Singapore’s prominence as a global logistics and supply chain management hub is undeniable.
With a robust network of industry leaders, world-class infrastructure, and unparalleled global connectivity, and an eCommerce market set to grow 11% to $9.58 billion in five years, Singapore presents attractive opportunities for the logistics industry.
However, the city-state faces a talent shortage challenge, requiring businesses to closely examine Singapore’s dynamic logistics landscape to make well-informed decisions and harness the challenge and the enormous growth potential it presents.
That’s why logistics professionals need to better understand Singapore’s logistics sector – to leverage its opportunities and navigate its challenges in logistics. Let’s delve into an excerpt from our comprehensive industry report, “State of Logistics in Southeast Asia 2023,” which examines the strengths and challenges facing the country’s logistics industry.
Download the complete report from Luwjistik.com for free.
Read Also: Reshaping the Logistics Landscape: Unpacking Southeast Asia’s Four Key Drivers of Growth
Outlook of the Logistics Industry in Singapore
Singapore has approximately 5.941 million people living entirely in urban areas, and its land area of 718 square kilometres.
With the small country size, Singapore has established itself as a global frontrunner in logistics performance, as evidenced by a recent WorldBank report. The report highlights Singapore’s remarkable achievements in the field, including its seventh position in the Logistics Performance Index (LPI) and its third-place ranking for logistics competence.
The detailed breakdown of the LPI scores highlights Singapore’s remarkable overall LPI score of 4.30, with five of the six scoring factors rising in recent years. Only timeliness dipped slightly. Notably, Singapore excels in infrastructure, scoring 4.60, a testament to its dedication to maintaining world-class facilities.
(Source: Singapore LPI Score by Worldbank, 2023)
The Challenges
According to an IndSights Research report, Singapore’s logistics industry is undergoing significant transformations due to global supply chain interconnections and multiple stakeholders. The sector has faced formidable obstacles in the past two years, including COVID-19 impact, border closures, diverse regulations, geopolitical tensions, increased fuel costs, and labour shortage compounded by strict safe management measures. These challenges have intensified the operational complexities for logistics service providers (LSPs) in Singapore.
The Opportunities
Singapore’s logistics sector has experienced significant growth, driven by extensive transportation connectivity, multimodal transhipment networks, and seamless intermodal connectivity highlighted in a government report. The report underscores Singapore’s special air freight operations within the 24-hour Free Trade Zone of Changi air-freight Centre, emphasising efficient cargo reconsolidation and minimal Customs formalities. IndSights Research reveals that the country’s digitisation efforts, including predictive analytics and platform technologies, have enhanced efficiency and reduced dependence on human labour. These developments position Singapore as a highly connected and dynamic country with promising prospects for logistic service providers.
Read Also: Outlook, Opportunities and Challenges of the Logistics Industry in Indonesia
With these exceptional performances in the logistics sector, the nation boasts a robust economy and plays a significant role in global trade, as evidenced by UNCTAD’s comprehensive data. In 2021, Singapore’s GDP stood at 385,221 million US dollars, with a growth rate of 6.05%. Regarding international merchandise trade in 2021, the data unveils that Singapore’s overall merchandise trade balance reached 51,131 million USD, with merchandise exports accounting for 457,357 million USD and merchandise imports comprising 406,226 million USD.
(Source: Singapore Total Merchandise Trade by UNCTAD, 2021)
The report emphasises that Hong Kong SAR, China, the US, Malaysia, and Indonesia were the top five export destinations.
(Source: Singapore Top 5 Partners by UNCTAD, 2021)
This remarkable growth is supported by Singapore’s e-commerce market, which has consistently grown in recent years, as the GlobalData report highlights. The market is projected to maintain this upward trajectory, with a compound annual growth rate of 16.2% from S$7.8 Billion (US$5.9 Billion) in 2021 to S$14.2 Billion (US$10.7 Billion) in 2025. Numerous factors contribute to this expansion, including increased consumer spending, government backing, and a burgeoning preference for online shopping.
(Source: Singapore E-Commerce Value by GlobalData, 2022)
Read Also: Outlook, Opportunities and Challenges of the Logistics Industry in Malaysia
The report remarks that, with the economy’s reopening and easing restrictions, Singapore’s e-commerce sector is experiencing a resurgence. Sales are projected to surge by 18.3% in 2022, reaching S$9.2 Billion (US$7.0 Billion), highlighting the country’s potential as a significant player in the global e-commerce landscape. Singapore Business Review emphasises the well-positioned logistics sector to capitalise on this surge, as the report underscores the increasing need for logistics solutions such as final-mile delivery, warehousing, and fulfilment. These solutions present opportunities for logistics providers to expand operations, invest in technology, and improve efficiency.
Read the Complete Industry Report
This was just an excerpt from the State of Logistics in Southeast Asia industry report. To explore these insights further and discover how logistics companies can prepare for the future, we invite you to download the complete industry report for free.
Just fill in the form below.
