Singapore is putting up a serious fight to remain the world’s largest transshipment hub and, off the back of that, one of the world’s busiest logistics hub.
“The Port of Singapore will have to continuously improve its operational capacity and capability through adding new berths and improving productivity,” Fang Fang, a consultant with maritime specialists Drewry told Asia Cargo News.
That’s a tall order for a port that in 2013 moved 32.24 million teus and connects to 600 places. Singapore also provides a multi-purpose terminal (MPT) which in the same year moved 0.91 million tonnes of general cargo and 1.25 million vehicles.
The response is incremental.
“PSA Singapore is adding 2.5 million teu capacity in 2014 with the completion of the first three berths of Pasir Panjang Terminal (PPT) phase 3 and 4,” Fang said. “The remaining berths will be built in phases to meet the projected volume growth.”
The total handling capacity of PSA Singapore is estimated to increase to 50 million teus annually when PPT phase 3 and 4 is fully operational around 2020, she added. Additionally, the Tuas Terminal is designed to handle 65 million teus yearly when it is fully operational. (Reclamation work for Tuas is ongoing with the first set of berths scheduled to be operational around 2023.)
The projection of 65 million teus is double what Singapore moved last year and illustrates well the scale of its ambition. Underlining this, the port is to be an intelligent port with home-developed but next-generation technologies covering automation, intelligent planning and control systems and green ports solutions.
“We will be better prepared to manage greater business complexities, as our customers’ requirements evolve. This will enhance the value proposition of Singapore as a global transshipment hub,” said Tan Puay Hin, regional CEO, Southeast Asia, for PSA International.
Whilst Singapore is very much a place where plans become real, there is a limit to Singapore as a port.
In the shorter term, the challenge is one of cost; Singapore is not cheap. Fang says that shipping alliances and capacity are at least partially beyond Singapore’s control. Longer term, though, the global manufacturing centre is shifting away from Southeast Asia. Not even Singapore can stand against that and win.
What underpins Singapore as a hub is not only the port but the other facilities it offers. Here, much of the attention must go to Changi airport, whose cargo operations are profound supplements to those of the ports.
Changi shifted 147,800 tonnes of cargo in September for a nine-month total of 1.37 million tonnes, an increase of 0.3% year-on-year but ahead of the traditional year-end rally.
Like PSA, Changi has taken steps to sustain the long-term growth of the air cargo sector and is supportive of the industry it serves.
“While the outlook for the global airfreight sector remains uncertain, we are committed to our airline partners in providing support where needed,” James Fong, the airport’s assistant vice president for cargo and logistics development, said earlier this year. “We will work with them to explore new opportunities and respond to emerging industry trends so as to sustain growth over the long term for the air freight sector.”
When times were tough in the cargo market, Changi introduced and then extended until March 2015 a cargo incentive scheme: a 50% landing fee rebate for all scheduled freighter flights and 20% rental rebates for cargo tenants leasing CAG cargo facilities at the Changi Airfreight Centre.
On top of this was the airport’s Growth and Assistance Incentive Programme, which provided a 50% parking rebate for all scheduled services from July 1, 2014, to June 30, 2015.
It is, though, difficult to get information from Changi officials about their next step. Maybe the success of Singapore as a logistics hub is not so much about its hardware, but about a tight-lipped commercial approach that suits well the sectors working there.
By Michael Mackey
Southeast Asia Correspondent | Bangkok