The Cainiao Aeropolis eWTP Hub, Malaysia, a joint venture between Malaysia Airports and Alibaba, has officially started operations at Kuala Lumpur International Airport (KUL) and is expected to allow 24-hour delivery within the country.

Formerly known as KLIA Aeropolis DFTZ Park, the e-fulfilment hub spans 60 acres (2.6 million sqft) with 1.1 million sqft of warehouse space and is expected to double KUL’s cargo volume to 1.4 million per year by 2029.

Operated by Cainiao Smart Logistics Network (Cainiao Network), the new facility aims to help elevate KUL’s air cargo network status and is expected to reinforce Malaysia’s cargo and logistics ecosystem for air, sea and land connectivity.

The e-hub promises seamless cargo entry and exit movement with an internal customs inspection point set up within its grounds to increase security and efficiency whilst reducing cargo handling time.

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Smart logistics

Group CEO of Malaysia Airports, Dato’ Mohd Shukrie Mohd Salleh, said the airport operator is targeting vertical markets from the automotive, sporting goods, fast-moving fashion and lifestyle, retail electronics and medical equipment sectors.

First to leverage the new facility is Southeast Asia’s e-commerce giant Lazada, with more companies expected to follow suit.

The CEO added industry participants can look forward to the application of smart supply chain technology and knowledge transfer capability in logistics.

“Constant improvements through automation, robotics and artificial intelligence and big data will continue to be made to the supply chain and value-added services. There is potential to hit at least USD10.1 billion GDP growth and create more than 100,000 jobs by the 10th year of the hub’s operations,” Mohd Shukrie explained.

“As one of Cainiao’s key regional hubs, the Cainiao Aeropolis eWTP Hub, Malaysia will play a strategic infrastructural role in facilitating cross-border trade for SMEs,” said Eric Xu, general manager of Cainiao Smart Hub, noting that smart logistics will play a pivotal role in helping SMEs reach the global market.

Air cargo boost

“With the growth in cargo volume, we are looking at improved airline connectivity via KUL with new routes and increase in flight frequency, belly space utilisation and freighter capacity. We hope to double the current number of freighter flights in the next 10 years,” Mohd Shukrie said.

Local air cargo players, such as Pos Aviation, MABKargo and GTR (Ground Team Red), will integrate existing facility within the new hub, whilst the final mile deliveries will be operated by GDex, Pos Laju, J&T Express and others, he added.

The core businesses of the e-hub will include cargo terminal operation (CTO), warehousing and sorting centres within the free commercial zone (FCZ). The facility will also benefit from the FCZ provision for value-added services, including light manufacturing, assembly, sorting, picking, re-labelling and packing.

The joint venture is a major project under the electronic World Trade Platform (eWTP) partnership between Malaysia and Alibaba announced in 2017.