KUALA LUMPUR: SMTrack Bhd, a radio frequency identification (RFID) solution provider, today launched the first air freight service in collaboration with Alibaba Group's logistic arm, Cainiao (Malaysia) Sdn Bhd.
SMTrack deputy executive chairman Azmi Osman said in launching its first air freight service to Shenzhen, China, the company has taken proactive measures to ensure that the air freight service to Shenzhen could happen soon after the company signed the agreement with Cainiao.
"The record speed of getting things done confirms our commitment to push forward our venture into the cargo business," he said in a statement today.
SMTrack has planned to ensure that the first international cargo flight under its wing could take off immediately after signing the agreement.
The company has purchased an aircraft worth US$6.7 million and has converted the passenger plane into a cargo plane at the beginning of this year.
According to Azmi, SMTrack's venture into the cargo carriage business will strengthen earnings growth amidst the booming e-commerce industry.
The strong cargo volume is mainly due to the rise in e-commerce, and this trend has been escalated as customers have become accustomed to online shopping due to the Covid-19 pandemic.
According to Mordor Intelligence, Malaysia's e-commerce market is worth US$4.3 billion. It is expected to double to US$8.1 billion by 2024, while the Malaysian freight and logistics market will reach more than US$55 billion by 2026 as compared to US$37.6 billion in 2020.
Asia Cargo Wings Sdn Bhd (ACW) executive director Alvin Heng Jee Zhi said this inaugural flight to Shenzhen for the company's air freight service would open doors for more business opportunities, including new routes, which is expected to enhance revenue.
"In addition, we are preparing for further growth as SMTrack serves the high demand for cargo carriage business," he said.
ACW is a subsidiary of SMTrack.
The partnership with Alibaba's Cainiao is important as Alibaba's e-fulfilment hub at Kuala Lumpur International Airport (KLIA), also known as Cainiao Aeropolis eWTP Hub, is expected to see cargo volume double to double 1.4 million tonnes by 2029.
The eWTP Hub is envisioned to turn Malaysia into a significant 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 and traceability feature that helps the supply chain to keep track of goods.
Under the agreement signed, Cainiao will provide SMTrack with international freight forwarding services for international cargo transportation, targeted at e-commerce and express delivery market.
The company is also planning 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.