Speech by Minister Chan Chun Sing at Toll City Grand Opening Ceremony

SPEECH BY MR CHAN CHUN SING, MINISTER FOR TRADE AND INDUSTRY, AT TOLL CITY GRAND OPENING CEREMONY, ON 18 JUL 2018, 11AM

Distinguished Guests,

Ladies and Gentlemen,

Thank you, Mr. Masatsugu Nagato, for your kind words about the investment climate in Singapore. I want to assure you that we are not complacent. We have achieved much, but we have every reason to work hard to make sure that Singapore continues to be a good investment location for everyone across the world. I must assure you that the investment is in good hands, not just because of the overall economic climate in Singapore, but because we have a good team of people led by your CEO Vincent Phang and his team.

I would like to congratulate Toll on what you have achieved today, together with ST Logistics and Japan Post. Today, as we walk around the facility, we can see a very efficient warehouse and logistics system. However, this is but just the surface level. What you see here and what is being done here actually takes up only 40 per cent of the space that it used to in the past. The productivity of a warehouse like this has increased by about 50%.

There are two deeper levels of accomplishments that this facility can bring.

This facility, by itself, can only achieve that much. However, the facility is part of the entire Singapore ecosystem making sure that our logistics and supply chains remain robust, resilient, secure and efficient from peace time to war time. What is not seen is the collaboration that form the entire ecosystem.

The next level of sophistication that is perhaps not seen when we visit the warehouse is that this is an important node in the entire global logistics network. We have every desire for Singapore to be an important, if not a key player, in the global supply chain.  

I know that many people are worried about e-commerce because consumption and production patterns are changing. But, in Singapore, we believe that aside from music, books and maybe a few other things, you can have all the e-commerce in the world but you cannot “e-consume” it. The last mile fulfilment is still critical. In fact, the more we push the frontiers of e-commerce, the more important our ability to fulfil the orders in a timely, efficient and cost-effective manner.   

In the past, the concept of a good warehouse might be a huge space holding a lot of things. Today, the efficiency of a warehouse Is not measured by how many things it can store. The efficiency of our entire logistics chain is determined by how fast we turn over the items in the store. In fact, I should be most impressed if I were to see minimal items on the warehouse shelves, because that means time and money are not being wasted.

Having said that, as we celebrate the accomplishment of ST Logistics, Japan Post and Toll Group, I would say that there are three big challenges that we, together as the entire Singapore logistics system, can overcome.

First, I would encourage all the logistics players and supply chain players – both as competitors and collaborators – to continue innovating. What we have today – automated vehicles picking items from the shelves and loading them onto the trucks – is just one part of our innovation in the entire supply chain.

Our dream is that we are able to use our logistics assets and systems much more efficiently. I have a dream whereby all the things in the warehouse are organised overnight in the dark – picked, packed and delivered in the night to all the destinations, without holding up the traffic or fighting with the daytime logistics flow. That is how smart urban cities should look like. 

This is the dream that we have and this is why EDB will lead the effort to work with all logistics players to realise this dream.

What we can achieve in Singapore can even be a model and a testbed for many other cities around the world, particularly in Asia. China alone is rapidly urbanising at the rate of one additional percent of the population moving into the urban cities every year. One percent of China’s population alone is the Tianjin city equivalent of 13 million people and that is just in China alone.

The need for efficient, timely urban logistics must not be underestimated as we progress into the future. This is why in Singapore, we are going to testbed new concepts in our urban logistics solutions for ourselves and we want to build this into a key competitive branch.

At a higher level, we are challenging ourselves to look at how we distribute, plan and organise our entire logistics systems across the island. 

Today, a typical item that enters Singapore, either from the port, the airport, or the causeway, would probably have zipped around the island a few times before it finally reaches the hands of the final consumers. This is highly inefficient, highly unproductive and a waste of time and money.

In the next step of our urban renewal and redesign by URA, JTC and many other agencies, it is important that we find the most efficient way for any item to enter Singapore, go to the most efficient distribution centre and have it distributed in the last mile. This is the challenge of urban planning and is part and parcel of the entire logistics system. In order to do this, we encourage all the players here to not just compete, but collaborate. 

In order for us to plan the new generation of logistics systems across our entire island, we need data. This is why EDB, together with our universities and many other agencies, are putting together the data for us to design the new generation of urban logistics systems. The same concept can also subsequently be applied across other cities as well. 

Last but not least, all these can only be possible if we train a new generation of supply chain specialists. Here, I want to credit the efforts of ST Logistics and Toll for taking the lead in this. 

There are two aspects to training the leadership of the new generation of supply chain logistics – (1) These are the people who are doing research in Republic Polytechnic and universities who are helping us to develop command and control systems to optimise our logistics flows, (2) It is also about freeing up the workers. Yesterday, the workers are depending on their muscles to pull items out of the shelves. Today, they are using technology and information to make their jobs much more efficient.

And this is where I would like to thank Vincent and team for taking the lead, because they are the ones spearheading the formation of the Logistics union to bring together the logistics practitioners to help upgrade their skills. For those who are not familiar with Singapore’s tripartite system, it has always been our secret ingredient. 

All the great plans that we have can only come about if the quality of our people improve. When there is greater research and innovation, there will be greater breakthroughs in concepts. Most importantly, the skills of people must also evolve. If we can continue to work together in a tripartite manner, together with the researchers, we can be confident that – some years down the road – we can see fundamentally different urban logistics solutions, not just for Singapore but for other cities too. If we can do that, then we can truly anchor ourselves as a key node in the global logistics supply chain.

And this is why the partnership between Toll and ST Logistics is so important. ST Logistics, which grew from a home-grown company focusing very much on domestic challenges, can now combine the strengths of Toll, which has a global footprint.

For us today, logistics is a global supply chain that we want to be part of. This is also why supply chain is under one of the 23 Industry Transformation Maps (ITMs) that we have set for ourselves to develop and execute – and execute well – in the next few years. This can be a competitive advantage for Singapore. We can turn our challenges and constraints into opportunities.

On that note, congratulations to Vincent and team and whole of ST Logistics who have worked so hard behind the scenes, as well as Japan Post and Toll for the confidence in us. Today is the start of a new journey for us to work together, not just to improve the operations and efficiency of warehouses, but also to develop the entire logistics ecosystem to deliver new generation of urban logistics in Singapore and all over the world. I wish you all the best.

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