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E-Transforming the Transport & Logistics Sector in Singapore

Dr Kaizad Heerjee, Assistant Chief Executive, Online Development, IDA Singapore - Opening Address Eyefor Transport Asia 2001 Conference, Shangri-La Hotel ...

Dr Kaizad Heerjee, Assistant Chief Executive, Online Development, IDA Singapore - Opening Address
Eyefor Transport Asia 2001 Conference, Shangri-La Hotel

Singapore, 13 September 2001

Distinguished Guests
Ladies and gentlemen
A Very Good Morning to you all.

I am honored to be delivering the Opening Address at the 'EyeforTransport' Asia 2001 Conference today.

Singapore is strategically located at the crossroads where the East meets the West. Singapore has long been recognized as the premier shipping and logistics hub of the Asian region. Our award-winning Changi International Airport coupled with excellent port facilities provide extensive and efficient linkages to the world

Today, the transport & logistics activities are an integral part of our economy, contributing approximately 9% to the nation's GDP.

Over the next decade, new leading-edge capabilities in terminal facilities, and greater competencies in logistics management, will be developed. Some of this has already begun to happen with companies like the PSA developing their "New Generation Port" at Pasir Panjang, and the $300M project to develop the Airport Logistics Park of Singapore. With these and other such projects happening, Singapore's premier status as an integrated Transport and Logistics hub should be further enhanced.

Growing Strategic Importance of Infocomm Technology (ICT) in the Transport & Logistics Industry

Within the Transport & Logistics Industry, there is a growing recognition that Infocomm Technology (ICT) plays a strategic role in boosting the overall competitiveness of the industry.

All major players within the industry, including the port operators, shipping lines, rail and airport operators, airlines and freight forwarders are leveraging Infocomm Technologies to improve process efficiency and effectiveness. Some of these companies include PSA, NOL, Maesrk, and Sea Land. More importantly, these companies are beginning to realize that embracing Infocomm Technologies in their operations leads to reduced transaction and documentation costs. These examples, coupled with industry studies have shown that implementation of e-business and e-logistics can result in total cost reductions of at least 30%.

A significant amount of productivity can also be gained by replacing manual processes that have inherent time delays. Adopting Infocomm Technologies to computerize a routine operation can help to reduce administrative and marketing overheads. This not only streamlines operations, but also eliminates errors and provides more accurate information to all parties. An example of this has been the significant productivity gains and cost-savings that PSA has demonstrated through the implementation of their award-winning PortNet application.

Furthermore, with the latest refinements and lowered costs of Global Positioning Systems (GPS) and Radio Frequency Identification (RFID) Systems, industry players are now able to track and trace the exact locations, progress and the condition of the containers and cargo at any time, and anywhere. Apart from ensuring the smooth delivery of goods, this boosts end-user involvement and creates efficient integration of logistics and supply chain management.

State of E-Business Adoption & Transformation in Singapore

We are therefore encouraged that the transport and logistics players in Singapore are continually looking at ways to enhance their competitiveness and profitability by transforming their businesses. We know that the larger and more established logistics and distribution companies, such as Bex Global and Danzas AEI, are in the advance stages of adopting Infocomm Technologies and e-commerce capabilities extensively in serving their customers. We want to further encourage the local transport & logistics companies to look to their international counterparts as role models in adopting best-in-class e-business practices.

This importance of this point was further highlighted in a survey recently conducted by the Trade Development Board and IDA, where it was found that only an estimated 10% of Singapore freight forwarding companies have adopted e-commerce technologies in their businesses. We believe there is potential for this figure to grow significantly as companies transform to position themselves to take advantage of the e-business opportunities created in the new knowledge economy.

In the Year 2000 Survey on E-Commerce, conducted by the Department of Statistics and IDA, B2B e-commerce sales revenues for year 2001 are estimated to reach S$109B. The transport & logistics industry have a great opportunity to move in quickly and capture a greater share of the growing e-business market in Singapore.

Integrating the Logistics Information Systems across the Supply Chain

In a recent PricewaterhouseCoopers study, it was observed that the level of integration of logistics information is not high across a company's or industry's supply chain. Most 3PLs rely on internal systems for track & trace functionality, and the traditional logistics providers struggle to offer the same kind of service. We have quite a long way to go to realise our vision of end-to-end logistics visibility.

The logistics network is still very document focused. This is the nature of the global logistics industry. Adopting end-to-end electronic documentation could be one instance of what the industry could do to improve the overall productivity of this sector, especially if e-business is deployed as an enabler in the process. Companies like APL and NOL have done this. So can other players in the Singapore context.

The IDA is therefore working with our sister agencies such as the TDB and PSB, on ways to support the industry to developing a number of such capabilities. An example of such a project would be the end-to-end track & trace capability, involving multiple government agencies, multiple end-users and multiple technology vendors. This effort, we hope, will drive the adoption, and provide visibility of an integrated end-to-end supply chain to companies.

Other projects could include exploring with the transport and logistics industry players on the implementation of E-Bill of Lading for Sea-Cargo & E-Airway Bill for Air-Cargo.

E-Business Transformation is key to increased competitiveness

Today, we see many airlines, airports, ports, shipping lines, freight forwarders, third-party logistics, and warehousing players - all experiencing excess capacity, slowdown in business and lower profits.

The industry too is consolidating through mergers and acquisitions. Industry players now acknowledge that e-business transformation can strengthen their competitive edge and maximize the potential of their supply chains.

Within the transport & logistics industry, the sense too is that e-business transformation is no longer an option. Indeed, it has been become necessary for survival in today's intensely competitive business environment, defined by efficient processes, low transaction costs and outreach to global markets and customers.

To conclude, I would like to leave you with this thought.

E-Business transformation empowers ALL businesses - big and small. E-Business harmonizes the benefits of business exchange platforms; secure transactions and efficient information exchange. I would like to encourage all our local transport & logistics players to assess the benefits of transforming their business today. They may not see the benefits immediately, but the resulting competitive advantage will become evident over time. As some of the Industry Analysts have stated, we need to act now or risk being left behind! It is all about survival of the fittest and e-business transformation will be a key accelerator in your drive to become a world-class transport & logistics player.

Thank you.