Singapore logistic industry: opportunities for foreign companies

Singapore logistic industry: opportunities for foreign companies

Transportation and logistics industry in Singapore

Singapore is slated for growth as a global transshipment hub regardless of recession in the European and American markets.

A rather sluggish but consistent growth in both port and airport tonnage volumes has been predicted for Singapore in the coming years.

Current statistics on the Singapore transport and logistics industry

Singapore’s Changi Airport that connects 280 cities in almost 60 countries has reported a fall in air freight handling at a rate of 1.3% year on year showing a noticeable slowdown in the growth of cargo processing. However, this has not deterred port and airport facilities from making considerable investments keeping the medium and the long term growth prospects in mind.

Several favorable factors are seen contributing to positioning Singapore as a liquefied natural gas (LNG) transport center.

Figures indicate that despite competition from Malaysia, Singapore’s box volumes have risen from 2.64 million (twenty foot equivalent) units to 2.83 million units in a span of a year indicating a healthy 7.2% growth in this sector.

Here is a SWOT analysis of freight transport in Singapore

For those wishing to invest in this sector, here are the facts:

Strengths

Singapore’s shipping industry location in the center of sea trade routes, its position as a major international trading hub and its modern and well connected Changi Airport. These certainly strengthen Singapore’s position as one of the main regional and passenger freight pivots of the world.

Weaknesses

Some major concerns are Singapore’s exposure to security threats, the Strait of Malacca spelling out trouble in case of a border dispute, piracy and high wage rate as compared to other Asian countries.

Opportunities

Singapore stands to gain market share in key markets like that of China and other countries in its neighborhood as it owns one of the most profitable world airlines. An estimated 8 billion USD is to be invested in expanding the Singapore port.

Threats

Despite being one the busiest trading terminals in the world, PSA might have to take a hit due to the proliferation of Chinese mainland ports at Shanghai and Ningbo Zhoushan. Add to this, the insecurity of a drop in external demand on account of a slowdown in the US and even in China.

Forecast: transportation and logistics industry in Singapore

An analysis of Singapore’s freight transport sector gives us an insight into the reasons that support the growth of Singapore’s transportation and logistics industry.

For starters, continued regional growth and an empowering domestic outlook are bound to drive Singapore’s imports and exports besides benefiting the freight transport sector.

Singapore’s position as a major container shipping and aviation transshipment hub supports growth of the logistics industry. A predicted growth in Singapore’s exports will hugely impact the overall growth rate of the economy and trade thus positively benefiting the freight transport sector.

Changi Airport being a hub of electronic products and Port of Singapore providing the world’s largest container facility play an important role in establishing trade links between Asia and the rest of the world.

If you are considering taking a position in the Singapore transportation sector, Alliance experts can help you with practical market research tailored to your specific information needs and sub sector.

 

This entry in Asia was updated on August 2, 2017 by specialist.