The modern history of Singapore dates to 1819 when Sir Thomas Raffles established
a British port on the island with the express intent of developing free trade
(Josey 1980) and loosen existing Dutch trading monopolies at the time. In 1965
Singapore was separated from Malaysia and lost its hinterland. In order to compete,
Singapore redoubled its focus on trade and developed a re-export-oriented manufacturing
economy, requiring efficient port operations, continuing Singapore’s role
as entrepoˆ t for Southeast Asia (about 85 % of the containers that come to Port of
Singapore never enter the country and over half of the remaining material leaves
Singapore as re-export). It is a hub for global corporations, or their subsidiaries,
importing raw materials and transforming them into world exports (Choy 2009).
To fulfill this need, first and foremost Singapore developed into a world-class
transshipment port, later establishing itself as a world-leading container port. This
was naturally followed by the move of logistics-intensive industries into Singapore,
transforming it to a regional as well as a global warehousing and distribution
center. In parallel, Singapore developed oil port facilities to cater to the needs of
oil companies in South East Asia. It is important to note that Singapore development
in general, and its logistics and trade in particular, rest upon a virtually
corruption-free environment, an educated and motivated workforce, and wellestablished
legal and financial business frameworks. Singapore was rated #2 in the
World Bank’s (2009) International Logistics Performance Index and #1 in the
World Economic Forum’s The Global Enabling Trade Index (Lawrence Drzeniek
and Moavenzadeh 2009).
At the same time, the Singaporean Port Authority (PSA) kept investing in
automation, leading to continuous optimization of port services, reducing time and
cost to its tenants. Hand in hand with this policy, the PSA and the government
made sure that port services were competitively priced and regulations were
simplified and streamlined.