Changi Airport's FTZ will allow companies to perform many functions without paying duty.CHANGI AIRPORT'S efforts to promote its Free Trade Zone (FTZ) as an important Asian cargo centre got a hefty boost last month from DHL Worldwide Express, which established its new Southeast Asian hub at the airport.
Scheduled for completion in the third quarter of 2001 at a cost of US$17.3 million, the DHL facility will represent a made-to-order centre at the second Express Courier Centre of SIA subsidiary, Singapore Airport Terminal Services (SATS). The premises is a first for an air express company at the Changi Free Trade Zone (FTZ).
Of the centre's 14,000 square metres, over 10,000 sqm will be taken up by DHL.
The express company will enjoy on-line connectivity with Singapore Customs and with the Trade Development Board, so that it can pre-clear shipments before a flight actually lands at Changi.
IT applications include systems for master airway bill automation, gateway information, shipment data, and "clear in the air" procedures.
"A major bugbear for air express companies in Asia, and one likely to continue to forestall some growth potential in the region, is the all-pervasive nature of Customs authorities around the countries of the region.
"This compares unfavourably with developments in Europe and North America," said an industry analyst.
He pointed out that ASEAN has had lengthy internal discussions on this matter, but had made little progress. DHL's international shipments will be able to transit without Customs formalities, although goods destined for Singapore will have pass the usual Customs protocol.
DHL CEO for Asia-Pacific and the Middle East, Charles Longley, said: "The new DHL Singapore hub comes after much consideration into the most suitable location for our next big investment. DHL is respected for its standards and reliability and we hope the new facility will further enhance our service between Southeast Asia, the Middle East and Europe."
He added that within the next two years DHL would decide on a central Asian hub. A choice would be made between Hong Kong, Macau, Guangzhou, Zhuhai, and Shenzhen.
An indication of the Singapore government's keenness to encourage companies into the FTZ was the award of Operational Headquarters status to DHL, made by Lim Swee Say, Minister of State for Trade and Industry and Communications and Information Technology.
"The establishment of DHL's sortation hub is an important milestone for Singapore," he said. "It will be the largest regional air express hub in Singapore, and will greatly enhance our position as an integrated logistics and e-commerce hub in Asia.
"DHL's hub will also complement our push into the digital economy so that both Internet ordering and physical movement of goods can be done from Singapore."
The new DHL/SATS facility will be part of the Changi Airfreight Centre, run by the Civil Aviation Authority of Singapore (CAAS) and comprising a 47-hectare complex run on a 24-hour basis.
This means that companies in the FTZ are able to move, consolidate, store, re-pack and break down consignments without paying duty or making out fresh documentation.
The CAAS quotes a time of four hours within which cargo agents can collect standard airfreight cargo, and one hour for express cargo.
At present the Changi Airfreight Centre comprises one Express & Courier Centre and seven airfreight centres, of which five are operated by SIA subsidiary, SATS, and two by PSA subsidiary, Changi International Airport Services (CIAS).
With its extensive flight connections, modern facilities, and duty-free status, Changi sees itself as well-placed to increase its FTZ business.
Sea-air mode is facilitated by the fact that Changi Airport and the main berths of the PSA are only 24 kilometres apart, linked by an expressway. There is also an Airmail Transit Centre, a trade permit office, and an animal and plant quarantine unit.
Of course, in the present high-tech environment, the Singapore authorities have put great store in the up-to-date IT solutions and automation systems that they have put in place.
Apart from the new Express & Courier Centre, an eighth airfreight terminal will be ready next year, providing an additional 800,000 tonnes of capacity.
New facilities are predicated on continuing booming demand: last year Changi handled 1,500,393 tonnes of air cargo, up 16.8 per cent on the previous year. Plane movements, at 165,749, showed an increase of 4.3 per cent on 1998.