“PSA Singapore currently holds the position as one of the busiest transhipment container ports in the world”
Considerable infrastructural development has taken place in the ports and shipping sector in Singapore over the years to handle rising cargo volumes and meet global shipping demands. Tuas port, owned and operated by PSA Corporation Limited, is set to emerge as the world’s largest fully automated port when it is completed in the 2040s. The port is being developed in four phases with the first phase having been inaugurated in 2022. PSA has recently undertaken the development of a new supply chain hub to support shipping services at Tuas port. The move reflects PSA’s commitment to providing customers with efficient supply chain services and Singapore’s goals to meet the needs of a rapidly changing global trading environment. At the groundbreaking of PSA’s Supply Chain Hub in October 2024, Lawrence Wong, the Prime Minister and Minister of Finance of Singapore, highlighted the importance of Tuas port and the new hub, and shed light on the growth of the port sector in the country. Excerpts…
Recent trends shaping the sector
A major trend in Singapore’s port sector is the rise in the scale of shipping and the increase in the capacity of ships. Earlier, container ships had the capacity to carry only around 500 to 800 containers; this capacity now stands at up to 25,000 containers. In addition to this, shipping alliances, which have been growing bigger over the decades, are now becoming mega alliances. In line with this, ports need to have extensive infrastructure and capabilities to handle these large ships and numerous containers efficiently. These major alliances today hold more than 80 per cent of the world’s container shipping capacity. Changes in their service networks could significantly affect freight traffic to hubs like Singapore. In order to attract these mega alliances, major ports like Shanghai, Ningbo-Zhoushan and Rotterdam are upgrading their infrastructure and offering value-added services, including cold storage facilities and regional distribution centres. This highlights the need for Singapore to sharpen its competitive edge to remain the preferred port of call.
Further, Singapore is expanding its capacity to meet the demands of the shipping industry. Tuas port under PSA Singapore is expected to be the world’s largest fully automated port, capable of handling 65 million twenty-foot equivalent units (TEUs) annually, once fully completed in the 2040s. This figure is almost double the current capacity handled by all ports in Singapore. This capacity will facilitate Tuas port to serve the world’s largest container vessels, alliances and shipping lines, and handle complex and voluminous transactions with efficiency and precision.
Current infrastructure and capacity
The founding leaders of Singapore envisioned tapping the country’s strategic location and constructing world-class port infrastructure, which was consistently upgraded over the decades. One of the major players in the sector, PSA Singapore operates the world’s largest transshipment hub with a total of 55 berths and an annual capacity of 43.9 million TEUs. PSA is connected to more than 600 seaports across
120 countries and serves as an international maritime centre. It also provides employment opportunities across the maritime ecosystem, including logistics and energy trading. It also currently holds the position as one of the busiest transshipment container ports in the world, and accounts for one-seventh of global transshipment volumes.Strong resilience offered by PSA
Over the decades, Singapore has made efforts to ensure that port operations were carried out while maintaining reliability, as seen during the Covid-19 pandemic. While various ports were either closed or faced freight traffic congestions and delays, PSA remained open throughout. As cargo and container turnaround continued, connectivity to the world was ensured, and critical goods including vaccines arrived in the country and reached other countries too.
The port and its stakeholders also demonstrate resilience in the face of headwinds. The recent conflict in the Middle East disrupted shipping through the Red Sea and created congestion at ports around the world including Singapore. To overcome this, the workers and unions along with PSA, the Maritime and Port Authority (MPA) and the Ministry of Transport came together to ramp up port capacity and open new berths. This ensured that businesses and consumers in Singapore were well shielded from supply shortages and disruptions. This spirit of solidarity among various stakeholders has enabled overcoming multiple challenges, and aided workers to reskill, upskill and stay updated with new technologies.
Features of new Supply Chain Hub
The PSA Supply Chain Hub is expected to further improve the competitiveness of Tuas port by enhancing its ability to handle various shipments. Currently, the Keppel Distripark, a multi-tenanted and modern cargo distribution complex, specialises in the consolidation, deconsolidation and distribution of cargo. It is, however, slated to be closed by 2027 as part of the shift to Tuas, thus marking another reason for the launch of the new Supply Chain Hub. It will expand the capacity currently available at the Keppel Distripark and attract increased trade flows including those seeking cargo management services. It will also introduce new capabilities including the use of emerging technologies. For instance, facilities to process cargo in cold storage and to handle dangerous or delicate goods will be developed. The Supply Chain Hub will also ensure that businesses can enjoy these value-added services more seamlessly under one roof within the same free trade zone.
The government has also stepped ahead and will aid in ensuring that cargo and vessels move on time and schedule. In particular, the MPA is developing new systems to enhance navigational safety and improve operational efficiency within the Singapore Strait and the port waters to deal with the increased complexity of maritime activities. Improved abilities to anticipate potential disruptions and hazards to shipping services and manage incidents will also be ensured.
Looking ahead
In the coming times, Tuas port will be the anchor for the future western gateway, enabling synergies with the surrounding industries at the Jurong Lake District, Jurong Innovation District, as well as the industrial facilities in the Tuas ecosystem. The multi-generation Tuas port project has now seen the opening of around 10 berths. With works commencing on the new Supply Chain Hub, various other developments are also anticipated to ensure that Tuas port can continue to serve the largest container vessels and ensure end-to-end supply chain solutions.
Going forward, another important goal of the Singapore government for maintaining the long-term competitiveness of the shipping sector is to ensure sustainable operations. Currently, responsibilities to meet the International Maritime Organization’s (IMO) target of net zero emissions by or around 2050 have gained notable importance. Singapore is also preparing for a multifuel future that involves cleaner maritime fuels. Further, contributions are also being made to the IMO discussions on global bunkering, safety and training standards for cleaner marine fuels, and energy efficiency measures to cut emissions from international shipping. Additionally, green and digital shipping corridors have been set up with Australia, China, Japan, the Netherlands and the US to test green and digital solutions before scaling them up.
Looking ahead, continual investments in ports and in value-added capabilities are essential to ensure continued success and to adapt and keep up with changing trends.