Singapore is well known to possess one of the busiest ports in the world. This in turn has led to an abundance of international maritime trades brought into Singapore. Many ships from the western countries in Europe and Americas stopped over at Singapore’s port for refueling before they continue their journey to other Asian countries. Some ships even unload all their containers at Singapore’s port and segment their containers into different destination countries in Asia. After which, they will engage third party sea freight to transport the containers to the respective countries. This has resulted in a lot of sea freight business for companies situated in Singapore.
These sea freight businesses make up part of Singapore’s logistics industry.
Next, there is also a huge land-based logistics industry in Singapore too, in particular the heavy machinery land-based logistics. Heavy machinery land-based logistics is supporting major companies and business activities in Singapore. For instance, huge machinery is needed to carry out big scale logistics activities such as moving of containers at ports. Real estate construction is also one area where these heavy machinery are needed to carry huge building materials around. Heavy duty logistics services are also required by manufacturing companies to transport mainly the raw materials to their factories.
Apart from heavy machinery logistics, there is also a sizable market specializing in small and medium size goods transportation. These transportation are typically carried out by cars, vans, motorbikes and lorries. As E-Commerce businesses grow in Singapore, the logistics market for this sector will definitely continue to grow. There is a growing demand for logistics service to transport these small and medium sized items. Many E-Commerce business owners outsource their logistics operations to third party logistics companies. These logistics companies will be able to offer a good rate due to the volume they are getting. The individual companies’ volume will pale in comparison to these logistics companies’ volume.
Finally, we have the air logistics services. Air logistics services are not offered by many Singaporean companies in the Singapore market. It is one area which is dominated by international air logistics players such as FedEx and DHL. These large corporations have huge network and tie up with lots of airlines around the world. Besides, they have existing infrastructure and huge volume that allow them to offer low price to customers. There is a huge barrier to entry to new start-ups in the air logistics service industry.
The logistics industry in Singapore is considered matured by the world’s standards. Industry growth is maintained at a steady pace. There is a broad range of logistics services established in the market. Demand for the logistics services is continuously huge.
Within the matured Singapore logistics industry, there are a lot of different niches – freight forwarding niche, dangerous goods logistics niche, courier logistics niche, and commercial cargo goods logistics niche. Together, the broad logistics industry in Singapore generates billions of dollars every year.
The most notable difference across the various logistics niche is the different items transported by the logistics companies. Each of them have specialized equipment to handle the transportation of the various types of goods. The similarity lies in their delivery standards. Every logistics industry have a pricing model which charges customers higher price for faster delivery. It makes sense to do so anyway as the companies have to prioritize these customers’ deliveries over the others and fulfill the delivery deadline.
Various delivery speeds include same day delivery, next day delivery, same week delivery, next week delivery, and the urgent delivery (which will normally be completed within 2 hours). Different customers have different requirements which result in the development of this delivery standards in the logistics industry. For customers with time-sensitive goods such as perishable goods or urgent documents to be sent to clients, it will make sense to get same day delivery or urgent class delivery service. For those people who have a lower budget and do not mind the longer delivery time, they will pick the next day delivery, same week delivery, or next week delivery instead.
In order to do well in the logistics industry, your business operations must be optimized effectively. It will greater reduce business cost which will then allow you to lower your price for customers or enjoy a higher profit margin. Many logistics companies in Singapore have highly efficient business processes and operations. Hence, the market rates for logistics services in Singapore are quite low as compared to other countries. In another words, the logistics industry in Singapore is competitive. This is natural as the industry is very matured.
Many logistics companies in Singapore continue to improve their business operations continuously in a bid to survive and last for the longer term. As a developed nation, the companies in Singapore are very receptive to technology. New technologies are tested and researched to help improve business operations and even the business models. As the demand for logistics services is projected to grow at a steady pace over the years, many players want a piece of the pie.