Singapore Post (SingPost) and airline food service provider SATS are researching the viability of setting up an ecommerce transhipment hub in Singapore.

The two Singapore-based entities have signed a Memorandum of Understanding (MOU) about their intent to jointly operate a state-of-the-art transhipment hub facility that will shorten delivery times and reduce operating and labour costs.

In a statement, the two companies cite a report by research firm McKinsey that predicts that between 2023 and 2026 the Southeast Asian ecommerce market will triple to USD230 billion in gross merchandise volume.

Under the MOU, SATS and SingPost have committed to providing equal resources to a feasibility study of the proposed ecommerce hub.

The companies say their first joint operations trial showed they had the potential to shorten cargo turnaround time by more than 60%, allowing for one- to three-day deliveries within Asia.

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.

SATS chief executive officer of gateway services Bob Chi says: "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 ecommerce players but also reinforce Singapore's position as a prominent regional hub for ecommerce logistics."

SingPost chief executive officer international Li Yu says: "The combined scale of SATS and SingPost will unlock seamless ecommerce 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." 

SATS supplies customers, including airlines, cruise lines, freight forwarders and postal services, in more than 201 locations and 23 countries across the Asia Pacific, United Kingdom, Europe, the Middle East and the Americas.

SingPost provides postal and ecommerce logistics, as well as warehousing, fulfilment, international freight forwarding and last mile delivery services to customers in more than 220 global destinations.