Oral reply to PQ on sea freight costs

Question

Mr Saktiandi Supaat: To ask the Minister for Trade and Industry as sea freight costs are rising around the world (a) how will this affect the prices of exports to Singapore; (b) what impact will this have on our supply chains; and (c) whether the Government will help to mitigate the increased costs by reviewing port charges.

Oral Answer (to be attributed to Minister of State for Trade and Industry, Ms Low Yen Ling)

1. Sea freight charges have been rising due to the confluence of factors globally, including the COVID-19 pandemic, reduced vessel capacity, imbalance in the supply of containers and volatility in consumer demand. In our engagement with businesses, we understand that some have absorbed the higher freight costs in the near term, while others are considering passing on the costs.

2. For supply chain resilience, we have adopted a multi-pronged strategy involving import diversification, local production and stockpiling. Import diversification allows us to ensure a continuous supply of goods at competitive prices should any of the sources be disrupted. We have also been working with local companies to strengthen their business continuity plans to better cope with possible supply chain disruptions.

3. Specific to port charges, ships calling at Singapore pay port charges to MPA and to terminal operators for port-related services, such as vessel traffic management and cargo handling. However, Singapore’s port charges, which have remained unchanged during this period, are unlikely to impact sea freight charges, as these are set by shipping lines based on market supply and demand. PSA has also worked with shipping lines and businesses to manage possible shipping delays by better anticipating and minimising congestion at the port.