How Singapore's port helped change the country's economy

How Singapore's port helped change the country's economy

The port of Singapore has played an important role in shaping the country's economy, bringing it from a sleepy trading post to a first world economy in one generation. Today, Singapore's maritime industry contributes about 7 per cent to the country's GDP.

SINGAPORE: The port of Singapore has played a significant role in the development of Singapore, helping the Republic become a first world economy in one generation. The maritime industry currently contributes about 7 per cent to Singapore's GDP, or 10 per cent of the services sector - which makes up three-quarters of the Singapore economy.

PSA now manages the container terminals in Singapore.

At PSA's control centres, ships are told where to dock, and crane operators move containers around remotely from ships to trucks to storage warehouses. The whole operation comes together seamlessly using sophisticated technology.

Mr Ng Pi Rui, a control centre deputy manager with PSA Singapore Terminals, said: "We handle an average of 91,000 containers every day - handling about 60 ships on average every day."

Five thousand - or about 6 per cent of those containers - end their journey in Singapore, while the rest are shipped on to destinations around the world.

Singapore's lack of natural resources means that almost everything needs to be imported using such containers. They contain things like food, cosmetics and building materials - anything Singapore's six million inhabitants need on a day-to-day basis. There are also refrigerated units, which can carry flowers and pharmaceuticals as well.

In 2014, PSA handled 33.5 million containers - lined end-to-end, that is enough to encircle the globe four times.

Associate Professor Peter Borschberg, who is with the Department of History at the National University of Singapore, explained the significance of Singapore's ports: "Singapore was always conceived and designed as a free port, and it remained so through the 19th and much of the 20th centuries as well.

"There are, of course, certain developments that are very important to mention in this context. The opening of the new harbour, later renamed Keppel Harbour, the opening of trade with Siam in the middle of the 1850s, the arrival of the first steamships in Singapore from the mid-1840s onward, the abolition of the British East India Company, and the founding of the Straits Settlements in 1867, and the opening of the Suez Canal in 1869.

"With these developments, Singapore was emerging as an important calling station between India and West Asia in general and the Far East."

Singapore's geographical location at a crossroads of the East and West also contributed to its success as a trading port.

Assoc Prof Borschberg added: “If you come from West Asia or the Bay of Bengal and you want to go to the Far East, and you're doing this either in the age of sail or in the age of steam, there are really just two entry points. There is only the Straits of Malacca or the Sunda Strait.”

Then, ships came from all over the world with goods packed deep in their hulls. On arrival, they were unpacked and transferred manually - loaded onto tongkangs and rowed down the Singapore River to where they would be stowed in warehouses.

CONTAINERISATION

An important milestone in Singapore's maritime history was the birth of containerisation. On the Jun 23, 1972, the newly-built Tanjong Pagar container port welcomed its very first container ship. It was also Southeast Asia's first container port then.

Two hundred and twenty-five personnel were specially trained for this momentous occasion - some to operate the giant cranes, and others to become all-purpose workers at the new container port.

And there has been no turning back since then as the port has grown from strength to strength. In 2000, there were a total of 15 shipping groups in Singapore. By 2014, that number grew to 130.

Mr Ng added: "Through larger cranes, deeper berths and longer quay lengths, Singapore is one of the few ports in the world that is able to handle mega ships."

CHALLENGES AHEAD

But the industry has not been without its challenges. The opening of Johor's Tanjung Pelepas port in 1999 saw Maersk shipping move all its operations across the Causeway, and business dropped by 10 per cent for the Port of Singapore.

Ms Tan Beng Tee, assistant chief executive of development with the Maritime and Port Authority of Singapore, said: "Because shipping is a global industry, it is evolving all the time, so there are a lot of geopolitical and economic uncertainties that the industry has to look at.

"There is a greater demand on the yard space - how do we ensure that these are turned around quicker, maintaining our competitiveness. So these will be one of the challenges we see with the alliances coming in. The other challenge we see will be greater competition, because we have got every port building their infrastructure, there will be competition and what should our response be to the competition."

To cater to future demand for cargo trade, the expansion of Pasir Panjang Port has been accelerated. It is in phase three and four of an expansion and will be fully operational by the end of 2017. The new terminals will be expected to handle 15 million containers, bringing Singapore's total handling capacity to 50 million containers a year.

Looking ahead, all terminals will move to a megaport in Tuas by the end of the next decade.

"The needs of the industry evolve. It is continuously evolving, and when it evolves, you have certain trends that come about, and certain additional requirements," added Ms Tan. "So we have actually announced that in the long-run, we will consolidate the port at Tuas, and Tuas port, when fully operational, should be able to let us handle up to 65 million tonnes of container throughput."

Source: CNA/ac