Mr Lim Hng Kiang at FIATA Singapore 2013/Singapore Logistics Association (SLA) 40th Anniversary Gala Dinner

Speech by Mr Lim Hng Kiang, Minister for Trade and Industry, at FIATA Singapore 2013/Singapore Logistics Association (SLA) 40th Anniversary Gala Dinner on 18 October 2013, Friday, 7.50 pm, at Fairmont Ballroom, Raffles City Convention Centre

Mr Quek Keng Liang, Chairman, Singapore Logistics Association (SLA),

Mr Stanley Lim, President, International Federation of Freight Forwarders Associations (FIATA),

Mr Thomas Sim, Chairman, FIATA Singapore 2013 Organising Committee,

Distinguished Guests,

Ladies and Gentlemen,

Good evening.

Introduction

1.            I am pleased to join you for the Gala Dinner tonight, capping 5 days of sharing, exchange and networking at FIATA Singapore 2013. I hope that our overseas delegates have enjoyed your stay in Singapore. My heartiest congratulations also go to the Singapore Logistics Association which is also celebrating its 40th anniversary.

Global and Regional Trends

2.            We are meeting amidst an uncertain global economic outlook, one that still faces significant downside risks. The International Monetary Fund has just downgraded global growth forecast for 2013 from 3.2 per cent to 2.9 per cent[1].  Correspondingly, global trade has moderated. The World Trade Organisation projects that global trade growth will be 2.5 per cent in 2013 and 4.5 per cent in 2014[2]. However, the good news is that trade growth in the emerging markets and developing economies is likely to outpace that of advanced economies and remain relatively robust[3]. Intra-Asian trade, in particular, is expected to remain resilient.

3.            The key drivers for this resilience in intra-Asian trade are the greater regional integration and economic growth across Asia, along with the rise of the middle class in Asia. For instance, the integration of ASEAN under the ASEAN Economic Community (AEC) vision by 2015 will give rise to a single economic region with a population of more than 600 million, the world’s third largest population after China and India. By 2050, Asia could account for half of global output, trade and investment[4], with an accompanying rapid increase in consumer wealth and purchasing power[5].

4.            As much as the logistics sector is driven by trends in international trade, many other factors will also shape growth in your industry[6]. Increasing urbanisation will make efficient city logistics a major area of focus in time to come. There is also tremendous opportunity to use analytics to extract real-time value from the data collected by the logistics industry. Additive manufacturing, utilising 3D printing production techniques, is likely to result in shorter supply chains and less time for large inventories. The industry will also need to consider risks such as climate change and cyber attacks.

FIATA

5.            In the middle of all these changes, FIATA continues to play an important role in addressing the challenges faced by all of you. By representing national logistics associations across 150 countries worldwide, FIATA is able to give the logistics industry a strong unified voice in dealing with worldwide regulatory bodies or other organisations that directly impact the logistics industry and the global economy at large.

6.            As in previous years, this year’s FIATA World Congress has enjoyed a strong turnout with worldwide representation. I am pleased that Singapore as host, we have provided a valuable platform for discussing shared issues, networking, and establishing new partnerships amongst the delegates.

Singapore Logistics Association (SLA)

7.            Singapore also has a body looking after the interests of the local logistics industry - the Singapore Logistics Association or SLA. Founded in 1973 as the Singapore Freight Forwarders Association, SLA has grown in scale and significance over the past 40 years. From just 67 members in 1973, it now has 507 members.

8.            Over the past four decades, SLA has played a key role in driving thought leadership in the logistics industry in Singapore.  Since 1986, it has been involved in instituting vocational training programmes leading to more than 13,000 training placements in logistics and publishing several practitioner guidebooks as valuable resources for its members.  

9.            In the international arena, SLA has been very active. For example, when FIATA started the process of launching the ‘Dangerous Goods by Air Training programme’ in collaboration with the International Civil Aviation Organization (ICAO), SLA provided content from its own air transport course, with the aim of benefiting the international forwarders and logistics industry at large.

Singapore as a logistics hub

10.         With its strategic location and well-developed infrastructure, Singapore has become one of the world’s foremost transportation hubs for both sea and air cargo. On a weekly basis, Changi Airport, is served by over 6,500 flights connecting to 250 cities in 60 countries and handles about 2 million tonnes of cargo. In 2012, Singapore was the world’s busiest transhipment hub, handling about one-seventh of the world's container transhipment throughput, amounting to 31.26 million twenty-foot equivalent units (TEUs) of container volume.

11.         Infrastructure aside, Singapore also has a large base of home-grown talents to support its growth as a leading supply chain hub. Every year, we train more than 8,500 science and engineering graduates, as well as graduates from specialised Supply Chain Management courses ready to enter the industry.

12.         All these attributes make Singapore an ideal springboard for companies seeking business opportunities across Asian markets. Just recently, Singapore has been ranked as the number one Logistics Hub amongst 155 countries in the 2012 Logistics Performance Index.  This is a strong endorsement of the unique value proposition that Singapore offers.

Logistics as a key enabling industry

13.         Ladies and Gentlemen, the logistics industry is an important part of Singapore’s economy, being a key horizontal enabler that supports the competitiveness of Singapore’s vertical industries, particularly tradable sectors with global supply chains. Logistics capabilities underpin the cost competitiveness of Singapore’s products and services, and opens opportunities for firms to implement global supply chain strategies. Recognising this, both the public and private sectors have set up partnerships to improve efficiency and productivity in the logistics sector.

14.         In April this year, SPRING Singapore, the Economic Development Board and the Republic Polytechnic officially launched the Centre of Innovation for Supply Chain Management (COI-SCM) to drive cross-sector projects to elevate the capabilities of our logistics players. The COI-SCM, which commenced operations in January last year, has been championing supply chain excellence for Singapore-based companies by working with them to implement projects in the area of innovation, process re-engineering and technology adoption.

15.         An excellent example of a COI-SCM project is the Cloud Logistics Tracking System. This is a collaborative effort between Keppel Logistics and three of their SME transport sub-contractors. The system was developed to enhance the control of Keppel Logistics’ traffic controllers over truck drivers and their delivery operations. The software provides logistics companies the visibility to manage delivery operations and track transactional status in real-time through smartphones using Cloud technology. In addition, the system is able to estimate the arrival times of deliveries to customers by combining operations data, as well as real-time traffic information. Since its pilot in June this year, this System has helped Keppel Logistics and its partners to enhance productivity, such as reducing the calls between traffic controllers and drivers by 60 per cent and achieve higher customer service standards.

16.         Such innovative solutions to increase efficiency and productivity are important, and we hope that more companies will be active in tapping opportunities to improve productivity and to innovate.

Conclusion

17.         Ladies and Gentlemen, in the medium to long term, Singapore will continue to enhance its infrastructure to strengthen its position as a logistics hub. This was elaborated by Mr Lui Tuck Yew, Minister for Transport, in his opening day address. With these exciting developments and leveraging on our location in the heart of a fast-growing Asian region, Singapore offers exciting opportunities for logistics players targeting to expand their footprint in Asia. I hope that SLA will continue to help the industry leverage new opportunities from Asia’s growth and write more exciting chapters for Singapore’s logistics industry.

18.         Let me once again wish FIATA every success in your role in spearheading international collaborations among logistics players, particularly in capability building and manpower development. With your continued support and partnership, I am confident that Singapore’s logistics industry will continue to flourish and reach new heights.

19.         On that note, I wish everybody here an enjoyable evening. Thank you.

[1] IMF World Economic Outlook dated 08 Oct 2013. Likewise, 2014 growth was revised 0.2% lower to 3.6%.

[2] WTO press release dated 19 Sept 2013. Projected global trade growth was downgraded from the April 2013 forecast of 3.3% in 2013 and 5.0% in 2014.

[3] WTO press release dated 19 Sept 2013. On the import side, the WTO is forecasting 2013 growth of -0.1% for developed economies and growth of 5.8% for developing economies. On the export side, it expects a 1.5% increase for developed economies and a 3.6% increase for developing economies.

[4] Asia 2050: Realising the Asian Century. Asian Development Bank 2011.

[5] Beyond Asia: New patterns of trade. Ernst and Young in collaboration with Oxford Economics. 2012. The number of households enjoying higher incomes will grow sharply. Forecasts incidate that 61 million homes will have annual incomes above US$30,000 in 2020 compared to only 15 million in 2010.

[6] Outlook on the Logistics & Supply Chain Industry 2013. World Economic Forum 2013.