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International Trade and Logistics

last updated 03 November 2017

Current Situation: Effective Trade Governance

To maintain our position as the world’s second-largest port for container throughput and the largest for bunker sales[i], we must address challenges arising from rising rent and labour costs in Singapore, regional competition and the potential opening of alternative sea routes.

There are also sector specific challenges:

  • Regulatory requirements and incentive schemes are often complex. Traders and businesses struggle to understand these requirements and schemes and find it difficult to determine an optimum trade route.
  • Shipping lines are forming alliances (i.e. 2M, O3 and G6) to address over-capacity in the industry, especially on main routes between Asia and Northern Europe which have started making losses[ii]. Operating cost will be a key consideration when these alliances choose their port of call.
  • The rise of e-Commerce as a distribution channel has created new players and thus greater competition in the international logistics landscape. For example, e-Commerce giant, Alibaba collaborates with China Shipping Container Lines to develop a new logistics service network specialising in full container load[iii], international logistics and transportation services.
  • Inaccurate demand sensing and information lag are constant problems for companies trying to manage the cost of their supply chains. To make matters worse, fast changing macroeconomic environments lead to high operating cost and inefficiencies in supply chain management.

Furthermore, current international shipment processes require nearly 25 parties to process a single shipment from Singapore. The environment is also fragmented, with more than 99 per cent of transport logistics service providers being small and medium enterprises that use disparate systems. Many do not embrace advanced automation because the cost of implementation yields low returns relative to their business size. These transport logistics service providers process over 40 documents for a single shipment, with 60 to 70 per cent of data re-entered at least once. This is both inefficient and error-prone.

Goals for International Trade and Logistics

The short to medium term goal is to provide trade facilitation through an ecosystem offering real-time information exchange. It will enable companies to streamline and integrate cargo and money flows while addressing inefficiencies in supply chain management. In the longer term, we aim to achieve trade multiplication where businesses harness cognitive computing and optimisation technologies to orchestrate trade development activities with multi-modal trade lane integration and insights.

[i]Source: Maritime Port Authority of Singapore (2013)

[ii]Reuters, Maersk Line sees shipping overcapacity for five years, 2nd  Oct, 2013 By Ole Mikkelsen and Stine Jacobsen

[iii]Full Container Load” refers to freight services where the shipper has exclusive use of an entire container versus “Less than Container Load” where the container is shared by more than one shipper.

In 2010, the Civil Aviation Authority of Singapore (CAAS) together with the Infocomm Development Authority of Singapore (IDA), the International Air Transport Association (IATA), the Singapore Aircargo Agents’ Association (SAAA), the Singapore Logistics Association (SLA) and the Singapore National Shippers’ Council (SNSC) signed a Memorandum of Understanding (MOU) with a common objective to enhance Singapore’s competitive strengths as a leading global air cargo and logistics hub.

Presently, e-freight@Singapore partners include government agencies such as the IMDA, Singapore Customs, Economic Development Board (EDB), SPRING Singapore as well as industry partners such as SAAA, SLA, SNSC, IATA, Changi Airport Group (CAG), Singapore Airlines Cargo (SQC), Singapore Airport Terminal Services (SATS) and dnata Singapore.

e-freight@Singapore will establish interoperable data standards built on IATA’s e-freight programme. It promotes the capturing of data at source, and the transmitting of the data electronically in an interconnected supply chain, for re-use in downstream activities. efreight@Singapore relies on the global IATA e-freight messaging format, for extensibility to global air cargo operations.

e-freight@Singapore aims to integrate the air cargo and logistics supply chain through electronically linking stakeholders in the supply chain, promoting the adoption of paperless freight documentation and improving industry capabilities through the use of Infocomm & Technology (ICT). This enhances data accuracy by reducing repeated manual data entry, boosts supply chain visibility and eventually, leads to productivity gains in the air cargo and logistics industry.

e-freight@Singapore benefits the supply chain stakeholders which include shippers, freight forwarders, ground handlers and airlines.

Shippers will enjoy higher visibility of their shipments, experience better freight performance and make more informed decisions when dealing with inconsistencies with better data accuracy. They can also enjoy a standardised method of exchanging data with multiple downstream partners.

Freight Forwarders can process cargo shipments faster and more accurately as the solutions will eliminate the need to manually re-enter data from the shipper. Electronic data exchange also means that freight forwarders will be able to provide timely information to downstream partners and facilitate advance permit applications, in advance of the physical cargo movement.

Ground Handlers and Airlines can achieve higher productivity with earlier shipment information, better data accuracy, and shorter cargo processing time.

For enquiries, please email to lee_boon_shim@imda.gov.sg