With its connectivity to many other countries in Southeast Asia and the world, Singapore has more than earned its reputation as a global logistics hub.1 This connectivity comes from having more flight lanes with other countries and also having more frequent flights to those countries. At its busiest, Singapore’s airports serve 6800 weekly flights to 330 cities around the world. As a hub, one of the countries that companies based in Singapore have their eyes on is the Philippines.
Before all the upheaval that 2020 brought with it, the Philippines was mentioned as a rising star by Standard Chartered Bank.2 Some of the factors mentioned in that report include the Philippines benefitting from regional trade deals, physical and digital infrastructure investments and increasing openness amid US-China trade tensions. Standard Chartered also credited the Philippines for its economic dynamism and GDP growth potential.
In the Philippines, Metro Manila on the main island of Luzon is the country’s major economic hub and is also the destination for today’s guide. With Manila being a four flight distance from Singapore, Singapore-based businesses can benefit from tapping into the Singapore-Philippine air freight supply chain.
Air freight is currently the fastest available transport option. With Singapore and The Philippines both being within the Southeast Asian region, a flight from Singapore’s Changi Airport to the Philippines’ Ninoy Aquino Airport in Manila takes around 4 hours. This is much faster compared to sea freight which could take a few days longer.
All this speed comes at a cost. However, there are times when it’s actually cheaper to ship via air freight compared to sea freight depending on the weight of your shipment.
Rates for air freight are charged by the order’s volumetric weight (how much space it takes up) or its actual weight depending on which is greater. To calculate volumetric weight in kilograms, the following formula is used:
Length (cm) x Width (cm) x Height (cm) / 5000 = volumetric weight in kg’s
For less-than-container-load (LCL) shipments, sea freight tends to be charged by volumetric weight, with a minimum chargeable volume being 1 cubic metre (cbm). LCL Sea freight saves you money if your order is above 2 cbm.
However, you don’t get those economies of scale for items that aren’t that big like small cartons that take up between 0.5 to 0.9 cbm since you’re paying for unused space. This is where air freight can be more economical than sea freight.
When choosing between air freight and sea freight, consider the following:
Air freight is fast, but can be limited by what you can ship. Bulky or oddly-sized items, will take up more space and result in additional costs.
Items too dangerous to meet air freight’s restrictions on what can be shipped generally should use sea freight instead. For example, products containing gases, all things flammable, toxic or corrosive items like batteries, magnetic substances like speakers, perishable items and more generally can’t be shipped via air freight.
Fortunately, you don’t need to work all of this out yourself. Logistics service providers like Janio can help advise you on whether air freight or sea freight is better suited to your current leg of the supply chain and also offer you both shipping modes for your orders. To find out more, reach out to us below:
B2C air freight shipments tend to face fewer hurdles as they are shipped to individuals compared to bulk shipping to businesses. These shipments tend to be below the customs’ de minimis rate of the destination country and do not need extensive customs documentation and also pay fewer import duties and taxes. The minimum documentation needed are usually commercial invoices and packing lists.
Bulk orders, on the other hand, face more regulation. The consignees of these orders are enterprises and businesses who need to be registered with local authorities. Your importing party also needs to have import licenses as well as other permits with relevant authorities at hand to clear destination customs clearance. These orders are subject to duties and taxes depending on their customs valuation and the type of goods shipped.
While the logistics supply chain from Singapore to the Philippines can vary depending on your requirements, shipping via air freight for this lane would usually follow these steps.
We’ll be going through these steps in more detail using a shipment from Singapore to Manila in the Philippines as an example.
The first mile stage in international shipping is when the shipment leaves the origin address, which can be the merchant’s address, be it a storefront, office, or warehouse. Depending on your arrangement with your logistics service provider, your shipment would be picked up by your shipping partner or dropped off at your partner’s designated location.
Before your goods leave your origin address, the product has to be packaged and labelled appropriately to facilitate smooth cross border shipping. Packages may sometimes go through bumpy rides like turbulence. Having extra padding for fragile items, like bubble wrap and packing peanuts, is recommended to prevent your products from bouncing around or getting deformed during shipping. To learn more about the best practices in packaging your goods, we’ve covered this topic in our packaging guide.
Additionally, shipping labels and the appropriate customs documentation must be visible to and accessible by customs officers to inspect the shipment. You can check out our guide on labeling your shipments which you can also find in our resources for B2C shipping to Southeast Asia.
After this, you can choose to drop your order off at your shipping partner’s drop-off point, or have it picked up from your address. Most shipping partners would have a cut-off time for submitting orders for drop-offs and pickups so that they can optimise their route.
If your shipment is a B2C parcel, it has to be consolidated on a pallet at a transportation hub or at a warehouse closer to the origin airport together with other packages with the same destination country before it can be sent for customs clearance. As B2B shipments are already consolidated, the shipment can be transported directly to the airport for customs clearance.
Some warehouses in Singapore also have transportation hub capabilities and are able to sort your parcels and have it ready for customs clearance within the same location such as those within Singapore’s Free Trade Zone.
Free Trade Zone warehouses also have the benefit of deferring tax charges on non-dutiable goods until they enter a country’s official borders, which helps with both cash flow and also as a storage area for regional hubs in Southeast Asia.
After collection, and consolidation if needed, your shipment will go through terminal handling at Changi Airport (SIN). At the airport, your shipment will be transported to the air cargo agent’s warehouse. Here, weighing and inspection of the cargo, tallying up the items with the commercial invoice and packing list and checking all the necessary shipping documents take place.
After that, your goods need to be cleared for export by Singapore Customs at Changi Airport. In Singapore, exported goods are not subject to customs duties and Goods and Services Tax (GST) but all goods must be declared.3
To get your goods cleared for export, your shipment at the usually needs to have the following documents ready:
If you’re using air freight to export out of Singapore in bulk, you’ll also need to prepare the following documents and information for Singapore customs:
A UEN number and Customs Account are needed for both exporting from and importing into Singapore. A UEN is a standard identification number for businesses to interact with government agencies in Singapore.4 The UEN can be obtained by registering with a UEN issuing agency, such as Singapore’s Accounting and Corporate Regulatory Authority (ACRA). Once you have your UEN, you can register for a Customs Account on the Trade.net online portal.
If the goods are dutiable or subject to control, you must obtain an export permit. Goods that are exempted from needing an export permit can be found on Singapore’s Customs website. This permit can be applied for via Singapore’s Trade.net portal.5 You must declare the FOB value of your shipment in the export permit.6
After checking these documents and clearing your shipment for export, your shipment can be loaded onto a plane headed towards the Philippines.
After getting cleared for export, your order leaves Singapore, bound for the Philippines. The mid-mile leg of the journey will take around four to five hours at most.
One of the benefits of shipping via air freight from Singapore is its interconnectivity with surrounding countries, which makes it a great regional hub for Southeast Asia. In recent years, the World Bank noted that Singapore can see 6800 weekly flights to 330 cities around the world. With this in mind, Singapore has consistent flights every week to feeder lanes such as to the Philippines, Malaysia and to Indonesia.
If your shipment is heading to Manila, the Philippines, it will land at Ninoy Aquino International Airport (MNL). Your shipment will then be inspected by Philippines customs officers for import clearance.
If you’re shipping below the Philippines’ de minimis value of PHP 10,000 and you aren’t shipping controlled or restricted goods into the country, your shipment will need the following documents to clear customs:
These shipments are usually brought in for personal use or consumption and would not need much fuss from the consignee.
On the other hand, to get import clearance in the Philippines for bulk air freight or import items that are controlled or restricted, your shipment will need the following documents:
The importer receiving your bulk shipment in the Philippines needs to have an Import Clearance Certificate from the Philippines’ Bureau of Internal Revenue. They’ll also need to register with the Bureau of Customs and set up a Client Profile Registration System account.
If your order contains any items that the Philippine government regulates imports of, the importing party also needs to have registered with the governing body in charge of that good and obtain a valid certificate for it. For instance, bringing in soap requires your importing party to also be registered with the Philippine Food and Drug Administration as a Drug Importer while also having a relevant Certificate of Product Registration.
You can check if your commodity is regulated at the Philippine National Trade Repository website, which also shows which documents and agencies you need to register with.7 If you’re also interested in the Philippines’ customs clearance for B2C shipments, check out our updated customs clearance guide.
Once your goods have been cleared for import, the last mile leg depends on whether you’re shipping B2C or B2B and which part of the Philippines your destination is.
If your shipment is B2C, the pallet or container your order is in will be unpacked for distribution to their respective destinations. Your shipment will then be shipped for the last mile leg either as loose parcels or as pallets depending on how they were initially packed. If your bulk shipment can be delivered as a pallet, your shipment doesn’t need to be unpacked and can be transported directly to the last mile address.
Depending on where your destination in the Philippines is, your shipment may need an additional flight to an airport closer to the order’s destination. Either way, the final leg of the delivery will be done via vans or trucks depending on whether it’s a full container or separate pallets being delivered.
Air freight works best when you need your goods delivered yesterday, and works even better when you have logistics service providers who can tell you when and where air freight is best used in your supply chain. Contact us below to find out more about how we can help you or if you’d like an air freight quotation to ship to and throughout Southeast Asia.
‘Having the flexibility to adapt to changing situations is one of the advantages of a startup’ - find out what else Janio's COO Ali had to say in Berita Harian's August 2020 feature!
Find out the process of shipping via air freight and sea freight from Hong Kong to Singapore including customs documentation here!
With Indonesia's market potential and price-sensitivity well-noted, exporters from China aiming for Indo still need to know - when's air freight best used?
Getting accurate data on the shipping label is crucial in the cross-border shipping process. Find out how you can ensure data integrity for a smooth eCommerce delivery.
With different import duty and tax rates for every country and every type of item, customs payments may appear daunting. Read on to find out how customs clearance can be made smoother with delivered-duties paid (DDP) so that you can expand into the Southeast Asian market with a peace of mind!
Customs Clearance requires your shipment to gain official permission to enter a country and for the required duties and taxes to be paid. That's the gist of it, but there's more, click here to find out more!