Singapore-based ground handler, SATS Ltd. and Singapore Post Limited (SingPost) have announced a commercial agreement for SATS to provide airmail consignment handling services to SingPost. The new automated facility, to be called SATS eCommerce AirHub, will improve efficiency and space utilisation, as well as enhance the consignment handling capabilities for both SATS and SingPost, the two said.

To be located at SATS Airfreight Terminal 1 within the Changi Airfreight Centre, this 6,000-square-metre facility is expected to be operational by December 2016 with SingPost as its anchor customer. SATS will become the first ground handler in the world to own such an air-side facility.

“We are pleased to be partnering SingPost as it expands eCommerce volumes through its Singapore hub.SATS eCommerce AirHub is the latest in a series of initiatives that we have launched to improve productivity and introduce new and innovative services across our network in Asia,” said Alex Hungate, president and CEO of SATS.

Under the terms of the agreement, SingPost will outsource its airport consignment operations located at Changi Airmail Transit Centre 2 (ATC2) to SATS when its lease at ATC2 expires in end-2016. This collaboration will result in the integration of both SATS’ and SingPost’s airmail consignment operations under one roof.

The integration will enable single scanning and sorting and remove the need to tow consignments such as mail and parcel bags as well as pallets between facilities. This will enhance operational efficiency, including shorter cycle and connection times, and increase productivity. When fully operational, SATS eCommerce AirHub is expected to achieve a productivity gain of more than 30 per cent.

Wolfgang Baier, group CEO of SingPost said: “This collaboration allows both SingPost and SATS to capitalise on our respective strengths while achieving greater efficiency and productivity in our operations. Working with other Singapore brands to jointly expand outside of Singapore, coupled with our continuous push to further improve our customer satisfaction and service, will all contribute towards SingPost’s transformation to be the leading eCommerce logistics player in Asia Pacific.”

Singapore Post has been pushing hard into the e-commerce space and recently announced a series of new initiatives with China’s e-commerce giant, the Alibaba Group,  for collaboration and growth following the signing of a joint venture agreement. The three initiatives signal the deepening of a business relationship that started last year and a commitment from both parties to increase e-commerce logistics collaboration in the future to build a leading e-commerce logistics platform to service the rapidly growing e-commerce businesses across Asia Pacific and beyond.