Singapore offers wary outlook in logistics, transport sectors

Singapore offered a wary outlook for the logistics- and transport-related sectors, saying that signs of a recovery are not broad-based.

"Business conditions change through the year, so we're not sure if targets by the cluster make sense. We will work toward maintaining the same level as last year," Goh Eng Ghee, director for logistics and transport at Singapore's Economic Development Board (EDB) said in a recent edition of The Journal of Commerce.

Logistics and transport attracted S$400 million (US$$222 million) in manufacturing fixed-asset investment in 2001, about 40 percent of the island nation's total.

This "cluster" accounted for about 22 percent of total business spending in the services sector in 2001, government figures show.

The EDB said that logistics and supply chain management will benefit if the economy picks up. Singapore, like most of east and southeast Asia, is suffering from the general economic contraction.

In the aerospace industry, short-term growth will be affected by the Sept. 11 terrorist attacks, although long-term prospects remain bright, the Board said. The marine industry has order books of about S$5 billion over the next 18 months, and is expected to show "some growth" this year.

PSA Corp., the dominant container terminal operator, took a significant hit when Maersk Sealand switched most of its services to the nearby Port of Tanjung Pelepas in southern Malaysia. Evergreen Marine Corp. is considering a similar move.

"Singapore is going to do something to continue to be competitive. I think we should see competition as part and parcel of life," Goh said.

Singapore offers a range of incentives to lure high-tech multinationals, especially in transport and supply chain management. Goh said the government should continue to build up its strength in the logistics sector, but didn't give details.

"Our intent for the logistics and transport cluster is to develop Singapore into an integrated and connected hub that enables the effective global and regional flow of goods and people. It will be a hub possessing seamless interfaces between various modes of transportation as well as between manufacturers and logistics service providers." - JP