SINGAPORE - Singapore's continued success as a global maritime and trade hub will depend on how efficiently it can move goods through its port and not just the volume it can handle, said Transport Minister S. Iswaran on Tuesday (Sept 21).
Physical infrastructure remains a major factor, and the upcoming Tuas Mega Port, which will open its first two berths by year end, has been sized to handle both existing cargo flows and new flows that are expected to occur, he said.
But beyond this, there is also a need to reduce frictions through digitalisation and to think hard about sustainability, he told attendees at Sea Asia, a three-day maritime and offshore industry conference that began on Tuesday.
"Whether you are a shipping line or a port operator... we need to squarely address the issue of sustainability because it is not just about costs, it is also going to be about competitiveness going forward."
Speaking to Singapore Maritime Foundation chairman Andreas Sohmen-Pao during a fireside chat, Mr Iswaran said goods still need to flow physically, even if the global supply chain and the way business is conducted have been disrupted by Covid-19.
Initiatives such as digitalOCEANS, an interoperable platform that sets common data standards and allows for cross-border data exchange, have allowed the Maritime and Port Authority of Singapore to create a digital "superstructure" that stitches the physical infrastructure together, he said.
Such digital port initiatives also allow for important and immediate efficiency gains and reductions in carbon emissions, as the ability to exchange information digitally minimises wait time, he added.
Mr Iswaran, who is also Minister-in-charge of Trade Relations, said: "How much can we minimise the frictions that arise from, for example, paper flows - whether it is fraud or whether it is just inefficiencies and inaccuracies?
"We know that there is considerable cost (for) businesses because of that, and when you talk about the shipping value chain, so many parties are involved from start to finish."
The maritime industry also needs to get the ball rolling on sustainable fuels, even though there are still challenges involving cost and availability, the minister said.
Global regulations, not just domestic ones, are key to raising industry standards across the board so that businesses do not feel they are disadvantaged, he added, when asked how the burden of adopting pricier sustainable fuels should be shared.
"It is a global commons challenge and we need a global commons solution," he said. "If the standards apply equally... then the industry will adjust and adapt. But if certain jurisdictions do so and others do not, then it starts to create an unevenness, and then you start to induce gaming behaviour."
This applies also to how carbon emissions are priced or taxed across different jurisdictions, Mr Iswaran added.
While it would be difficult to have all governments in the world harmonise their tax systems, there is a need to ensure that there is a common standard, he said.
Mr Iswaran said governments need to engage industry in consultations and discussions to generate solutions.
Conversely, it is also important that businessmen and business leaders understand that it is a shared responsibility to train workers to adapt to the shifts in trade, digitalisation and decarbonisation, he added.