*Produced by SilverKris for Mishcon de Reya*
When it comes to maritime trade, a privileged perch counts for a lot. When Sir Stamford Raffles penned a treaty with Sultan Hussein Shah of Johor in 1819 to create a free port open to all, the strategic location by the Strait of Malacca made Singapore destined for greatness. Today, one-third of global trade flows through the narrow channel.
But location is only a good start. Maintaining that leadership takes effort and commitment. Singapore’s world-class infrastructure, maritime arbitration framework and focus on sustainability continue to justify its ranking as the world’s top maritime capital in seven straight annual reports by global shipping organisation Baltic Exchange.
“Singapore commands a strategic position as a maritime hub in the regional and global arena,” says Lu Su Ling, chief of Baltic Exchange Asia.
Indeed, the Port of Singapore welcomes 130,000 vessel stops per year, driving a US$25 billion maritime industry, representing 7%of the country’s GDP. And the sector’s importance will only grow as Singapore builds the Tuas mega-port. The US$1.75 billion project is scheduled for completion in 2040 and will create the world’s biggest container terminal.
A shelter from the COVID storm
As the pandemic impacted global trade this year, reliable supply chains became more important than ever. The Port of Singapore demonstrated its vital role as the lynchpin in a maritime network the UN calls “the backbone of global trade”.
Container traffic through Singapore’s port remained roughly unchanged this year, even while Changi Airport was largely closed for business. In the first half of 2020, the Port of Singapore’s container traffic held steady at 17.8 million 20ft equivalent units (TEUs) against 18 million TEUs over the same period last year.
“Maritime transport and logistics kept essential goods and trade flows moving. Ships moved, ports kept open,” says Shamika Sirimanne, who heads logistics at the United Nations Conference on Trade and Development (UNCTAD).
The US$1.75 billion Tuas mega-port is scheduled for completion in 2040 and will create the world’s biggest container terminal
The Tuas project will give Singapore even greater flexibility in handling global trade flow shocks in the future. Annual capacity in Singapore is expected to rise to 65 million TEUs by the project’s completion.
Safe harbour for international trade disputes
The city-state’s role as a maritime power is not just about state-of-the-art container hangars. Singapore is a tightly-woven ecosystem of financial, legal, tech, logistical and infrastructure services.
“Singapore port has thrived also because of the opportunities seized along the way,” says Singapore Transport Minister Ong Ye Kung. “We built on our dynamic port and generated many other complementary industries, in shipping, ship finance, marine insurance, maritime legal and maritime logistics.”
This dynamism includes the way Singapore leveraged its English Law traditions to build a specialised arbitration framework for international trade, investment and maritime disputes. Modern arbitration strategies enable parties to resolve disagreements with lower cost, greater speed and more robust confidentiality.
The mega-port will double Singapore’s current TEU capacity with roughly half the carbon emissions compared with 2005
“Singapore’s position as the leading centre in Asia for handling commercial arbitration is now undisputed,” says Gavin Margetson of Mishcon de Reya, a law firm which advises clients across Asia from its office in Singapore.
Singapore is fast taking a global lead in dispute resolution, leveraging robust legal infrastructure and a sterling reputation for safety, integrity and rule of law. Since its founding in 1991, the Singapore International Arbitration Centre (SIAC) has risen rapidly in prominence, from handling two cases in its first year to 489 new cases in 2019 (worth US$8 billion). SIAC administers a wide range of commercial arbitrations, especially international trade and commodities disputes. In addition, Singapore also boasts the specialist Singapore Chamber for Maritime Arbitration (SMCA), which administers shipping and charterparty arbitrations.
Greening the seas with technology expertise
Singapore is also a global tech power: the eager embrace of green solutions, including electric buses and urban farms, in part stems from being a tiny island vulnerable to rising seas.
The sustainability commitment extends to its maritime sector, where Singapore is deploying deep pockets of engineering and tech acumen to become the golden standard in green shipping.
The Tuas Port, for example, aims to be the world’s largest fully automated container terminal, doubling Singapore’s current TEU capacity with roughly half the carbon emissions compared with 2005. The project will deploy a fleet of fully electric autonomous vehicles to transport containers around the sprawling facility.
Meanwhile, the Port of Singapore will encourage ships to use cleaner LNG fuel by offering discounts on port duties. And Singapore is supporting open seas decarbonisation through a Maritime GreenFuture Fund to foster eco-friendly technologies in global shipping.
“As a maritime centre,” says Minister Ong, “we will bring together key players—shipowners and operators, brokers, insurers, legal and arbitration professionals, technology players—to develop sustainable solutions for the sector.”
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