“Singapore has invested heavily in infrastructure and institutions that facilitate the seamless movement of goods through the country”

Singapore stands to be a strategic supply chain and logistics hub with strong connectivity and advanced infrastructure. The presence of robust maritime and air cargo hubs in the country provides a solid foundation. This is complemented by advanced storage and supply chain management capabilities, further strengthened by the recently inaugurated World Gateway II. Moreover, the integration of advanced technologies and the adoption of sustainable initiatives continue to form key components in enhancing the supply chain. At the opening ceremony of Maersk’s World Gateway II, Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, highlighted Singapore’s role as a global hub, the key features of the new facility and the country’s long-standing relationship with Maersk. Edited excerpts…

Singapore as a strategic hub

Over the decades, Singapore has invested heavily in infrastructure and institutions that facilitate the seamless movement of goods through the country. The Port of Singapore is the world’s busiest transhipment hub, connecting over 600 ports globally, and handling around one-fifth of global container transhipment flows. Changi Airport, on the other hand, is one of Asia’s largest air cargo hubs. Further, most of the top 25 global logistics players operate in Singapore and many have their regional or global headquarters located in the country. Together, they form a strong ecosystem that has allowed Singapore to become a strategic logistics and supply chain hub, serving businesses across Asia.

Singapore’s partnership with Maersk

Maersk has been an important part of Singapore’s journey towards becoming a strategic logistics and supply chain hub. Maersk has steadily expanded its presence in the country since its first vessel called at the Port of Singapore in 1929. Singapore is currently Maersk’s second largest base worldwide outside Copenhagen, handling over 1,500 employees and having over 140 vessels under the Singapore Registry of Ships. Maersk also has a long-standing partnership with the Maritime and Port Authority of Singapore in areas including digitalisation and decarbonisation of the maritime sector. In recent years, it has also transformed itself into an integrated logistics company, providing end-to-end supply chain solutions across sea, land and air.

World Gateway II

Maersk’s first regional distribution centre in Singapore, the World Gateway I, was inaugurated in 2016. It was one of the largest automated and customs-bonded warehouses in Asia, supporting high-tech logistics operations and regional distribution. With the opening of World Gateway II, Maersk is taking the next step. This second regional distribution centre was successfully completed within a span of just two years. The facility, featuring a logistics capacity of 1.1 million square feet, almost doubles the company’s footprint in the country to over 2 million square feet. In addition to being an expansion to a logistics centre, the move highlights the deepening partnership between Singapore and Maersk. It further reinforces Singapore’s role as a global hub for the movement of goods. These two facilities together create a powerful logistics platform for the region, facilitating high-value cargo including pharmaceuticals, beverages, apparel and lifestyle products to arrive in Singapore and be distributed efficiently across Asia and via sea, air or land.

Technology and innovation

Automation and digital technologies are expected to enable supply chains to become faster, more reliable and more resilient. World Gateway II demonstrates how technology is transforming logistics. The facility features the multi shuttle system, one of the largest automated loose-piece handling systems in the region. Together with autonomous case-handling robots and autonomous mobile robots, these systems help maximise the utilisation of warehouse space, improve inventory accuracy and increase output. This is the future of logistics.

Sustainability in supply chains

The logistics sector plays a critical role in the global transition towards lower-carbon supply chains. As companies, governments and customers place greater emphasis on greener trade and logistics, global supply chains are under increasing pressure to reduce their carbon footprint. Improvements in energy efficiency, electrification of operations and the use of digital technologies to optimise routing can significantly lower emissions across supply networks. World Gateway II incorporates sustainability features such as solar panels installed above the container parking lots, supporting greener energy use for the facility. Singapore will continue to work closely with partners like Maersk to advance green maritime and logistics solutions. Hence, combining sustainability with efficiency and innovation can pave the way for global trade to become cleaner and more sustainable.

Investing in infrastructure and logistics capabilities

The global environment is currently witnessing a change. Trade flows are increasingly being shaped by geopolitical tensions, economic fragmentation and supply chain disruptions. As a result, companies are diversifying production, redesigning supply chains and exploring new options to build greater resilience into their operations. More recent conflicts including the ongoing war in the Middle East have affected key shipping routes and created uncertainty across global supply networks. These developments are affecting trade flows and causing rerouting and reorganising. For a trading nation like Singapore, this highlights how its position as a global hub cannot be taken for granted. There is a need to continually refresh and strengthen the country’s role as a hub for global goods flows, while ensuring necessary capacities and capabilities.

Singapore, therefore, will continue to invest in its infrastructure and capacity. Works are under way for Tuas port, with a capacity to handle 65 million twenty-foot equivalent units (TEUs) annually. It is slated to be the world’s largest fully automated port when completed in the 2040s. The development of Terminal 5 at Changi Airport and expanded cargo facilities will further strengthen Singapore’s role as a global air cargo hub.

However, the development of infrastructure alone is insufficient. There is a need to strengthen the logistics and supply chain ecosystem in order to remain competitive. This comprises advanced warehousing, regional distribution centres and supply chain management capabilities that facilitate companies to handle high-value goods and more complex supply chains. Investments like World Gateway II, therefore, are important. They expand Singapore’s logistics capacity while strengthening capabilities in automation, digital logistics and advanced fulfilment.

Singapore will also strengthen the nexus between ports, airports and the logistics ecosystem to further reinforce its hub position. Such intermodal connectivity will become increasingly important as companies redesign supply chains to be nimbler and more resilient. Facilities like World Gateway I and II play an important role in strengthening this ecosystem, by connecting Singapore’s ports and airports with regional supply chains and consumer markets across Asia.

Looking ahead

For decades, Singapore has grown by serving as a trusted hub for the movement of goods across the world. This has supported its economy, created good jobs and connected Singapore to global markets. However, with the current uncertain global environment, there is a need to refresh and strengthen this role, including through investments in infrastructure, strengthening the logistics ecosystem, embracing technology and deepening partnerships with industry leaders.