Singapore Deputy Prime Minister and Coordinating Minister for Economic Policies, Heng Swee Keat, on April 4 at his keynote speech at the Singapore Maritime Week 2022 laid out three key areas of transformation that the maritime sector must focus on, against the backdrop of the Covid-19 pandemic and Russia’s invasion of Ukraine.
DPM Heng said the global maritime industry is approaching the next storm from a position of strength and that the fundamentals for growth in the medium term are strong, despite the short-term headwinds. The industry will need to transform itself to grow, and there are three critical areas to focus on.
“Continuous maritime investment. Digitalization for efficiency. Decisive green transition. These are three key areas that the global maritime industry must focus on. As a global maritime hub, Singapore seeks to contribute to these transformation efforts.”
Heng announced the launch of the refreshed Sea Transport Sector Industry Transformation Map for 2025, which sets out the collective course for the next few years with an emphasis on innovation, human capital development, and resilience.
“To strengthen the translation from ideas to action, we will also be setting up a Maritime Industry Tripartite Transformation Committee, comprising our businesses, unions, and government agencies to oversee implementation.”
Heng said that in the area of digitalization, Singapore is taking it one step further with the development of OCEANS-X, an API marketplace to facilitate data exchange, that will enable the industry to scale digitalization more easily and quickly.
Singapore is also making a decisive green transition. Among the various initiatives, Singapore is joining the Clydebank Declaration for Green Shipping Corridors, together with 22 other signatory states. Singapore is looking to build a green ship financing ecosystem, and develop a suite of financing options to enable the green transition. In the coming years, the maritime sector will undergo a transition to cleaner fuels.
A new geopolitical reality
DPM Heng said that “the Ukraine crisis will apply the brakes on global recovery. Oil prices are at an all-time high, further pushing up the cost of transportation. This in turn adds pressure to global inflation and increases the risk of stagflation.
“With the civil airspace over Ukraine closed, some flights have been cancelled while those still operating are taking longer routes. Shippers are also avoiding the China-Europe rail lines which run through Russia. The decreased air and rail cargo capacity, and the resulting higher costs, have put a greater strain on shipping.
“Yet the armed conflict has also disrupted shipping. More than a hundred ships are stuck in ports in the Black Sea, with several damaged due to the conflict. With Russia and Ukraine accounting for 15% of the global seafaring workforce, there could potentially be manpower disruptions to the maritime sector.
“Even if military action in Ukraine ceases, the invasion has irreversibly accelerated the tectonic shifts in geopolitics.”
Photo credit: Maritime and Port Authority of Singapore (MPA). Singapore Deputy Prime Minister and Coordinating Minister for Economic Policies, Heng Swee Keat.