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Tuas Port: Gateway to The Future

In September 2022, Prime Minister Lee Hsien Loong officially opened the first phase of Tuas Port - a moment that had been 10 years in the making since plans for it were first announced in 2012[1]. Three more phases are expected to be completed over the next 20 years, sealing its position as the biggest fully automated port in the world[1].

Currently, the port of Singapore sits in second place among the top 8 busiest ports in the world, with 6 of those spots being ports in China, and Shanghai taking the number 1 spot[2]. Yet, while Shanghai’s port can handle 50 million TEU (twenty-foot equivalent units) annually in full capacity, Tuas Port will be able to handle 65 million TEU when completed[3].

More than just being one of the biggest ports in the world, however, Tuas Port represents a spearhead into other areas too:

  • A greener port
    Sustainability is integral to Tuas Port, implemented from the planning stage right up to the building and maintenance of it. Indeed, the whole point of the conception of Tuas Port was to provide a single consolidated location for Singapore’s container activities to significantly reduce inter-terminal haulage operations, and hence reducing GHG emissions[4].

    Among other green efforts include reusing build materials for Phase 1 and 2, with more than 50% of fill materials being used consisting of dredged material and excavated earth from other construction projects[4]. And to protect potentially affected marine life, environmental impact assessments were conducted to establish strict Environmental Quality Objectives for compliance during the reclamation works. A programme was even implemented to help relocate corals, successfully achieving a survival rate of 80%[4].

  • A more technologically advanced port
    Touted as the world’s largest fully automated port[5] when completed, many processes will be fully-digitalised. For example, artificial intelligence and machine learning will be used to coordinate vessel traffic management and port clearance[5]. Instead of trucks with drivers, the new port will deploy a fleet of unmanned driverless automated guided vehicles, set in place by cranes[5]. All these 5G-enabled vehicles will be supported by a private 5G network, activated throughout the port. And because of this automation, operations can be done in complete darkness - so much so that, in a first-of-its-kind move, Tuas Port has eliminated the need for mast lights at all[6]. To add to that, drones, equipped with artificial intelligence processes, will also be utilised to survey the port, in a bid to save on manual costs[7].

  • A commitment into future economies
    Singapore has always been the number one mid-way stopping point for goods flowing from Asia into the E.U. and U.S.[2]. Further to Singapore’s strategic location, it has gained a value proposition of being a ‘catch-up’ port, offering shorter transition times to make up for delays in the route[8]. To compare, the two largest ports in the U.S. still face problems with dwell times of up to 9 days, while Singapore has consistently delivered just 24 hours of dwell time[2].

    CIMB economist Song Seng Wun said Tuas Port indicates Singapore’s commitment to remain a major hub for the supply of many kinds of goods and services[1]. It puts the shipping industry in tandem with the nation’s air freight services, creating more integration for greater trade. Commenting on Singapore’s commitment to maintaining and improving maritime efficiency, he said “There needs to be faster and faster connection between air and sea ports. It’s about the whole economy benefiting from the greater trade volumes handled.”[1]

The tides of change

However, much has changed in the world since the plans for Tuas Port began. We have since weathered a global pandemic, witnessed the start of a war, and are currently anticipating a recession for 2023, each event creating its own impact on maritime trade. 

As we came out of the pandemic in 2021, demand shot up with economic recovery. However, the shipping industry immediately began facing bottlenecks, exacerbated by disruptions caused by spot lockdowns, safety distancing measures and workers falling ill to COVID-19[9].

And if those could be considered post-pandemic teething problems, the Suez crisis in March 2021 served as a headlining proof point for just how vulnerable the global shipping line stands. A single cargo ship that was stuck between the canal’s banks caused a traffic jam of ships and tankers for almost a week, costing USD9.6 billion in daily delays[10], and racking up months of supply chain disruption backlog[11]

The repercussions of it all began to show in soaring shipping prices. For instance, the cost of shipping a twenty-foot container from Singapore to Los Angeles by sea in 2021 shot up to about 10 times that of 2019. Even now, almost a year after Singapore opened its borders again to the world after COVID-19, shipping prices remain four times of the pre-COVID-19 rate[9].

To add to the uncertainties, Russia’s war on Ukraine began early 2022, causing fuel prices to skyrocket, ultimately affecting shipping costs and prices too[12].

And now, as we move into the new year of 2023 on the heels of a looming prediction of a global recession, the shipping industry will face yet another hurdle. Associate Professor Yap Wei Yim, Head of Maritime Management Minor, SUSS School of Business, noted that the expected elevated inflation and high interest rates will dampen consumer and investment spending, which could result in reduced port traffic volumes in Singapore[13].

In elaboration, he added “These effects can already be seen in port traffic volumes for Singapore, particularly in the last quarter of 2022[13]. For example, containerised cargo volume fell by 11.7 percent and 10.9 percent year on year respectively in November and December 2022,” while predicting that the negative impact on the maritime industry is expected to persist into the first half of 2023 - at the least[13].

Right place, right time

While the global shipping industry is undoubtedly facing its challenges, Prof Yap, remains optimistic about the future of Singapore’s maritime industry. Its location is key, which allows Singapore to serve three main markets: The East-West trade route between Asia and Europe, the transshipment trade in the region, and the fast-growing intra-Asia container trade[6].

He points out that in fact, 80% of Singapore’s container traffic currently comprises transhipment containers. And this proportion of transhipment containers is expected to increase even further to about 90% by 2040. 

Even now, before the completion of Tuas Port, Singapore is already the dominant port-of-call, leading its competitors of Tanjung Pelepas and Port Klang in Malaysia by a large margin[6]. When completed, Prof Yap is confident Tuas Port will cement Singapore’s leading position as the premier container port and transhipment hub in the Asia Pacific. 

Elaborating this further, he explains that the container shipping industry is dominated by mega carriers, with many of these shipping lines belonging to an alliance. Through these alliances, shipping lines are able to achieve network economies and economies of scale in their operations. For example, one line may be able to leverage on the network of another to call on more ports, which enables better vessel utilisation and in turn lowers the cost unit of operations. 

By successfully anchoring such alliances in Singapore, our manufacturers and traders will be able to enjoy unparalleled connectivity to various import and export markets around the world.

One such example is that Singapore currently hosts the Ocean Alliance (made up of CMA-CGM, Cosco Group, OOCL and Evergreen) with a joint venture to handle almost 10 million TEUs a year for them. This is the scale required to host such major shipping lines, and signals just how much of an impact Tuas Port can make in positioning Singapore as the calling port of choice for such alliances.

But Tuas Port not only marks a major milestone in Singapore's journey towards becoming a Global Hub Port and International Maritime Centre, it is also a milestone in a digital revolution for the industry, giving rise to a new generation of roles such as data analysts and data scientists[14]

Supporting the Singapore maritime industry is the MaritimeONE Scholarship, a key manpower initiative of the Singapore Maritime Foundation (SMF)[14]. Established in 2007, it has since given out scholarships worth $14 million to 524 recipients. Last year, in 2021 alone, 54 MaritimeONE scholarships and 12 Tripartite Maritime Scholarships, valued at $2.7 million in all, were sponsored by industry partners in the maritime sector this year[15].

It was at this scholarship awards ceremony that SUSS announced it would begin offering the new Maritime Management Minor programme. The course is supported by the Maritime and Port Authority of Singapore and SMF, and aims to further develop a strong talent pipeline for the maritime sector.

So is this the right time to join the maritime industry?

“Anytime is a good time to join the maritime industry, says Prof Yap. The maritime industry is - and will continue to be - an important pillar of the Singapore economy, anchored by Singapore’s premier global hub port status and vibrant International Maritime Centre (IMC) ecosystem. 

The industry is also a key enabler of the logistics sector with more than 80% of global trade moved by seaborne transport. On top of that, the recent COVID-19 pandemic only highlighted the importance of the maritime industry which essentially became a lifeline for many countries, facilitating international shipments of goods by sea despite restrictions and lockdowns faced worldwide. 

Having a future-ready maritime workforce, with professional standards and global mindset, supports the efforts by Maritime Singapore to remain competitive and attractive to the international maritime community in this post-pandemic landscape.” 

[1] STRAITS TIMES (SEP 2022) Tuas mega port officially opens with 3 berths; PM Lee says it will be critical engine driving economy   

[2] BRAUMILLER LAW GROUP Tuas Megaport in Singapore, An Upcoming Model to the World in Port Operations, and soon to be Light Years Ahead of the Globes Largest Ports

[3] MARITIME AND PORT AUTHORITY OF SINGAPORE Tuas Port - A smarter and greener port 

[4] WPSP (2019) Maritime and Port Authority of Singapore – Singapore’s Next Generation Tuas Port Project

[5] CNA (AUG 2022) NDR 2022: Tuas Port will be world’s largest fully automated port when completed in 20 years

[6] STRAITS TIMES (SEP 2022) Tuas Port opening: Higher efficiency, lower carbon footprint justify higher operational costs, say companies

[7] STRAITS TIMES (NOV 2021) First phase of Tuas Port completed, greener concrete being explored for future phases

[8] CIVIL SERVICE COLLEGE (JUL 2018) Connecting to the World: Singapore as a Hub Port

[9] STRAITS TIMES (AUG 2022) Consumers thinking twice about overseas purchases as air and sea freight rates soar

[10] WASHINGTON POST (MAR 2021) What the Ever Given saga taught us about the world 

[11] CNBC (MAR 2021) The ship that blocked the Suez Canal may be free, but experts warn the supply chain impact could last months

[12] SHIP TECHNOLOGY (JUL 2022) The Russia-Ukraine conflict’s global impact on maritime trade

[13] STRAITS TIMES (JAN 2023) S’pore ports handled second-highest number of containers in 2022 despite fall in global container trade

[14] STRAITS TIMES (APR 2021) Be part of the Singapore maritime industry's digital transformation

[15] STRAITS TIMES (AUG 2022) Multidisciplinary talent needed as Singapore develops world's largest automated port


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