Singapore at 61: A Logistics Story Built on Looking Ahead

by Dr. Raymon Krishnan,
Editor-at-Large, CargoNOW

Singapore turns 61 this year and is one of the world’s leading supply chain hubs – a major container transshipment hub, a global aviation gateway and an important centre for logistics, trade and supply chain services. None of this happened by accident.

Singapore’s location certainly helped. Sitting at the crossroads of major East-West shipping routes has always been an advantage but location alone does not explain why Singapore became what it is today and Singapore’s role in maritime trade is not solely a post-independence story.

As Temasek, the island was already part of regional trading networks centuries ago. Ships and traders from China, India, the Middle East and elsewhere passed through the region. The modern story began in 1819, when Stamford Raffles established a British trading post and Singapore developed as a free port. The absence of heavy customs duties helped attract merchants and cargo, and Singapore gradually became an important entrepôrt linking Asian markets with Europe and beyond. The opening of the Suez Canal in 1869 strengthened that position considerably. The shorter sea route between Europe and Asia made Singapore’s location even more valuable. Post independence, Singapore built on this geographic position and trade routes.

Leveraging Containerisation

One of the most important decisions came in the late 1960s. Containerisation was changing shipping. Traditional breakbulk cargo handling was giving way to standardised containers, larger ships and much faster cargo handling. Singapore’s leaders recognised that this would change the nature of international shipping and decided to invest.

The first container berths at Tanjong Pagar were developed in the late 1960s, and the terminal opened in 1972. At the time, it was a significant investment for a young country but it proved important. During primary school in the 70’s I passed by the terminal and the Keppel shipyards twice a day from Telok Blangah to Victoria Street on the bus service No. 125, which travelled along this ‘coastal road’.

As container shipping expanded throughout Asia, Singapore was already positioned to handle it. That early decision helped establish the foundations of the Singapore we know today as a major container and transshipment hub.

Aviation and Airfreight

The same thinking applied to aviation. By the 1970s, it was clear that Singapore needed an airport capable of supporting the country’s ambitions as an international business and trading centre. The investment was about much more than providing Singapore with somewhere for passenger aircraft to land. The objective was connectivity. Today, Changi is one of the world’s best-known airports and an important air cargo gateway.

Infrastructure is only half the equation

Another key part of Singapore’s logistics story receives considerably less attention. Whilst infrastructure is important, Singapore leads because of the ecosystem it has created. A banking and financial hub, stable and good government, land based infrastructure and connectivity and up until recent years, cost efficiency and a well educated and competitive workforce.

Professional organisations and industry bodies have played an important role. For the past 27 years, the Logistics & Supply Chain Management Society (LSCMS) has been part of Singapore’s logistics and supply chain community. Its contribution has been very different from that of a port authority or airport operator. LSCMS has focused on the people behind the industry, developing professional capability, encouraging knowledge sharing, bringing practitioners together and creating opportunities for the industry to discuss the issues shaping its future.

The logistics industry has changed enormously over the past 27 years. The people working in it today are dealing with supply chains that are more global, more technology-driven and considerably more exposed to geopolitical and environmental risk than they were when LSCMS was established. Professional development has therefore had to change as well. The industry now has to understand artificial intelligence, automation, supply chain resilience, cybersecurity, decarbonisation, trade disruption and an increasingly complicated geopolitical environment.

That requires more than infrastructure. It requires people who understand what is happening and are prepared to challenge established ways of doing things.

Singapore’s next challenge

The question now is whether Singapore can maintain the same momentum over the next 61 years. The circumstances differ from those faced in the past. Global trade is becoming more fragmented. Companies are reconsidering where they manufacture and source. The Johore-Singapore Special Economic Zone is one example. It creates a highly attractive alternative for land, labour and cost-sensitive activities that may previously have been located in Singapore. There is an opportunity to make Singapore and Johore function as an integrated supply chain ecosystem, with each location doing what it does best. There is also increasing conversations – and action –  around designing supply chains around resilience as well as cost. Technology is changing how logistics decisions are made, while decarbonisation is beginning to influence investment and operating decisions.

Geography gave Singapore a very good starting point. Tuas will bring a new generation of automated container handling however will the trade flows of the future justify the scale of the infrastructure Singapore is building today? This remains to be seen. Changi will continue to function as an adequate international aviation and cargo hub. Digitalisation and AI will change how supply chains operate but do we have people capable of seeing what comes next and leveraging it?

That is why the story of Singapore’s logistics success is not only a story about ports, ships, aircraft and infrastructure. It is also a story about the ecosystem comprising of people and institutions that have helped build the knowledge, skills and connections behind them.

As Singapore celebrates its 61st birthday, that is something worth recognising. The country has come a long way from Temasek, the trading settlement of centuries ago.The challenge now is the same one that Singapore has faced throughout its modern history: What comes next and are we ready for it?

Majulah Singapura.