Capt Francis Koh, President SNI and Organising Chairman of SNI Gala Dinner 2014,
 

Council Members of SNI,
 

Distinguished Guests,
 

Ladies and Gentlemen,
 

Good evening.

 

First allow me to congratulate the Singapore Nautical Institute (SNI) on its 35th Anniversary. For the pioneers of the SNI who are here with us this evening let me also recognise the efforts you have put in, both in your professional life and your contributions to the work of the Institute.

Anniversaries are timely occasions to reflect upon the journey you have taken since your formation in 1979 but more importantly, to think about the future, and what it means for all of us in the maritime community.

The importance of the maritime sector cannot be over-emphasised. Some 80-90% of world trade is still carried by sea and there is no sign of this changing. Indeed, no other mode of international transport provides the same economies of scale as shipping. And no other mode plays such an important link in the global supply chain.

In 2013, world container port throughput reached 602 million TEUs. Worldwide, ships carried more than 11.5 trillion cubic feet of natural gas as LNG - enough to supply the entire US for half a year - to places around the world where gas pipelines are unable to reach.

Yet shipping is taken for granted because much of what is carried is unseen, packed in container boxes, and shipped across the vast oceans away from the public eye.

But the industry as whole stands at an important crossroads as world trade continues on its trajectory of growth, albeit at a slower rate, but with an increasing share of that trade driven by the developing countries. That said, much also hinges upon the recovery of the sluggish European economies that account for a third of world trade and the rebound of the US economy.

Shipping, always a barometer of the economy, itself still faces several challenges. While the worst of the downturn in 2008/9 is over, the industry is still not out of the woods. The maritime industry still faces depressed and volatile freight rates in various segments because of excess capacity generated by the downturn in 2008/9 economic and financial crisis that has also led to tighter credit for new builds. Coupled with high bunker prices until recently - it remains to be seen whether current rates are sustainable - many shipping lines are still struggling to stay in the black.

The last 10 years has also seen the convergence of several developments. Ships are becoming larger, the Maersk Triple-E is a good example, steaming slower, and crews are getting smaller. New mega-alliances such as the 2M and Ocean 3 are also being formed to optimize the capacity of these larger vessels. This in turn is exerting tremendous pressure on ports to upgrade their equipment and enhance their efficiency.

Ports around the world are also expanding, prompted by growing cargo volumes carried on larger ships. While ports in East Asia can handle these larger container ships, ports in the East and Gulf coasts of the US are currently unable to do so. However, the Panama Canal expansion project, slated to be completed by next year, will change this picture. This in turn has triggered port expansion plans in these regions.

Elsewhere in the world, new investments in port infrastructure will be required in many developing countries. The country most active currently is China, which is investing in ports from Africa to Southeast Asia. The project that has attracted the most attention of late is that of a Chinese businessman's plan to build a 173-mile canal across Nicaragua at a cost of US$50 billion at the least.

It remains to be seen whether this will materialize, in the same way that there have been many plans to build a canal across the Isthmus of Kra to bypass the Straits of Malacca and Singapore. Indeed, longer term, we would need to keep an eye out for potential game changers such as new trade routes, particularly the Arctic Routes as climate change reduces the ice cover and makes shipping across the Northern Sea Route possible without ice breaker escorts. The Polar Code will by then be in active use.

But in the nearer to medium-term, growing environmental concerns will weigh heavily on the maritime industry. From 1 Jan 2015, the new 0.1% sulphur limits for fuel used in emission control areas in The English Channel, North Sea as well as North America will kick in. The global limits for sulphur will also be reduced to 0.5% in 2020 depending upon whether a review in 2018 if not earlier, can confirm the availability of such low sulphur fuel.

Besides sulphur limits, the industry is also bracing itself for the implementation of the Ballast Water Management Convention. Singapore has thus far held back our accession given real industry concerns. The recent MEPC meeting has made significant progress in addressing the main sticking points such as revision of the G8 Guidelines, not unduly penalizing those who have installed earlier generation ballast water management systems, and for port states not to unduly detain ships. As with many IMO Conventions, we are unlikely to get a perfect solution before the Convention kicks in, so we should all be prepared for it coming into force in the near future.

Preparing for the Future

In the face of these challenges, Singapore is investing in infrastructure and technology to ensure that our port remains highly efficient and competitive. We have begun preparatory works for a Next Generation, consolidated container terminal at Tuas. When completed, the Tuas Port will be a highly-automated, highly-efficient and sustainable port that meets the future challenges of container shipping.

We are developing our maritime cluster by attracting maritime companies to Singapore. Compared to about 30 groups ten years ago, we now have over 130 international shipping groups covering the container, tanker, bulk shipping and the offshore energy sectors. Today, there are also over 30 law firms with maritime practices, 20 Lloyd's insurance syndicates, more than 25 banks with shipping portfolios and over 30 key shipbroking companies in Singapore.

Given our limited land and manpower resources, our maritime industry must make a major push for productivity-driven growth. In June last year, MPA launched the S$25 million Productivity Programme under the Maritime Cluster Fund to support our maritime industry's productivity efforts.

It is also important to ensure a sustainable pipeline of well-trained and skilled manpower to support Singapore's maritime industry and this includes a pool of seafaring professionals. In recent years, MPA, the Singapore Workforce Development Agency (WDA) and the e2i (Employment and Employability Institute) have collaborated to roll out several initiatives for careers onboard ocean-going vessels and harbour crafts. The Tripartite Maritime Scholarship Scheme (TMSS) Scholarships, offered jointly by MPA, shipping companies, the Singapore Maritime Officers' Union (SMOU) and the Singapore Organisation of Seamen (SOS), are also awarded annually to attract local youths to a seafaring career. In addition, MPA works closely with Institutes of Higher Learning and Training Service providers to ensure that there is a wide range of maritime courses available to local seafarers to upgrade their skills through the Maritime Cluster Fund (Manpower Development).

Singapore's maritime industry is rich in heritage and is a dynamic industry that offers good career prospects. We hope to enhance the public's perception of the maritime industry and to encourage more Singaporeans to take up maritime-related studies and embark on careers in the industry. To this end, MPA will be embarking on a campaign to brand Maritime Singapore next year. More details will be shared in due course.

Ladies and gentlemen, Singapore's success as a premier global hub port and international maritime centre is by no means a coincidence. All of us have played an important role in one way or other to make it happen. I believe the Government, industry and unions remain fully committed to grow Maritime Singapore.

Role of SNI

It is in this context that SNI should assess how it can play a larger role in supporting the growth of Maritime Singapore. But first, let me take this opportunity to commend SNI for its efforts and support. SNI has been a valuable partner to MPA, providing helpful inputs when we draft legislations that potentially impact deck officers.

SNI's active organization and participation in talks and forums has contributed towards improving the knowledge and skill sets of seafaring professionals. These include technical talks on topics such as salvage, the maritime economy, and insurance. SNI spearheaded a Steering Committee looking into the safety and best practices of Ship to Ship Transfer Operations (STS), as well as forums on the topic of STS where stakeholders from the maritime industry gather and discuss on industry practices. MPA officers have recently attended the forum and I am pleased to mention that we received positive feedback on the forum.

Apart from industry engagement, SNI supports the Youth Skipper Flotilla, an interdisciplinary youth yachting uniform organization that integrates curricular activities and subjects for secondary and pre-university students to give cadets a holistic education. SNI also continues to support youths who wish to study in the maritime industry by contributing annually to the Singapore Polytechnic Book Prize.

I believe there is still much that SNI can offer. Let me outline three areas. First, SNI can leverage on its rich expertise and experience to inspire and mentor the next generation of seafarers. This could be done through more networking platforms so that the junior and senior seafarers can interact, as well as support for the mentorship programmes that MPA, SMOU and our IHLs will need for their training programmes. We all know the difference a good mentor makes, just as we remember the teachers in our schools that have made a difference to our lives.

Second, SNI can play a larger role in helping to professionalize the maritime industry, in particular working with MPA, unions and industry partners as part of a tripartite partnership to organise technical workshops and forums to promote knowledge sharing. Likewise, SNI could also link up with professional associations such as the Society of Naval Architects and Marine Engineers, Singapore (SNAMES) to promote more professional exchanges in areas of common interests such as safety of navigation, ship safety, marine technology etc.

Third, SNI can help raise the profile of Maritime Singapore to the rest of the international community by encouraging more cross-exchanges with other institutes. The challenges facing the maritime industry are global in nature and require global solutions. SNI can contribute to the global discussions on many of the issues where Singapore can share its experience. This is one way we can position ourselves as a relevant member of the international maritime community, besides our efforts on the IMO front.

Ladies and Gentlemen,

No one can predict the future. For all of us to stay relevant in this changing world, we must all adapt as the world changes. That's basically how Singapore has survived since independence. We kept ourselves going by our wits, determination and gumption. Having dedicated 35 years of service to Singapore's maritime industry is a great achievement. I wish to thank the SNI and its members for your contributions to Maritime Singapore, and I wish you many more successful years ahead.

Thank you.