Ready for change: Southeast Asia is flexibility meets opportunity

Southeast Asia is proving that flexibility meets opportunity, positioning itself as a global leader in air cargo logistics. Through strategic collaborations, infrastructure upgrades, and diversified manufacturing, the region is redefining its role in global supply chains and becoming indispensable for air cargo stakeholders.

Southeast Asia is rapidly cementing its position as a critical global air cargo ecosystem hub. With strategic geographical advantages, diversified manufacturing bases, and robust investments in infrastructure, the region is transforming into a powerhouse for global supply chains. From Singapore’s Changi Airport driving intermodal transshipments to Vietnam becoming a nearshoring destination, air cargo players are capitalising on Southeast Asia’s immense potential.

Singapore Changi Airport is one of the most important air cargo hubs for Southeast Asia and the entire world. In the first nine months of 2024, Changi Airport handled about 1.5 million tonnes of cargo, a 15 percent year-on-year (YoY) increase.

"My team and I are keeping our fingers crossed to cross the 2-million-tonne mark for 2024, which will bring us on par with 2019 figures.”
Jaisey Yip, Changi Airport

According to Jaisey Yip, Vice President, Cargo Business Division, Changi Airport Group, the growth drivers include the recovery of Singapore's exports in high-tech semiconductors, the rise of intermodal transshipments, and a surge in cross-border e-commerce. She was talking exclusively to The STAT Trade Times during the Air Cargo Forum of The International Air Cargo Association (TIACA) in Miami.

"My team and I are keeping our fingers crossed to cross the 2-million-tonne mark for 2024, which will bring us on par with 2019 figures," she said.

Transhipments play a crucial role in air cargo hubs like Changi. For instance, Yip points out perishables as one of the top four commodities that Changi Airport is focused on along with pharmaceuticals, high-tech and e-commerce.

"These verticals are crucial due to factors such as strong foreign direct investment in pharmaceutical manufacturing and the burgeoning e-commerce market in Southeast Asia," she said.

However, she also points out that the majority of perishables transported through Changi are neither produced nor consumed in Singapore. “Even though Singapore is not a producer of any agriculture or food, we have very good connections between the major producing markets as well as the major consumption markets,” she said.

One factor that enables Changi Airport to become a cargo hub is its geographical position and there are other airports and countries interested in building cargo hubs in the same region of Southeast Asia.

“We have the advantage of being located in the Southeast Asia region where all the emerging markets are just around us.”
Mark Jason Thomas, MASkargo

“We have the advantage of being located in the Southeast Asia region where all the emerging markets are just around us.” This is how Mark Jason Thomas, Chief Executive Officer of MASkargo, the cargo airline and subsidiary of Malaysia Aviation Group, explained it in one of the recent episodes of Cargo Masterminds, a STAT Media Group interview series presented by cargo.one.

In fact, Thomas was emphatic about developing Kuala Lumpur as a transhipment hub and reported that their recent partnership with Qatar Airways Cargo caused a 50 percent YoY increase in transhipment cargo within a month.

"Kuala Lumpur is strategically located in Southeast Asia. We have a good reach to the east, to the China markets, even to Australia and New Zealand," he said.

In October 2024, Qatar Airways Cargo and MASkargo launched a new partnership under which QR Cargo operates a Boeing 777 freighter twice a week between Doha and Kuala Lumpur.

"This collaboration that we have with Qatar Airways allows us to reach cities that we couldn't operate with our existing aircraft. It gives us the opportunity to expand our network and increase our capacity," Thomas added.

On the other side, Qatar Airways is planning to leverage MASkargo’s flights and capacity offerings to Australia and China. In fact, MASkargo operates twice-a-week flights to Sydney and once-a-week to Melbourne using its fleet of three dedicated Airbus A330 freighters.

Qatar Airways Cargo is not the only Middle Eastern carrier exploring partnerships in Southeast Asia. Since May 2024, Teleport and Etihad Cargo partnered to inject capacity and frequency into their respective cargo network between Southeast Asia and the Middle East. Under the agreement, Teleport has deployed its freighters for Etihad to ship machines, raw materials, phones and chip sets among others from Ho Chi Minh to Kuala Lumpur twice a week with onward connection via Etihad’s capacity to Abu Dhabi and beyond.

“Our mission is simple: to move things cross-border — cheaper, faster, and better than anyone else.”
Jagedeswaran Nadrajah, Teleport

Teleport runs Southeast Asia’s one of largest air logistics networks which combines the AirAsia network with the capacity of over 40 airline partners. This gives them connectivity across Asia, Oceania, and the Middle East, offering direct, cost-effective point-to-point links.

“Our mission is simple: to move things cross-border — cheaper, faster, and better than anyone else,” said Jagedeswaran Nadrajah, Head of Air Partners at Teleport.

Our asset-light, highly scalable model and next-day delivery capabilities position us to support the rapid growth of eCommerce, which is projected to increase at a CAGR of 22 percent from 2023 to 2030. By leveraging our freighters, exclusive access to 7 AirAsia Airlines, along with our airline partnerships, we’re enhancing our logistics capabilities to meet this growing demand,” he added.

He also makes the goal clear, “To scale our volume and capacity to deliver 2 million parcels per day by the end of 2025. By collaborating closely with our airline partners, we ensure we never fly empty thus unlocking incremental returns for everyone involved.”

Teleport’s direct tech integration with e-commerce marketplaces enhances visibility and enables real-time dynamic capacity planning, reducing complexity and costs. According to Nadrajah, this collaboration allows them to deliver logistics solutions that are well-suited to the fast-paced, unpredictable nature of e-commerce.

“In e-commerce, every minute counts, and agility is crucial. As the eCommerce market continues to grow, visibility, dynamic capacity planning, and a customer-centric approach in the tech we’re aggressively developing are becoming more critical than ever to ensure we keep delivering fast and reliable service,” he said.

Increasing capacity is critical to meeting demand, and Nadrajah informs that they are committed to optimising operations and collaborating further with our airline partners to unlock more capacity in the region.

“This strategy strengthens the Teleport Network, extending our reach from China — the primary source of eCommerce moving into Southeast Asia — to global markets, including Oceania, the Middle East, and Europe,” he added.

“Southeast Asian nations like Vietnam, with a diversified manufacturing base, are increasingly emerging as preferred destinations for near- and friend-shoring strategies.”
Ashish Kapur, Cathay Cargo

While there are several geographies influencing the growth of air cargo in Southeast Asia, the single most important will be China. While its proximity to manufacturing hubs in China directly brings cargo to the region, supply chain diversification by multinationals has opened new opportunities and production capabilities to the countries in Southeast Asia.

For instance, Ashish Kapur, Regional Head of Cargo, Southeast Asia, Cathay Cargo, argues that the China Plus One strategy has allowed factories, particularly in regions like Southeast Asia, to easily augment production in response to any changes to the geopolitical environment.

“Southeast Asian nations like Vietnam, with a diversified manufacturing base, are increasingly emerging as preferred destinations for near- and friend-shoring strategies,” he said.

Additionally, he also pointed out that Southeast Asia also has the advantage of multiple hubs that offer enough capacity for goods distribution.

“An example would be established road connectivity between Penang and Singapore; Malaysia and Thailand; and Phnom Penh and Ho Chi Minh City—these provide additional logistics options and allow for the optimal use of available capacity. These give Southeast Asia an advantage over other emerging markets,” he added.

Furthermore, Kapur also noted that investments in airport infrastructure developments, including the expansion of airports in Thailand, Cambodia and Vietnam, are expected to enhance the region’s capacity to handle increased cargo volume, again positioning Southeast Asia as a critical logistics hub in the global supply chain.

In another major development in terms of air cargo flow between China and Southeast Asia, Chinese airport operator China Henan Aviation (CHAGC) signed a Memorandum of Understanding (MoU) with Malaysia Airports (MAHB) in June 2024 aimed at boosting air cargo connectivity. CHAGC plans to expand its overseas projects in Asia, particularly in Malaysia, by exploring the establishment of an air cargo hub to complement China’s Belt and Road Initiative. CHAGC currently manages Zhengzhou Xinzheng International Airport (CGO), one of China’s air cargo hubs, and also has a global presence with cargo terminal projects in Budapest Ferenc Liszt International Airport (BUD) and Leipzig/Halle Airport (LEJ).

Direct air routes from CGO to KUL were expanded with Raya Airways operating thrice weekly cargo flights from August 2024. Additionally, China Southern started servicing seven commercial flights weekly in June 2024.

Vietnam is establishing itself as an ideal nearshoring site in Southeast Asia, confirms a September 2024 report by DHL.

“Its solar panel industry attracts ancillary support providers, including plastic moulding manufacturers and energy storage providers,” it reads.

Chinese companies that have moved to Vietnam include Growatt, a Shenzhen-based power storage firm, and Hangzhou First Applied Material, a solar panel component maker.

Vietnam’s total import-export value reached $113 billion in the first two months of 2024, marking an 18 percent increase compared to the same in 2023, according to preliminary statistics released by the General Department of Customs on March 21, 2024.

The influence of these developments is visible in the logistics sector as well.

Maersk opened its first bonded warehouse in Vietnam in November 2024 at SLP Park, Nam Dinh Vu IP, Hai Phong province. The warehouse connects with Maersk’s current fulfilment centre in Hai Phong and the upcoming terminal at Lach Huyen port.

Meanwhile, in October 2024, Lufthansa Cargo launched its direct transpacific freighter service between Ho Chi Minh City (SGN) in Vietnam and Los Angeles (LAX) in the United States.

“This new freighter connection highlights our commitment to connecting economies by responding to the demand of the rapidly growing economy in Vietnam, which can now be seamlessly connected to the U.S. even faster,” explained Ashwin Bhat, CEO of Lufthansa Cargo, in a release.

As Southeast Asia has become a major alternative for manufacturing, DHL in its report titled ‘Highway to the future’ noted that countries like Vietnam, Thailand, and Malaysia are leading the way. “The region has attracted investments in electronics, automotive, and other industries, enhancing demand for integrated logistics solutions,” it reads.

It also points out that Thailand's Eastern Economic Corridor has become a hub for automotive and electronics manufacturing, which includes strong connections to air and road logistics networks.

In November 2024, at least two logistics companies announced their new facility at Suvarnabhumi International Airport in Bangkok.

DHL Global Forwarding introduced the DHL International Multimodal Hub, the new 480m2 facility located within the Multimodal Transportation Center at Suvarnabhumi International Airport Free Zone 3 in Bangkok.

Meanwhile, Kuehne and Nagel opened a new bonded air consolidation warehouse in the Suvarnabhumi Airport Free Trade Zone in Bangkok.

Southeast Asia stands at the forefront of global air cargo, where flexibility meets opportunity. The region's ability to adapt to shifting supply chain demands, diversify manufacturing bases, and invest in strategic infrastructure positions it as a critical player in the future of logistics. Airports like Changi and Kuala Lumpur are leveraging partnerships, transhipment expertise, and strong intermodal connectivity to create resilient and efficient hubs.

The rise of Vietnam, Thailand, and Malaysia as manufacturing and logistics powerhouses underlines the region’s readiness to embrace evolving trends, such as the China Plus One strategy and nearshoring. Strategic alliances, like those between MASkargo and Qatar Airways, as well as Etihad and Teleport, are expanding capacity and creating new growth opportunities. Meanwhile, investments in bonded warehouses, multimodal facilities, and airport expansions further showcase the region’s preparedness for increased cargo flows.

As global supply chains evolve, Southeast Asia’s adaptability and strategic vision make it not just a key link, but a leader in air cargo logistics. With its unique blend of innovation, collaboration, and foresight, the region is set to redefine how the world moves goods in the years ahead.

This was originally published in the December 2024 issue of The STAT Trade Times.