Remarks by Senior Minister Of State, Ministry of Transport, Mr Chee Hong Tat at the Opening Session of CILT-TUM Asia Roundtable For Corporate Leaders & Senior Executives on 1 April 2022

Mr Karmjit Singh, Chairman of the Chartered Institute of Logistics and Transport Singapore

Dr Markus Wachter (“Vach-ter”), Managing Director, TUM Asia

Distinguished Guests,

Ladies and Gentlemen,

1.     Good afternoon. I am pleased to join you today for the CILT-TUM Asia Roundtable. I congratulate CILT and TUM Asia for bringing together industry thought leaders, experts and leading practitioners.

2.     Digitalisation is fundamentally changing business models, not just in the logistics sector, but throughout the whole economy. I am sure all our participants here today know and appreciate the importance of digitalisation for your organisations, though you may be at different stages of implementation and adoption of different technology solutions.

3.     So before I touch on a few areas on digitalisation, which I hope will help to generate some further discussion during your roundtable discussions, I just want to reflect on some of the points that Mr Karmjit Singh and Dr Markus Wächter have shared earlier. Supply chain and logistics is a little bit breathing. When things are going well, when life is moving smoothly, we take it for granted and assume that we will always have oxygen to keep us going. But when we cannot breath all of a sudden, then we start to realise how precious the air around us is. In the same way, for a long time, a lot of the hard work that is being done by our supply chain and logistics sector has not been given the recognition and appreciation, of how much thought has been put into designin a resilient supply chain, and how much effort has been put into preparing for efficient and smooth operations. But when it suddenly came to a standstill, like during the pandemic, when a vessel was stuck in the Suez Canal, then we are made to realise how important it is for a smooth operation of supply chains.

4.     We can react to the disruption in supply chains in two ways. At one extreme, we can say, let us onshore everything. Let us try not to depend on others, do everything ourselves, disconnect ourselves from the rest of the world and become a fortress. That is one reaction. Of course for a small country like Singapore, that is impossible. So, we are not even contemplating that. But for some countries, that idea may sound quite tempting. The other way is that we remain completely open, maintain free flows, and have business as usual. I think after the pandemic, a lot of us are having very serious reflections and conversations on where to strike that balance. I do not think we want to go to either extremes. To strike a balance, then the logistics sector, and hopefully digitalization, will allow us to build stronger, more resilient and more efficient supply chains.

5.     This afternoon, I would like to share three perspectives on how digitalization could help to contribute to striking this balance, and what it would require.

Efficient Digital Solutions Enable High Growth

6.     First, one of the first reasons why companies digitalise, is to achieve greater efficiency as the business grows. When volumes increase, whether for goods or data,the level of complexity will also increase, and it will soon become humanly impossible to manage with traditional manual processes. Indeed, the higher the volume, the greater the potential for efficiency gains from digitalisation. It is actually a key enabler to scale the business, and scale in turn provides the critical mass for companies to make investments, to make the digitalisation happen.

7.     This is happening across our land, sea, and air transport, and also our logistics sectors, driven by different stakeholders. For land transport, the Container Depot and Logistics Association (CDAS) has worked with partners to digitalise the process of tracking assets such as trailers and prime movers, undertaken by container haulage companies. This shifted the tracking process from onerous manual recording to automatic updates of asset locations. Container haulage companies are also able to share locational data with ports, warehouses and container depots, for them to prepare for the haulage companies to collect or drop off containers.This would improve operational efficiency across the entire logistics value chain.

a.     For sea transport, PSA has been leveraging data gathered across its logistics nodes, such as ports, depots and terminals, to improve cargo and trade flow visibility. 

i.     PSA EventHub, a central cloud-based data platform, allows stakeholders within the PSA family to access data from PSA’s nodes, to optimise processes, increase operational efficiency, and design more sustainable practices. 

ii.    PSA has also launched a global supply chain platform called CALISTA, and it allows cargo owners and shippers to track shipments and manage their logistics flow more efficiently.

b.     For air transport, various air cargo stakeholders have come together as a community, to improve information connectivity and increase efficiency across the eco-system. 

i.     Today, we have over 100 airlines, 20 Ground Handling Agents and 400 plus freight forwarders using the Cargo Community Network’s (CCN) digital platform for a range of services including data exchange, industry compliance, customs compliance, billing, and reconciliation.

ii.    To create new digital offerings, CCN is launching the Open Collaborative Platform for third party solution providers to host their value-added services on CCN’s platform. Third party system providers can utilise the rich pool of existing data that can be found on CCN’s platform, instead of requiring end-users to input data over and over again. This is going to be a win-win for everyone.

c.     The solutions certainly need not be limited to within each sector. The Singapore Trade Data Exchange (or SGTraDex) was formed as a result of an Alliance for Action (AfA) project under the Singapore Together movement. This is a group that comprises representatives from industry, unions, government agencies, identifying practical solutions for challenges faced by our industries. This could be data exchange, supply chain resilience, whatever the case may be, the modus operandi is to identify practical problems that we want to solve, and then bringing the tripartite government agencies, unions and stakeholders to come together to find practical solutions to these challenges. Through this process, the SGTraDex was formed, and it seeks to build a common data infrastructure to facilitate trusted and secure sharing of data within the supply chain ecosystem.

i.     It is currently working on 3 use cases to strengthen financing integrity of trade flows, enhance end-to-end visibility of container logistics flow, and provide real time visibility in digitalising the marine bunkering industry. 

ii.    SGTraDex is looking for more partners to come onboard, to participate in existing use cases or even drive new use cases.

8.     So, when it comes to leveraging digitalisation for greater efficiency, my suggestion is to think beyond your individual organisations, so that you can work with partners and scale up more quickly by plugging into the broader eco-system. Take full advantage of the network effect.

Effective Digital Solutions Require High Usability

7.     Second, digital solutions need to be easy-to-use and tailored to the needs of users. As consumers of digital products, be it the iPhone, which many of us have, or home-based IoT appliances, we are all familiar with this concept. The same principles apply to corporate solutions. Effective digital solutions require ‘High Usability’ to make them human-centric and user-friendly, by incorporating the best elements of design and technology.

a.     Artificial Intelligence (AI) is a useful tool in the design of advanced digital solutions, that can enhance the experience of users. 

b.     A good example would be the CargoEye and CargoMind systems, borne out of TUMCREATE’s initial prototype development under CAAS’s Aviation Challenge, and it is now fully commercialised under SpeedCargo Technologies. These systems automate cargo operations and assist workers in cargo space planning and placement. It is a very complex operation that cannot be achieved manually, so this system allows us to do what even human beings cannot do alone, when we augment the process with technology.

i.     CargoEye uses image processing to capture cargo data such as dimensions, labels, Air Waybill numbers instantaneously. This enables workers to seamlessly process incoming cargo and digitally verify cargo records.

ii.    The data is then seamlessly integrated into the CargoMind space planning software, which uses AI to optimise the build-up of cargo pallets for various parameters such as space utilisation, revenue maximisation and shipment prioritisation. There are step-by-step instructions generated to guide workers on the correct sequence and placement of the individual shipments.

iii.   So, the back-end technology that enables the system is sophisticated, but the front-end user translation is easy-to-follow, simple to use, and has a significant impact on the productivity of the workers. 

iv.    Besides dnata, other logistics companies such as Swissport and Etihad Cargo have partnered SpeedCargo to trial and deploy these solutions for their operations.

Ethical & Equitable Digital Solutions Generate High Trust

8.     Besides high usability, the other key ingredient for successful digital solutions is a high degree of trust and confidence from users. To generate high trust, digital solutions must be ethical and equitable. Two of the biggest concerns with digitalisation are: one, data privacy and cybersecurity of users; and two, job security of workers. Companies will need to address these concerns as part of your digitalisation journey.

a.     In 2020, IMDA, in partnership with ESG and the industry, jointly refreshed the Logistics Industry Digital Plan. The IDP provides a step-by-step guide on the digital solutions which SMEs can adopt at each stage of growth. 

i.     It enables our SMEs to identify digitalisation opportunities that are relevant to their businesses, and critically, what the skillsets are in their workforce to support their digitalisation journey.

ii.    The digital solutions in the IDP supported under the Productivity Solutions Grant (PSG) incorporates basic cybersecurity and data protection good practices. Additionally, SMEs may also leverage cybersecurity toolkits and engage Data Protection or Cyber Essentials service providers to help them with their data protection and cybersecurity needs. It is necessary to give our customers and stakeholders the confidence that the systems that we digitalise and secure and safe to use.

10.    More mature SMEs and large organisations can also sign up for IMDA’s Data Protection Trustmark (DPTM) certification to demonstrate that they adopt high standards of accountable data protection practices. Earlier, I mentioned that the two biggest concerns of digitalisation are data privacy and cybersecurity, and job security of workers. CILT is one of the new associates of the National Trades Union Congress (NTUC). NTUC brings in new companies, and works with government and with companies in the industry, through a tripartite partnership. We work with management partners, with government, to not just ask for better wages and better jobs for workers, but also to push for higher skills, higher productivity, so that our companies can achieve their goals. And when companies achieve their goals, they can then share their gains with workers, and it beomes a win-win solution.

11.    This model of tripartite collaboration and partnership is very valuable to us, and I hope that when we digitalise, we can give our workers the confidence that they are part of the solution. They are not left behind. We will bring in our workers and equip them with the skills, so that they are able to work well in the new environment. We do not want a situation, like what we see overseas, where workers and unions are against digitalisation and against technology, against free trade. It is very dangerous, because this does not grow the pie. You may win the battle, but lose the war. You may win a negotiation, but you could be shooting yourself in the foot over the long term. What we want to be able to do is to help companies to grow, and digitalisation is a key part of this process. And we need to ensure that workers can also be a part of this process. Hence, skills upgrading, and job redesign, has to be part of this conversation.

12.    In your subsequent discussions on digitalisation, I hope that you will not just talk about the technology, but also remember the impact on workers, and how to bring them along, how we can ensure that workers are brought alongside the digitalisation journey.

Conclusion

13.    So, let me conclude my speech. I have touched on a few points. First, efficient digital solutions will enable high growth; second, effective digital solutions will require high visibility; third, ethical and equitable digital solutions are critical in generating high trust.

14.    Thank you, and let me wish everyone an energised and engaging Roundtable, as we support one another in our digitalisation journey.