Mr S Iswaran at the Singapore Logistics Association’s Dinner & Dance 2008

Speech by Mr S. Iswaran, Senior Minister of State for Trade and Industry, at the Singapore Logistics Association’s Dinner & Dance 2008 on 25 October 2008, 8.10pm, Orchard Hotel Singapore

Mr Quek Keng Liang, Chairman, Singapore Logistics Association,

Distinguished Guests,

Ladies and Gentlemen

Good Evening

I am happy to join you this evening to celebrate the 35th anniversary of the Singapore Logistics Association.

The Global Logistics Industry is evolving rapidly

The global logistics industry has witnessed dynamic market changes over the past few decades. Globalisation, outsourcing and rapid technological advances have transformed the way businesses are conducted. Manufacturers and retailers have embraced a “source anywhere, make anywhere and sell anywhere” concept. As such, the “time to market” factor is now of utmost importance.Logistics companies need to develop extensive supply chains that are integrated. They must possess the ability to handle supply chain complexities and develop effective solutions for their clients. At the same time, logistics companies have to adhere to environmental and supply chain security demands both from regulators and customers.

These complex and stringent demands, however, present new business opportunities for logistics companies. Forward-looking logistics companies now need to move beyond freight, warehousing and transportation to offer excellent supply chain management and specialized logistics with capabilities in the pharmaceuticals, chemicals or perishables sectors.

Singapore’s Logistics Industry is a key enabler of the economy

The logistics industry is critical to the Singapore economy. It not only supports the global trans-shipment of goods, it also strengthens Singapore’s position as a manufacturing and distribution hub. In 2007, this growing sector employed some 180,000 workers and contributed 9.4% to the GDP.

Over the years, Singapore has built up excellent connectivity to global markets and world-class infrastructure. Twenty-one of the top 25 leading 3PL international players such as DHL, UPS, Agility and Schenker have established a strong presence here. Leading manufacturers have also set up their logistics and supply chain management base here because of Singapore’s strengths in logistics, our connectivity and excellent IT infrastructure. In 2007, the World Bank recognized Singapore as the World’s Number One Logistics Hub. Indeed, Singapore has become Asia’s leading hub for integrated logistics and supply chain management.

But, we cannot take our strong fundamentals for granted.The recent global financial crisis has dampened business confidence, consumer spending and international trade. At the same time, higher fuel prices, rental and manpower costs in recent times have squeezed profit margins.

During these challenging times, it is even more critical that our local logistics players build up core and differentiated competencies to offer value add services to international clients. Such services could include specialised handling and storage capabilities, innovative technology deployment, as well as seamless end-to-end solutions.

Upgrading is Key to Strengthening Competitiveness

The public-private partnership between the agencies and industry partners has been valuable in providing feedback on the ground situation and developing strategies to strengthen the overall competitiveness of our logistics industry. SPRING Singapore, through collaborative discussions with the industry, runs the $10 million Logistics Capability Development Programme or CDP to help SMEs develop and strengthen their capabilities across the whole logistics value chain and in supply chain management. To date, the Logistics CDP has facilitated 38 upgrading projects across 45 enterprises. The projects have generated more than $280 million in value-added so far.

SLA has also played an important role in the development of the industry since 1973. In 2007, it embarked on the Local Enterprise & Association Development (LEAD) programme to spearhead the future growth of the industry. I am pleased to hear that SLA is making good progress on the LEAD initiatives. It has successfully operationalised its Training Institute to centralize resources and expand the number of programmes conducted for the industry. To date, the association has trained 172 more participants under the Specialists Training Programme, and recently developed a new courseware on Supply Chain Security. These initiatives will enable SLA to train more professionals to augment the talent pool within the industry.

I urge all industry players to work closely with SLA and take advantage of its LEAD programme and the Logistics CDP, to strengthen your capabilities to meet the needs of the global markets in the years ahead.

Finally, I wish all of you the very best in your business ventures in this challenging and promising industry.

Thank you.