Opening Speech by Mr S Iswaran, Minister for Trade and Industry (Industry), at the Container Depot Association (Singapore)’s Third Logistics & Transportation Conference on 23 August 2016, 9.00am at Furama City Centre, Ballroom 1 & 2
Mr Sharafdeen Abdul Razak, President of Container Depot Association (Singapore),
Distinguished guests,
Ladies and gentlemen,
Good morning.
Introduction
1. I am glad to join you this morning at the third Logistics and Transportation Conference organised by the Container Depot Association (Singapore) (CDAS). This conference serves as an excellent platform to bring together the logistics community to discuss trends and opportunities, share ideas and best practices, and also to develop partnerships that help shape the future of our logistics sector. It is an important part of our economy, a key horizontal, in the sense that it will enable a whole range of other industries to do what they do well productively, efficiently but it is also a very important vertical in its own right.
2. Thanks to the hard work of the logistics community over the years, Singapore has successfully built up and maintained our status as a leading global logistics hub. However, there are challenges that lie ahead. The global economic outlook remains uncertain. Domestically, an ageing demographic and competing industrial needs are putting pressure on our labour and land resources. In addition, we face rising competition from neighbouring economies and rapid technological change. Given these trends, the logistics sector will have to find new ways to provide value in the regional and global arena.
Shaping and transforming the future of our logistics sector
3. The theme of today’s conference: “Smart Nation, Smart Logistics – Transforming Singapore’s Economy for the Future”, is therefore timely and important because that is the basis on which we will be able to transform the future of our economy. In the face of new economic realities, we must keep pushing the boundaries of innovation and productivity. There is room for our domestic logistics sector to achieve higher productivity, even in traditional areas such as the container depot and manufacturing industries. We can harness the latest technologies, standards and skills to work smarter – to achieve more with less.
4. Logistics is one of the sectors that has been identified under the Industry Transformation Programme announced in Budget 2016. I am confident that the sector has the capacity to transform itself, having established and sustained a strong foundation over the years. The ITM will provide a set of strategies and initiatives to strengthen enterprises and industry, as well as to drive growth through innovation. It will involve integrating efforts to raise productivity, develop our talent base, drive research and innovation, and facilitate the internationalisation and scale-up of our companies. The ITM for logistics, as well as for many other sectors, brings together all these areas, in terms of technology, R&D, manpower, capability development and in terms of how we can internationalise and scale our businesses and economic opportunities. It is crucial for us to deepen partnerships between government and the industry, and among industry players, to effectively implement these changes and achieve the transformation that we seek. Another dimension that we have been emphasising is the partnerships between industry and the government, and also within industry, the larger players working with smaller players, whether it is in areas that are pre-competitive, or also in areas where a collective effort will lessen the costs and the risks in order to achieve wider benefits for the sector as a whole.
5. There are two areas that are key to the transformation of the logistics sector. First, the role of the industry and trade associations; and second, standards as enablers. Let me touch on each of these.
Trade associations have a crucial role to play in logistics transformation
6. Trade associations and chambers (TACs) are key partners in driving industry transformation, because of their deep knowledge of the needs in their specific sectors, the potential areas for growth, and ability to reach out to many member companies, especially SMEs. I am happy to note that the logistics sector TACs have been active in driving such change and in working with their members.
7. Two years ago, many of you witnessed the launch of the Container Management System, or CMS. CDAS developed the CMS to enhance communication between container depot operators and transport operators. With the digitisation of some processes in inland container depots, such as using a ‘live’ booking website for hauliers entering depots, CMS gave transport operators the ability to better manage and schedule their operations.
8. I am glad to note that about 80% of the container depot industry and more than 95% of container trucking companies are already on CMS. Results at these depots have been encouraging – the average turnover time has been cut by half, from 60 minutes to 30 minutes. This has helped to significantly reduce traffic congestion at depots and enhance productivity.
9. CDAS has built on the success of the CMS and advanced it into the Electronic Container Trucking System (“eCTS”) that will be launched today. The eCTS will connect all container logistics companies through a common IT platform. This will streamline container logistics operations, improve container supply chain visibility and position the eCTS as the platform upon which future applications can be built. Using a mobile application, eCTS will help link drivers to the different nodes in the supply chain and introduce geo-fencing technology to modernise depot operations.
10. I am pleased to announce that SPRING Singapore and the Singapore Workforce Development Agency (WDA) will partner CDAS to help companies adopt the eCTS under the Lean Enterprise Development Scheme. SPRING will support the development and adoption of eCTS with the Local Enterprise and Association Development (LEAD) grant, while WDA will provide funding support for eCTS training through the Industry Catalyst Programme. I want to encourage all container logistics players to plug into the platform and benefit from the network. Even as eCTS is being rolled out, I would also like to challenge the logistics sector to look at the next step beyond, and explore innovative ways of achieving seamless information exchange and visibility across more areas, or even the entire domestic supply chain.
11. Besides CDAS, other logistics associations have been working hard on a range of initiatives that will help to shape the future of our domestic logistics sector. The Singapore Logistics Association (SLA), in partnership with one of our local advanced manufacturing SMEs, HOPE Technik, has started its trial on the use of Autonomous Guided Vehicles (AGVs) in warehouse operations. If successful, the AGVs will automate the process of moving goods from loading bays to racks, and reduce the manpower needed in warehouses. SAAA@Singapore has also launched its Air Cargo Transport Shuttle Service, which has helped SME freight forwarders to achieve cost savings, and improved productivity by consolidating freight transport and cargo loading activities at the Airfreight Centre.
12. I would like to take this opportunity to thank our TACs for all this good work. The Government will continue to partner you in driving such transformative projects that will help the sector and your members stay ahead of the curve in the face of increasing competition.
Standards as a critical enabler
13. Besides technology adoption, standards are a key enabler for the logistics industry. In the United Kingdom, a 2015 study showed that standards accounted for 37.4% of annual labour productivity growth and contributed about 28.4% of annual GDP growth from 1921 to 2013[1].
14. Recognising the importance of standards, key stakeholders in the Logistics Technical Committee, under the Singapore Standards Council's Manufacturing Standards Committee, have worked together to develop standards to raise productivity in the industry.
15. Last year, the Logistics Technical Committee launched the world’s first national standard, TR39, on Freight Container Equipment Interchange Receipt, which provides a set of guidelines to properly document and report the condition of the containers at each interchange point of handling and taking over. The implementation of the TR39 minimises disputes over container damage accountability and results in increased productivity for container logistics operations.
16. In April this year, the Logistics Technical Committee launched another world first national standard, TR46, on Last Mile Delivery – eCommerce Data Interchange, to enable smoother and more efficient fulfilment of eCommerce orders. eCommerce is going to be a major driver of growth, not just in Singapore, but certainly in the region and beyond. The fulfilment capability of our logistics sector is going to be a key driver of the growth of the sector, and Singapore’s own positioning within that. In the implementation trial of TR46, nine companies reported a reduction in integration cost by up to 70% and lower delivery timing and errors.
17. I am happy to announce that a new technical reference, TR53, on Container Depot Operations, will be launched today. This new technical reference provides guidelines for the 13 container depot operators that manage empty container storage in some 20 locations in Singapore. These container depot operators handle about 15% of the container throughput, on average about 12,500 TEUs[2] daily. These guidelines will help ensure a seamless flow of information to back-end administration, and smooth operation between container trucking operators and container depot operators.
18. SPRING and its stakeholder partners will continue to ensure that standards are used as a strategic tool for strengthening the competitiveness of the logistics sector. I urge all industry players to support the development and implementation of these new standards.
Conclusion
19. In conclusion, let me thank CDAS for inviting me to this conference. I congratulate the logistics community on the significant strides it has made in enhancing productivity and competitiveness, and encourage all members of the industry to fully engage themselves in this journey of transformation. I wish all of you a fruitful conference. Thank you.
[1] The Economic Contribution of Standards to the UK Economy June 2015 - Centre for Economics and Business Research Ltd (Cebr)
[2] PSA Container Throughput Performance 2015 – Press Release 14 Jan 2016. PSA Singapore Terminals contributed 30.62 million TEUs for 2015. Industry sources estimated that 15% of these TEUs are for local import/export. “TEU” stands for “Twenty-foot Equivalent Unit”.