A Tale of one City

As the sun rose over the island of Borneo, the container ship Kobayashi Maru, boundfor the Port of Singapore near the heart of the city, rounded the southern tip of Singapore Islandfrom the South China Sea. The captain knew the crew would be disappointed by the short staythat would prevent many from taking shore leave. In spite of the extensive off-loading and on-loading planned at the container terminal, the Kobayashi Maru would put to sea by nightfall.Singapore's state-of-the-art shipping facilities could turn around an average-sized container shipin under 10 hours, as opposed to 20 hours or more for most ports. A major factor in this was the newTradeNet system. Early that morning he had sent his ship's cargo manifests, in electronic form, tothe freight forwarders in Singapore. Within two hours, using TradeNet, the freight forwardershad already obtained import permits, cleared customs and paid duties for all cargo going ashore,and received export permits for the ship's outbound cargo. Because of TradeNet, together with theother systems in the Singapore port, the days of the long layover in Singapore City were over.Now, shipping there was strictly business.A city-state of 2.6 million people occupying a 625-square-kilometer island at the southerntip of the Malaysian Peninsula, Singapore was prosperous and had sustained remarkable economicgrowth during the 1970s and 1980s. GNP in 1989 was US$ 23.84 billion,1 and per capita GNP wasUS$ 9,000. With a literacy rate of over 87% and a life expectancy of 74 years, Singapore was on theverge of moving into the club of developed nations. The government had adopted a public positionthat the country would be recognized as a developed nation by the year 2000.Its position at the tip of the Malaysian peninsula, at the bend in the long sea trade routebetween the Indian Ocean and South China Sea, had made Singapore a key strategic port for thoseinterested in trade in and around Asia (see Exhibit 1). Its location had been the crucial factor inSingapore's development since its founding in 1819 and was a major source of the country'sremarkable economic growth since becoming an independent republic in 1966.

As of 1989, Singapore had the largest port in the world in gross tonnage and in bunkeringactivity (transshipment of oil and oil products). The second-largest port in container handling,behind only Hong Kong, Singapore was significantly ahead of Rotterdam, the third-largest port.