24 April 2012

Mr Lui Tuck Yew
Minister for Transport and Second Minister for Foreign Affairs,

Mr Yudhisthir Khatau
President, Baltic and International Maritime Council (BIMCO),

Ladies and gentlemen,

1. Good morning to all of you, and a warm welcome to Singapore for our overseas visitors. We are pleased that BIMCO is holding its Annual General Meeting in Singapore this year, in conjunction with the Singapore Maritime Week.

2. BIMCO, as a maritime thought leader, has played an important role in inspiring ideas to meet the challenges facing the international maritime community. Your Annual General Meetings from now on will and have consistently provided the industry with valuable insights on key maritime issues and trends.

Challenges in the Maritime Industry

3. This meeting is particularly important because the maritime industry is facing severe challenges. Indeed, the very theme of your meeting - Survival through Innovation suggests this.

4. The last few years have been exceptionally volatile and the outlook for global trade remains uncertain. This uncertainty stems from the economic troubles in OECD countries as well as an expected slowdown in emerging markets like China. At the same time, fuel prices are rising and financing has tightened. The over-supply of tonnage looks set to worsen as more new-builds ordered before the last global financial crisis are now coming on-stream. Compounding these difficult market conditions is the global shortage of maritime manpower and an increasing attention to the environmental impact of shipping.

5. In this challenging climate, the theme for today's conference, is both timely and highly relevant. Indeed, innovation is the only way for the maritime industry to overcome the key challenges and meet the increasing demands for greater efficiency, safety and environmental sustainability.

The Maritime Industry's Innovative Spirit

6. Throughout history, innovation has played a key part in the maritime industry's development, often introducing paradigm shifts. During the Industrial Revolution in the 19th century, the industry underwent a revolution when wind-powered wooden ships were replaced by larger steam-powered steel ones that could carry more goods over longer distances. The industry also transformed the nature of freight transport when it adapted the concept of containerization to shipping some 50 years ago.

7. More recently, the maritime industry has once again demonstrated this spirit of innovation with new merchant ship designs that can achieve greater economies of scale and fuel efficiency such as the Maersk "Triple-E" class 18,000 TEU container ships. Some companies are also exploring the use of alternative fuels like LNG to power their ships. On the landward side, we see ports making greater use of IT, and technology with automated guided vehicles and remote-controlled cranes.

8. But innovation is not limited to technological advances. It is also about changing the way we do business. Service innovation is another way to build up the industry's resilience, especially in the current difficult period. Some shipping lines, for instance, have developed new service offerings such as daily sailings on the Asia-Europe trade route. Others are finding new ways to stay lean by forging new alliances to consolidate shipping routes.

Nurturing an Innovative Culture

9. From these examples, we can see that the spirit of innovation remains strong in the maritime industry. However, it is important that the industry puts in place a conducive environment to nurture this culture of innovation. As a service industry, innovation must be a priority across all maritime enterprises from senior management to entry-level employees.

10. On our part, the Singapore Government remains committed to fostering an innovative culture within our maritime cluster as part of our efforts to develop Singapore into a leading International Maritime Centre. We do so through a three-pronged approach: First, we invest in maritime R&D infrastructure; second, we formulate pro-innovation policies to meet changing business needs; and third, we develop maritime talent to drive innovation across industry.

Investing in R&D Infrastructure

11. Let me start with R&D infrastructure. Every good idea needs an environment to incubate, test-bed and develop. As such, the Maritime and Port Authority of Singapore (MPA) has been working closely with our local Institutes of Higher Learning (IHLs) to build up maritime R&D infrastructure that can help the industry develop nascent ideas into concrete solutions. Today, our maritime research centres are engaged in a wide range of research from engineering design of marine and offshore technology to optimization of port operations and IT integration. For example, a group of researchers from the Nanyang Technological University (NTU) developed a software tool that can simulate almost all aspects of port operations from vessel berthing to cargo handling. The MPA has found this tool useful for its port planning needs and several port operators and shipping lines have similarly used this tool for their capacity studies .

12. To enhance maritime R&D in Singapore, we established the Singapore Maritime Institute (SMI) in 2010. This Institute optimizes the R&D capabilities across our maritime research centres and ensures that their work remains relevant to industry needs. As part of a Whole-of-Government approach, the MPA has committed up to S$200 million in funding for the SMI; and this will be supplemented by S$150 million of funding from the Agency of Science, Technology and Research (A*STAR) and the Economic Development Board (EDB). As one of its first milestones, the SMI, in collaboration with the MPA, will be launching the "Next Generation Container Port Challenge" this Friday to seek radical new ideas for the design and operations of future container ports.

Developing Pro-Innovation Policies

13. Our second prong is to develop pro-innovation policies and schemes. We recognize that innovation and R&D require significant investment but with no guarantee of success. While shipping companies are focused on their current bottom lines, it is also important that they continue to make long-term investments in R&D so as to meet future challenges.

14. To support maritime R&D efforts, the MPA has set up a S$100 million Maritime Innovation and Technology Fund (MINT Fund) to provide co-funding support for R&D projects and test-bedding activities. One successful project supported by the MINT Fund is the development of a "crystallization" technology that can convert maritime and industrial waste products into environmentally-safe construction materials. Jointly developed by MPA and NTU, this innovation has won several awards in the region. In fact, a recycling plant is currently being built in Singapore to commercialise this technology . The MINT Fund also supports R&D in port technology, clean energy and fuel cell research.

15. In recent years, an area that is rapidly gaining attention and where there is a strong impetus for innovation is environmental sustainability. Shipowners are increasingly looking towards green technology to not only reduce their emissions and improve efficiencies, but also to develop a green branding as a competitive advantage. At the international level, the IMO has made significant progress in curbing greenhouse gas emissions from shipping with its adoption of global ship energy efficiency measures like the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP) last year. The EEDI standards will spur ship designers and builders to focus on developing more efficient ships for the future.

16. On our part, the Singapore Government is committed to supporting the industry's drive towards environmental sustainability. Last year, the MPA launched the S$100 million Maritime Singapore Green Initiative to encourage greater innovation in clean and green shipping. Under this Initiative, maritime companies can receive co-funding support for R&D and adoption of green technologies. Ship owners can also enjoy concessions on port dues if they burn cleaner fuel in port and lower registration fees if their Singapore-flagged ships exceed the IMO's EEDI requirements. I am glad to hear that 27 maritime organisations have signed the Maritime Singapore Green Pledge to commit their support for our Green Initiative, and I look forward to more companies coming onboard.

Developing Maritime Talent

17. Our third and most important prong is to develop a core of local talent who can spur innovation and support the future growth of our maritime industry. To ensure a steady pipeline of talent, we have worked with our IHLs to launch several maritime-related degree and diploma courses.

18. Besides attracting good students, we also recognize that those who are already in the industry must continuously enhance their knowledge and deepen their skills. To support their efforts, the MPA works closely with industry partners like BIMCO to bring in new training opportunities. For example, BIMCO conducted its Asia Shipping School in Singapore last month. This one-week residential course, modeled after the renowned BIMCO Summer School in Copenhagen, provided some 30 participants from 6 countries with an in-depth knowledge of the shipping business. BIMCO also regularly organizes Masterclass Workshops in Singapore on key aspects of maritime commerce. These initiatives not only help to grow a quality maritime workforce in Singapore but they also support a learning maritime community where innovative ideas can thrive.

Conclusion

19. I believe the call for innovation resonates across the maritime industry. I am confident that with the strong partnership between the Government and the industry, we can chart a clear passage through the rough waters and emerge as a more resilient maritime community. Then, the industry will be poised to seize the opportunities that the tide of recovery will bring.

20. On this note, let me wish you a fruitful conference.