Raj Subramaniam, President and CEO of FedEx,
Jonathan Kaplan, US Ambassador to Singapore,
Png Cheong Boon, Chairman of EDB,
Distinguished guests,
Ladies and gentlemen.
It is a pleasure to be here this morning to open FedEx’s new Asia-Pacific, Middle East, and Africa Headquarters right here in Singapore. Welcome back to Kawal Preet, who started your career with FedEx in Singapore – things come full circle.
FedEx reached fifty years last year. One index of success is when your company’s name becomes a verb. “FedEx” has become a verb. So, it is fifty years of success. What is heartening for us in Singapore is that for eighty per cent of that time, FedEx has been here in Singapore since 1984. You established what at that time was called the South Pacific regional headquarters, and that was done in 1992.
Over the years, you have become a reliable, constant, and growing presence in this part of the world. Forty years on now, we are very pleased to see the deepening of this partnership which FedEx has had with Singapore. We view this as a vote of confidence in Singapore’s position as a key global hub for trade, for logistics, and for connectivity.
Currently, FedEx employs about 1,200 people in Singapore. We hope that you will grow this sector. We believe this provides good jobs, jobs that will scale and levels of expertise that will rise in the future. This will be a great opportunity for FedEx as well as Singaporeans, the employees here and throughout this part of the world.
Today, we are not only celebrating a milestone for FedEx but reaffirming the critical importance of enhancing global supply chains. The world, despite all the problems, is interconnected, at a very fundamental level. This is an existential need of the present and of the future.
Globalisation and modern supply chains have enabled globally dispersed economies to become increasingly interconnected. Not interconnected for its own sake, but interconnected in order to reap the full benefits of economies of scale and cost efficiencies.
If you look at a ubiquitous item, which everyone has in their pocket – a phone – it may well contain chips from the US, from South Korea, from Taiwan; batteries from China and South Korea; aluminium and rare earths from Australia and or even as far away as the Democratic Republic of Congo. All this is before the final package is usually assembled nowadays in China, India, Vietnam, and other parts of Southeast Asia. It is these diverse, interconnected supply chains that really define the modern economy.
We do know that more recent geopolitical developments have led to significant shifts in global supply chains. Just think of the impact of the war in Ukraine and what that led to in terms of food and energy prices, and even in the reordering of those supply chains. More recently, the attacks by the Houthis in the Red Sea have disrupted a critical sea lane of communication linking Europe and Asia, through which about twelve per cent of global trade by volume and thirty per cent of global container traffic passes. We are also painfully aware that geostrategic contestation between the world’s two superpowers has also led to another layer of complexity for those of us in this line of business.
On top of that, the COVID-19 pandemic was another stark reminder that the paradigm of “just-in-time” has also now been supplemented with “just-in-case”. In fact, there is a premium on reliability, trustworthiness, speed, and the fact that you are good for your word. You see some of this also in this trend that some people have called ‘reshoring’ or ‘onshoring’ or ‘friendshoring’. But the fundamental strokes of this picture are very clear.
It means that companies everywhere will prioritise resilience and reliability in supply chain planning. It is not just about cost, not just even about speed. This is also an example where it had played to FedEx’s strength. Because even fifty years ago, you were focused on higher value-added items; items for whom reliability of supply, timeliness of delivery mattered.
It is also worth pointing out that when FedEx established its presence here in Singapore forty years ago, the world looked quite different. Asia as a share of global GDP was much smaller. The other point for a network company like yours is also pre-positioning yourself for future growth. I think it is no accident that today we are inaugurating not just the Asia-Pacific, but India, South Asia, Africa, and Middle East. We all know this is where future growth is going to be multiplied. It is another example of you pre-positioning yourself for growth and to maximise the opportunities of the future.
From a Singapore perspective, I just want to say we have always been a small, tiny city state. But unlike any other economy in the world, our trade volume is three times our GDP. You would be hard pressed to find any other country with that kind of ratio. What that means is that when we say we believe in free trade, we believe in supply chains. This is not just a standard stump speech that politicians make. This is lifeblood for this place, for this Little Red Dot called Singapore.
The ability for Singapore to play a crucial role for resilient supply chains has always been essential for our survival and success. We are a major global bunkering hub. We have significant share of refining in the petrochemical industry globally – all this despite Singapore not having a single drop of oil or molecule of natural gas. We are also a key global semiconductor industry node. We account for about five per cent of global wafer fab capacity, twenty per cent of global semiconductor equipment manufacturing output. It is not too bad for a place this small.
Today, we are a global logistics and connectivity hub. Our port is one of the world’s busiest. Our port handled a record 39 million shipping containers, or what we call twenty-foot equivalent units (TEUs) last year. A record for us. Changi Airport is also a significant global air cargo hub and one of the world’s busiest international airports. It has one of the largest networks in the region, with connections to about 400 cities. We also ranked first on the World Bank’s Logistics Performance Index in 2023.
I should also add one other factoid, which is that even in the depths of the COVID-19 pandemic, even when passengers were not able to fly, we kept Changi Airport open. The airlines continued to fly. Sometimes, passenger seats were filled with cargo – air freight cargo of high value-added items. That commitment to remaining open, not panicking, and being reliable in the depths of the biggest crisis of recent times is another example of our commitment and why we believe we will continue to play a vital role in this global network.
We have been building up our connectivity ecosystem over the decades. We recognise and affirm that FedEx has been a key partner in this journey. You have certainly contributed to establishing and building Singapore’s status as a key logistics hub. We are grateful for that partnership. You have been a reliable and like-minded partner during the COVID-19 pandemic. I referred to that earlier, and I think Kawal and Raj would have examples of where we played perhaps an understated but crucial role when the chips were down.
In this age of disruption, geopolitical contestation, and, as Jonathan has said, war and terrorism, we are not short of bad news and awful headlines. I put to you that just staying calm, cool, rational, reliable, focused on efficiency, focused on delivering what we have committed to our clients and customers, has become even more valuable. We are very glad, and I congratulate FedEx for opening your new headquarters here.
As Jonathan has also said, just as we celebrate the 20th anniversary of the US-Singapore Free Trade Agreement (USSFTA) this year – a successful, ambitious, forward-leaning, ahead of its time free trade agreement which has withstood the test of time. It was the United States’ first free trade agreement with an Asian country when it entered into force in 2004. It is a gold-standard FTA, and well worth celebrating.
We hope that companies like FedEx and indeed the wider business community will continue to take advantage of Singapore’s position, Singapore’s ability to serve as a vital global node in global supply chains, take advantage of the US-Singapore FTA, which enables American companies like FedEx to plug-and-play in our high trust, high reliability ecosystem, and use us as the springboard to tap into the wider Southeast Asian, South Asian, Middle East, African markets –where growth is going be in the next two decades.
So, congratulations to the entire team that has made this possible and thank you for the privilege of joining you today.