RADIO frequency identification (RFID) solution provider SMTrack Bhd celebrated the inaugural flight of its air freight service in collaboration with Alibaba Group’s logistic arm Cainiao (M) Sdn Bhd yesterday (Nov 20).
The group has taken proactive measures to ensure that its maiden air freight service to Shenzhen could happen so soon after both parties inked an agreement recently.
To serve this purpose, SMTrack has converted the passenger plane it purchased at US$6.7 mil into a cargo plane at the beginning of this year.
“We’re excited with our first air freight service to Shenzhen, China,” commented the company’s deputy executive chairman Azmi Othman. “The record speed of getting things done confirms our commitment to push forward our venture into the cargo business.”
According to Azmi, SMTrack’s venture into the cargo carriage business will strengthen the group’s earnings growth amid the booming e-commerce industry.
Strong cargo volume in recent times has often been associated with the rising e-commerce trade. This trend has escalated as customers have become accustomed to online shopping due to the COVID-19 pandemic.
According to Mordor Intelligence, Malaysia’s e-commerce market which is worth US$4.3 bil is expected to double to US$8.1 bil by 2024, while the Malaysian freight and logistics market will reach more than US$55 bil by 2026 as compared to US$37.6 bil in 2020.
Alvin Heng Jee Zhi who is executive director of Asia Cargo Wings Sdn Bhd, a subsidiary of SMTrack, said the inaugural flight to Shenzhen is poised to open doors for more business opportunities, including new routes which are expected to enhance the group’s revenue.
“In addition, we are preparing for further growth as SMTrack serves the high demand for cargo carriage business,” added Heng.
The partnership with Alibaba’s Cainiao is important as Alibaba’s e-fulfilment hub – the Cainiao Aeropolis eWTP Hub – at the Kuala Lumpur International Airport (KLIA) expects to see its cargo volume doubling to 1.4 million tonnes by 2029.
The eWTP Hub is envisioned to turn Malaysia into a major regional player for e-commerce distribution and a leading airfreight gateway in ASEAN. Such ambition requires SMTrack’s RFID solutions that enable automation of manual processes in the warehouse as well as traceability feature that helps the supply chain to keep track of goods.
Under their partnership agreement, Cainiao will provide SMTrack with international freight forwarding services for international cargo transportation targeted at e-commerce and express delivery market.
Moving forward, SMTrack also plans to expand the delivery of e-commerce and express delivery routes to include delivery from Kuala Lumpur to Sabah and Sarawak which has been gaining momentum over the last few years.
At the close of yesterday’s trading, SMTrack was unchanged at 8.5 sen with 893,900 shares traded, thus valuing the company at RM39 mil. – Nov 20, 2021
