1. A very good afternoon to family, friends and fans of Maritime Singapore. 

2. As Singapore commemorates our Bicentennial this year, we recall that when Stamford Raffles stepped onto our shores 200 years ago, Singapore was already a seaport.

3. But trade only really picked up in volume after 1869. Before the opening of the Suez Canal, global East-West trade route traversed Africa’s Cape of Good Hope, passing the Sunda Strait before heading to the Orient. The East-West trade often bypassed Singapore prior to Suez Canal opening.

4. We would be mistaken to think that our hub status is predestined. Today, 70 percent of the global maritime economy transits through the Singapore Strait.  But things can change very quickly tomorrow. 

5. The question is – what will determine Singapore’s future as a Maritime Hub? 

Driving Forces for Maritime Industry

6. In 2007, the late Mr. Lee Kuan Yew delivered the inaugural Singapore Maritime Lecture. I recently re-visited that speech and was struck by the longevity of his insights. Some of the forces that Mr. Lee outlined a decade ago remain relevant, and perhaps even more so, today. 

Geopolitics

7. First, geopolitics. We face a challenging global environment. US-China relations, Brexit, rising protectionism dominate global headlines. The rise in nativist politics has come about with social resentment as wealth and progress have not been evenly distributed. The people who have lost out, either absolutely or relatively, turn against global trade and technology, which they blame for their predicament.  In turn, protectionist economics has become more prevalent, and this is threatening to fragment the current global trading system with serious implications on the maritime industry.

8. Trade tensions will continue to brew between the US and China as both sides compete over technology, economics and geopolitical influence. How competition between them pans out has a bearing on the global economy. In extremis, the world could be fragmented into different trading blocs. 

9. Even if the landing turns out to be somewhere in between fragmentation and global integration, the presence of protectionism will inhibit global trade, which is the raison d’etre of the maritime industry. 

Demographics

10. Second, demographics. It will determine the flows of logistics and energy. Trade is about connecting the areas of supply with the areas of demands.  Asia is projected to represent 66% of the global middle-class population, and 59% of middle-class consumption by 2030. Asia’s share of the global economy will also eventually converge to its share of the world’s population. Analysts project that, in 2030, six out of the world’s ten largest economies will be in Asia. ASEAN is set to become the fourth largest economy. This means that much resources and goods will flow from resource-rich countries into Asia to fulfil the growing middle class demand for years to come.

11. In particular, the growth of China and India bears close watching – both countries alone account for a third of the world population and are experiencing fast-growing urbanisation. 

12. For China, the Belt and Road Initiative is its way to secure its supply and distribution chains as consumerism increases, and infrastructure is needed to meet this demand. Such developments will create growth opportunities for the shipping industry. 

Technology

13. Third, technology. The future maritime landscape will be very much digital and enabled by data which will drive global logistics flows. The development of smarter sensors and data linkages will allow businesses to gather unprecedented volumes of fleet data – in fractions of a second.  Big data analytics like neural networks will allow industry to extract invaluable insights from these data –  such as how to better deploy resources to support shifts in global value chains, as well as to better tap on the efficiency of different modes of transport. With the rise of intermodal connectivity, shippers can also employ algorithms to gain operational and cost efficiencies, by combining road, rail, air cargo and ocean freight solutions. 

14. The Chongqing Connectivity Initiative – New International Land-Sea Trade Corridor, or CCI-ILSTC in short, is another example of how it is possible to create a new trade route using a combination of air-land-sea routes, optimised by data.  The CCI-ILSTC connects the Belt and the Road of China’s Belt and Road Initiative. By linking Chongqing to Qinzhou Port in Beibuwan and Southeast Asia, this route enhances connectivity both within Western China, as well as between Western China and the rest of the world. Transport time between Southeast Asia and Western China will be drastically reduced from three weeks to one. This is made possible through the improvement of traditional multi-modal connectivity offered by air, land, sea and river links, as well as the integration of modern dimensions of connectivity such as data, talent, technology and finance.

15. Engineering breakthroughs and the development of advanced materials will also radically transform ship applications and shipbuilding, down to the composition of individual vessel parts. Remotely operated commercial vessels, corrosion protection using graphene, and coats of paint that self-clean and self-repair, are already technologies of the present.   These have implications beyond the firm level – for example, changes to ship sizes will also impact the efficiency of ports and hubs.   

Climate Change

16. Finally, the fourth driving force that we have to consider is climate change. As the world fights to forestall global warming, rules, such as those to reduce greenhouse gas emissions will have a significant impact on shipping. Investments in innovation will be essential to get ahead – and stay ahead – of the shifting regulatory landscape. 

17. Retreating Arctic ice would open up new commercial shipping routes between Asia and Europe. Today, it is already possible to traverse the Northern Sea Route without an icebreaker. The opening up of the high Arctic all year round could shave 30 per cent off travel time between the two regions. The ensuing diversion of trade away from the conventional Suez-Malacca route could upend the maritime economic ecosystem in the region.  

How to Position Singapore?

18. As the shipping industry redesigns its business models for the 21st century, Singapore must also rethink our Maritime strategy. Our continued status as a Global Hub Port and International Maritime Centre will depend on how well we can navigate the challenges and opportunities that come to fore with these driving forces. 

We don’t wait for trade to come to us or through us

19. Geography is not destiny. It can neither prescribe our future, nor promise our success. Our answer to the driving forces of demographics and climate change must be to go to where trade flows will be. 

20. We have and will continue to establish linkages with key markets. The CPTPP and our ASEAN agreements and initiatives allow Singapore-based businesses to plug into the growth of the region. For instance, once the EU-Singapore Free Trade Agreement comes into force, qualifying exports out of Singapore will benefit from a network of 25 trade agreements with 64 trading partners. Maritime businesses can look forward to privileged access to even more markets through upcoming FTAs like RCEP and MERCOSUR. 

21. We are involved even in the Arctic, despite it being some 7,000 kilometres away. Singapore is an observer in the Arctic Council, and has provided support for the region, such as through the construction of icebreakers. 

22. Data will be an essential element of the Singapore Platform, which will be open and connected, as opposed to balkanized. This is so that all can participate in global connectivity. The ASEAN Single Window which is now live for Indonesia, Malaysia, Singapore, Thailand and Vietnam, allows traders to benefit from expedited cargo clearance and reduced paperwork. At the same time, Singapore’s Networked Trade Platform brings together government certification and third-party commercial services onto a single digital platform. By digitalising the paper trail and making data analytics tools readily available, we help traders leverage technology to transform their businesses. 

23. Beyond strengthening our existing competitive advantages, we must also seize new opportunities.  As more and more companies and countries share platforms to enhance B-to-B and B-to-G operations, we will reap greater efficiencies in time and cost.  The Networked Trade Platform and Calista are such examples.  Regardless of whether the trade physically flows to or flows through Singapore, they can all benefit from the network efficiencies by trading on this Singapore platform.

Trade flows must not be in isolation

24. To truly succeed as a Maritime Hub, we must see physical trade not in isolation; but as part of a multifaceted connectivity that includes data, talent, technology and finance flows. Our selling point has to go beyond our geographical location and our reputation as a “catch-up port”.

25. This means broadening and deepening our maritime service offerings by strengthening complementary adjacent sectors such as finance, insurance, commodity trading and logistics. Earlier this year, we launched the SWRIC (Singapore War Risks Insurance Conditions) to enhance war risk insurance cover for ships, including those not registered in Singapore. I am also happy to welcome new P&I (Protection and Indemnity) clubs into Singapore – West of England, Steamship Mutual and Britannia.

26. Training initiatives like MPA’s Maritime Cluster Fund and new education programmes like SMU’s Maritime Business Operations Track help to nurture a pipeline of Singapore maritime experts to support evolving industry needs. 

27. To grow alongside shipping lines and alliances, we will boost our port capacity and enhance efficiencies. The future Tuas Terminal will have a capacity of up to 65 million TEUs (twenty-foot equivalent units). It will be equipped with higher levels of automation – PSA is already testing automated guided vehicles to transport containers between quayside and container yards 24/7.  

Support for an open rules-based global trading order

28. Finally, we must defend the open rules-based global trading order. The multilateral trading system has underpinned global economic growth and development for the past few decades. It provides predictability and stability through a set of rules agreed to by all 164 WTO Members. 

29. We know that the system is not perfect. But we must build on the foundation that has enabled countries to prosper and update it for our future needs. For example, rules will need to be updated for relevance in the new economy consisting of unparalleled data, digital and financial flows.  We must continue to work with like-minded partners to resist the fragmentation of the world order and uphold established rules of law. Our goal has to be to promote a predictable pro-business and open environment for all countries. 

Conclusion 

30. There is a saying among seafarers – “One ship sails east and another west, by the same winds that blow. It is the set of the sails–and not the gales–that tells the way we go”. In many ways, this saying reflects our belief that Singapore is defined not by our challenges, but by our responses.

a. We understood that our domestic market is small. In terms of population size, Singapore makes up less than one percent of ASEAN. Trade is our lifeline. So we work with like-minded partners, sign FTAs and diversify our sources, and that has made us resilient in a time of rising protectionism.

b. We understood that our only resource is our people. So we developed a value proposition based not on the richness of our lands, but the ingenuity of our people. Services and technology became our Maritime comparative advantage.

c. We understood the vagaries of global trade flows. So we reimagined what it means to be a Maritime City of Tomorrow. Not a localised port operator, but a global Maritime platform that transcends our geography. 

31. In 1969, when no container ship sailed through the region, Singapore boldly raced to build Southeast Asia’s first container terminal. Amidst global uncertainties, the true measure of our strength will once again be how we rise to meet the challenges and opportunities of tomorrow. 

32. Thank you very much.