28 June 2018
Ladies and Gentlemen,
1 Thank you all for attending this seminar. Some of you may have taken part in our earlier thematic workshops under the Industry Transformation Map or ITM, while some of you may be here for the first time. Either way, we welcome you to today’s event which aims to share with you the various feedback we have received since we launched the ITM in January this year which will help us refine our strategies going forward.
2 I should qualify that the ITM was only just launched in January, so whatever progress in the last few months should be seen in this context. Some of you may recall that we had even pre-launched our ITM last year just to garner feedback and to bring everyone into this effort at an early stage.
3 Some of you may even recall me saying that the ITM is a dynamic and living roadmap, meaning we will improve upon it as we go along, based on our engagements with the industry, but we will not wait for the perfect roadmap or for that matter, the perfect moment to start work. Work should start even before the ink is dry, which is how we have approached the ITM.
4 This series of workshops also serve an important objective of helping all of us come to terms with the realities confronting our industry, which merit not only an individual response but in many cases, also a collective response. You may recall me saying that unless we can come to terms with the challenges, and mount an effective response, the ITM will just be a paper exercise at best.
Challenges confronting Industry
5 Indeed, the maritime sector faces many challenges, in fact more challenges than the last time we met. Growing trade tensions between US, China and Europe over tariffs and the prospect of a trade war comes at a time when many expected markets to turn around, adding to the current concerns over higher fuel prices, tighter global regulations on shipping like IMO’s low sulphur cap for marine fuels, as well as the disruptive impact of new technologies, all mean greater pressures on the already thin margins in the industry.
6 Within Singapore, land and resource constraints, efforts to reduce our reliance on foreign workers, and the drive towards higher productivity also presents its own set of challenges.
Challenges and Opportunities
7 While some of these challenges are unique to Singapore, we have to be alive to the fact that our strategic environment is fundamentally changing, and changing rapidly. If it gives us any solace, many of the challenges we confront are the same issues that confront other international maritime capitals in the world, from Oslo, London, Hong Kong, Shanghai to Singapore.
8 For example, every port I have visited over the last few years are expanding their capacity, investing in new and better equipment e.g. bigger cranes, automated yard equipment etc, and for the more developed ports, investing in new technologies to make their ports smarter, more intelligent and so on. Through our Port Authorities Roundtable, a Singapore-initiated platform for the exchange of best practices, and rotated among various ports, Rotterdam, Ningbo and the upcoming one next month in the Port of Long Beach, everyone is looking at improving their port facilities, generating greater value add from port activities, from the land that the port sits on, as well as creating ports that are at harmony with their environment and communities given rising standards and growing environmental awareness.
9 Likewise, when we engage the shipping community, both shippers as well as the ancillary service providers, they too are grappling with what the future beholds for their businesses. Shipping companies are trying to avoid being the most commoditized part of the supply chain, having to bear the bulk of the capital investments, but not being able to generate decent returns on their investments. Ancillary service providers from ship agencies, brokers, suppliers etc, are trying to prevent themselves to be disintermediated as markets and supply chains are made more efficient, transparent and open. Meanwhile, new players, from both within and outside of shipping, are sussing out opportunities to deliver the same service at a lower cost.
10 All these developments will have an impact on Singapore, given the many players we have here, as we are a microcosm of global maritime industry. To stay relevant, we need to do a number of things:
a. First and foremost, we cannot be complacent. This you can be assured of because it is not in the DNA of the Singapore government to be complacent. But having said that, we also need to be agile and adept. And here is where we must be prepared to be more open and receptive to new ideas. Not just any idea, but good ideas.
b. Second, we cannot do this alone. I mean “we” as in the MPA or the government. In today’s complex world, collaboration is the way to go, and we see this taking place increasingly across many industries. So we need to form more partnerships and collaboration, not only within the government and agencies, but also with the industry and across industries.
c. Third, given that any transformation is difficult, managing that process of change is just as important as achieving that change. Here is where we need all the relevant stakeholders to come together, namely the industry, unions and government. Having built up the tripartite relationship over the last few decades, it is time we put this to good effect in helping manage, or even better, drive the change.
11 Here is where the ITM provides us with a good platform to put all these ideas into practice.
What the ITM is not...
12 The ITM is not simply about new technologies and how we have to embrace alien sounding things like automation, AI, blockchain and so on. At its heart it is about the things we do on a day to day basis, and whether we can find a better way of doing so, as a basis for more fundamental change. If we just take the current port and activities around the port for example, I am sure we can find many inefficiencies, be it in time wasted, no shows, mismatch in resource allocations, and so on. Simply addressing these inefficiencies will yield great savings in time as well as money. But the tools to help us do this are now available. So I am heartened that PSA, Jurong Port (JP), the ferry launches and bunker industry are all looking at ways to improve efficiencies whether through simple process automation, mobile apps or even use of chat bots. None of these are far flung technologies but have been applied to other more fast moving industries like banking, retail and the sharing economy, which we have become accustomed to, except the maritime sector has been slow to adopt.
13 Next, the ITM is also not about disrupting the industry as we know it. Disruption will come about whether we like it or not, with or without the ITM. We have seen this take place across many sectors of the economy. Malls today find a challenge to attract customers without changing the customer experience. Taxis no longer have the roads to themselves with the advent of Uber and Grab. And hotels have to confront the likes of AirBnB. The reason these models are disruptive is because the industries concerned did not see the writing on the wall. They held on to their traditional business models, thinking they could outlast the change. Unfortunately, this did not happen.
What the ITM is....
14 Now let me highlight what the ITM is about. The ITM seeks to avert the above by providing an environment where transformation can take place across the industry where all the major stakeholders come together to identify the common challenges and find effective ways of dealing with them. We don’t need to have the whole community to come together, which will be practically impossible, but we can start with the communities that are prepared to chart the way forward, be as inclusive in our approach, and bring the rest on board the effort. The four thrusts - innovation, productivity, jobs & skills and internationalization - are sufficiently broad to cover the range of measures required.
15 MPA sees itself playing the role of an enabler, creating an environment that fosters industry collaboration, regulatory sandboxes for the testing of new concepts and solutions, and your partner working with the relevant agencies in transforming your business with the various grants and support schemes we have. For this purpose, we have done a number of things, which you may have read in the media, for example:
- Investing in capacity ahead of demand through our new mega port in Tuas and beyond that, looking at the ecosystem around our port as part of the Western Region redevelopment efforts, not to mention the efforts to attract more maritime players to Singapore and work with them to broaden and deepen their operations in Singapore;
- Providing test bedding opportunities e.g. MPA Living Lab - setting aside sea spaces and anchorage for experimentation e.g. drones and other autonomous systems as well as innovative floating structures. In addition, both PSA and JP also have their own living labs to test port-related initiatives;
- Establishing innovation platforms such as PIER71, our maritime accelerator programme at Block 71 to support start-ups in the maritime space;
- Creating various funding and support schemes such as MCF and MINT Fund for business process improvements, test bedding and early adoption of technologies
- Creating new platforms for industry engagements - during and outside of Singapore Maritime Week which is now a well-established platform, and bringing in other clusters from logistics, commodity trading and e-commerce to promote cross-fertilization of ideas; and
- Creating new opportunities in areas where Singapore has traditional strengths - such as safety, security and environmental sustainability besides more traditional areas as finance, insurance and capital markets to develop new products and solutions.
Way Forward - Towards a Collective Response
16 For the above efforts to work, we will need everyone to play their part. In the next few presentations, you will hear of some of the feedback on the ITM and how we can strengthen it further. Some will relate to what MPA or the government has to do, which we will factor into the refinements to our strategies or initiatives, but others will relate to what the industry can do to either help us or help itself.
17 I hope as we go through these presentations, we will also keep in mind the bigger picture of what we need to do, not only individually, but also as a community. Never forget that the strength of the Singapore Maritime Cluster is its active and cohesive community, of various interest groups and even passionate individuals with their hearts and minds in the right place to make this a stronger cluster.
18 As we embark on the various work streams and efforts, it will be useful to continue to have such dialogues to take stock of where we are, share lessons both successes and failures, and learn and adapt as a community. So expect more forums and workshops in the coming months, some to raise awareness, others to update on ongoing efforts, while others involve embarking on joint industry or tripartite efforts.
19 Last but not least, let’s all keep open minds. Think of all the challenges as opportunities, and think of Singapore as the place where the maritime world connects, where maritime solutions of the future are created, and where the best maritime talent can converge - and as recommended in the IMC 2030 Report, for Singapore to be the preferred hub for connectivity, innovation and talent.
20 I look forward to a fruitful panel discussion.