Singapore port to help ease global supply chain crisis, but it comes at a ‘cost’: Chee Hong Tat

SINGAPORE: The port of Singapore is ready to help ease the global supply chain crisis, but this is expected to cause container pileups and longer waiting times for ships coming to dock here, Senior Minister of State for Transport Chee Hong Tat said on Wednesday (Oct 20).

Global supply chains have been under pressure amid the COVID-19 pandemic, which has reduced manpower, delayed ships and caused bottlenecks at major ports worldwide.

Singapore, as a key node in the global supply chain, is not immune to these disruptions, with congestion in upstream ports causing ships to arrive off-schedule here, Mr Chee told reporters via teleconference.

Global vessel schedule reliability has fallen from an average of 75 per cent in the past few years to 35 to 40 per cent in 2021. Ships are arriving an average of 7.5 days late, Mr Chee added.

But the minister said Singapore’s reputation as a “catch-up” port means it wants to help ease some of this congestion, by ramping up its port capacity and resources, as well as helping shipping lines reroute their cargo and better plan their logistics.

For instance, port operator PSA has increased capacity by starting to use yard space at the Tuas mega port since September, Mr Chee said, enabling it to handle an extra 2,000 twenty-foot equivalent units (TEUs). The unit refers to the dimensions of a standard shipping container.

The Tuas port is opening in four phases starting this year. When fully completed in the 2040s, it will be the world's largest fully automated terminal capable of handling 65 million TEUs annually, almost double the 36.9 million TEUs that Singapore handled in 2020.

Since late last year, PSA has also reopened eight berths at its Keppel terminal and 18,000 ground slots to provide about 65,000 TEUs of yard capacity. More than 2,500 local workers have been recruited to boost manning by around 20 per cent, Mr Chee said.

“By relying on our excellent connectivity, and our strong reputation for efficiency and reliability, we have become the go-to port for shipping lines to catch up on lost time and connections, and also to untangle some of their operational challenges,” he added.

“We are not just a catch-up port, we are also a one stop-port where we offer a range of different services to the shipping lines so ... they do not just load and unload cargo, they can also do a range of other services, including bunkering, supplies and crew change.”

Beyond port operations, Mr Chee said PSA has been expediting the inflow of time-sensitive and critical materials like semiconductors, to avoid disruptions to production schedules.

The operator is also working with small- and medium-sized enterprises in Singapore to facilitate cargo flow from China to Singapore, enabling several local projects to complete on schedule.

“These are things which we can do ... to try and arrive at a more optimised arrangement to minimise the delays, and to do better planning,” Mr Chee said.

“So then, this requires us to also open up the data, and to share this with key stakeholders, so that there is greater visibility of where the choke points are. There is no point rushing to arrive at a port when there is a long queue.”

COST TO SINGAPORE

Nevertheless, Mr Chee said this kind of service comes at a “cost” to the port of Singapore, in the form of longer queues for ships and build-up of containers in its yards.

“Because what it means is that the boxes now stay in our yard much longer than before ... and also, long-dwelling boxes in our yard then put additional pressure on our operations,” he said.

“And as more ships come to Singapore to make use of what I described earlier, the one-stop service and the catch-up service, it does also add on to the queues and the waiting times."

Mr Chee said some of this, like the bunching up of vessels and greater fluctuations of intensity in port operations, were unavoidable.

“But we will try as much as we can to give them advice, share that information and help them to plan, but you can't avoid this because everybody wants to do catch up, everybody wants to reorganise their supply chain as quickly as possible,” he said.

When asked whether the supply chain disruptions would affect food prices in Singapore, Mr Chee said Singapore has always sought to reduce its reliance on a single source.

“The more diversified and wide-ranging our supply sources are, the greater the confidence that will be in terms of being able to withstand any single source disruption,” he said.

Ultimately, Mr Chee said Singapore made the “conscious” move to help ease global supply chain disruptions based on “longer-term strategic considerations” and its “global responsibility” as a key transshipment hub.

“To be frank, it would not totally remove the bottlenecks and congestions in global supply chains, because some of these are upstream, some of it is downstream, so the issue is a very complex one,” he added.

“However, what we want to do is to play our part as a global hub port, to be able to mitigate and reduce the extent of the problem that shipping lines and their customers are facing.”