SATS and SingPost sign MOU for potential JV of e-commerce transhipment hub in Singapore

Bryan Wu
2-min read
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The jointly operated transhipment hub facility will aim to shorten delivery times and reduce operating costs and manpower.

On June 30, SATS S58 and Singapore Post S08 (SingPost) signed a Memorandum of Understanding (MOU) to explore a jointly operated transhipment hub facility with the aim of shortening delivery times and reducing operating costs and manpower.

In a joint media statement, SATS and SingPost say they are poised to collaborate closely and leverage their “combined expertise” to address the evolving needs of regional e-commerce players.

According to McKinsey’s projections, the Southeast Asian market is expected to triple between 2023 and 2026, with a compound growth rate of 22% and an approximate US$230 billion ($310.76) in gross merchandise volume.

In a separate report from June 2022, Statista highlighted Singapore and Indonesia as key players in the growing e-commerce across Asia, Australia and the Americas, with projected increases of 36 and 34 percent, respectively, in their online sales.

Under the MOU, the two companies have committed to providing equal shares of resources to engage operational and commercial consultants for business case formulation, explore synergies and facilitate trial runs to capture essential data for a feasibility study. The study will assess the operational viability and potential synergies for both entities, enabling the parties to leverage their respective strengths and resources effectively.

The first joint operations trial took place in February and delivered “promising results” with the potential to shorten cargo turnaround time by over 60%. This would allow for delivery periods between one to three days for items within Asia.

Li Yu, CEO of SingPost International, says: “The combined scale of SATS and SingPost will unlock seamless e-commerce flows into, within and out of Asia, building on strategically located hubs in Singapore and, in time to come, Hong Kong and Europe. We are poised to shorten delivery times and advance our logistics solutions, providing enhanced customer experience across the region.”

The proposed transshipment hub aims to streamline cargo logistics workflows by eliminating the need for transport between SATS and SingPost facilities, minimising the reliance on traditional cargo vehicles and further optimising warehouse space. “By combining their expertise and capabilities, the companies aim to create a seamless and efficient hub that will redefine the e-commerce industry in Singapore and the region,” say the companies.

SATS Gateway Services CEO Bob Chi adds: “This partnership marks a significant milestone for both companies, representing an innovative approach that combines our strengths and expertise. Together, we aim to drive operational excellence, achieve cost reductions, and elevate the overall customer and partner experience.”

“Moreover, this collaborative effort will not only benefit e-commerce players but also reinforce Singapore's position as a prominent regional hub for e-commerce logistics,” adds Chi

As at 10.49am, shares in SATS and SingPost were trading flat at $2.58 and 45 cents, respectively.

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