BIMCO AGM Singapore – A call for innovation resonates across the maritime industry

As he introduced Emeritus Senior Minister Goh Chok Tong, Mr. Lui Tuck Yew, the Minister for Transport and Second Minister for Foreign Affairs, accompanied by other distinguished guests, BIMCO President Mr. Yudhishthir Khatau said that the theme of the meeting – Survival through Innovation – could well be inspired by the dynamic example of Singapore – a global maritime hub. Welcoming the Senior Minister, the BIMCO President recalled that Mr. Goh had a long association with the shipping industry, having been Managing Director of Neptune Orient Line between 1973 and 1977. A neighbour and friend of former BIMCO President the late Mr. Lua Cheng-Eng, the Minister, said Mr. Khatau, could be considered “a member of our fraternity”.
Maritime thought leader
In his welcome to delegates, the Emeritus Senior Minister pointed out that BIMCO, as “a maritime thought leader”, has played an important role in inspiring ideas to meet the challenges facing the international maritime community, its meetings consistently providing the industry with valuable insights on key maritime issues and trends.
The present meeting, he said, was particularly important in view of the severe challenges that the industry was facing, with the theme of “Survival through Innovation” suggesting this situation, with the outlook for global trade remaining uncertain after the last few years of exceptional volatility.
Enumerating some of the challenges facing shipping, he listed the economic troubles of OECD countries, the slowdown in emerging markets like China, coinciding with rising fuel prices and tight finances. The over-supply of tonnage, said Mr. Goh, looks set to worsen, with more new builds ordered before the crisis came on stream, while compounding these difficult market conditions were the global manpower shortage and increasing attention to the environmental impact of shipping.
Timely and highly relevant
In such a challenging climate the theme for today’s conference, he said was both “timely and highly relevant”, with innovation the only way for the maritime industry to overcome these key challenges and meet increasing demands for greater efficiency, safety and environmental sustainability.
The lessons of history, said Mr. Goh, demonstrated the role of innovation in the maritime industry’s development, often introducing paradigm shifts. He cited the revolution in the 19th century that saw wind-powered wooden ships give way to larger, steam driven steel vessels, able to carry more goods over longer distances and the way that the industry had “transformed the nature of freight transport” with the adoption of containerisation a half-century ago. In more recent times, the industry has continued to demonstrate its spirit of innovation with new merchant ships achieving greater economies of scale, like the Maersk Triple-E class, and companies exploring the use of alternative fuels like LNG. On the landward side, said Mr. Goh, ports are making greater use of IT, along with technology such as automated guided vehicles and remote controlled cranes.
Innovation, he continued, was not limited to technological advances, but was also about “changing the way we do business”. Resilience, especially in the current difficulties, could be built by service innovation. As examples, he cited the daily sailings by some lines on the Asia-Europe trade route, or efficiencies resulting from alliances consolidating services.
From such examples, said the Minister, “we can see that the spirit of innovation remains strong in the maritime industry”. But it was important that the industry has a “conducive environment” to nurture the culture of innovation and ensure that it is a priority across all maritime enterprises, from senior management to entry-level employees.
Fostering an innovative culture
In Singapore, he said, the government remains committed to fostering an innovative culture within the maritime cluster as part of the efforts to develop into a leading international maritime centre. This involved a three pronged approach; an investment in maritime R&D infrastructure, the formulation of pro-innovation policies and the development of maritime talent that will drive innovation across industry.
With the first of these, said the Minister, every good idea needs “an environment to incubate, test-bed and develop”. Here, the Maritime and Port Authority of Singapore (MPA) has been working with local Institutes of Higher Learning to build up maritime R&D Structures that assist nascent ideas become concrete solutions. Singapore’s maritime research centres, he said, are engaged in a wide range of research from engineering design and offshore technology to the optimisation of port operations and IT integration.
An example was the work being done by a group of researchers from Nanyang Technological University in developing a software tool able to simulate almost all aspects of port operations from vessel berthing to cargo handling. The MPA, said the Minister, was finding this tool useful for its port planning needs, while several port operators and shipping lines were using to study their capacity requirements.
The establishment in 2010 of the Singapore Maritime Institute, said Mr. Goh, was designed to enhance maritime R&D in Singapore, optimising R&D capabilities across the maritime research centres and ensuring that their work remains relevant to industry needs. As part of a “Whole of Government” approach the MPA has committed up to SGD 200 million in funding for the SMI, to be supplemented by SGD 150 million of funding from the Agency of Science, Technology and Research and the Economic Development Board. The Minister noted that in just three days’ time the SMI, in collaboration with the MPA was to launch its “Next Generation Container Port Challenge” to seek radical new ideas for the design and operations of future container ports.
Pro-innovation policies
Pro-innovation policies and schemes, said Mr. Goh, constituted the second prong, which recognised that innovation and R&D required significant investment but with no guarantee of success. It was important that while shipping companies were focussed on their bottom line, they should continue to make long term investments in R&D if future challenges were to be met.
A SGD 100 million Maritime Innovation and Technology Fund has been set up by the MPA supporting maritime R&D efforts and will provide co-funding support. One successful project supported by the fund is the development of technology that can convert maritime and industrial waste products into environmentally safe construction materials. This innovation, said the Minister, has won several awards in the region and a recycling plant is currently under construction in Singapore to commercialise this technology. Port technology, clean energy and fuel cell research are also supported by the MINT fund.
In recent years, said the Minister, environmental sustainability was attracting much attention, with ship owners increasingly looking towards green technology to reduce emissions and improve efficiencies, but also to develop green branding as a competitive advantage. Commending the progress made by the IMO in this respect, with the adoption of the Energy Efficiency Design Index and the Ship Energy Efficiency Management Plan last year, Mr. Goh suggested that these standards will encourage ship designers and builders to develop more efficient ships.
For its part, the Singapore Government was committed to supporting the industry’s drive towards environmental sustainability, with the launch last year of the MPA’s SGD 100 million Maritime Singapore Green Initiative to encourage greater innovation in clean and green shipping. With this initiative, he noted, co-funding support is available for R&D and the adoption of green technologies. Ship owners are able to enjoy concessions on port dues if they burn cleaner fuel in port and they can lower registration fees if their Singapore-flagged ships exceed the IMO’s EEDI requirements. No fewer than 27 maritime organisations have signed the Maritime Singapore Green Pledge to commit their support for the Green initiative. “I look forward to more companies coming on board”, he added.
Core of local talent
A core of local talent able to spur innovation and support the industry’s future growth, was, said the Minister, the third and most important prong. A steady pipeline of talent would be ensured by working with the institutes of higher learning to launch several maritime-related degree and diploma courses.
There was a need to attract good students, but also, emphasised Mr. Goh, a requirement to encourage those already in the industry to continuously enhance their knowledge and to deepen their skills. To support their efforts, the MPA works closely with industry partners like BIMCO to bring in new training opportunities. The Minister commended the BIMCO Asia Shipping School, held in Singapore in March and modelled after the renowned Summer School in Copenhagen. In the Singapore course, 30 participants from 6 countries had been provided with an in-depth knowledge of the shipping business. The BIMCO Masterclass Workshops on key aspects of marine commerce, said Mr. Goh, were also a regular feature in Singapore, such initiatives helping to grow a quality maritime workforce in Singapore, and supporting a learning community where innovative ideas can thrive.
Concluding his address, the Minister suggested that the call for innovation resonates across the maritime industry and that he was confident a strong partnership between the Government and the industry would help to chart a clear passage through the rough waters and emerge as a more resilient maritime community. Then, said Mr. Goh, “the industry will be poised to seize the opportunities that the tide of recovery will bring”.
Editor’s Note: The above article is a report of the speech given by Emeritus Senior Minister Goh Chok Tong on 24 April 2012 at BIMCO’s “Perspectives in Shipping” Conference.
Source: BIMCO