Cargo situation at Changi stabilises; Sats prepares to assess compensation claims

SINGAPORE - All cargo backlog accumulated in terminals over the past two weeks has been cleared and import operations have been stabilised, Changi Airport's chief ground handler for airfreight Sats said early on Wednesday morning (Feb 9).

In a statement to The Straits Times, Sats said incoming cargo is now being processed at the regular rate, although the handler is still working out some shipment details from the backlog.

It will take a few days for all freight forwarders to be informed of when to collect their cargo, it said. Arrangements are also being made to expedite trans-shipment cargo so the shipments can catch their connections.

The ground handler's statement comes after nearly two weeks of congestion at its terminals, with massive delays in processing caused by a shortage of manpower due to Covid-19 infections among staff and a surge in pre-Chinese New Year deliveries.

After ST reported the problem last Saturday, Sats said it redeployed more than 40 staff from other areas of operations and recalled 10 to 12 staff daily on their days off to speed up clearance.

It then pledged to clear the backlog by Tuesday, which saw many freight forwarders rushing to the terminals to collect their goods and Sats needing to pace them out so that operations could be carried out safely.

Freight forwarders who had been unable so far to collect their goods told ST they were continuing to suffer losses and might sue for compensation.

A shipping spare parts company said its cargo of about eight tonnes, which had cost $80,000 to transport here, has had to be re-routed as it missed the vessel it should have been loaded onto.

Another electronics company said a whole batch of its soldering paste was rejected by a customer as it had been delayed by a week.

Some companies are reporting trouble locating their containers.

In response to ST's queries, Sats said it will assess all claims and work closely with its insurers on possible compensation. It has also decided to waive all storage charges – which are calculated by weight and can go up to hundreds of dollars for a consignment – for all affected shipments until further notice. 

In the past two weeks, the pile-up at Sats' terminals prompted the ground handler to take some uncommon steps to speed up cargo clearance.

ST has learnt that it had to move some of its cargo to rival dnata's storage area in Changi. Both Sats and dnata declined to say how big the area used was.

In its statement, Sats indirectly referred to these as "alternative sites to break down and speed up cargo collection". It said it was common practice in the industry to set these up during times of disruption.

Stuck goods also caused some logistics companies to take contingency steps and send their own workers into the terminals to collect their goods, but even this process proved frustrating. 

A spokesman for Pacific Logistics Group said: "We had to go to the terminals four to five times since Jan 24 to locate our cargo. This (caused us to incur) indirect additional costs as manpower is required for the transportation of these shipments and it affected the availability of our services."

The spokesman said it was the first time the company, whose shipments included products for hospitals and construction sites that had critical deadlines, was allowed such access.

"We were unable to accept additional bookings for transportation and warehousing services as the delay congested our airport warehouse, which was meant for trans-shipment purposes."

Sats told ST that all logistics workers had remained in the truck docking area throughout their operations, which did not stray from established protocols governing how freight forwarders move their goods. 

All such access was authorised by Sats, the ground handler said. 

The managing director of a freight forwarder, who requested anonymity, characterised the measures taken to clear the backlog as “desperate”.

"It used to be a 'first cargo in, first out' situation. But because of how tightly packed the area was, it became 'last in, first out' as the last ones in were easier to retrieve," he said of the situation last week.

Companies interviewed hope that this is the beginning of the end of a distressing chapter, during which they had to answer repeated client complaints.

"The clearance process has accelerated very quickly since two days ago. Of course, there are still some kinks here and there," said a spokesman for a shipping agent that delivers spare parts to vessels.

"Excess port dues are small peanuts, but if a vessel is loaded, charterers will claim huge amounts from ship owners for delivery delays. It could be in the hundreds of thousands."

He added: "But the most important thing is still Singapore's image. Ship owners select Singapore because they feel things move fast here, for the efficiency. Let's hope such incidents don't put potential clients off."

Associate Professor Goh Puay Guan, who teaches at the National University of Singapore’s Business School, said airfreight is usually for time-sensitive and more high-value cargo, which would have affected businesses’ operations. 

“Ironically, a strong economy will have high demand for goods and this puts pressure on both air and seafreight. We were already seeing delays on seafreight for the past one year due to high demand,” he said. 

Rising shipping costs and delays mean more companies are moving their deliveries by air. 

But Prof Goh said the two-week disruption that Sats suffered should not have an impact on Singapore’s long-term attractiveness. 

“If this is an isolated incident, it will likely not lead to any economic impact as it is a short-term disruption,” he added.