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TRANSPORT & LOGISTICS | Contributed Content, Singapore
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Shawn Chen

Navigating ASEAN: overcoming challenges on Singapore's path to becoming top logistic hub

BY SHAWN CHEN

ASEAN is quickly gaining a reputation as an important trade hub, thanks to many factors at play. The region currently enjoys one of the fastest growing consumer markets in the world, strong foreign investments, and a windfall of benefits that stems from the ongoing US-China trade war. Strategically situated at the heart of this trade zone and armed with the right resources, Singapore is set to spearhead bold transformations that would reverberate through the region’s logistics industry.

But the diverse ASEAN landscape can pose tough challenges to Singapore, whose journey to becoming the top logistics hub requires joint ventures with players from emerging markets. For many ASEAN member states, the quest to build digital economies is still underway, and according to Bain & Company the region’s untapped digital potential could stimulate GDP growth of US$1t in ASEAN by 2025. Unlocking this digital power – through close collaborations and a comprehensive understanding of government agendas – needs to be the key strategy in Singapore’s game plan to capitalise on existing market opportunities and raise its profile as the trade hub of Asia.

Establishing a digitalised and connected logistics network
The digitisation of supply chains is a key area of growth for the logistics industry in ASEAN. A recent McKinsey study found that on average, companies digitising their supply chains can expect to boost annual growth of earnings by 3.2%. Efforts to actively promote the adoption of advanced supply chain solutions across its network of partners can yield rewarding results for Singapore, including a significant boost to the overall logistics capabilities of the region and increased trade activities thanks to new levels of efficiency and flexibility.

Singapore’s location within the fourth-largest exporting region in the world provides a great opportunity for the country to collaborate with the wider network of ASEAN – including neighbours like Vietnam, a major textile exporter and Thailand, an automotive parts manufacturer. The proximity to key manufacturing hubs creates a golden opportunity for Singapore to establish a robust, interconnected, and digitally driven logistics network connecting the entire supply chain and paving the way for higher shipping volumes throughout the region.

Equipped with strong research and development (R&D) capabilities, Singapore is also well-positioned to boost knowledge exchange and enable the overall network to better leverage high-tech tools including advanced forecasting and real-time global visibility to deliver new values to customers.

Leveraging ASEAN’s digital push
The different stages of technological adoption amongst ASEAN member nations is undoubtedly a challenge for Singapore to overcome when building out a digitally driven logistics ecosystem. However, governments across the region are doubling down on initiatives to promote new technology models and local logistics industries stand to reap tremendous benefits through close monitoring of the region’s digital agendas. This can lead to informed decisions and strategies around future investments, partnerships, and expansion plans.

Thailand is an example of a market with promising digitalisation trajectories, and consequently, significant business opportunities, thanks to new government priorities. The implementation of the Thailand 4.0 programme paved the way for the development of the Eastern Economic Corridor (EEC); a specialised section of the country governed by the EEC Act is aimed at accelerating infrastructure development. In the next few years, an estimated US$43b will be invested in the EEC, making Thailand an up-and-coming economic hub with an expanding consumer market and rising logistics demands.

By taking into account the various government outlines designed to accelerate digital adoption and large-scaled infrastructure development, Singapore can plan ahead in terms of expanding its logistics footprint across the region.

ASEAN is no doubt an economic driver of Asia, but the diversity between countries, as well as cultural and business differences, add complexity and challenges to business ventures. These are just some of the factors Singapore must navigate on its way to building a reputation as a top logistics hub. This is a massive undertaking, but with the right focus on building strategic partnerships with industry experts and bridging the digital gap across the region, Singapore will overcome roadblocks to ensure its continued growth today and enable better trade for tomorrow. 

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.

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Shawn Chen

Shawn Chen

Shawn Chen is the Commercial Director, Global Forwarding, Asia and also Director of Southeast Asia, for C.H. Robinson (NASDAQ: CHRW). He is responsible for development, training, and hiring for C.H. Robinson’s client acquisition and retention process across North Asia. In addition, Shawn is directly in charge of global client relationship management, ensuring the highest level of customer service for our global partners.

In his 15+ year tenure at C.H. Robinson, Shawn has worked in various locations around the world, leading C.H. Robinson’s sales and business development efforts. With stints in various regions of the United States, South America, Hong Kong, and most recently Singapore, Shawn brings a wealth of knowledge to matters of consultative supply chain analysis, change management, free trade programs, and organisational team development.

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