2. Speeches
Speech by SMS Koh Poh Koon at the Singapore Logistics Forum 2018
3 October 2018
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SPEECH BY DR KOH POH KOON, SENIOR MINISTER OF STATE, MINISTRY OF TRADE AND INDUSTRY AT THE SINGAPORE LOGISTICS FORUM 2018, 3 October 2018, 9.30 AM, at ENTERPRISE SINGAPORE, BUGIS JUNCTION OFFICE TOWER
Mr Tan Puay Hin, Chief Executive, Singapore Logistics Association,
Mr Ted Tan, Deputy CEO, Enterprise Singapore,
Distinguished Guests,
Ladies and Gentlemen,
1. I am pleased to join you this morning at the Singapore Logistics Forum 2018, and to see such a big turnout of members of the logistics sector.
2. The logistics sector forms the backbone of our economy and contributes to our quality of life, by ensuring that goods move from production and distribution sites to businesses, households and consumers in a reliable and efficient manner.
In 2017, the logistics industry contributed 7.2% of our GDP and registered year-on-year growth of 4.8%. It also employed more than 84,000 workers, an increase of 1.5% over the previous year.
3. There is still plenty of room for further growth. To do this, our companies must be able to exploit the immense potential of the region unlock opportunities through technology and innovation, and build a capable team to make these possibilities come true. In other words, by internationalising, innovating and investing in talent.
Internationalise: Companies can leverage digital connectivity to seize global opportunities
4. First, in the area of internationalisation, an increasingly important dimension needed to support international expansion is digital connectivity. Our aim is for Singapore to become a key node in the global supply chain.
Through digital channels, our companies can transcend the limitations of size and geography and connect with partners and customers globally. Many companies have made good progress on this front.
5. One such company is local freight forwarding company Alliance 21 which launched its online freight and fulfilment portal ALEX.world last year with the support of then-SPRING Singapore. ALEX, which stands for Alliance21 Exchange, brings together Alliance 21’s global network of partner agents on a single digital platform, allowing users to easily obtain quotes and make bookings for their freight shipments, and subsequently track the shipments from any web-based device. ALEX has enabled Alliance 21 to compete with other larger multi-national third-party logistics (3PL) companies, thus transforming the company from a specialist logistics service provider to a market leader in logistics innovation.
6. I am pleased to note that China-based Zall Group, Global eTrade Services (GeTS) and Singapore Exchange (SGX) recently entered into a joint venture to establish the Commodities Intelligence Centre (CIC) in Singapore. The CIC is the first global B2B commodity e-trading platform in Singapore, and today, our logistics players, namely PIL Logistics, Warehouse Logistics Net Asia (WLNA) and YCH Group, will be signing an MOU with the CIC, GeTS and Zallsoon Information Technology (Wuhan Co. Ltd) to enhance strategic collaboration in supply chain and logistics. This will enable local logistics players to plug into digital trade and capture value from cross-border flows and supply chain activities such as shipping, freight forwarding, and warehousing, even if they take place outside Singapore.
Innovate: New technologies and business models can help companies raise productivity and sharpen competitive advantage
7. Besides internationalisation, another key ingredient for growth is innovation. Technological disruption and new business models are changing the landscape for logistics companies. Autonomous and electric vehicles will change the way goods are transported, while blockchain technology has the potential to transform various processes from warehousing to delivery and payment, to create more robust and transparent supply chains. Companies that harness new technologies and ideas will be able to compete more effectively not just in Singapore, but also on the global stage.
8. For instance, companies can reap time and cost savings by leveraging technology to speed up or replace manual operations. Under an initiative supported by Enterprise Singapore, SkillsFuture Singapore and the Centre of Innovation for Supply Chain Management at Republic Polytechnic (COI-SCM@RP), companies such as UT-Ways and Shalom Movers pioneered the use of Robotic Process Automation (RPA) for freight information submission and retrieval. The adoption of RPA has benefited UT-Ways, which reported time savings of 67% per airway bill submitted.
9. Innovation is often sparked by the cross-fertilisation of ideas and capabilities. This is why we are working to foster an ecosystem that is conducive to collaboration and experimentation. I am happy that Enterprise Singapore has formed a partnership with PortXL, a global maritime accelerator that was first established in Rotterdam. PortXL will help catalyse co-innovation in the maritime and logistics sectors by enabling local companies to pilot new solutions, secure business connections and access a global network of mentors, experts and partners.
Invest in Talent: Companies can tap on initiatives to support talent attraction and development
10. Last but not least, internationalisation and innovation efforts have to be supported by a highly-skilled workforce. To this end, we have put in place several programmes to attract and develop talent for the logistics sector.
11. An example is the Adapt and Grow Professional Conversion Programme (PCP), for South East Asia Ready Talent for Logistics, co-developed by Enterprise Singapore and Workforce Singapore. The PCP has enabled interested mid-career professionals from other sectors to join the growing logistics industry.
12. One such participant is Mr Vincent Chan, who is in his 40s and used to be an operations manager handling local supply chain logistics for wine, beer and spirits. OV Logistics saw his potential and his experience in supply chain management, and decided to hire him as Deputy General Manager in Operations through the PCP, so that he was able to gain new insights and deeper knowledge of regional logistics markets. It also equipped him with skills to manage and oversee operations in regional markets. Today, he is based in Myanmar and managing contract logistics business.
13. Supporting these efforts, Republic Polytechnic, working closely with the Logistics Alliance, Enterprise Singapore and SkillsFuture Singapore, will be rolling out a series of bite-sized industry-relevant modules under the SkillsFuture Series for Supply Chain Transformation.
14. Covering emerging areas such as Robotic Process Automation (goRPA) and Smart Logistics, the SkillsFuture Series will help our logistics workforce continually advance their skills to prepare for the future of logistics.
15. To strengthen management capabilities, The Logistics Institute-Asia Pacific is working with C-suite executives on a THINK Executive Programme in Logistics and Supply Chain Innovation. Curated jointly with the Logistics Alliance, this will enable business leaders to learn from industry experts, share best practices and gain insights into transformational developments in the logistics industry.
16. I encourage our logistics companies to tap on these and other available initiatives to invest in developing yourselves and your employees.
Partnerships and collaboration are central to the Logistics Industry Transformation Map
17. I have outlined the steps which companies can take to internationalise, innovate and invest in talent development. Many of you would be aware that these are key strategies under the Logistics Industry Transformation Map (ITM), which articulates Singapore’s vision to be a globally leading logistics hub, underpinned by operations excellence, innovation and a strong skilled workforce.
18. I am heartened that since the launch of the ITM in November 2016, many stakeholders and businesses have come on board and are working together to uplift the industry. Partnerships with Trade Associations and Chambers (TACs), Unions, Institutes of Higher Learning and other industry players are central to the ITM, and have been instrumental in increasing the effectiveness, scale and pace of change.
19. In the last two years, close to 500 local logistics companies have benefitted through more than 750 projects supported by Enterprise Singapore and the industry associations. In particular, it is encouraging that the number of logistics companies participating in industry association-led initiatives has increased by about 60% from 2017 to 2018.
20. Building on this momentum, I am very pleased to announce that the Singapore Logistics Association (SLA), together with members of the Logistics Alliance, will spearhead a new three-year roadmap focussed on technology adoption and exploring opportunities in overseas markets. Supported under Enterprise Singapore’s Local Enterprise and Association Development (LEAD) Programme, the roadmap is expected to benefit over 700 companies.
21. Our unions also play an important role. In April this year, the Labour Movement formed a new union for the logistics sector called the Supply Chain Employees’ Union (SCEU). Why did we form this union? Let me talk about the process of transformation. First, it must start with the bosses. The bosses must want change. With that, the workers will have a focus on how they can change and they can match their skillsets with the direction of the company. But the workers must also want change. This is where you may hit a bottleneck. How do you get your workers to buy into the transformation. The workers want a decent day’s wages but they are not involved in the strategic discussion. This is where SCEU can bring together workers from the same sector to facilitate mindset change. Workers telling workers they need to change will make the bosses’ job easier. Let me encourage all the employers here to have your workers be part of the SCEU so that we now have a platform to galvanise change. SCEU will help workers to understand what transformation means and how it impacts them. The Union will also work with key stakeholders to enhance jobs, skills and wages in the logistics sector.
Conclusion
22. In closing, let me reiterate the Government’s commitment to continue working with industry partners to help our logistics companies deepen their capabilities, scale up and internationalise. Transformation is a long-term undertaking. With the strong tripartite relationship that we have, we can build our institutional systems that will allow us to continue growing for decades to come.
23. On this note, I wish all of you a fruitful day ahead of discussions ahead.
24. Thank you.