Daniel Tan, Executive Director, Singapore Shipping Association
Daniel Tan, Executive Director of the Singapore Shipping Association, gives a thorough insight into the role the SSA in maintaining Singapore‘s reputation as one of the world’s most efficient, competitive and busy ports, while also expanding on the longstanding importance of the shipping industry to Singapore‘s economy.
Could you please begin by describing a bit more of your key objectives as an association today?
The formation of the Singapore Shipping Association (SSA) back in 1985 was intended to consolidate Singapore’s fragmented ship owning and shipping industry. When speaking to the government agencies back then, our discussions were not very efficient and productive because there were a number of diverse shipping organizations. In that regard, the Singapore shipping community felt that they needed to build up a stronger voice for the shipping industry especially when we speak to the government or the maritime related agencies on important policy matters.
Our key objectives as an Association are to promote the interests of our members, and to further enhance Singapore’s position as a competitive international maritime hub. To this end, SSA strongly supports transparent, pragmatic and implementable policies.
The shipping industry in Singapore can trace its roots to the days when Sir Stamford Raffles set up a trading post that ultimately turned into something beyond his original imagination. Given the country’s rich maritime heritage how would you describe the importance of its shipping industry to the country’s wealth and success?
Sir Stamford Raffles first set foot in Singapore in 1819. He subsequently set up a small trading post at the mouth of the Singapore River. One hundred and ninety years later, the trading post has grown to become a major metropolis. Today, shipping is an important industry to Singapore as it contributes approximately 7 percent to the country’s GDP.
Over the years, we have leveraged on our strength, largely dependent on our port and deep water harbor and our strategic location at the trading crossroads between east and west. All trade between the developed countries in Europe, Middle East and East Asia are routed through here. Besides trade, Singapore has also become the world’s largest bunkering hub. If you are flying into Singapore, one would be able to clearly see a vast ocean of ships dotted everywhere around Singapore’s shorelines and anchorages.
In contrast to our resource rich neighboring countries, Singapore is a small island state with no resources. Our Government therefore tried very hard to maximize on what Singapore has—its port, geostrategic location and a talented workforce. Singaporeans work very hard and this comes right from the top with the Government’s strong emphasis on productivity and efficiency. Fundamentally, it is the people’s dedication and work ethics that have shaped Singapore’s overall success.
How would you describe the main strengths and competencies within that industry today?
The strength of Singapore as a shipping nation lies in the port itself. Besides having a deep-water harbor where ships can easily call, we also have very good and modern supporting infrastructures—roads, telecommunications, warehousing, depots and airport. A lot of emphasis has also been placed on manpower development and our dedicated workforce. The port itself is highly automated, employing the state of the art technologies, which provides highly efficient and productive services to turn around ships fast after working cargoes.
As an international shipping centre, Singapore provides a comprehensive range of ancillary services: ship repairs, bunkering, ship surveys, bunker surveys, ship broking, financing, marine insurance, arbitration and ship supplies etc.
The Government of Singapore is pro–enterprise and adopts an open shipping policy. Ships of all flags are welcome to trade with Singapore. All stakeholders are working very diligently to shape Singapore as a shipping nation.
No one can ignore the fact that widespread economic turbulence in the international shipping industry has caused many companies to reconsider their strategies and business models. What impact does the slowdown have on the allied industries surrounding the shipping industry?
Shipping is a global business. What happens elsewhere can also affect shipping in Singapore. We are not immune to any global financial crisis. Although certain segments of the global shipping market have suffered, with the particular exception of the offshore industry, the industry is still holding and managing well in Singapore and in the surrounding ASEAN countries. China’s economy is still going strong, as is India, for example. They are the main engines of growth in this region. As Singapore is straddled right in the middle of this economic powerhouse zone, intra-ASEAN and intra-regional trade is still relatively healthy.
Within the shipping industry, what is the relative importance of the offshore industry to Singapore? As it continues to demonstrate strong growth prospects, how is it affecting your association and members?
The strong oil price levels continue to encourage upstream oil and gas companies to search for resources in unexplored areas. With resource rich neighbors like Malaysia and Indonesia, Singapore is always fast to leverage on the various business opportunities that may arise as a result of the increased exploration activities. Increasingly, we see a strong presence of marine offshore-related companies being set up in Singapore. Singapore shipyards are also very active in supporting FPSO conversion, offshore rig design, construction and repair, ship repair and conversion and specialized shipbuilding.
In this regard, the SSA has put together a special committee dedicated to addressing the issues of concerns relating to the offshore industry in which companies such as Swire, among others, are very active.
Have you seen the membership structure change in any way with more offshore players coming in? Or have there been the same numbers but more active participation?
In fact we represent a very wide spectrum of the shipping industry. The backbone of the association is in ship-owning, ship management and shipping agency. If you own offshore vessels, you are welcome to join SSA. In recent years, we have seen many offshore companies being set up here in Singapore, and many of them have in fact joined the association.
As the Maritime and Port Authority of Singapore (MPA) and the International Enterprise (IE) of Singapore have both placed strong emphasis on the offshore and wider oil and gas industry, the SSA is also playing its due role in the offshore domain. Through our Offshore Committee, we hope to be able to address and assist them with their business concerns, not just oil and gas issues within Singapore, but also as part of their regional growth plans.
In terms of LNG, what are the technical and commercial challenges that the marine industry has to overcome in order to achieve a thriving LNG trade here?
LNG will certainly become a reality over time. There is plentiful supply of it everywhere. The only problem now is that when we speak of LNG terminals, Singapore has one but who else has it? We understand that Korea and Japan may be investing in such infrastructures. However, the issue is that foreign going ships using LNG will require refueling stations. In Rotterdam, I understand that ships on short sea trades, such as passenger ferries, are using LNG, but not those on long haul voyages.
In the Singapore context, I reckon our harbor craft operating in our domestic waters could become the user of LNG in the near future.
It’s big business for Singapore having to do LNG conversions. They are better equipped here to do that than in China for instance, given the technology considerations.
Yes. I suppose the shipyards here are building up to that as they have the necessary expertise and competitive edge as compared with the newer yards elsewhere.
The overall success of Singapore’s shipping industry has attracted a lot of attention from your neighbors, many of whom are investing in their own ports and harbors. How does Singapore aim to compete and keep its leadership position?
There are plenty of business opportunities out there but it’s really up to the businessmen and on how they wish to exploit them. Singapore has many selling points: As mentioned earlier, we are fortunate to have a strong and stable government which is pro-shipping and pro-enterprise, an efficient, dedicated and productive work force, conducive working environment, low tax regime, good modern infrastructures and a wide range of ancillary shipping activities. Not to mention many other factors which are difficult to duplicate overnight. We are riding on a different plane as compared to our surrounding countries. In that sense, Singapore is a much better and conducive place to do shipping business for a long time to come. We will continue to build and strengthen our range of competencies and leverage on our advantages to the fullest to maintain our leadership position.
The SSA has established a Young Executive Group initiative to develop the skills of the upcoming generation. Can you tell us more about that?
As an industry, we tend to focus on the more established people in the industry. In the years to come, the older generation will be phased out and there is a risk of losing that accumulated knowledge and talent. Hence, there is a need for a transition from the older generation to the younger and up coming professionals, which is why we decided to form a networking platform: The Young Executives Group. The idea is to groom them to become the future leaders of the industry. We want to create a young, dynamic and vibrant shipping industry in Singapore and we hope that this initiative can serve as one platform towards achieving that objective.
Where would you like to see the shipping industry in the next three to five years, and in particular, the offshore sector?
The Association will be celebrating its 28th Anniversary on 27 September 2013. We are in the 28th year since its formation. As far as the association is concerned, I would like to see it mature. Not in the business or operational sense, but in terms of its international outlook. Until recently, the association has maintained an internal focus dealing with problems only affecting Singapore and its local industry. Over the recent past, we have ventured out regionally and internationally. The SSA is a member of the Federation of ASEAN Shipowners’ Associations (FASA). As a FASA member, we are also a member of the wider Asian Shipowners’ Forum. We have also taken an active interest in the International Chamber of Shipping (ICS) of which we are a member as well. Our Council member, Mr. Esben Poulsson has been elected recently as one of the Vice Chairmen of the ICS.
Increasingly, we are looking at international rules and regulations and how they impact our Singapore owners and shipping in general. In that respect, I hope that the SSA will rise up and further develop professionally and begin to contribute to international organizations. We need to be able to speak on the major issues that face the global industry. Being a non-profit organization, I suppose that we are only limited by the lack of financial resources. Unlike most shipping associations around the world which rely on membership subscriptions based on shipping tonnage, the SSA charges only a very small, flat fee on its members.
The marine offshore industry is expanding rapidly in Singapore. Many companies are being set up and they are here to stay. Therefore, I would strongly encourage them to join the Association so that we can also become a credible voice for the marine offshore players.
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