the e-commerce market.

5.            Indeed, several leading e-commerce companies have already invested in Singapore.  Last year, Alibaba invested US$1 billion in Singapore-based e-commerce start-up Lazada Group.  Rakuten also established its Asia Headquarters in Singapore, and is expanding its operations in the rest of Southeast Asia.  A growing number of local e-commerce startups, such as Zalora and Reebonz, have also successfully scaled their e-commerce platforms from Singapore to the regional markets.

6.            The global air freight market remained healthy in 2016, and Changi Airport handled a record 1.97 million tonnes of airfreight[2].  However, long-term trends indicate that the air freight market is facing overcapacity, as supply of cargo space has been outstripping shipping demand.  Amidst these developments, e-commerce will be an important growth driver for the logistics industry, and this eCommerce AirHub will strengthen Changi Airport’s attractiveness and value proposition as a leading air hub.

We must continue to leverage technology and innovation in our industry transformation efforts

7.            The growth of e-commerce is reflective of a broader trend, with new opportunities being created by technological advances and innovation.  We must embrace and adapt to new technology and innovation in order to remain relevant and competitive.

8.            Last November, I launched the Logistics Industry Transformation Map (ITM), which charted out integrated strategies to reinforce Singapore’s position as a leading global logistics hub.  A key thrust of the Logistics ITM is to adopt technology and innovation to enhance productivity and achieve operations excellence.  For example, automated solutions and collaborative robots can help with cargo handling, while data analytics and the Internet-of-Things will enable faster and safer supply chains.

9.            Next week, the Civil Aviation Authority of Singapore (CAAS) will also be launching the Air Transport ITM.  The Air Transport ITM and the Logistics ITM were developed in close consultation, and will mutually reinforce each other to support the transformation of these sectors.

10.         This eCommerce AirHub, which is supported by the CAAS Aviation Development Fund, is a good example of what Singapore wants to accomplish as part of our industry transformation journey.  By leveraging automation, this facility is able to increase its throughput and process up to 1,800 mailbags per hour, which is more than threefold the capacity of previous manual processes[3].  Through electronic integration and efficient data transfer between SATS’ and SingPost’s systems, time-critical e-commerce shipments can be loaded more quickly onto outbound flights.  With these processes, SATS expects to achieve a productivity gain of more than 30% when the facility is fully operational[4].

11.         SATS will also be able to enhance services to its customer through this new facility.  For instance, the eCommerce AirHub is equipped with improved cargo traceability that will allow customers to better track their parcels through the system. 

Our industry transformation efforts will create new job opportunities for Singaporeans

12.         The transformation of the Logistics industry will bring about new and better job opportunities for Singaporeans.  For instance, under the Logistics ITM, we expect to create 2,000 new PMET jobs by 2020.  There will also be opportunities for our operators to upgrade their skills and take on new roles.

13.         SATS is a good example of how companies can harness automation to create new skills-intensive and higher-value jobs.  For instance, SATS is retraining its cargo equipment operators to take on the role of ‘eHub Specialist’ at the eCommerce AirHub.  This new role will entail bigger responsibilities and higher salaries.

14.         Mr Norman Bin Idris is one employee who has benefited from the retraining.  He joined SATS as an Equipment Operator five years ago.   After undergoing classroom and on-the-job training, Norman has acquired new skills to take on the ‘eHub Specialist’ role, and will be responsible for operating the automated sortation system at this new facility.

15.         We encourage more companies to partner us to invest in and develop the skills of our workforce, and prepare them for the new and exciting job opportunities.

Closing

16.         In closing, SATS eCommerce AirHub demonstrates how companies can effectively leverage technology and innovation to raise productivity, enhance competitiveness, and create new job opportunities for Singaporeans.  We will continue to partner companies and other stakeholders to harness technology and innovation in our industry transformation efforts.  

17.         My congratulations to SATS on the opening of this facility, and I wish the team every success. 

18.         Thank you.

[1] Based on the Google-Temasek report “e-conomy SEA”, released in May 2016.
[2] Statistics provided by Changi Airport Group.
[3] Under previous manual processes, SATS could process up to 500 mailbags per hour.
[4] Previously, SingPost and SATS required 100 employees in total for airmail consignment.  With automation, they will only require 63 employees to handle the same volume of work.