Uncertainty over US tariffs affecting business confidence, but opportunities available: SATS CEO

Key Concepts:

• U.S. Tariffs: Import taxes imposed by the U.S. government.
• Business Confidence: The level of optimism or pessimism among businesses regarding the economic outlook.
• Agility: The ability of a company to respond quickly and effectively to changing circumstances.
• Cargo Handling: The process of loading, unloading, and managing goods at airports.
• Connectivity: The ease with which goods can be transported between different locations.
• Special Cargo Handling: Handling capabilities for specific types of cargo, such as pharmaceuticals or live animals.
• Global Value Chains: The interconnected network of activities involved in the production and distribution of goods and services across the world.

Impact of U.S. Tariffs and Uncertainty

• Carrie Mok, CEO of SATS Group, stated that U.S. tariffs create uncertainty and negatively impact business confidence.
• The "stop-start nature" of tariffs was highlighted as a key factor causing uncertainty.
• Mok argued that uncertainty leads to more conservative policy investments.
• Despite the challenges, SATS has seen increased volumes in the Middle East, particularly in Saudi Arabia, where it operates a large cargo handling operation.

SATS' Response to Changing Policies

• Mok emphasized SATS' agility in responding to changing government policies.
• SATS focuses on staying close to customers, understanding their needs, and offering solutions to navigate uncertainty.
• The company aims to find ways to help customers even in the U.S. market.

Competition and Collaboration in the Cargo Logistics Sector

• The cargo logistics sector is competitive, with companies like Swissport and dnata also operating in the space.
• Despite competition, there is a focus on operating in a "very respectful manner."
• Industry players are working together to improve the industry as a whole.

Singapore's Strengths as a Cargo Hub

• JC Teo, Vice President of Cargo Business Division at Changi Airport, highlighted Singapore's unique qualities in fending off competition.
• Key factors include strong local fundamentals, accessibility, connectivity, and reliable service.
• Singapore is focused on building new special cargo handling capabilities and capacity.

Cargo Handling Operations

• The video showcased cargo handling operations at an airport, including the temporary storage of goods in warehouses.
• Goods are held for a few hours or days while paperwork is completed before being flown to their destination.
• WFS, a member of the SATS Group with 2,500 staff in France, handles ground handling of goods, food, medicine, and live animals.

The Essential Role of the Freight Industry During the Pandemic

• While passenger traffic was disrupted by lockdowns, the freight industry proved essential in ensuring the continuity of global value chains.
• The video concludes by stating that "for cargo services, the sky is the limit."

Conclusion

The air freight industry faces challenges due to U.S. tariffs and global uncertainty, but companies like SATS are adapting by focusing on agility, customer relationships, and strategic growth in key regions. Despite competition, collaboration is also emphasized to improve the industry as a whole. The freight industry's essential role during the pandemic has highlighted its importance in maintaining global value chains, and innovation in cargo handling and connectivity remains crucial for future success.