Why Singapore as Transit Point for Shipping to Indonesia?

Singapore is formidable as a transit point of goods and shipment for a long time since the British Empire in Singapore. Singapore is blessed with the location in the tip of the Malaysian peninsula that connecting all over Asia as a trading hub. Every merchant from the West that wants to trade their goods in Asia must be bypassing Singapore.

Since then, the government of Singapore using the opportunity and the need of the shipping hub and keeps improving the efficiency of the port as well. Singapore is the top 10 busiest hub in the world, that is why the efficiency and time management skills needed by the Singapore Government.

Singapore Changi Airport serves around 6000-7000 flights weekly and connecting more than 200 cities in 60 countries and handling close to two million tons cargo. With tremendous infrastructure as well in the air transport hub, Singapore has competitive advantages as the leader in the logistics of the world.

From time-to-time, the Singapore Government keep building the port as the world-class standard, with the support of integrated IT system, human resource management, and the effectiveness of the logistic system, make Singapore thrive as one of the logistic leaders in Asia.

Basically, there are 4 factors that help Singapore thrive in the industry:

  • Connectivity. Singapore’s location supports Singapore connectivity as the hub of air and sea logistics. Even so, Singapore is an island, Singapore able to thrive in regards to the need for the world of the hub and logistics and maximize the opportunity. If Singapore’s location not as strategically located, Singapore will not be able to reach the current level of success.
  • Infrastructure. Singapore’s infrastructure is world-class and compared with the South East Asia region, Singapore’s infrastructure is quite stand out. Singapore government believe to invest in the best infrastructure to be able to support the need for high-class infrastructure for the industry.
  • Processes. Do you know that in Singapore, it only need minutes to issue import permit compare to any third world country such as Indonesia, Myanmar, Cambodia, etc, that need days and a lot of bureaucratic levels of clearance to issue such a permit? In Singapore, processes of documents, the flow of import and export are seamless and integrated. 
  • Private sector participation. With the ease of access to investment, the private sector in Singapore is thriving and able to help the country to the next level. The private company in Singapore understands that by setting up an office in Singapore, multinational companies able to reach South East Asia and the Pacific region easily.

We use Singapore as a hub for our transit points as many of the shipping agencies also use it. Few reasons why we use Singapore as our hub transit are:

1. Global Connectivity

Singapore boasts the world’s busiest transshipment point and the airport itself is the busiest cargo airport in Asia, providing vital air and sea connections to every part of the world.

2. Trusted World’s Courier Hub

There’s 20 of the top 25 top global logistics players hub office and warehouse for South East Asia regional and important link to the Pacific as well. Few companies like DHL, TNT, FedEx, Kehne + Nagel, Sankyu, Schenker, Toll Logistics, UPS and Yusen Logistics, etc use Singapore as the main hub. World Bank which, in its reports, has consistently rated Singapore as the first or second most competitive place in the world for logistics.

3. Effective and Efficient System

Singapore has also been recognized to have highly efficient customs and business-friendly import/export procedures providing companies greater efficiencies in obtaining clearance/documentation/permits for their goods.

4. Improvement of the Supply Chain Management System

Leading manufacturers such as Apple and Unilever are using supply chain management as a differentiating competency for their global business. To remain globally competitive, Singapore has been working with global companies to optimize and manage their supply chains across Asia.

5. Singapore is Trustworthy

Air-freight providers focused on the shipment of high-value goods will benefit from Singapore’s safe and trusted hub status. Singapore is aligned with international security conventions and has introduced the Secured Trade Partnership programe, the Advanced Export Declaration Scheme and the establishment of Mutual Recognition Agreements (MRA) with major trading partners including Canada, Japan, Korea, and China.

Most importantly, Singapore is the leader of the customs process around South East Asia. With clear regulation and less bureaucracy compared to Indonesia, the goods are easily imported to the region through Singapore and shipped to Indonesia.

Even the Singapore government keeps strengthening the logistic system in Singapore by encouraging the private sector to specialize and deepen the capabilities in key sectors, including food and healthcare logistics, e-commerce fulfillment and aerospace service logistics as these industries keep growing in the future.

Technology is changing the future as the food and healthcare need is keep improving the future, so the companies need to find a way in regards of the most effective way to distribute the food around the region. Furthermore, the healthcare industry always in need in regard to the older population in countries.

Furthermore, with the rapid growth of e-commerce around the region, Singapore will have a major role in logistics for the South East Asia region due to the strategic location as a shipping hub and connector for the countries around Singapore.

A few factors that help Singapore shape the e-commerce around the region are the minimum threshold tax which is the highest around South East Asia. SGD 400 is quite a sum of free tax for purchaser around the region to import their goods via Singapore compare to imported directly to their own country,

Compare it to Indonesia which only has USD 75 of the tax threshold minimum, and complicated tax rate, Indonesian will choose to import the goods via Singapore and ship it through the nearest city close to Singapore as a transit hub.

Another industry that keeps on growing in the future is the airline’s industry due to the demand for air transport around the region. With more planes flying in major time, maintenance would be such a need for the airliner. Singapore needs to have a major role in the logistic of the airline service industry.

As of competitiveness increase around the region, Singapore keeps deepen up the knowledge and the cooperation between countries as the stakeholder in improving the logistic around the region.

Do contact our staff for any inquiry in shipping goods to Indonesia, email and WhatsApp us for a quick reply. 

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