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Speech by Senior Minister of State Dr Janil Puthucheary at the Sea Asia Opening Ceremony

09 Apr 2019 Speeches

Excellencies,

Ladies and Gentlemen,

Distinguished guests,

1.     Good morning. To those of you who have come to Singapore for the first time, welcome, and what took you so long? My congratulations to Mr Chris Hayman, Chairman of Seatrade, and Mr Andreas Sohmen-Pao, Chairman of Singapore Maritime Foundation for what I hope will be another successful Sea Asia event, and thank you for your kind words this morning.

2.     As a nation born out of the maritime trade, we know that sea transport is the lifeblood of world trade today and will remain so for the foreseeable future. 90% of global trade is carried by sea and the demand for shipping grows year on year.

3.     Asia continues to grow, and is projected to be one of the strongest growing regions for shipping for the next few years. The projection is more than 6% growth, with China still registering strong growth despite all the things we are reading about and the trade tensions. India’s economy is also poised to pick up and to contribute towards this opportunity for growth.

4.     ASEAN itself – closer to home for us – with a 650-million population is vibrant; with young people, with a growing middle class, a rising consumer demand and also, a young workforce, providing a demographic dividend for many of our ASEAN Member States. It is projected to become the fourth-largest economy in the world by 2030.

5.     But, as has been hinted, it is not going to be business-as-usual for the maritime sector. It can’t be business-as-usual for the maritime sector. We have competition posed by players such as Amazon and Alibaba, and as the opportunities created by increased connectivity, better provisions of computational power, increasing deployment of new business models and algorithmic models. This competition will intensify.

6.     Players with traditional business models may face disruption with the rise of maritime platforms taking advantage of emerging technologies and digitalisation.

7.     As we have heard, tighter environmental regulations will also impact us in a very significant way, impacting our costs as well as operations. From September 2019 onwards, ships will have to install ballast water management systems. On 1 January 2020, ships will have to use compliant low sulphur fuel oil and install equivalent abatement technology such as scrubbers. In the longer-term, measures to achieve maritime greenhouse gas targets are also expected to have cost implications as well.

8.     And the manpower crunch, is also a key factor constraining how we do business going forward. And in particular in Singapore, we are acutely aware of manpower as an issue, as a factor of production that may well, in some circumstances, be zero-sum. That is why we have to find ways to work together – find solutions to these challenges, change these challenges into opportunities and reap potential benefits of shared growth.

9.     I am glad to see that the Sea Asia Conference will dive deep into these issues – capitalising on new areas of growth, looking at more sustainable shipping and capturing the mindshare of talent.

10.    Singapore is acutely aware that facing the world, dealing with the globalised connected world is only possible through significant partnerships with stakeholders. And we too, have to play our part and bring to the table a reasonable share of the burden and the work in partnership with our stakeholders.

New Growth Areas - Digital Connectivity

11.    What are we doing? What are we seeing and what is our response? The growth area: the issues of digitalisation spurring the next wave of growth opportunities. We are already seeing these disruptions through the integration of logistics services, with shipping to provide more holistic, end-to-end services, leveraging emerging technologies such as blockchain. As I do some work in our Smart Nation Digital Government Group, I am aware that some of these technologies are part of a hype cycle. But whatever the name of the technology, it is going to cause a significant change.

12.    What does it mean for us as a maritime community? How can we improve our service offerings in order to remain competitive? One example here in Singapore is where our shipping community and government agencies have come together to develop an electronic Bill of Lading (eBL) under Singapore’s TradeTrust Framework. As you know, this is a key document for international trade and we have to have that process of stakeholders coming together, representing the entire supply chain in order to get a functional, a viable and an effective electronic Bill of Lading.

13.    There remain risks despite keen interest from the shipping and technology players to develop and use an electronic Bill of Lading. One of the key risks is landscape fragmentation, as differing eBL standards are being proposed. This could well deter, or defer, the adoption of an electronic Bill of Lading. The TradeTrust approach is a framework where we hope we will be able to develop inter-operability standards across various eBL platforms – a process that Singapore is not unfamiliar with, looking to see how we can deal with emerging standards, emerging platforms, and from the viewpoints of community engagement as well as the engineering, design inter-operability as a key function. We know that we also need to make sure that we need to have robust processes to deal with dispute resolution, especially when you have multiple standards with potentially competing inter-operability standards. We will work through TradeTrust to establish the legal backing of an electronic Bill of Lading.

14.    Through this, we hope to boost the productivity of the shipping sector and grow cross-border trade by enhancing access to players along the supply chain.

15.    We strongly encourage members of the maritime community to come on board to try to take advantage of these opportunities as we move towards a more digital future here in Singapore.

Cleaner Shipping for the Future

16.    Second, as an industry, as a maritime community, we’ve taken steps already to make shipping cleaner. By 2020, we will implement the IMO 0.5% fuel oil sulphur limit.

17.    We are prepared for this implementation here in Singapore. We hope to ensure minimal disruption to the industry. We will make sure that low-sulphur fuel will be available in Singapore. BP and Shell have chosen to make or include Singapore as a key location where low-sulphur fuel oil will be made available. They have also successfully conducted fuel trials of their low-sulphur fuel oil on board vessels here. A list of 49 licensed bunker suppliers of low-sulphur fuels in Singapore is now available through the MPA database and website.

18.    Our Maritime and Port Authority (MPA) has been facilitating the introduction of other cleaner fuels such as LNG. To date, MPA has committed S$24 million to support the building of LNG-fuelled vessels and LNG bunker vessels to facilitate the development of ship-to-ship LNG bunkering. In addition, in terms of further research and development, we have the Green Energy Programme (GEP), committing another S$5 million to help industry tap and develop other cleaner, alternative marine fuels.

19.    MPA is preparing the port and Singapore-registered ships for this implementation. We are going to have reception facilities for the collection of residues generated from the operation of scrubbers; partner with the Singapore Shipping Association to engage ship owners and operators on this implementation; and issue technical guidelines to outline options helping ship operators to comply with the new regulations.

Manpower: Developing Talent

20.    A final example of how we are trying to get ourselves ready for the changes, is manpower. Singapore is very used to looking at manpower as a potential constraint on our economic growth but if we can get the management and interventions correct, it becomes a competitive advantage driving our economic growth. That competition for talent is something that we have been working with for many years. We face challenges in attracting and retaining people into the maritime sector. This applies to both seafaring as well as shore-based jobs. There remains a significant shortage of trained and experienced seafarers as the global fleet grows, exacerbated by the use of new technologies.

21.    Digitalisation and emerging technologies will transform existing maritime jobs even as new jobs are created. We are going to have to attract new talent with new skills and help the existing talent up-skill to make them effective within the maritime workforce.

22.    We have been investing in our people to ensure a continuous pipeline of maritime manpower. We have the Maritime Cluster Fund for Manpower Development Programme, administered by MPA, to co-fund training for more than 5,000 individuals each year, and Earn-and-Learn Programmes (ELP) to provide on-the-job training across our various shore-based and seafaring jobs.

23.    We will continue to partner the industry, key stakeholders, maritime associations and Institutes of Higher Learning to support this effort to develop our human capital as well as in training and up-skilling people who are already within the workforce.

Strengthening Stakeholder Commitment and Collaboration

24.    A key partner in this is our labour movement, our unions who are strong advocates for reskilling and restructuring the workforce and have been so for many decades as they continue to grow their membership and their outreach and effectiveness.

25.    Our ongoing partnerships and collaborations across the industry are vital. MPA partners the Singapore Shipping Association (SSA) to roll out industry development initiatives – the Singapore War Risk Insurance Conditions (SWRIC), the eBL we’ve talked about, and productivity initiatives; and the maritime unions.

26.    At the international level, this approach towards partnerships and collaborations I hope is just as strong. Through platforms such as the IMO, IALA and the Port Authorities Round-table, Singapore collaborates with like-minded countries and port authorities to advance maritime interests across a wide range of issues – cybersecurity, maritime safety, technology development, LNG bunkering standards and the promotion of maritime start-ups. We welcome more such collaborations, and we will do our part as a member of the international community. Ultimately, stakeholders, platforms, partnerships, collaborations need to come together to discuss ideas, challenge each other’s way of thinking, share conceptual models and grow together and become stronger together.

Conclusion

27.    So we need platforms such as Sea Asia to bring partners together and give us a chance to get together and speak our minds and learn from each other. I congratulate you for doing this year on year, growing from strength to strength and playing a vital role in the development of our maritime community. Congratulations and I look forward to an exciting and interesting conference. Thank you very much.