‘Full Steam Ahead’ for Singapore’s Tuas Port

'Full steam ahead' for Singapore's Tuas Port

Singaporean Prime Minister Lee Hsien Loong inaugurates Tuas Port Phase 1 in Singapore on September 1, 2022.

Credit: Twitter/Lee Hsien Loong

China has long been home to the busiest container in the world. ports for more than a decade. Densely clustered along the East Coast, they ship a variety of products, from smartphones and computers to clothing and appliances, to the global marketplace. Latest yearShanghai only processed 47 million TUEmore load than the top ten US ports set.

but an old rival may be quietly catching up.

Singapore sleepless Tuas Port Phase 1 this year with the long-term goal of building a consolidated hub for the global shipping industry. After a decade of construction, the $20 billion terminal is designed to handle 65 million TEUs per year around 2040.

“Let’s go full steam ahead” said Prime Minister Lee Hsien Loong, who inaugurated the project in September. Loong raised and loaded a container remotely to demonstrate how automation had simplified what was once a physically demanding task. The berths, built on land reclaimed from the sea, will be manned by drones and driverless vehicles. The design is well suited to Singaporean conditions, given its perennial land and workforce. shortage. Chee Hong Tat, a senior minister of state for transport, saying Parliament that a technology-focused approach was essential: “If we don’t get ahead of the competition, others will steal our lunch.”

The launch of Tuas Port comes during a period of turmoil in the world of container shipping. China’s “zero COVID” policy has upended supply chains this year. The side effects still reverberate through the system. a satellite Photo taken on April 19 showed nearly 500 ships off the coast of Shanghai unable to dock. The bottleneck at sea was a direct consequence of a virtual closure of trucking post-lockdown. Containers piled up on the docks with no workers or trucks to clear the jam.

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One of the companies affected was Apple’s subcontractor Pegatron. A technology industry analyst saying the BBC that the temporary closure of the Shanghai-based iPhone assembly plant “would throw gasoline on the raging fire that is Apple’s supply chain.” Shortly after the shutdown, Pegatron and other iPhone assemblers indicated they would move some production lines to VietnamIndonesian and Indian.

The pivot to Southeast Asia could be a chance for Singapore. With a population of just 5.6 million, the city-sized nation is in no position to compete with China’s “ports of entry” in export volumes. But the southern tip of the Malay Peninsula has a long history of serving as the main transfer regional cargo hub, adding containers from ASEAN neighbors like Vietnam and Indonesia. About 85 percent of incoming cargo goes to other ports. Singapore is also an essential stop on the maritime energy trade route, refining Raw oil for China, Australia and Indonesia. In particular, the location of the port along the Strait of Malacca, an oil industry “bottleneck”, gives the city-state a degree of geostrategic influence.

Singapore is also vulnerable to these maritime “bottlenecks”. More than 90 percent of the food supply is imported. Malaysia is the main ground supplier, but other items, including frozen chicken, arrive by shipment. containers From Brazil. Tankers bring 70 percent of the country natural gas, which powers its power plants. “Singapore always looks at the world from a position of great vulnerability”, Foreign Minister Vivian Balakrishnan said at an event on the sidelines of the United Nations General Assembly this year.

Plans for Tuas were launched in 2012, two years after Singapore lost its major port status to Shanghai. Building a mega port in advance of demand seemed like a reckless proposition at the time. China already had seven ports in the top ten and was funding Belt and Road maritime projects in Southeast Asia. Transshipment leader Hong Kong appeared poised to benefit from the explosive growth of container shipping in China.

However, Belt and Road port projects such as the malacca gate in Malaysia, built for challenge Singapore has yet to live up to expectations. Hong Kong missed the boat (literally) as large container ships disregarded Kwai Tsing terminals and sailed directly to ports of entry such as Shenzhen. “Transshipment in many ways is the poisoned chalice of terminal operations. It is not as profitable as export/import cargo. You can pack up and go much faster and effortlessly than domestic freight.” write Eric Johnson, a US-based supply chain analyst.

Hong Kong decline is a cautionary tale for Singapore.

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