The Logistics and Transportation industry in Singapore is an important economic indicator, contributed nearly 8% of country's GDP in 2011 (nearly SGD 20 Billion) and employing almost 205,000 workers. Singapore's strategic location, world class infrastructure and excellent connectivity have made this place a compelling global logistics hub and supply chain management (SCM) nerve centre. Country's dynamic logistics industry and solid infrastructure are attributable to the various locations dedicated to the augmentation of connectivity and efficiency, such as the Airport Logistics Park of Singapore (ALPS) in the airport free-trade zone, the Banyan LogisPark, and Changi International LogisPark.
As mentioned recently by the Minister of State, Ministry of Trade and Industry & Ministry of National Development; companies in the logistics and transportation industry can look forward to greater government support for productivity-driven growth. The National Productivity and Continuing Education Council (NPCEC) has endorsed a US$ 42 Million, 5-year productivity roadmap to lift the long term productivity of the logistics and transportation industry. As logistics is a key enabler to other industries, these efforts will boost the productivity in both manufacturing and service sectors.
As a top logistics hub in Asia, global companies and Asian enterprises in the logistics and supply chain management (SCM) sector are expanding their innovative and specialized activities in Singapore. Despite a challenging year in 2009, Singapore's logistics and SCM sector continues to grow with new investments amounting to (US$346.8 Million) in total business spending. When fully implemented, these investments are expected to contribute US$149.2 Million in value-added (VA) per annum.
Out of the top 25 global third-party logistics providers (3PLs), 17 have established significant activities such as regional headquarters and regional hub operations in Singapore. In addition, Asia Pacific / Middle East 3PLs (e.g. Agility, Gati, Sankyu, Toll ) as well as leading global distributors (e.g. DKSH, Zuellig Pharma) have established regional headquarter and other global functions in Singapore.
As global manufacturers expand their operations in Asia, Singapore presents a strategic home-base for companies to establish regional distribution centers and orchestrate their global supply chains. For instance, Avaya's first Asian SCM hub established in Singapore has helped Avaya reduce lead time from 14 days to 2 days, and reduce logistics cost by 80%. Over 500 tonnes of finished goods, worth over US$100 Million, are handled in Singapore. This RDC is co-located with Avaya's 250- man regional HQ that manages regional operations and supply chains. Further, Diageo invested SGD 13 Million in its Asia Pacific logistics hub in Singapore. Diageo's 80-man Asia Pacific Logistics Hub in Singapore is expected to process up to 8 Million cases annually.
The Logistics and Transportation industry seems to grow incredulously in the coming future. The productivity roadmap, which focuses on enhancing supply chain management capabilities and improving operational efficiency, will help select segments of the logistics and transportation industry achieve the productivity target of SGD 130,000 for VA per worker by 2015. The launch of the Logistics and Transportation Productivity Roadmap underlines Economic Development Board's (EDB) strong commitment to work with companies, government agencies and industry associations to improve productivity ensuring industries to retains its long term competitiveness and achieve goal for Singapore to be a leading global logistics hub.
(Source: Insight Alpha)