SPEECH BY MR KHAW BOON WAN, COORDINATING MINISTER FOR INFRASTRUCTURE AND MINISTER FOR TRANSPORT, AT THE SINGAPORE MARITIME FOUNDATION'S NEW YEAR COCKTAIL RECEPTION 2016, 13 JANUARY 2016, 7:45PM AT PARKROYAL ON PICKERING

Mr Michael Chia
Outgoing Chairman, Singapore Maritime Foundation (SMF),
Mr Andreas Sohmen-Pao
Incoming Chairman, SMF
Friends of the Maritime Community,

Ladies and Gentlemen,


A very good evening. Let me start off by wishing everyone a Happy New Year!

1. I would also take this opportunity to extend my thanks to all of you for your unwavering support. Your commitment and contributions have enabled us to fly the Singapore flag high in maritime circles.


Looking Back at 2015

2. For many shipping companies, 2015 was yet another challenging year. Demand for shipping remained weak due to sluggish trade growth. Coupled with an oversupply in tonnage, freight rates have stayed low.

3. The Port of Singapore put in a mixed performance. Our advance estimates show that vessel arrival tonnage increased by 5.6 per cent. The volume of bunkers sold increased by 6.5 per cent, making us the worlds top bunkering port for another consecutive year. However, our container throughput contracted by 8.7 per cent. This was largely caused by the overall slump in Asia-Europe volumes, and compounded by developments such as the rebalancing of volumes across alliances, and an increase in direct sailings due to lower bunker prices.

4. The challenging environment has spurred many companies to find ways to remain competitive and put themselves in a better position to seize opportunities when the tide turns. For instance, we have seen a wave of consolidations such as the merger of China Shipping (Group) Company and China Ocean Shipping (Group) Company (COSCO), and of course, closer to home, the proposed acquisition of Neptune Orient Lines (NOL) by CMA CGM. This trend will shake up alliances as well. I hope that these consolidated entities and alliances will continue to support Maritime Singapore. In this respect, I welcome CMA CGM's plans to establish its regional head office in Singapore and increase its volumes at our port.


Commitment to Growing Maritime Singapore


5. So even as we celebrated SG50, 2015 was a reminder that we cannot take our past success, in this case of Maritime Singapore, for granted.

6. To strengthen our position as a global hub port and help our container line partners through these challenging times, the Maritime and Port Authority of Singapore (MPA) and PSA Corporation Limited have proactively worked on a suite of help measures.

7. MPA will grant an additional 10 per cent concession on port dues for container vessels calling at Singapore, starting from 15 January. This will be on top of the 20 per cent port dues concession first introduced in 1996, as well as further concessions such as those available under the Green Port programme. In all, these concessions are expected to amount to savings of about $17 million annually for container lines. Perhaps a modest sum, but it is another reflection of the Singapore Government's consistent commitment to stand with and help our partners through challenging times. MPA will release more details later this evening.


8. On PSA's part, I am told that they are putting in significantly more resources to help their customers through this period, and have been proactively engaging them on this. They are working with their customers to enhance vessel productivity at the port. They are also working alongside the container lines on their network planning activities such as service deployments and phasing in and out of vessels, with the aim of lowering their operational costs. In addition, I understand that they are actively engaging container lines which wish to establish a long-term presence in Singapore.

9. This suite of measures complements existing initiatives to boost the competitiveness of our port. For instance, MPA will press ahead in its collaboration with PSA to further raise the efficiency of our port operations by investing in automation and other new technologies.

10. We will continue to keep working on the long-term development of Maritime Singapore. In 2015, despite the challenging conditions, we managed to attract a diverse range of players and enhance the breadth and depth of our maritime services. Amongst others, we welcomed insurance players such as The Standard Syndicate Services Asia Pte. Ltd and Antares Underwriting Asia Pte. Limited, making Singapore home to the largest Lloyd's platform outside of London, with over 380 staff across 20 companies.


11. To further strengthen Singapore's position as an international maritime centre, MPA will develop a manpower plan for the Sea Transport Sector under the SkillsFuture framework. Developed in collaboration with industry partners, unions and educational institutions, this plan will map out ways to deepen the skills of our Singaporean core and broaden their career advancement pathways. I am happy that three new SkillsFuture Earn and Learn programmes for the maritime sector will be rolled out by June this year.


Conclusion


12. Ladies and gentlemen, I am confident that the tripartite partnership forged over many years between the Government, industry and unions will see us emerge stronger from the current storm. Let us continue to sail the waters together, and on the Government's part, let me give you the assurance that we will remain sensitive to your needs and continue to be a reliable partner through good and bad weather.


13. I wish you all a happy and prosperous new year, and have a great evening.