Fresh opportunities grow as prosperity spreads

Supply chains for perishables and pharmaceutical products that incorporate air cargo are well established in Europe and the US, but some of the concepts and processes are less developed across large swathes of Asia. However, that is changing quickly and, as supply chain operators seek to establish new routings to serve fast-growing markets, airports are seeking to provide the facilities to meet their evolving needs.
Envirotainer, a supplier of temperature-controlled air cargo containers, primarily to the pharmaceutical industry, is expecting Asia to be the world’s fastest-growing market for temperature-controlled air cargo in the coming years. “Some organizations predict it will grow at 50% per year, double the rate of Europe and North America,” says a spokesman.
The growth in cold chain traffic in Asia is being driven by the economic transformation of the region, which is creating fresh demand for consumer and healthcare products, according to Singapore ground handler Sats. It estimates that perishables currently constitute 9-15% of worldwide air cargo shipments, a share that is expanding as a new generation of consumers in Asia demand the same type of products that their western peers have enjoyed for two decades.

As Asia’s middle-class continues to expand, consumption will further spiral, driving up demand for high-quality fresh products and seasonal produce that needs to be imported throughout the year, a Sats spokesman insists.
“With Asian society becoming more affluent, demand for high-quality, fresh products and seasonal produce is on the rise,” he adds. “As demand as a whole increases, we see a corresponding rise in air cargo movements.”
Lilian Chan, executive director of Hong Kong Air Cargo Terminals (Hactl), the leading handler by volume at HKIA, says perishables moving via cold chains account for around 5–6% of Hactl’s annual throughput, although in Hong Kong’s case the majority are imports, where they make up a far higher proportion.
“Imported perishable cargo accounts for 15–16% of the total imported cargo handled in our terminal,” she says. “The demand for temperature-controlled air cargo is primarily intercontinental. Perishables are mainly imported from North America and south-east Asia, while pharmaceutical cargo primarily comes from Japan. Nevertheless, Asia’s booming economic development is driving demand for more health products and perishables, and hence stimulating intra-Asia cargo movement.”
A similar picture emerges at Singapore, a major rival to HKIA for regional hub status for cold chain handling. “Intra-Asia temperature-controlled air cargo is on the rise, especially for Indonesian produce, as the country is proactively promoting its agricultural products to China, Japan, Korea and Singapore,” says the Sats spokesman.
Perishables accounted for approximately 10% –185,000 tonnes – of Changi’s total throughput in 2010, and further growth in absolute volume is expected in the years ahead.
“Perishable goods at Changi are made up largely of fresh fruits and vegetables, fish and meat, which account for about 84% of Changi’s total perishables volume,” said Albert Lim, vice president for cargo and logistics development at Changi Airport Group (CAG), which manages the airport. “Changi is well placed as a gateway to serve southeast Asia and Australia and we expect the demand for quality fresh air freighted produce to increase with the growing affluence among the population living in this region.”
He says Singapore’s development into a high-end tourist destination will also stimulate demand for such fresh produce. “The same applies to demand for cut flowers, of which Changi handled about 18,000 tonnes in 2010,” he adds. “The carriage of cut flowers is also likely to grow as Singapore looks to maintain its position as one of the world’s leading orchid exporting nations.”

Critical to Singapore’s success will be ‘Coolport@Changi’, a dedicated on-airport facility operated by Sats. Coolport opened in June 2010, offering import, export and transit services for a wide range of perishable cargo, including chilled meat and live seafood, as well as pharmaceuticals and fresh flowers.
The says the facility has experienced “significant growth” in air freight volumes since its launch, success that a spokesman puts down to “the growing number of affluent consumers in Singapore and the region who expect freshness and high-quality produce”, and the growth of “Singapore as a key healthcare hub for the region”.
He says the attraction of the facility is helped by Changi Airport’s global air connectivity “and comprehensive logistics offerings,” adding. “In addition, our strategic location and status as a regional air transport hub allows us to provide quick turnaround time for transhipment perishables.  
“Singapore also has a well-trained workforce and this makes it possible for Sats to implement HACCP [Hazard Analysis Critical Control Point] procedures in its cargo terminal in Singapore – something unheard of in Asia.”
Located within Changi’s Free Trade Zone, Coolport has an annual handling capacity of 250,000 tonnes with scope for expansion from the current 8,000 square metres to 14,000 square metres. Facilities include 18 cold room zones that can be customised for temperature storage and re-work, at –28 through to 15 degrees, and a special zone for time-critical products, which can be cleared by customs within 90 minutes of arrival.
Coolport also offers Halal-certified zones, specially designed work stations for the building and breaking down of pallets, and value-added services such as sea-air shipment options, escort services for time-critical cargo, and regional distribution services, which take in a sophisticated warehouse management system to help manage the inventories of retailers.
“We also have a dedicated medical cargo handling process, which means that urgent shipments of medical cargo are separately catered for in an ‘express lane’ facility,” the spokesman adds.

He says Coolport is the only HACCP-certified facility in the Airline Logistics Park of Singapore, and the first Halal-certified air cargo hub for perishables in the Asia Pacific – an important qualification for some key, and rapidly growing, markets. “This certification is essential to support our airline clients to forward fresh products to the affluent Middle East market with Singapore as a distribution centre.”
CAG says Coolport has enhanced Singapore’s positioning within the perishables market in Asia Pacific. “Temperature-controlled products – perishables and pharmaceutical products – have been identified as new growth drivers of the cargo base for Changi,” said Lim. “Sats’ investment in Coolport has been timely, as it takes advantage of the growing demand of perishable products in our region.”
CAG recently partnered Sats in the innovative initiative of installing solar-powered mobile chillers on the tarmac, to help extend Coolport’s services beyond the cold-storage facility at the air freight terminal itself, to provide protection to temperature-sensitive shipments from the airport’s tropical day-time heat to and from the aircraft’s door. They can also be used to provide protection for tail-to-tail transfers of temperature-sensitive cargo.
Lim says: “We assessed that the extension of the perishables cool chain onto the tarmac via the mobile chillers will open up new opportunities for carriers to target more segments of transhipment cargo round the clock.”

Over at Bangkok’s Suvarnabhumi Airport, ground handler Bangkok Flight Services, a joint venture between Worldwide Flight Services and Bangkok Airways, offers 16,000 cubic metres of handling capacity dedicated to the cool chain process. At BFS trucks carrying perishables are offloaded in a temperature-controlled environment and cargo then is stored at the correct temperature range in one of five inner chambers, maintained at temperatures of -20°C, +2°C to 4°C, 4°C to 8°C, 8°C to 15°C and 15°C to 25°C.
“This allows us to handle the many different varieties of fruit, vegetables and flowers that we handle daily,” says Stewart Sinclair, managing director of BFS.
Like Hong Kong’s Hactl, he says most of the cool-chain cargo handled by BFS is intercontinental traffic, although in Bangkok’s case, a lot of the perishables cargo is outbound. “Our airlines are predominantly flying to Europe, either directly or through Middle East airports,” Sinclair explains. “We do not have any Japanese carriers, and that is the other major market out of Thailand.”

BFS has developed two products designed especially for the Thai market. ‘Pre Care’ is a cooling service for produce that arrives above the ideal temperature, while ‘Special Care’ is an airport-to-airport cool chain process involving cooling, loading into thermal-lined containers, temperature monitoring, and thermal-blanket protection on the ramp.
“Convincing shippers to change to an end-to-end cool-chain process has been very difficult, but the Special Care product has convinced some to change and they have benefited by delivering quality produce to the consignee, and the consignee has benefited from increased shelf life of the product,” says Sinclair.
“We continue to work in the local market to get more people to change and adopt better practices.”
At HKIA, Hactl has two dedicated cargo handling centres for handling temperature-controlled air cargo, both located on the north side of the main terminal building and offering direct linkage between the airside and storage facilities.
A bulk cargo refrigeration centre offers total floor area of over 750 sq metres, while a unitized-cargo refrigeration centre has a capacity for 50 standard unit load device (ULD) positions and four half-size ULD positions, the equivalent of one-and-a-half B747 freighters.
Hactl also provides dedicated customs examination facilities to allow for the fast release of goods and more than 40 truck docks dedicated for fast collection and delivery of perishables.
“Our refrigerated cargo centres are uniquely designed to cater for the needs of both bulk cargo and airline unit load devices,” said Chan.

HKIA’s ability to serve the cold chain will receive a further boost in early 2013 when Cathay Pacific Airways opens a new terminal. It will feature a 1,600 sq metre cold facility comprising of three bulk-storage compartments and three ULD storage chambers that are capable of storing up to 80 tonnes of bulk cargo on pallets and 48 LD3 ULDs, respectively.
“The temperature for the compartments or chambers is interchangeable between that of a freezer or a cooler,” said Jack Lo, cargo product and marketing manager at Cathay. The freezer compartments or chambers have a temperature range from -25°C to 1°C and the cooler compartments or chambers have two selectable temperature ranges: 2°C to 8°C, or 5°C to 15°C.

“These cold-room facilities have a direct interface to the truck docks and to the mechanical handling system, for speedy transfer of the cargo,” he adds.
The ground floor of the terminal will have two lanes with 57 airside interfaces for import and export operations, while a fully mechanised buffering area will organise and pre-queue export cargo to allow just-in-time operations. The ground floor will also feature a dedicated Quick Transhipment – or ‘QT’ – area where transhipment cargo will be re-sorted according to its onward destination, without the need to travel to higher floors of the terminal.
Lo said efficient design of the terminal, coupled with the use of advanced technology, would enable cold-chain forwarders and shippers to enjoy a reduced cut-off time for pre-packed export deliveries.
“It will also be possible for imported perishable cargo to be delivered to the consignee immediately after being towed to the cargo terminal from the aircraft,” he added.