The maritime industry is one worth investing in. While 80 per cent of global trade volume moves by sea, it only creates 2.2 per cent of global greenhouse gas emissions.
Singapore’s port and maritime industry was once the beating heart of its economic progress. But in recent years this has slowed down significantly. Over the last decade, the maritime industry turnover has seen a drop of S$7 billion (US$5.2 billion) from its peak in 2014; a decrease of more than 40 per cent.
Just as the ocean was once the frontier of discovering new continents, so too can it be a site for innovation in supply chains.
Maritime logistics could be the most exciting new innovation opportunity – backed by a trusted legacy. To get there, we must first overcome three major hurdles.
Hurdle 1: COVID-19 exposed complexities of global supply chains
COVID-19 laid bare the importance of intricate global ecosystems. International chains of travel moved the virus – but they also moved critical medical supplies to infection hotspots.
When borders first shut, and the manufacturing engine of China dawdled, we had to reckon with the realities of global trade. Toilet paper, hand sanitiser and N95 masks rocketed in value overnight. Deliveries were delayed by weeks.
Also Read: BeeX wins Singapore’s Smart Port Challenge 2020 for its innovative autonomous maritime solutions
The invisible global supply chain suddenly became a blinding problem of international importance.
With citizens seeking solace in online shopping, the seas became the only consistent and reliable means to transport goods. Singapore did an especially admirable job in protecting the port with a progressive programme of concessions on port dues and mindful management of crew changes.
Yet with human error accounting for up to three-quarters of accidents in the maritime sector, it’s clear there is a lot of room for improvement. Applying modern disruption to legacy infrastructure could overhaul and refresh the industry.
Hurdle 2: challenges existed before these challenging times
The maritime industry has long suffered from the sluggish inefficiencies of legacy systems. Before COVID-19, global supply chains already contained an estimated S$240 billion (US$179 billion) of inefficiencies. But these were easier for consumers and investors to ignore.
Prior to the 2008 great financial crash, we were assured that financial institutions were too big to fail. Now, the maritime industry appears too big to change. After all, it can take up to 20 minutes for a cargo ship to come to an emergency stop.
The fallibility of a single ship was all too clear on the Diamond Princess – the cruise ship that once hosted the highest cluster of COVID-19 cases outside of China. Singapore’s own passenger ship arrivals have dropped by over 95 per cent. But container volumes have dropped only by one per cent in the first half of 2020.
Consumer demand for goods from across the ocean has not waned, so we need to rethink our industry. How can we best meet consumer needs efficiently, while maintaining a seamless experience at every link in the chain?
Hurdle 3: A lack of consensus
Being the first mover is risky. Currently, the ecosystem is limited to startups who supplement the existing infrastructure. But unprecedented times call for bold measures. Singapore could lead the world if we invest in disruptors who are rethinking how the supply chain operates.
We can use these foundations of a robust global system. Leverage our legacy of seafaring hustle. Add a future-facing disruptive outlook to inspire sustained change. Singapore’s geographic and social position bridges East and West, so we play a critical role in coordination.
But as it stands, the ecosystem is fractured between established titans of industry, with little space for innovation.
We have the chance to create avenues for corporations to enter Asian markets, and to create opportunities for agile startups to bring their fresh perspectives. This will cement our position as a catalyst for growth.
We already have our life jacket
Maritime industry innovation is an opportunity to build back better. We can invest in enhancing existing infrastructure while re-invigorating the sector with new perspectives.
Venture attention in the maritime industry validates the need for innovation. In November, Rainmaking launched the Ocean Ventures Alliance: a maritime innovation advisory network for Southeast Asia made up of more than 30 industry leaders. These executives will support startups to test their emerging technologies in the maritime sector – innovating with an immediate impact.
Streamlined supply chains can help beyond restarting the economy, but play an active role in a green and sustainable recovery. We’ve already seen US-based Flexport become the first maritime unicorn, accelerated by a balance of corporate and government support in the vision. Who will be Asia’s first?
Flattening the curve required a nation coming together behind a common goal – now we must replicate the same to reinvigorate the global economy, and to drive exponential growth once more.
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Image Credit: Ayotunde Oguntoyinbo on Unsplash
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