Impact of Normalisation of Global Supply Chains on Singapore's Seaport

Mr Saktiandi Supaat asked the Minister for Transport in light of industry reports that the global supply chain congestion is easing and normalising (a) what percentage of its capacity is Singapore’s seaport presently operating at; (b) what will the impact of a "normalisation" of global supply chains have on our seaport; and (c) whether the Ministry needs to scale up or augment our seaport’s capacity to prepare for the expected change in the shipping landscape over the next year.

Mr Speaker, the Port of Singapore remained open throughout the pandemic and served as a “catch-up” port for many ships that faced delays in other parts of the world. MPA worked closely with PSA and the unions to open additional berths and yards, and deployed more port workers and equipment to handle surges in container volumes. Our port handled a record high container throughput of 37.5 million 20-foot equivalent units (TEUs) in 2021.

Our container port is currently operating at about 85% of its maximum handling capacity of 44 million TEUs per annum. There is enough buffer to meet short-term increases in demand from shipping lines. As more berths at Tuas Port are completed, our handling capacity will increase further and provide sufficient capacity to handle future growth in volumes.

Mr Speaker, I would like to thank the Senior Minister of State for his answer. I just have one supplementary question. I am very concerned because of the recent report in Bloomberg which shared that the New York Federal Reserve's Global Supply Chain Pressure Index fell for a fifth straight month. My concern is that there could be a potential scenario where we could see an untangling of transport snarls which are happening just as fast as the system knotted up previously, last year.

The Senior Minister of State mentioned that we have enough capacity and resources to potentially absorb some increase in activity. But will there be a possible scenario in 2023, where the activity picks up substantially, despite some risk of economic slowdown globally? It could potentially pick up and do we have enough manpower, resources and also the fact that we are in the transition of shifting to Tuas from our current location?

Mr Speaker, I thank Mr Saktiandi Supaat for his questions. The maritime and shipping industry is one that goes through up cycles and down cycles. So, shipping lines and port operators are used to dealing with ups and downs.

Importantly, one of the key drivers of port container volume is global trade and supply chains. There are some signs of certain sectors like manufacturing, for example, slowing down because of what is happening in different parts of the world. So, while some of the factors may point towards increases in trade volumes, there are also other factors that point in the opposite direction.

Regardless of whether it is up cycle or down cycle or an increase in volume or a decrease in volume, what is most critical is this. We maintain very strong tripartite partnerships among employers, unions and Government agencies to always look at how we can maintain our port competitiveness. This is, of course, partly driven by our capabilities like the skills of our workers and the technology we deploy. At Tuas Port, for example, we are not only going to make it a more sustainable and more efficient port, we are also deploying technology that will reduce the need for manpower, for example, drivers. We use autonomous vehicles to help us to transport the cargo within the port. We use productivity improvements so that one crane operator is able to operate multiple quay cranes at the same time.

So, these are all different ways to amplify the impact of our workforce to improve productivity and to improve our port competitiveness.

The second very important factor when it comes to competitiveness for port operations is connectivity. Because the more ships call at Singapore, the more shipping lines hub at Singapore, there is a network effect. This is why we served as a catch-up port during the pandemic because people who got delayed elsewhere come to Singapore to rearrange their cargoes and use us as a catch-up port to make up for lost time.