Singapore magazine launches assessing the strengths and weaknesses of the preeminent maritime hub of the 21st century

Splash takes a typically unflinching view on the pros and cons of this vibrant Asian city-state in the latest market report to launch from our fast-growing magazine stable.

Singapore’s maritime mantelpiece needs reinforcement, groaning from all the trophies, accolades and awards lavished towards the Lion Republic, the preeminent shipping hub of the 21st century.

Singapore remains the world’s leading maritime hub according to multiple global surveys. Despite concerns over human resources and soaring prices, there’s an argument to say Singapore has bolstered its maritime credentials compared to rival cities in the year since Splash’s last magazine on the city-state. Regionally, the close-in of China, seen through covid and in general with the direction of Xi Jinping, has curtailed expertise in Shanghai, while the Sinofacation of Hong Kong has eroded that entrepôt’s claims to being Asia’s world city. More globally, a declining economy, soaring costs and political instability have seen London loose some of its shipping shine.

“Singapore continues to improve its standing as a global maritime hub, backed by supportive government policies, robust port infrastructure and a comprehensive range of maritime service providers,” says Dr Harry Banga, chairman and CEO of the Caravel Group.

“Without a question, Singapore maintains and is building on its position as the leading maritime capital of the world,” says Raymond Peter, managing director of BSM Singapore.

Nevertheless, Peter is keen to stress that decision-makers and institutions of the country are not becoming complacent.

“We need to remain watchful, agile and flexible to remain relevant to the very demanding nature of our industry,” he says.

“Singapore maintains a leading position due to the accessibility of travel as well as the ease of doing business in the country, access to capital, assurance in a robust legal system and the unique opportunity Singapore gives to leverage its diverse multicultural business and talent environment,” says James Forsdyke, client marketing director at Lloyd’s Register, conceding, like many others, that there are issues over rising costs and securing the services of foreign talent.

Sectors for improvement

Citing the 2022 Leading Maritime Cities publication, authored by his company and Menon Economics, Dr Shahrin Osman, DNV’s regional head of maritime advisory, notes Singapore ranked a comparatively low eighth in the world when it comes to maritime finance and law.

“The city needs to focus on developing shipping finance activities,” Osman says, adding: “Specifically, there is a need to encourage the growth of listed maritime companies in the local stock exchange, increase the shipping portfolio of banks with headquarters in Singapore, and expand the number of maritime syndicate-mandated loans.”

“Weaker areas, such as ship finance, capital and equity markets remain,” says Charles Maltby, CEO of BW Epic Kosan.

Rama Chandran, head of marine at QBE Singapore, is one of a number of respondents who points to insurance as a weaker part of Singapore’s maritime armour.

“Though we are well represented by international insurers, only two local insurers provide marine insurance despite the maritime sector contributing to 7% of Singapore’s GDP,” Chandran says.

Matt Cannock, managing director of Latitude Brokers, describes the local marine insurance market as “somewhat lightweight”.

“It has excellent representation from the P&I sector but needs more capacity and lead markets for hull
and machinery risks,” Cannock argues.

Cost concerns

All those polled for this 56-page magazine have voiced familiar concerns about the high costs of doing business in Singapore. For all the awards and accolades the city-state receives, the one authorities cringe at is the the regular annual crowning by The Economist of Singapore as the world’s most expensive city.

“The cost element is presently a topic of concern in all board rooms,” concedes BW Epic Kosan’s Maltby.

Philippe Lecloux, head of marine at Aderco, describes the cost of local office space and accommodation as “crazy”, saying, like others, that his company is having to consider alternatives.

“Office and accommodation rents have tripled over the past year and Singapore needs to be careful that it doesn’t become a too costly place to do business in,” says a spokesperson for OSM Thome.

“Thanks to inflation, Singapore has gone from a high-cost place in which to run a business, to an excessively expensive place,” says Bjorn Hojgaard, CEO of Anglo-Eastern, adding that he is confident the authorities will know how to reel in inflation and stay competitive.

Vinay Gupta, managing director of Union Marine Management Services, says it is hard to survive keeping the entire workforce in Singapore and more and more companies are strengthening their back offices and shifting roles outside of Singapore.

“The good part or the silver lining is that it is bringing in efficiencies and digitalisation as a continuation of what was started during the covid time,” Gupta says.

“Cost remains a key consideration,” concedes Chandran from QBE Singapore, “but technology and AI have helped to outsource back-end functions to low-cost markets or even done away with such tasks entirely. The challenge is to develop and retain top talent, an increasingly scarce commodity.”

Another familiar issue brought up by Heidi Heseltine, who heads up Halcyon Recruitment, are the high amounts of red tape and administrative burden.

Combined with the human resources issues there’s clearly a lot for Singapore’s mandarins to be working on to ensure the maritime trophy case continues to swell.

This article is one of many reports carried in our brand new 56-page Singapore Market Report. Splash readers can access the full magazine for free by clicking here.