Singapore Port Avoids COVID-19 Impact, New Port Construction Also 'Smooth Sailing'

First Half Year Cargo Volume Decreases by Only 200,000 TEU... Contrasting with Changi Airport
Tuas New Port Construction to Partially Open Next Year as Planned, Completion in 2040

[Image source=Reuters Yonhap News]

[Asia Economy Singapore Correspondent Seo Jumi] Despite the spread of the novel coronavirus disease (COVID-19), Singapore, the hub of Southeast Asia, has maintained stable cargo container throughput. This contrasts sharply with Changi Airport, which has been struggling due to a sharp decline in passengers since the COVID-19 outbreak.

According to the Maritime and Port Authority of Singapore (MPA) on the 15th, the cargo throughput at the Port of Singapore in the first half of this year was 17.8 million TEUs (one 20-foot container), a decrease of only 200,000 TEUs compared to the same period last year. An official from the port authority stated, "This is not a level of concern compared to other Southeast Asian ports near Singapore."

Singapore suffered significant economic damage as COVID-19 spread early this year. According to the Ministry of Trade and Industry of Singapore, Singapore's Gross Domestic Product (GDP) in the second quarter fell by 41.2% compared to the previous quarter. The gateway, Changi Airport, was closed, and exchanges with neighboring countries such as Malaysia were largely suspended.

Considering these conditions, the fact that port cargo throughput did not show significant fluctuations is seen as playing a crucial role as an economic pillar. The Port of Singapore is the world's largest transshipment port, handling one-fifth of the world's container volume. Geographically, it serves as a central hub for trade between Asia and Europe, and half of the world's crude oil supply is transported through the Port of Singapore. Notably, transshipment cargo, which involves only changing ships within the port, accounts for 80% of the total container volume. Transshipment ports collect port usage fees and handling charges. Additionally, compared to surrounding Southeast Asian ports, the well-established unmanned and automated systems have also helped maintain cargo throughput.

The port-related industry accounts for about 7% of Singapore's GDP and is known to employ approximately 170,000 people. Furthermore, many indirect industries such as shipping, ship finance, insurance, legal services, and logistics are connected based on the port.

The Singapore government is also accelerating the construction of new ports. The Tuas New Port construction, which was expected to be delayed at the beginning of the COVID-19 outbreak, is expected to proceed as planned. This port will be a fully automated terminal capable of handling up to 65 million TEUs annually, with partial opening next year and completion scheduled for 2040.

However, since the maritime industry is closely linked with other sectors such as aviation, there are forecasts that prolonged recession could inevitably cause damage. There are calls for the Singapore government to develop systems that enable smooth collaboration between aviation, shipping, and port industries. In this regard, PSA, the Singapore port operator, is reportedly developing a digital solution connecting ports and aviation jointly with SATS, the airport ground handling company. Separately, there are also calls to increase the share of sectors gaining attention in the COVID-19 era, such as e-commerce and medical supplies.

Meanwhile, Singapore's aviation industry has been hit hard by COVID-19, leading to the suspension of operations at the existing Terminal 2 and Terminal 4. Due to border closures, airport passenger movement sharply declined, with passenger traffic in July dropping by 98.5% compared to the same period last year, and air cargo volume also decreasing by 30.1%.

This content was produced with the assistance of AI translation services.