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Staying ahead of the competition
DESPITE its success so far on the international stage, Singapore's maritime sector has to deal with the challenges of a fast changing global economy and growing competition in the region to maintain its leadership position.
Globally, Singapore is known as one of the world's busiest ports and a top bunkering port. It has also been ranked as a leading international maritime centre (IMC).
The latest Xinhua-Baltic Exchange Shipping Centre Development Index published in 2016 ranked Singapore as the top shipping centre among 43 global maritime hubs. It was also ranked as the world's leading maritime capital in the last study conducted in 2015 by Norwegian consulting firm, Menon Economics, which benchmarked the top maritime cities around the world.
Industry players say that Singapore's key success factors include its pro-business environment, attractive taxation schemes and quality work force. As a result, more than 130 international shipping groups - up from just 20 in 2000 - as well as leading players in ship management, finance, broking, insurance, law and arbitration call Singapore their home today.
One local player in this ecosystem is Eastport Maritime. The company offers services that include shipbroking and consultancy services in chemicals, vegetable oils, crude oil & petroleum, dry bulk commodities as well as sale and purchase and time charter projects.
Says Matthias Cher, chairman of Eastport Maritime: "Anchoring key players within our shores will mean that we can continue to have a vibrant and thriving network which will in turn attract and retain more businesses as well as strengthen our hub competitiveness."
Riding on the growing maritime sector here, the company has expanded into consultancy, operational management as well as financial services.
Mr Cher adds that the country's political and economic stability, strategic location as well as a transparent legal system, have all played a part in helping the city-state grow into an IMC.
Singapore has also invested heavily in infrastructure and R&D initiatives to ensure it stays ahead of the game. Projects such as the Next-Generation Port in Tuas will leverage advanced technologies to achieve connectivity, reliability and efficiency for customers.
Work has started on Tuas port which, when completed, will be able to handle up to 65 million TEUs (20 equivalent units) - double the current capacity -- while freeing up precious waterfront space in the city.
"This port will be built to higher specifications - it will be more efficient, intelligent, secure and environmentally sustainable. This move has sent a strong and positive signal to the industry that we are committed to the long term," Maritime and Port Authority of Singapore (MPA) CEO Andrew Tan told The Business Times last year.
MPA is also making a longer-term investment in R&D and technology through the Maritime Innovation and Technology (MINT) Fund and through the research funding under the Singapore Maritime Institute (SMI).
Yet, Singapore's IMC status cannot be taken for granted, and the sector is facing challenges on multiple fronts, from competition in the region to the emergence of new technologies that are disrupting businesses.
SS Teo, managing director of Pacific International Lines, says that reinforcing Singapore's IMC position must remain the focus of the government's vision to remain relevant in the face of potential threats to its status such as the proposed Kra Canal.
The canal would connect the Gulf of Thailand with the Andaman Sea across southern Thailand, similar to the Panama Canal and Suez Canal. The canal would compete directly with ports in the Straits of Malacca area, including Singapore's.
Meanwhile, the planned East Coast Rail Line (ECRL) will connect ports on the east and west coasts of Peninsular Malaysia and alter current regional trade routes, which ply between the busy Straits of Malacca and the South China Sea through Singapore. The five-year ECRL project is scheduled to launch this year with funding from China.
"Singapore must step up its emphasis on security and efficiency. If we keep abreast of technology and innovation, we can continue to enjoy growth in trade despite the impact of the Kra Canal or the ECRL," says Mr Teo.
He also urges the local universities and institutes of higher learning to "continue to develop the future leaders and workers to drive the Smart Nation to face the challenges and adapt to the changing landscape".
Recognising the challenges ahead, the MPA set up the IMC 2030 Advisory Committee last year to chart the future direction of Singapore's maritime sector by identifying new growth areas to enhance its long-term competitiveness. The committee is led by Andreas Sohmen-Pao, chairman of BW Group, and comprises global business leaders and experts in maritime and related sectors such as global logistics, finance and technology.
"The rapidly evolving global economic environment poses both opportunities and challenges for Singapore's development as an IMC. Emerging trends in the maritime and logistics sectors such as smart ships and ports, data analytics, digital platforms and other new technologies are disrupting traditional business models and creating new value chains," said MPA in a statement announcing the formation of the committee.
"The IMC 2030 Advisory Committee will focus on these new developments and identify cross-sector growth opportunities to strengthen Singapore's position as a leading IMC."
Says Mr Cher: "Regular tweaking of initiatives and launching fresh ideas may be a pre-requisite for continued success. No one should rest on their laurels in this race to be a global maritime leader."