PFFA & IATA AIR CARGO DAY 2023
KEYNOTE ADDRESS BY
YAB TUAN CHOW KON YEOW
THE CHIEF MINISTER OF PENANG
PFFA & IATA AIR CARGO DAY 2023
“Strengthening the Air Cargo Community through Collaborative Safety Efforts and Digital Transformation”
20 June 2023
Amari SPICE Penang
Mr. Krishnan Chelliah
President, Penang Freight Forwarders Association (PFFA)
Mdm. Yuli Thompson
Area Manager Southeast Asia, IATA
Mdm. Saudah Mat Isa
Director, MATRADE Northern Regional Office
Distinguished speakers
Members of the press
Ladies and gentlemen
Good afternoon.
It is with great pleasure that I welcome all delegates to Penang for the Air Cargo Day 2023 organised by the Penang Freight Forwarders Association (PFFA) and the International Air Transport Association (IATA). I’ve been made to understand that while IATA has organised Air Cargo Day and hosted Air Cargo Logisticians in other countries in the past, this is the first Air Cargo Day to be held in Malaysia!
From Penang’s early days as a seaport economy to celebrating the state’s 50 years of industrialisation last year, Penang’s geographical limitations paled in comparison to the state’s growing prowess in the electrical & electronics (E&E) sector. Constantly contributing between 56 – 60% of the country’s E&E exports over the past four years, Penang recorded its all time-high in year 2022 with RM452 billion in total exports, and recorded a trade surplus of RM126 billion, which represented 49% of the country’s total.
With those figures in mind, it is befitting for Penang to be a venue of choice for this premier cargo event. As one can expect a well-curated programme for these two days providing insights and discussions on the latest air cargo trends, as well as new cargo innovations & initiatives to better prepare Malaysia-based and Penang-based air cargo logisticians for the future, I am confident that delegates will benefit from the sessions and the networking opportunities in between. Indeed, the air cargo community made of suppliers, freight forwarders, ground handling agents, cargo terminal operators, airports, and airlines are only as strong as the strength of collaborative efforts between parties.
Ladies and gentlemen,
Based on IATA’s input, the air transport industry supported 604,000 jobs and is worth USD 15.7 billion in Malaysian GDP pre-COVID. This is noteworthy, as air transport is clearly a key enabler of Malaysia’s and Penang’s economy, supporting sectors such as manufacturing and tourism, and providing vital connectivity in facilitating the movement of people and goods.
Certainly, shipping by air is a fast and efficient means of transport for goods. Airlines transport over 52 million metric tons of goods a year, representing more than 35% of global trade by value. This is equivalent to $6.8 trillion worth of goods annually, or $18.6 billion worth of goods every day. With Penang as part of the global manufacturing supply chain, I am pleased to note that Penang International Airport’s air cargo throughput in 2022 registered more than 130,000 tonnes, recording a slight increase compared to 2021.
To this end, air cargo is essential to sustain global supply chains from transporting the latest phone and multimedia gadgets to transporting temperature-sensitive pharmaceuticals in the best conditions, using cutting-edge technologies and procedures. In addition, the exponential growth of e-commerce has revolutionized the way of logistics and air cargo is naturally suited for this logistic challenge.
Nevertheless, it has been known that the air cargo industry has been lacking true digital integration for far too long. This situation prevents stakeholders from a truly efficient collaboration, creates reliance on manual processes, and lacks door-to-door visibility and transparency from customers’ point of view. I am confident however, that the initiatives defined and driven by IATA will address these challenges, by leading the industry with end-to-end supply chain collaboration on the development of innovative technologies, streamlined processes, and global standards.
Ladies and gentlemen,
The global air transport and air cargo industry is very much in the spotlight, in good times and in bad. From bustling air traffic to global images of airplanes grounded on tarmacs during the lost COVID years, we are now seeing a return to air travel, albeit with costlier air fares.
What is lesser known to the general public though, is the increasing number of incidents in cargo shipments. With more than 1.25 million dangerous goods being shipped by air each year, shipping dangerous goods safely is a leading concern that must be addressed. One such example is the transportation of lithium batteries. It is unsurprising that consumer demand for lithium batteries grows by 35% annually, as they can be found in a wide variety of consumer goods, ranging from mobile phones to children's toys, cars, and e-bikes. Yet, most of us are not aware that lithium batteries are dangerous goods which can pose a safety risk if not prepared in accordance with transport regulations. In this regard, I trust delegates will benefit from tomorrow’s Dangerous Goods Workshop which will provide the stakeholders with the most current guidelines on how to handle and ship dangerous goods safely.
Another item that has attracted much interest, at the national level, is the approved expansion plans of the Penang International Airport. The construction of this RM1.2 billion project is expected to begin in 2024, involving a new terminal, infrastructures and other facilities for passengers. This expansion plan is designed to accommodate for approximately 12 million passengers annually upon its completion, compared to the peak of 8.33 million passengers as recorded for year 2019.
Understandably, the air cargo community is also watching this development closely given the current congestion faced by both the MAS Cargo Centre and the Second Air Cargo Complex. The Penang State Government remains committed to strengthen Penang as a leading aviation and cargo hub, as well as cultivating a wide spectrum of aviation-related businesses and activities. On that note, the Penang Development Corporation has engaged consultancy services for a feasibility study, preparation of master plan and liaising with potential investors for the creation of distribution parks. 3 main areas have been identified, namely next to the Penang International Airport, Batu Kawan Industrial Park (BKIP) and BKIP3. The State Government acknowledges that an increasing air cargo traffic should necessarily be met with adequate cargo terminal warehouses in enabling efficient transit, transfers and submission of exports to the airlines in an effective manner.
Ladies and gentlemen,
Against the backdrop of post-Covid economic recovery and headwinds from increasing geopolitical tensions, the economic challenges industries face today are probably one of the most complex to date. In bracing for more economic uncertainties, it is crucial for industry players, stakeholders and governments to work hand in hand to map the way forward. While the air cargo industry plays an increasingly important role in this fast-paced age of borderless transactions, it is equally imperative that we join hands and foster a culture of knowledge-sharing to enhance mutual safety and security, and cooperation to make digital transformation truly accessible for all.
In closing, I would like to thank PFFA and IATA once again for organizing Air Cargo Day 2023. I wish everyone great success in this conference with fruitful takeaways.
Thank you.