Future of transshipment in Singapore

Abstract

Purpose

Transshipment points in container transport are a vital part of the functioning and competitiveness of global logistics systems. However, competition between different geographical locations is ongoing and therefore competitive landscape and leading actors are continuously changing. The purpose of this paper is to understand one of world's leading transshipment points, Singapore, and its competitiveness in the future as lower‐cost alternative locations try to challenge its position.

Design/methodology/approach

Observations are based and mostly drawn upon qualitative case study interviews among 11 key companies involved in Singapore's transshipment business. Along with this, second‐hand national statistics are used to support the findings.

Findings

As Singapore is the largest container sea port in the world, it has several advantages at its disposal to defend its position against the others. These are mainly due to connectivity around the world, and second, the high frequency of these connections. However, even though the customs procedures are generally argued to be smooth and state of the art, in some comments from real life actors, problematic areas and further room for improvement were inferred. Longitudinal statistics from national consensus also show, for example, that the electronics industry transshipment volumes are on the decline, and the main reason could possibly be due to the relocation of manufacturing sites to China or Vietnam, changing in turn the transshipment point in Asia. For future consideration, Singapore should enhance its capabilities in localization of value‐added services or manufacturing while goods are in‐transit, and also invest in technologies enabling higher container fill rates for airline shipments.

Research limitations/implications

In most qualitative research, amount of observations is always limited and this work is not an exception with this regard. However, reliability caveat is tried to be covered with careful selection of interviewed organizations and using second‐hand national statistics to verify the interviewees' inputs.

Practical implications

This research has value for all countries with high‐cost transshipment points, in building their operations to sustain against new lower‐cost entrants. Also, the functioning of global supply chains with respect to cost, lead time and technical capability are better understood through this case study, as all the examples are drawn from real life.

Originality/value

The paper shows how global logistics networks have changed significantly in recent decades, and it is increasingly in line with case study findings after major sea ports such as Dubai and Shanghai have grown into leading position throughout the world.

Citation

Wee Kwan Tan, A. and Hilmola, O. (2012), "Future of transshipment in Singapore", Industrial Management & Data Systems, Vol. 112 No. 7, pp. 1085-1100. https://doi.org/10.1108/02635571211255032