The Port of Singapore: a Reflective Essay

[Company Address] 08 Fall The Port of Singapore Prepared by : Rajib Das, Student # 38410098 This document discuses about the Port of Singapore and the strategic importance of its location to the modern traders. It also discusses the government incentives and the Advanced Information Technology that the port has been using to attract new shipping companies in the recent past. Anything beyond is not discussed for the limitation of the term paper. Table of Contents The Port of Singapore3 Singapore: Strategic Importance of the Geographic Location†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 The Adoption of IT 6Government Incentives9 Competition10 Conclusions11 Appendix12 Citations16 The port of singapore Over the last 40 years, the world has been awestruck with the unbelievable growth of the island nation into a major transportation epicentre of global trading. In the 1970s ,the Port of Singapore pioneered the first container port in the history. By 1980’s the port h it its first milestone of handling 1 million TEUs and within the next 10 years by 1990’s (Port of Singapore Annual Reports), the port was handling 5 million TEU (Twenty foot equivalent container units)per annum.Today, about 20 years after the big landmark, the port handles over 28 million TEUs (Port of Singapore Annual Reports) per year making it the second largest port in the entire world after the Port of Shanghai in terms of Container traffic. The container shipments from the Port of Singapore comprise of one fifth of the world’s container shipment volume (Authority). The port also takes immense pride in shipping half of the world’s annual crude oil supply. In terms of total cargo volume, the port handles about 500000 thousand freight tonnes per year (Authority) which makes it the second busiest port in the world after the Port of Shanghai .Today the Port Singapore is connected to 123 ports of the world spreading over 123 countries and 6 continents, making it one of the most important ports of the world. Singapore: Strategic Importance of the Geographical Location The importance of the Geographical location of Singapore has been largely significant since trading started between Asian, North American and the European continents. The Singapore Strait has been used heavily for trading by the Romans, Chinese, Arabs, Greeks and the Indians since time immemorial (Gupta).After the Suez Canal opened in the mid 1800s, the Singapore Strait have become a vital linkage of trade between the powerful European nations and East Asia. The Singapore Strait is attractive to traders because it is the shortest and cheapest sea-link between the Pacific Ocean and the Indian Ocean (Gupta). With the advent of the large Japanese car manufacturing industry , the textile industry of South Asia and the heavy outsourcing of the North American manufacturing plants in the last 30 years, Asia is no longer a continent which mainly exports low-valued raw materials to be processed in the West.The flow of more expensive manufactured goods from the East to the West have proliferated in the last 30 years. (Sie) As a result, shipping and transportation costs have become even further less inelastic fostering the immense growth of the shipping industry of Singapore. Although it is often not in the limelight, but the South-east Asian nations have a large base of oil- refineries which have led to the heavy shipping traffic of the crude oil through the strait of Singapore. Taiwan has a oil refining capacity of . 54 million b/cd and South Korea has a capacity of 1 million b/cd alongside Singapore.Japan and China tops the list with a capacity of 4. 7 and 2. 2 million b/cd respectively. (Olson) Apart from China which has a self-sustaining production of crude oil, every other nations depend on the Middle-Eastern countries for their oil supplies. Japan alone imported 130 million tonnes and 195 million tonnes of crude oil from the Middle-East and the African natio ns in the years 1990 and 2010 respectively (Olson). Owing to these heavy demand for crude oil, the Port of Singapore has been responsible for transporting half of the world’s oil supply in the year 2010.Owing to it’s prime geographic location and heavy government incentives and a base of Information Technology discussed later in the paper, majority of the exports from Singapore is based on re-exports from other countries . There are about 60000 ship movements annually in the Strait of Singapore. In 2010, the Port of Singapore transhipped 17447,000 TEUs which constituted almost 82 (Statistics)% of Singapore’s annual export . Today, the port of Singapore is the busiest Port in the World in terms of transhipment of containers.Port of Singapore : Operations The Port of Singapore has 6 terminals to accommodate all types of vessels-ocean liners, lighters, cargo freighters, coasters, break bulk carriers and container ships. The 6 terminals are Keppel Terminal, Brani Te rminal, Pasir Panjang Terminal, Sembawang Wharves and Pasir Panjang Wharves . The Wharves terminals can facilitate all kinds of vessel while the other terminals are specialized meant for the containers vessels. The Port of Singapore’s container’s facilities are listed as follows: * Number of Terminals: 4 Area: 436 hectares * Designed capacity : 24700 kTEU * Quay cranes: 143 * Maximum draft: 16 m * Quay length: 12800 m According to the Global Competitive Report published by the World Economic Forum, Port of Singapore ranked the best port in terms of facilities and received a rating of 6. 76 out of a maximum 7. The adoption of information technology Over the last few years The Port of Singapore has invested heavily in Information Technology which means that processes now are much faster, more reliable and more cost effective for the consumers.Making the most out of the latest automation technology, information technology and wireless communications, the Port of Singapore combined it’s large domain knowledge in container operations with the latest technology such as CITOS(Computer Integrated Terminal Operations System), PORTNET and Flow through Gate Technology. CITOS(Computer Integrated Terminal Operating System) Singapore Port’s massive network and heavy shipping traffic is very efficiently controlled by Computer Integrated Terminal Operations System(CITOS).CITOS is a Resource Planning System that keeps track of every asset from prime movers to yard cranes to quay cranes to containers and drivers. Before CITOS was introduced, resources were allocated to a certain place in the port and they stayed there unless it was needed somewhere else. With CITOS, resources can be much easily coordinated and allocated. 60 different vessels harbour the Singapore Port on a given day. Although a lot of these vessels arrive out of schedule, CITOS make sure that they don’t have to wait in the harbour for a minute.When any shipping line applies fo r a berth, the ship stowage and the shipping connection information is sent to the port through PORTNET . The CITOS system begins planning the berth of the shipping line almost 72 hours prior arrival which means that the system also compute other alternatives in case that the vessel is off schedule. This means that for almost all the vessels that harbour the Port of Singapore, there is almost zero waiting time. (Authority) Once a ship is harboured, the quay cranes operated by the CITOS system start discharging containers destined for other ports and load boxes brought in by other vessels.Once containers are unloaded on the dock, they are not randomly stacked on the yard. The Information about the container is fed into the system and CITOS generates a ship stowage and yard layout plans base on the following factors in order of importance : * Special requirements (e. g. Dangerous goods, tight connections etc) * Destination * Ship stability (for further stowage planning) * Size * Weigh t The CITOS system provides many competitive advantages to the Port of Singapore. It allows the system to keep track and locate every single container on the port.It allows the maximum use of land and optimize efficiency. Last, but not the least, it ensures maximum utilization of each individual resource since it is pre-planned by the system beforehand. PORTNET PORTNET is a network service that provides internet connectivity to the entire port community with a single sign-on network portal. The system provides interconnectivity between vessels, freight forwarders, government agencies and haulers. This helps them to synchronize and manage information much better.PORTNET Singapore has about 8000 users who use the system to get real time, detailed information on all port, logistics and shipping processes and use it to make critical decisions in their business. The main functions of PORTNET Singapore is summarized below: * Enable shipping companies to monitor their own performance * Pro vide a documentation portal between the consumers and the shipping company, * Managing efficiency for transhipment processes of the vessels * Supporting real time information exchanges between shipping line alliances. FLOW THROUGH GATEThe Flow through gate system is a sustainable paper-less system that helps truck drivers to identify the specific containers that is needed to be loaded onto the truck within a span of 20-25 seconds. On average, the system processes about 8000 trucks per day. Before the driver arrives at the dock, he submits a requisition for the containers through the PORTNET system. After the driver arrives at the Port gate, he verifies his identity through a fingerprint biometric reader or by punching in his unique identification number. The gate scan’s the truck’s dashboard and identifies the truck.The Container number Recognition system captures the container number with a close circuit camera. The system then matches these information against the in formation provided during requisition and clears the truck for entry. After the driver enters the port, the system sends a text message to the driver’s mobile phone with the precise information about the location in the dock where the containers would be ready to be stacked onto the truck. Government incentives The Government of Singapore had a major role to play in the boom of the shipping industry in the last 40 years.Singapore has 5 Free Trade Zones to encourage Re-exports of goods from other countries. Under the Free Trade Act goods could be cleaned ,sorted, distributed, repacked, assembled or sold in accordance with the Act. Under the Act, transhipment goods can be stored in Singapore free of charge with very little custom bureaucracies. In 1991 , The Singapore government enacted the Approved International Shipping(AIS) Enterprise incentive under which shipping companies based on Singapore could be exempted from corporate taxes for the initial 10 years and can be renewed even if they don’t own their own vessel.In 2009, the Government of Singapore announced their goal of making Singapore the ‘’global maritime knowledge hub’’ of the world. Since then the government have heavily invested in research and development of Information Technology in the shipping industry and the Port of Singapore. It has introduced the Maritime Cluster Fund which offers financial funds for training ,various research, engineering and innovation under this field. Such HR incentives have definitely smoothened the transition of a lot of shipping companies to Singapore in the last two and a half years.COMPETITION As discussed earlier, the Singapore Strait have grown massive importance in the last few decades. Today, Singapore faces massive competition from the neighbouring ports especially from the port of Tenjung Peepas in Malaysia. In the early 2000, 10 % of the Singapore’s container volume moved to the port in Malaysia owing to the che ap handling charges in the neighbouring country. Statistics shows that, handling charges were about 30-40% lower than Singapore. Many of the neighbouring ports have below-par facilities compared to the Port of Singapore.Hence many of these ports can afford to have much lower handling and receiving charges. Although Singapore have a much better reputation, the comparatively more expensive nature of the Port of Singapore is going to continue to pose a threat to the port in the years to come. COnclusion The Port of Singapore has a great reputation being the trade epicentre of the world and for being one of the best sea port in the world. Although the port has an excellent past reputation, the 21st century will bring about new challenges and competition from neighbouring ports such as Malaysia.The Government of Singapore is doing its best by harnessing advanced Information technology at the Port and providing different government incentives to hold it’s competitive standing. In r esponse, many of the foreign companies such as Clarkson, Swiss Re, Shipowners’ P&I club and Rolls Royce have moved their marine headquarters to Singapore in the last few years. As the supremacy for leading ports unfolds, more shipping companies will be taking government incentives and Information Technology for granted.Today more firms are showing interest in ports which have established legal, financial and logistics sector. It will be interesting to see ho the Port of Singapore respond to these new challenges in the years to come. Appendix Table 2. Containers handled at the PSA terminals (source: PSA annual report 2000) Year| Million TEUs handled| 1989| 4. 36| 1990| 5. 22| 1991| 6. 35| 1992| 7. 55| 1993| 9. 04| 1994| 10. 39| 1995| 11. 84| 1996| 12. 93| 1997| 14. 12| 1998| 15. 1| 1999| 15. 9| Appendix 2: Port Rankings according to the World Economic Forum Table 1.Ranking of ports on port facilities as presented in the global competitiveness report published by the world econ omic forum Rank| Country| Rating for port facilities are extensive and efficient (1 strongly disagree, 7 strongly agree)| 1| Singapore| 6. 76| 2| Netherlands| 6. 64| 3| Canada| 6. 42| 4| Germany| 6. 38| 5| Hong Kong SAR| 6. 38| 6| United States| 6. 27| 7| Finland| 6. 26| 8| Belgium| 6. 17| 9| Denmark| 6. 16| 10| New Zealand| 5. 82| Appendix 3: 14. 1 SEA CARGO AND SHIPPING STATISTICS 2000 2005 2006 2007 2008 2009 2010 Vessel Arrivals Number 145,383 130,318 128,922 128,568 131,695 130,575 127,299Shipping Tonnage (‘000 GT) 910,180 1,151,791 1,314,990 1,459,221 1,621,065 1,784,669 1,919,408 Total Cargo (‘000 tonnes) 325,591 423,268 448,504 483,616 515,415 472,300 503,342 General 199,577 262,265 281,393 314,917 336,425 280,349 313,683 Bulk 126,014 161,003 167,111 168,699 178,991 191,951 189,659 Total Container Throughput (‘000 TEUs) 17,087 23,192 24,792 27,935 29,918 25,867 28,431 Bunker Sales (‘000 tonnes) 18,651 25,479 28,379 31,546 34,936 36,387 40,853 Singapor e Ship Registry (End of Period) Number 3,335 3,219 3,249 3,553 3,843 3,950 3,978 ‘000 GT 23,043 32,963 34,793 39,603 43,702 45,632 48,783Works Cited Authority, Port of Singapore. www. singaporepsa. com. Gupta, Sen. The Malacca Straits and the Indian Ocean: A Study of the Strategic and Legal Aspects of a Controversial Sea-lane. New Delhi, 1974. Olson, Hal F. â€Å"â€Å"Tanker traffic and shipping routes†. † n. d. â€Å"Port of Singapore Annual Reports. † Port of Singapore, 1970-2010. Sie, Chia Lin. â€Å"â€Å"The Straits of Malacca and Singapore: Navigational, Resources, and Environmental Considerations†. † Southeast Asian Seas: Frontiers for Development, 1981. Statistics, Singapore Department of. â€Å"†Yearbook of Statistics? .† 2011.