In the second of a six-part, fortnightly series sponsored by enterprise development agency Spring Singapore, Francis Chan, Jonathan Kwok and Dhruv Velloor look at how local logistics firms can become world beaters.
GLOBALISATION is making the world smaller and more interconnected, but that does not mean logistics firms are having it any easier.
According to Ms Samantha Su, deputy director of Spring Singapore's services and biomedical division, customer needs and global supply chains are becoming more demanding and complex.
"One of the challenges in this sector is the competitive pricing... another would be the difficulty in attracting and retaining talent due to the poor image of the industry, with many perceiving it to be laborious and unglamorous," she said.
Firms in the transport and storage sector are mainly those dealing in sea, air and land transport, and warehousing, storage and courier services.
The sector contributed more than $22billion in value-add to Singapore's economy, and accounted for about 9 per cent of gross domestic product last year, according to the Singapore Department of Statistics.
Although the industry is traditionally dominated by larger logistics firms, there has been a marked increase in the number of small and medium-sized enterprises (SMEs) that provide support services.
Today, nine out of 10 firms in the transport and storage sector are SMEs, which together with their larger counterparts, employ more than 135,000 workers here.
The robust economic recovery and rebound in global trade mean there will be more growth opportunities ahead.
But to remain competitive and increase productivity, local firms will need to turn to technology upgrades and improve their processes, said Ms Su.
For instance, Spring has been helping firms in the logistics sector diversify into areas that require more focused or niche capabilities such as chemicals, perishables, marine and pharmaceuticals handling.
"We develop these companies to become total solutions providers instead of single function providers like pure freight forwarding, warehousing or transportation service providers," added Ms Su.
"Spring also helps these companies adopt best practices capabilities and find partners overseas."
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