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Bienvenido a Bombas y Automatización
McKendrick, A. Neo, B. King and L. Applegate Nolan, R.
Managing the computer resource: A stage hypothesis. Managing the crisis in data processing. Harvard Business Review, March—April. Perrow, C. Complex Organizations — A critical Essay. Random House. Pfeiffer, H. The Diffusion of Electronic Data Interchange. Porter, M. Free Press, New York. Although recent years and events have challenged its relevance, the author believes the industry can brave the storms and continue giving Singapore its competitive advantage.
Under competitive pressure, the maritime industry has diversified to offer a wide range of ancillary services, such as maritime legal, financial, and insurance services. The port has also refined its core competencies in ship repairing, bunkering and transhipment, becoming one of the few ports in the world which can handle mega-ships and maintaining its position as the busiest transhipment hub worldwide.
In addition, the industry has been developing new competencies in offshore and marine engineering, which have succeeded in making Singapore a global leader in oil and gas drilling units and offshore support vessels. These efforts have been instrumental in helping Singapore retain its competitive advantage.
However, things have not all been smooth-sailing for the maritime industry in recent years. Decreasing container throughput and falling oil prices have inevitably shaken maritime firms. Signs such as these are clear indications that the maritime industry is undergoing significant structural changes. The following sections will examine what these changes are as well as what can and has been done to tackle the problem at hand. The maritime industry faces two main challenges moving forward. Firstly, a global economic slump which has resulted in falling demand for shipment.
Secondly, a rise in the number of regional competitors. This section explains how the aforementioned factors have impacted the industry. Global economic growth has been sluggish in recent years. As GDP growth and trade are intrinsically correlated, this translates to falling demand for imports and exports. More worrying is the impact of falling oil prices which began in The offshore and marine industry earns more than half its revenue from the offshore and rig building sector. As oil prices plummeted, oil companies started to restrict their supply to restore prices.
This meant lower demand for drilling solutions like jack-up rigs and Floating Production Storage Offloading units. Consequently, the annual turnover for marine and offshore firms decreased by Falling demand has led to greater excess capacity in shipping lines. In response, shipping companies have begun to form mega-alliances with one another in an attempt to drive costs down through economies of scale.
Naturally, this trend has been accompanied by a more prevalent use of mega-ships as companies try to lower unit costs. Continuous upgrading of port facilities to suit the complex demands of shipping companies will ensure that Singapore does not lose out to its competitors. Singapore faces competition from surrounding nations who are eager to have a slice of the maritime pie. With wages rising faster than productivity growth, the port is losing out in price competitiveness to low-cost labour countries like the Philippines and China.
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The matter is exacerbated by international regulations such as ballast water management and lower sulphur limits which impose greater operating costs on the port. The wave of disruptive technologies, including advanced robotics and artificial intelligence, will also transform the battlefield.
Indeed, China has already begun automating its once manual labour dependent ports. Singapore must make sure that it stays ahead of the curve. Michael Porter argued that it is not industries that make nations competitive, but rather nations that make industries competitive. In light of this, the government has an important role to play in creating the economic infrastructures necessary for the maritime industry to flourish.
This section provides an analysis of the policies that the government has implemented and their effectiveness. Numerous shipping lines stationed in Singapore will benefit from increased port concessions and be more inclined to resume operations. However, a policy like this should not be seen as a long-term solution as it may encourage retaliation by neighbouring countries, dragging everyone down in a concessions race. The industry should hence not be over-reliant on port concessions. MPA has certainly been very active in incorporating technology into the maritime industry. Indeed, the adoption of technology in the maritime industry has shown significant impacts on productivity.
In , the chairman of Orient Overseas, Tung Chee Chen, reported that the deployment of object-oriented technology and open client server platforms significantly reduced operating costs and halved administrative overheads.