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Gearing up for change
- Andrew Tan, chief executive, Maritime and Port Authority of Singapore (MPA).
- Esben Poulsson, president, Singapore Shipping Association.
- Andreas Sohmen-Pao, chairman of Singapore Maritime Foundation and the International Maritime Centre 2030 Advisory Committee.
- Ong Kim Pong, regional CEO South-east Asia, PSA International.
- Ooi Boon Hoe, CEO of Jurong Port.
Moderator: Narendra Aggarwal
The Business Times: As we approach SMW 2018, how do you see the industry outlook for the next two to three years?
Andrew Tan: Industry transformation centred on growing cost pressures, tighter regulations, and digitalisation will shape the maritime industry in the next few years. The emergence of new trade flows as we see changes to manufacturing and production networks, and the opening of new economic corridors as countries invest in much-needed infrastructure, will also open up new opportunities and challenges.
The maritime industry continues to evolve with market consolidation through mega-alliances, mergers and acquisitions as well as closer integration with adjacent sectors such as logistics players and intermodal transport with the rise of e-commerce. The emergence of e-platform companies such as Ocean Freight Exchange, VesselsValue, Flexport and the entry of non-traditional players such as Amazon will add further impetus to industry transformation and digitalisation.
Esben Poulsson: Barring a full-blown trade war I believe the container segment, which has seen a significant improvement, though from a low base, looks in reasonable shape.
Dry bulk, likewise, has seen improved fundamentals, in terms of rates and sentiment albeit again from a low base. The tanker market has been disappointing but I believe we will see improvements into the second half of this year and in the years ahead.
Andreas Sohmen-Pao: Shipping is primarily about two things - world economic growth which drives demand for goods, and the supply of ships to meet that demand. Currently gross domestic product growth is positive, and supply of ships is moderate, so the outlook is benign. But we are still digesting some of the overhang from previous excesses, so not many people expect a sudden upswing.
Ong Kim Pong: Container shipping has always been closely interlinked with global economic and trade growth. However, those will not be the only determinants of the industry's fortunes.
Within the container shipping industry, the combination of mega-vessels, mega-alliances, and industry consolidation has resulted in unprecedented and lasting structural changes. The dust has not fully settled yet. In the near term at least, stakeholders will have to continue adjusting and adapting to the new norms.
We have also begun to see how technology, digitalisation and consumption demographics can combine to disrupt and revolutionise the way and the speed that people, goods, and information move. These same forces have been and will continue to challenge the shipping industry and its entrenched (some may say outdated) practices. The calls for better visibility and connectivity in the supply chain are getting louder. Stakeholders must be prepared to embrace these challenges and opportunities, or face obsolescence.
Ooi Boon Hoe: In the next two to three years, market conditions will continue to be challenging; however, we are encouraged by the industry's plans under the Sea Transport Industry Transformation Map (ITM). Jurong Port is similarly undergoing its own transformation journey towards being a next-generation multipurpose port. With the rest of the industry, we will emerge stronger for the upswing.
BT: From Singapore's perspective what are the key challenges going forward?
Tan: Singapore faces growing competition on all fronts, from regional ports to other international maritime clusters as they seek to attract the major shipping lines and build up their maritime industries.
While costs and location remain important, other factors are also becoming important - such as connectivity, innovation and talent.
For Singapore to stay relevant as a key node of the global supply chain, we must be able to offer a strong value proposition by delivering a high level of connectivity, efficiency, reliability and a comprehensive ecosystem with strong inter-linkages with related sectors such as logistics, commodity trading, e-commerce and even Industry 4.0.
Positioning ourselves as the place for innovative solutions is another way we can differentiate ourselves. Can we, for example, attract the players to see Singapore as a place to test-bed new ideas, from e-platforms, smart ships to smart ports? And do we have a maritime workforce with relevant skills and a global mindset? Only then can Singapore remain relevant and competitive.
Poulsson: We live in a very competitive world and it will be crucial for us to stay nimble if we are to continue not only to maintain our position as a leading maritime centre, but to further grow it.
Sohmen-Pao: There is a lot of competition from other maritime centres, and from countries which are investing heavily in port and maritime infrastructure.
Ong : It all starts with investing in our human capital - how we seed, nurture, and develop a diverse and sustainable pool of talent that is not only equipped with the skills needed to compete today, but also the boldness and motivation to innovate and adapt for the future.
Apart from engaging and upskilling current staff, PSA also works closely with the institutes of higher learning to raise the profile of what we think will be a very dynamic sector among our leaders of tomorrow, and to create and offer exciting opportunities for training and research and development (R&D).
With the right people, the right skills, and the right environment, Singapore can be at the forefront of developing, implementing and harnessing new technologies for use in the port, be it the Internet of Things, cloud blockchain, automation, augmented and virtual reality, artificial intelligence (AI) or advanced data analytics.
Last but not least, our approach of investing in human capital and technology to be future-ready also fully aligns us with Singapore's push towards a smarter economy, and higher-value job creation.
Ooi: Ensuring that Singapore's maritime workforce is equipped with the relevant skill sets to be future-ready. A world-class pool of port and maritime professionals will require an enhanced skill set to tap on new technologies and they have to possess a global mindset.
Anticipating future requirements, we established Jurong Port Academy in early 2017 to help reskill and upskill our workforce in order to develop a new generation of multipurpose port professionals for the industry. The academy is part of the port's efforts to transform the multipurpose port industry by leveraging new technology and innovation to enhance capabilities.
Market disruptors will span different industry segments. Collaboration is therefore essential for companies to be able to innovate solutions that can tackle such disruptions and tap on next-generation technology.
For example, Jurong Port inked a memorandum of understanding with Nanyang Technological University to pursue joint efforts in R&D to testbed solutions as part of our "Living Lab" programme. Such collaboration will help us better innovate and equip ourselves with next-generation capabilities.
BT: How is Singapore positioning itself to seize new opportunities for future growth?
Tan: The recently launched Sea Transport ITM seeks to grow the sector's value-add by S$4.5 billion and create more than 5,000 good jobs by 2025. We are enhancing both Singapore's physical connectivity through our new next-generation port at Tuas as well as strengthening the non-physical trade flows and information linkages between the shipping community, our port and international maritime cluster.
For instance, we are supporting companies which use Singapore as the hub for their digital offices as well as 24/7 vessel operations/monitoring centres. Likewise, companies trying new concepts as blockchain and other distributed ledger technologies for trade facilitation or leveraging big data to optimise their operations around the world. We are also fostering closer tie-ups with the logistics and commodity trading sectors so that we can create a more vibrant marketplace. With Singapore Exchange Ltd's recent acquisition of the Baltic Exchange, it also opens up new opportunities in developing Singapore's freight derivatives market.
Poulsson: The ITM is a very worthwhile initiative that had already identified a number of areas not only to improve productivity, but also to embrace the numerous new technologies that will in part disrupt, and in part offer great opportunities.
Unlike many other maritime centres, the government, through the MPA, is spearheading a number of initiatives in technology and innovation - in some cases ahead of the industry's ability to embrace and absorb them at the blistering pace required.
Sohmen-Pao: Singapore is consciously looking for ways to leverage its strong maritime community to develop new ideas and businesses, and to develop skills which set us apart from other centres.
Ooi: Singapore's ITM for the maritime industry helps to define how the industry is anticipating and preparing for the new opportunities in the years ahead. At Jurong Port, our transformation involved the development of competencies in handling a wider range of cargo such as clean petroleum products and liquefied natural gas. This will enable us to seize new opportunities that could emerge as part of emerging mega-trends such as the increasing adoption of alternative and cleaner fuels in maritime shipping. Similarly, changes in the construction sector could also yield new opportunities to handle pre-fabricated modular units via sea routes.
BT: How can Singapore stay ahead in the highly competitive global maritime industry by harnessing new technologies and talent development?
Tan: The Maritime Transformation Programme (MTP) was also launched after the ITM to develop future capabilities in maritime traffic management, enhancing operational efficiencies, and improving safety and security. This will be done through supporting the development of new technologies, designs and operations concepts using automation, digitalisation and AI that can be deployed in the next-generation Tuas Port and Jurong Port.
MTP complements the annual Smart Port Challenge and Maritime Technology Acceleration Programme where companies, technology players and startups collaborate. Promising technologies are tested in the "Living Labs" under real-world conditions. Promising solutions and technologies will be tested in the "Living Labs" across MPA, PSA and Jurong Port, as we encourage greater collaboration within the ecosystem.
Poulsson: The MPA is at the forefront of harnessing new technologies and numberous initiatives are under way, including the establishment of a "Living Lab" and greater cooperation with the institutes of higher leading. This joint approach, provided it is well-coordinated, will help Singapore stay ahead.
Sohmen-Pao: We need to attract the right people to the industry, and to put together teams which combine knowledge of the industry with technology skills. We also need to find ways to catalyse collaboration within the industry.
Ooi: The industry will need to keep evolving to keep pace with the changing environment and stay ahead of the global competitive environment. For our manpower and workforce, there is a need to constantly reskill and upskill workers to remain relevant and future-ready. Singapore must develop and grow the next generation of maritime professionals who are ready to embrace automation and technology. Future growth will rely on our ability to enhance productivity, innovate and use digital technologies to create greater value for customers.
BT: How is your organisation gearing up for the future growth of the maritime industry in Singapore?
Tan: To grow deep research expertise, MPA is working closely with our universities and research institutions to establish centres of excellence in three key areas such as port modelling and simulation, energy and environmental sustainability, and safety and security which can leverage Singapore's strong brand name in trust and reliability.
At the heart of the maritime industry is its people. We need to build up a good pipeline of local talent even as we remain open to talent. This gives us a competitive edge. With our strong education system and excellent training facilities, there is no reason why Singapore cannot position itself as a knowledge hub for talent and skills.
Poulsson: Trying to keep up with the rapid changes before us, and attempting to allocate the resources required to run a business and having on eye on the future - all at the same time.
Sohmen-Pao: We are hiring good people, we are investing in technology and start-ups, and we are challenging our teams to come up with new ideas.
Ong: PSA's confidence in the future of Singapore maritime is perhaps best encapsulated by our commitment and the efforts that we have vested to ensure the successful development and delivery of the future Tuas Port.
This high-tech next generation port will see automation innovations and smart technologies deployed on an unprecedented scale to deliver class-leading levels of service and cement Singapore's position as a premier transshipment hub.
Tuas Port will, however, not only be about impressive infrastructure and intelligent hardware. PSA is also working closely with government agencies and private sector partners to cultivate an entire maritime, logistics and supply chain ecosystem that extends well beyond the port's boundaries.
The community will be connected not only by physical, but also online and digital platforms that will offer seamless exchanges of information and services to connected counterparts locally and across borders. PSA is looking at Tuas as a full port ecosystem.
Delivering these outcomes requires not only vision and foresight, but also a collaborative and coordinated approach among the stakeholders. We also have to be mindful of our competitors and their ambitions. But if we can get it right, and we have every confidence that we can, the maritime sector will become an even bigger contributor to Singapore's future economy.
Ooi: Jurong Port is keeping a keen eye out for emerging trends and technologies. We then also need to adopt a bold but risk mitigated mindset to avail our port to new business opportunities and technologies. Not every opportunity will turn out as expected, and we must be prepared to take quick remedial action in those cases. With such a mindset, we reckon that we will be primed for future growth.