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15 Mar 2023
5 mins
Maritime Singapore Poised for Future Growth

How has it been for Maritime Singapore amidst challenging global economic conditions in the past year of 2022?

Maritime Singapore concluded last year on a good momentum for future growth. In his address at the annual Singapore Maritime Foundation (SMF) New Year Conversations on 13 January 2023, Mr Chee Hong Tat, Senior Minister of State for Finance and Transport, reviewed the performance of Maritime Singapore in 2022.

The Port of Singapore remained resilient despite a decline in global container trade of about 3 to 4 percent. Amidst challenges like global inflation pressures and supply chain disruptions, Singapore’s container throughput hit 37.3 million twenty-foot equivalent units (TEUs), the second-highest throughput on record, a slight decline of 0.7 percent from 2021’s record throughput of 37.6 million TEUs.

In the same year, a total of 577.7 million tonnes of cargo was handled. Vessel arrival tonnage hit 2.83 billion Gross Tonnage (GT) and the port registered 47.9 million tonnes of bunker sales. While the total volume of bunker sales declined by 4.3 percent year-on-year, in 2022, bunker sales included about 140,000 tonnes of biofuel blends over more than 90 biofuel bunkering operations, surpassing the 16,000 tonnes in Liquefied Natural Gas (LNG) bunker sales.

Amongst the sector’s achievements is having more shipping companies in Singapore. It was reported that in 2022, more than 30 companies had established or expanded their operations in Singapore, beating 2021’s record by 30 percent. With the increase, total business spending by shipping companies exceeded S$4.3 billion.

The Singapore Registry of Ships (SRS) also continued to rank as one of the top five largest ship registries globally, with the total tonnage of ships under the Singapore flag hitting close to 96 million GT, an increase of 4 percent from 2021.

In 2022, 25 Singapore-flagged ships from 13 companies received Green Ship certificates under the Green Ship Programme. The certificates are awarded to companies for their efforts in reducing the environmental impact of their fleet, including using low-carbon fuels such as methanol and energy efficient technologies that enabled the ships to exceed the Energy Efficiency Design Index requirements mandated by the International Maritime Organization (IMO).

Since 2011, over 650 ships have been recognised under the Green Ship programme, which will continue to evolve to support the decarbonisation of the maritime sector. The SRS expects to see a steady rise in green fleet, given Maritime Singapore’s continued efforts to attract green ships into Singapore.

With the statistics revealed at the SMF New Year Conversations, Maritime Singapore is optimistic in its outlook for capturing new opportunities and driving further growth through continued investments in capability-building, talent development and innovation, anchored by strong tripartite partnerships.

SMOU continues to forge strong tripartite partnership to attract, retain and develop talent in the maritime sector. At the SMOU and Wavelink Lunar New Year Luncheon and Hong Bao Presentation on 26 January 2023, SMOU Assistant General Secretary Gwee Guo Duan highlighted the union’s involvement in the Maritime Industry Transformation Tripartite Committee (MITTC), where tripartite and industry representatives develop strategies to spearhead the maritime sector into decarbonisation, digital transformation, and grow maritime talent. “This will allow SMOU to engage in key conversations regarding the future of shipping and in-depth discussions on the new skills needed for seafarers,” Brother Gwee commented.

Outlook 2023

According to an annual poll of industry sentiment conducted by Lloyd’s List, business prospects will be hit by a global recession throughout 2023.

Almost 50 percent of respondents drawn from Lloyd’s List readers cited recession as the dominant risk affecting business prospects in 2023.

While regulatory uncertainty and an oversupply of vessels were also cited as risk factors affecting strategy, the most significant macro factor impacting businesses over the next two years will be inflationary pressure (34 percent), followed by slowing growth in China (33 percent).

Decarbonisation concerns dominated the responses to this year’s poll, which revealed a sector divided on how to respond to the challenges posed by a rapidly evolving regulatory and commercial landscape.

More than 50 percent of respondents viewed the global energy transition as a strategic opportunity, but 29 percent described it as a strategic and operational risk.

Reflecting the timing of regulatory changes and the investment required to reduce emissions, the priority ranking of concerns saw availability of new fuels as the biggest challenge over the next five years, followed by the cost of new fuels (26 percent) and the ability to source trained crews to handle the new fuels (20 percent).

The cost of decarbonising shipping topped the list of concerns among the industry, followed by the cost of compliance.

It was reported that with the Carbon Intensity Indicator looming large in the industry’s list of operational concerns, the poll revealed an exact 50/50 split in the poll audience’s view of how effective the measure will ultimately be.

Efficiency retrofits topped the list of best investment opportunities for companies in 2023, with digital optimisation and zero-carbon research and development both scoring 24 percent of the vote.

With regards to which shipping sector will perform best in 2023, 40 percent of respondents named tanker, followed by container (27 percent)  and dry cargo (14 percent). Over a half of the respondents (65 percent) anticipate that there would be a decline of small private shipowners within the next decade.

However, the recent years show that such risks and disruption of global supply chains do not always cause poor financial performance. According to Lloyd’s List, on the contrary, shipping industry has been able to multiply its profits. When evaluating the prospects of 2023 the analysts referred to the record-high results of 2022.