1. Good morning. First, let me thank DB Schenker for hosting us.
2. Today, we are here to introduce the opportunities in the logistics sector. This sector has been undergoing rapid transformation in the last few years. There are a few reasons for that.
3. The first reason is because there is a reorganisation of the global supply chains. Major companies across the world want to reorganise their supply chains from where they produce, to where they distribute their products, and to where the final markets are. This trend of the global reorganisation of supply chains has been happening even prior to COVID-19, and I would say that COVID-19 has accelerated this trend.
4. The second thing that has impacted this sector has to do with digitalisation. Digitalisation allows us to compete on the basis of the speed and efficiency in which we are able to deliver to customers, compared to previous logistics players which perhaps competed on the basis of price, land and manpower. COVID-19 has brought about an acceleration in these trends. On this basis, the question for us is whether there are good prospects for the logistics sector. In fact, we are very proud to say that we see this as one of the bright sparks in our economy going forward.
5. Why is that so? There are three main reasons why we are becoming an even more important global logistics hub compared to the past. Today, and in the past, people have always been concerned with the efficiency factor.
6. In the Singapore logistics industry, efficiency has become even more important, especially for time-sensitive, high-value products. This is what people are concerned with — the efficiency of the connectivity. There are two layers of efficiency. One has to do with the efficiency of logistics companies and how fast they are able to move the products around accurately and at the lowest cost.
7. There is another part of the efficiency that has to do with the entire integration of their operations to our ports, airports, customs, clearance and facilitation. It is an entire system efficiency that we are looking at. When Singapore competes in this field, it does not just compete on the basis of the efficiency of our companies. It competes on the efficiency of the entire company’s operations, and there are many of these players in Singapore and a growing number of them, together with our ports and airport operations.
8. The second factor has to do with the reliability of our policies. For many of the players in this industry, including Schenker, the ability to fund their investment in a place where there are consistent and coherent policies for the long-term is very important. The ability to find a place where they have a network of free trade agreements that can help to facilitate the movement of their goods at competitive prices is also very important. Hence, this reliability factor has also become much more important during a COVID-19 situation.
9. In the past, this may not be so obvious. However, in a COVID situation where there is a lot of disruption to the supply chains and a lot of manmade policy-induced restrictions to the supply chains, then Singapore's reputation as a trusted partner becomes even more important. In fact, I think Schenker and other companies will be able to share that during this COVID-19 period, our reputation as a reliable partner for the global supply chain has actually been enhanced, and that provides us with more opportunities going forward.
10. We have talked about efficiency and the reliability of the policy posture. The last issue that has also become very important is the resilience of our network. Compared to the past when people focused a lot on efficiency, after COVID-19, people are focusing much more on resilience as well. How do you have system redundancies whereby goods are able to get from point A to point B even amidst the pandemic, or amidst a disruption in various supply chains?
11. Singapore is able to provide this resilience not just at the company level, because of our network. Today in Singapore, if someone wants to ship something through Singapore, and if one part of the network gets disrupted, we can quickly re-channel the network to another part and still provide that continuity in service. These are the factors that make us more competitive through the COVID-19 situation. It has to do with the efficiency of our operations, the reliability of our policies, and also the resilience of our system.
12. These three factors, I believe, will continue to put us in good stead going forward for the logistics sector. From the investments that EDB has been able to bring into Singapore recently, we expect that this sector will continue to grow, not just in terms of value but also in terms of employment opportunities. Over the next five years, we can expect another 1,500 quality jobs being created here in Singapore because of our competitiveness as a logistics hub. Going forward, we will continue to strengthen our hub status in the following ways.
13. Firstly, by making sure that global players like Schenker continue to plant their investments and grow their operations here so that we serve as a hub not just for Singapore and the region, but for global operations.
14. Secondly, we will continue to strengthen our network of free trade agreements to make sure that we provide even more opportunities at more competitive prices for people to use Singapore as a base.
15. Thirdly, we are going to make sure that we continue to improve the efficiency of our systems, employing the latest technology possible for us to turn over the logistics at a much faster rate. In the past, people might visit warehouses and be very impressed with a lot of things in the warehouse. Actually, from our perspective these days, you want to see a relatively empty warehouse because things are moving through at a faster rate. I think that is really what we are striving for rather than to just store things. Actually, you see that more and more of those biopharma products and ICT products, both high-value and time-sensitive products, are coming through Singapore. We will continue to do all this to strengthen our hub status.
16. Today, we are very happy that it is not just that Schenker is growing, but that many of the other logistics players and third-party providers are all growing at the same time. This creates a very healthy ecosystem for us.
17. Thank you.
27 OCT 2020