Cainiao eWTP Hub to catalyse aviation landscape, drive air cargo

The hub is expected to generate a cumulative GDP of RM4.2b in the next 10 years and support over 35,000 jobs


MALAYSIA will boost its position as a regional distribution centre (RDC) with the upgraded customs clearance system at the Cainiao Aeropolis eWTP Hub that is capable of reducing clearance time from 24-48 hours to 1.5 hours.

The hub is a major project under the Electronic World Trade Platform (eWTP) partnership between the Malaysian government and China giant Alibaba Group Holding Ltd.

“The logistics sector will need to handle greater volumes of freight, speed up the time taken to deliver goods across the supply chains and lower the cost of delivery,” said Transport Minister Datuk Seri Dr Wee Ka Siong at the hub’s launch in Sepang yesterday.

The new clearance time has been made possible by Royal Malaysian Customs Department through the establishment of satellite operations and an administrative office away from their main base in Kuala Lumpur International Airport (KLIA).

Wee said Cainiao will be a game changer for Malaysia as the Asia Pacific hub for RDC and e-commerce logistics with huge benefits such as its strategic location within the Free Commercial Zone with airside access where value-added activities such as break bulking and light assembly are also permitted.

“The hub is a growth engine for Malaysia,” he said, projecting it to generate a cumulative GDP of RM4.2 billion in the next 10 years and support over 35,000 jobs during the period.

The hub, a partnership between Malaysia Airports Holdings Bhd (MAHB) and Alibaba’s logistics arm Cainiao Smart Logistics Network, has been operating since November 2020.

It targets vertical markets including automotive, sporting goods, fast-moving fashion and lifestyle, retail electronics and medical equipment sectors. The facility enables 24-hour and 72-hour deliveries within Malaysia and to the rest of the world, respectively.

The Malaysian freight and logistics market was valued at US$37.6 billion (RM156.04 billion) in 2020 and is expected to reach more than US$55 billion by 2026.

MAHB MD Datuk Iskandar Mizal Mahmood said its entire network of airports in Malaysia recorded a 24% month-onmonth increase in total cargo tonnage to about 86,200 metric tonnes (MT) for September 2021. For the first nine months of this year, it recorded approximately 726,800MT for total cargo operations in Malaysia, an increase of 24% from the same period last year.

“The forecast cargo growth in the next 10 years arising from this initiative will be an additional 600,000MT per year, which will double KLIA’s present cargo volume to 1.3 million MT a year. This growth will further generate total cross modal cargo volume encompassing air, sea and land for business-to-business and business-to-consumer,” he said.

Iskandar Mizal added that constant improvements to the supply chain and value-added services will continue to be made by Cainiao through automation, robotics, and artificial intelligence and big data which will further facilitate the double-digit growth of trans-shipment air cargo volumes.

Since its commencement, Cainiao has onboarded freighter airlines such as Kargo Xpress to operate directly from the hub. This has culminated in the launch of more international and domestic routes for charter and scheduled flight operations, thereby enhancing air connectivity and air freight stability to support growing demand for air cargo transportation.

Ground Team Red Sdn Bhd and POS Aviation Sdn Bhd are also operating directly in the hub to improve cargo handling efficiency for both shippers and consignees. In addition, cargo clearance time has been reduced from 4 hours to within 2.5 hours upon delivery from aircraft.