Two emerging trends in the airport logistics industry! In the previous post, we looked at increasing demand for e-commerce cargo and fresh cargo.
This post will talk about what infrastructure Incheon Airport is establishing in line with changing trends in logistics, focusing on major facilities.
1) Popular goods prepared in advance! - Global Distribution Center (GDC)
Incheon Airport is putting efforts to create a logistics hub specialized in e-commerce. One of such efforts is its GDC.
Global Distribution Center (GDC) refers to a center for global logistics which receives and stores products from global e-commerce companies, classifies and repackages them by item, and delivers them according to individual orders. The key is to predict demand for particular products with big data and place in advance such products at GDC.
For instance, you can bring clothes from Europe and the US and sell them in Japan and China. You can store products you bring by predicting their demand at Incheon Airport’s GDC and transport them to other countries when orders are placed. It is gaining attention as a business model which reduces time and cost while improving logistical competitiveness. In addition, GDC is expected to create more than 300 jobs and the economic value of more than KRW 100 billion and being highlighted as a logistical facility that contributes to the national economy.
Incheon Airport is making efforts to build infrastructure, such as a lot for GDC as well as direct/return routes. Furthermore, to attract competitive logistical companies to GDC, it is seeking various activities to improve competitiveness in GDC land, such as implementing strategic incentives and providing multifaceted policy support through a government-wide committee.
2) “One-stop” logistics handling beyond storage - Fulfillment Center
Incheon Airport is trying to attract fulfillment centers of global tech companies, such as Amazon and Alibaba, in response to increasing e-commerce and changing processes in the distribution industry. If such companies come here, it may work as a breakthrough to get ahead with e-commerce cargo in the Asia-Pacific region and become an important growth engine.
Fulfillment refers to logistics performed by professional logistic firms on behalf of sellers, including storage, sorting, packaging, delivery, and handling. While distribution centers used to simply store products, fulfillment is a concept over the full cycle including product storage, orders, packaging, and after-sales service.
Incheon Airport acquired additional land for its Fulfillment Center from some part of the land reserved for Sky City and is conducting activities to encourage government-wide policy support. In addition, it is focusing on attracting more fulfillment centers by actively making use of relative stability in laws and regulations in Korea, business friendly policy environments, and the country’s location connecting Asia and the Americas.
3) Cool and fresh… Facility designed to handle fresh cargo! Cool Cargo Center (CCC)
Temperature control and product value are key in transporting fresh cargo. Since food or drug products show performance at different temperatures, they need a cold chain cargo terminal combining various facilities and future technologies.
In this regard, Incheon Airport is garnering attention as it pursues the construction of Cool Cargo Center (CCC), a facility dedicated to handling in the passenger apron, for the first time in Northeast Asia. If the facility is constructed, it will greatly shorten the logistical process. While fresh cargo was transported to the passenger terminal from the cargo terminal through the cargo waiting place in the past, it will be moved directly to the passenger terminal with CCC. It can create belly cargo of more than 60,000 tons annually, which reduces 120 minutes in connecting time and 60% in distance!
Apart from providing a strategic terminal area and period depending on the type of cargo and seasonal temperature, Incheon Airport will introduce the Cool Chain Dolly cold chain container to minimize outdoor air exposure for fresh cargo while loading and unloading to and from airplanes and provide technical support including temperature history control by using IoT and blockchain.
Drug product transport in particular is expected to grow the fastest in the air cargo industry, and competition is getting fierce among airports around the world. In June 2019, Incheon Airport acquired IATA CEIV Pharma, a quality certification for the air transport of drug products, built a higher level of trust, and is ramping up its efforts to attract and expand more drug products.
We have so far looked at how Incheon Airport is preparing its logistical infrastructure for emerging cargo trends.
Let’s look forward to more achievements and efforts by Incheon Airport, which is preemptively responding to changes by developing specialized logistical facilities and systems, including Global Distribution Center, Fulfillment Center, and Cool Cargo Center!