RHB economist: Infrastructure investment, port upgrades, and digitalisation key to keeping Singapore's trade hub status as businesses reroute amid trade volatility
Photo: Freepik/onlyyouqj
SINGAPORE: Continued infrastructure investment, port facilities upgrades, and digitalisation are key to keeping Singapore competitive as a global trade hub, according to Barnabas Gan, RHB Bank's group chief economist. This comes after logistics firms said more businesses are turning to Singapore as an alternative route for goods, amid global trade volatility brought by sweeping US tariffs, Channel News Asia (CNA) reported.
From January to April this year, port operator PSA Singapore reportedly handled 6% more container traffic than the same period in 2024, moving around 14.1 million twenty-foot equivalent unit (TEU) containers. Changi Airport also recorded a 2% rise in air freight movements in the same period, according to data published on its website on May 22.
Maersk, one of the world's largest container shipping firms, reported it has handled more cargo in the region and expects the trend to continue into the second quarter, with front-loading activity picking up.
Bhavan Vempati, the company's head of Asia Market, Ocean Product, told CNA that Singapore plays a critical role in Maersk's network and is a transshipment hub for Asia. He noted that some companies are taking a 'wait-and-see' approach, while others are diverting cargo to alternative destinations and market segments in response to tariff changes.
FedEx shared a similar view, noting that air freight demand remains strong in Southeast Asia. The company's vice president of Southeast Asia operations, Bianca Wong, said this is the advantage of the city-state. 'When Southeast Asia grow(s), we see more volume coming to Singapore as transhipments,' she said.
RHB's Mr Gan also said that forming partnerships within the Association of Southeast Asian Nations (ASEAN) will help Singapore's ports to maintain its position as a primary trading hub.
On April 15, FedEx launched a new direct cargo flight from Singapore to the US and announced it will invest more in its air connectivity networks. Meanwhile, PSA said it is investing in technology, automation, and artificial intelligence (AI) to speed up vessel turnaround times and maintain the smooth flow of goods. /TISG
Read also: Trade costs force 42% of Singapore firms to raise prices, HSBC finds
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