Singularly, Singapore!

Just what is it that keeps Singapore humming? And just how is it capable of scaling the top of the table, annually in port performance, shipping traffic, offshore excellence and bunker throughput? Does it have a magic bullet? Or, has the little city-state aced its performance so well that it can outclass and outfox everybody, all the time? The answer to all these lies in a simple, single formula which is to continually keep an Argus-eyed focus on developments around the region and do what others dither about -which is to innovate.  Jaya Prakash reports

Pasir Panjang Terminals

Once again and has been the wont over the years, Singapore is where it always wanted to be – at the top of every table. The Xinhua-Baltic International Shipping Centre Development (ISCD) index has said the city-state has trumped all other states in its maritime and shipping prowess. 

The index offers a comprehensive ranking of the world’s port and shipping services based on port throughput and facilities amongst a myriad of other factors. 

Lu Su Ling, Head of Baltic Exchange Asia, said: “The maritime industry is, and will remain, a big contributor to Singapore’s economy and it is therefore important that we continue to innovate and invest in this sector to achieve long-term success.” 

Dr Lam Pin Min, Senior Minister of State for Transport, said the Republic’s sixth straight year topping the index in 2019, was “a vote of confidence to the quality of services offered by the Port of Singapore, as well as the conducive business environment [facilitating] an array of maritime activities in Singapore”.

Any an observer of the Singapore would gaily note that the maritime and aviation industries put together are the proverbial sheet anchors of the nation’s economy. They contribute more than 10%, or perhaps even more, of the nation’s gross domestic product (GDP) and employ thousands of people. Keeping these industries well-oiled and at peak performance lies at the heart of all strategic concerns that range from innovating, to getting the best hires and equally, more of the ‘soft power’, kind of machinations in lasting and enduring collaborations with the best in the industry, across the world. 

Lying strategically on the east-west shipping lanes has also had its blessings unlike nations such as Korea, China or the Philippines. That location triggered, if it may be called the Hobson’s Choice of having vessels to only but, call at Singapore. 

Even with an on-going pandemic, PSA International Pte Ltd (PSA) handled 86.6 million twenty-foot Equivalent Units (TEUs) of containers at its port projects around the world for the year ending 31 December 2020, the Group announced. But there was a dip of 0.9% in its Singapore terminals, said a PSA spokesman on condition of anonymity.

It is no secret that Singapore has firmly established its international maritime credentials. By leveraging on its strategic location its founding fathers have helped entrench this position and made the maritime sector an important economic participant in world trade by connecting the country with major trade markets.

The next ten years will prove interesting as the nation goes about building the largest mega-port in its history, known as the Tuas port. The Tuas Mega Port, currently under construction and with the first phase, is a natural extension of Singapore’s strategy to entrench its regional dominance as a leading trans-shipment port.

Tuas Port Artist Impression

The port’s avowed aim is to be the leading trans-shipment port connecting and feeding containers to smaller regional ports.

It will feature above and below-ground space, optimising land use for complementary purposes such as storage facilities.

A next-generation traffic management system will be installed across the port, which will improve safety and security and will use automated yard cranes and port equipment technology to reduce labour costs.

All port handling equipment will be electrically powered to reduce carbon emissions, while the smart grid systems will further minimise overall power consumption.

Tuas port will feature green building designs and rainwater harvesting and will also employ renewable energy sources such as solar power.

Location means everything. 

Just and why Singapore began was and still, is part of an historical lore. 

Sitting at the crossroads, the nation was a toss-up in the Great Game of power politics between Dutch and British colonials, eager to outfox one another. 

When the city-state’s then founder Raffles chanced upon the sleepy village in 1819, he knew he had to weasel his way into the then Johor royalty, under whose suzerainty Singapore rested in. Thus, was born a nation that out of an historical ‘accident’, endured another heart-wrenching moment in 1965 to become the independent republic of Singapore. 

It is also now the veritable fountainhead of all port calls amid COVID-19 amidst the slowing tide of commerce in its neighbourhood and the world even as free trade agreements simply keep, exploding. 

Except for the disruptions brought on by the two World Wars, Singapore’s port and all its maritime support service have never stopped to amaze. Today it attracts some 130,000 vessels calls on average annually, and the city-state knows all too well that it cannot stop, for if it does the more than 180,000 of its people who depend on it for their livelihoods will be hurt. 

That figure, according to the nation’s Minister of Manpower, Josephine Teo, is only but slated to grow by 2025. Of the many comparative advantages, is not just its strategic position but also of its sound policies formulating the right kind of policies. The nation’s Ministry of Transport under whose writ lies its maritime ecosystem is aiming to develop a comprehensive range of maritime ancillary services to provide one-stop service for all port, shipping and maritime activities, is perhaps its long-term objective.

As it now stands there are currently over 5,000 maritime companies in Singapore – including more than 130 international shipping groups – forming an important anchor for its international maritime centre.

And given the capital-intensive nature of shipping, it has announced several schemes to support the growth of shipping companies one of which is the Maritime Sector Initiative Approved International Shipping Enterprise. 

Lying at the cross-section of a mammoth waterway does give the nation a heft, seen in only a few waterways like the Malacca Straits and Amsterdam. That strategic location which must have been at the back of the mind of the British explorer, and where the effluent waters of the Straits of Malacca abut the mouth of South China Sea, has never been a better bet for the world’s maritime fleet. 

And if the topography does not move, it will always be where ships must come to shore. Singapore knows that to be in top-flight condition it needs just the kind of investments in technological contrivances to remain where it wants to be. 

A spokesman for the port once told a British-based publication: “The Port of Singapore is looking to consolidate and build upon its success by employing a new generation of technologies….”. 

It launched the digitalPORT@SG which is a maritime ‘single window’ whose functions include streamlining vessel immigration and port health clearances across multiple agencies into a single application by consolidating 16 separate forms. That saves the industry some 100,000 manhours annually, apart from optimising port resources and the enhancement of efficiency by artificial intelligence by facilitating just-in-time operations for optimal vessel passage.

In the words of a Wan Hai spokesman operating in Mumbai, ‘PSA Mumbai is equipped with the latest technology to offer customers fast turnaround of their vessels and is also well-connected by major highways and rail networks to key markets in Maharashtra, Gujarat, and the National Capital Region of India.

“By further strengthening its current service scope among India and Far East corridors, PSA Mumbai will enhance Wan Hai Lines’ market coverage to better serve customers’ needs”. 

The move away from LNG.

It was something that had, had to happen and Singapore just knows what it had, to do when that happens?  

Like how PetroMin understands from a key official in Keppel Marine and Offshore, “We want to establish our footprint in LNG and are working to achieve that”.  Keppel’s new focus away from the Offshore and Marine business to renewables has been a bittersweet pill coming just as it told Marine and Offshore arm, suffered a colossal fall of profits to just USD23million!

Renewable energy plants

The figure not just slack-jawed Keppel but was grist for its CEO, Loh Chin Hua to declare, “The share of renewables and new energy solutions in the global energy mix has been growing rapidly, driven by environmental concerns as well as technological advancements and the declining cost of renewables… seize opportunities in this fast-changing environment, we are making bold and decisive moves to transform Keppel O&M to ensure that it remains relevant and competitive, and fully aligned to Keppel’s Vision 2030.”, indicating by every means a clear move to renewable energy as the next business frontier. 

Singapore is fully conscious of all the machinations and soundings it has received surrounding marine fuel oil. Except for the four years when the world weathered a US administration averse to the Paris Climate Accords, the city-state is consciously aware of who to line up behind in its international green obligations and towards clean air. In 2019 it pledged its renewed commitment to the 2015 Paris Agreement limiting the emissions of greenhouse gases. Its Environment Minister, Masagoes Zulkifli, said one of the ways to fire up environmental protection is to latch onto solar power as well as natural gas which happening as it now does, lies squarely within the context of the Singapore Liquefied Natural Gas or SLNG corporate entity. 

As recently as September 2020, SLNG and Total Solar Distributed Generation (DG) signed an agreement for solar power to be implemented at the Singapore LNG Terminal on Jurong Island. 

With that agreement, comes not just of turning a word into a bond, it requires Total Solar DG to finance, build and operate a 600 kilowatts peak (kWp) rooftop solar power system, to be installed on rooftops of several buildings at the Terminal.

The installation of the solar panels is part of SLNG’s slew of initiatives under its Green Strategy and is expected to be completed by 2020.

Mr Tan Soo Koong, CEO of SLNG, said, “SLNG is committed to doing its part to help fight climate change and promote environmental sustainability; and the use of solar energy at our Terminal is just a modest first step. We are also actively exploring ways to catalyse the use of LNG and other green energy alternatives. For one, we are looking into collaborations to develop new infrastructure in Singapore to promote the use of LNG as a cleaner marine fuel. For another, we are working with various partners to develop technologies related to the importation, transportation and storage of hydrogen.”

MPA, or otherwise known as the nation’s port regulatory body which has been behind every move Singapore makes in its maritime evolution said, “As a responsible Member State of the IMO, Singapore promotes the environmental sustainability of the maritime industry. 

As such, MPA encourages the use of green fuels to reduce the impact of shipping on the environment” To do that, it is growing the range of marine fuels offered to vessels calling at its port. There is little to underestimate the range of Singapore’s commitment to a cleaner greener future. It is also working with government agencies and the private sector to “develop a technical reference for LNG bunkering (TR56) that guides LNG bunkering operations in the Port of Singapore. On the international front, MPA had collaborated with like-minded port authorities and maritime administrations to develop a set of harmonised LNG bunkering standards and procedures for ocean-going vessels calling at different ports for LNG bunker’, its spokesperson said. By granting a five-year waiver of craft dues for LNG-fuelled harbour crafts, MPA’s real aim is to promote the uptake of LNG bunker fuel in its environs. Not to sit on its laurels, the MPA is also studying alternative fuels such as biofuels, electricity and hydrogen/ammonia as options for the bunker to meet the IMO’s greenhouse gas emission targets of 2030 and 2050.

In a website announcement it said, ‘we are pursuing opportunities in renewables to augment our range of competitive energy solutions’. It has, it said, ‘delivered and has a stake in Blue Tern, one of the world’s largest and most advanced multipurpose offshore wind turbine installers for the North Sea’. 

If anything, Singapore’s commitment to renewables is undiminished. In a speech last October, its Minister for Sustainability and the Environment Mrs Grace Fu, declared, “solar energy is Singapore’s most viable renewable energy option, given our limited access to alternative energy sources such as geothermal, wind and hydropower”. 

News of the endeavour comes close on the back of an announcement by ENGIE group, a low-carbon energy and services provider. It recently commissioned Singapore’s biggest microgrid to generate clean power from multiple sources at Pulau Semakau, an outcrop lying on the fringes of the Singapore mainland. 

Bulging Bunkers!

Apart from its port, transhipment traffic, what has set Singapore apart from the rest of the world, is its ability to snag bunker fuel purchases aside from having some more than 300 mainline operators calling at its port.

And despite the withering climate the maritime industry has not stopped. Astoundingly, it has progressed and even managed to take top billings in global rankings. Measures taken to contain the COVID-19 pandemic have unfazed the city-state. It today accounts for about 20% of the global bunkering sales, according to a Reuters news report.

According to Senior Minister of State of Ministry of Transport and Ministry of Foreign Affairs Chee Hong Tat, Singapore managed to remain as the “world’s top bunkering hub” in the Xinhua-Baltic International Shipping Centre Development Index for the 7th consecutive year. It was also named the best Asian seaport for the 32nd time at the Asian Freight, Logistics and Supply Chain Awards.

He said that even with tumbling box numbers in 2020, the maritime industry recorded a 5% year-on-year increase in sales. 

Yet it is not just bunker sales seizing attention and admiration. Singapore knows that the world is moving assiduously fast to cleaner marine fuel and that it should not be left dawdling in that race. 

In a seismic move, the American Bureau of Shipping (ABS), Singapore’s Nanyang Technological University (NTU), and the Ammonia Safety and Training Institute (ASTI) have begun collaborating on a study on using ammonia as marine fuels in the port of Singapore, as well as exploring the supply, bunkering and safety aspects.

Ammonia is a fuel with significant potential for marine applications and ABS is leading the way in understanding challenges in the safe design and operation of ammonia-fuelled vessels. It is also clear that Singapore has the potential to play a critical role as a strategic downstream location to receive, store, consume or bunker ammonia,” said Panos Koutsourakis, ABS Director of Sustainability Strategy.

Those sentiments underscore the depth and intent of Singapore in honouring its global obligations towards clean energy, and marine fuel and though laudable, efforts at ensuring that are still at its embryonic stage. 

Should there be a new beginning?

For all its wonders and accomplishments, something that is least understood is how fragmented the shipping and offshore industry is? 

That is nowhere than what and where the offshore industry is headed? Singapore became the natural position for businesses because of its talent-friendly environment and the diverse range of services and asset companies seeking to make a mark in South-east and South Asia.

But the problem with runaway growth is with its pitfalls. Many family-owned companies started ordering vessels without restraint, mostly with borrowed money and little thought to long-term sustainability and banks and financial institutions lent money though exotic structures with little regard to the cyclical nature of the industry. 

When SGX titans Swiber and Swissco fell, other unshakeable titans such as Hin Leong just vanished. Miclyn Express Offshore defaulted on its bonds and Nam Cheong entered a scheme of arrangement with its creditors.

As it now happens Singapore’s maritime industry is now on a cusp of ‘revolutionary’ change. Yet for a maritime power such as Singapore, there is no Singaporean classification society, a Singaporean P&I club or even a customised Singaporean maritime bank. 

What it needs to do now, is to make its sterling maritime reputation ‘complete’. That may take time, but it is worth every penny of an investment.