Risks to Singapore as Busiest Transshipment Hub in World

Launched by October, provides a higher level of support for SMEs. It will be capped at $100,000 per company and requires co-funding by firms.

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FROM A18

TRANSSHIPMENT RISKS Another issue at hand is transshipments, as around 80 per cent of the world's trade is done by sea. Singapore is a critical player in this. It has banked on its strategic location to become the world's busiest transshipment hub.

A record number of 41.12 million TEUs, or twenty-foot equivalent unit containers, were handled by the country's terminals and ports in 2024, according to the Maritime and Port Authority of Singapore.

Of these, 90 per cent were bound for other destinations, including the US.

Although transshipments are regulated by law, with agents needing to obtain a Customs permit, among other requirements, there is a risk that Singapore may "attract transshipments trade aimed at circumventing US tariffs on third countries", said Mr Holmes.

Put simply, a company that is currently shipping goods from another country in Asia that faces a higher tariff may choose to route shipments through Singapore, which has drawn a lower export tax.

In recent weeks, the US authorities have moved to tighten their stance on transshipments.

Mr Trump warned in his tariff letters that have been sent to a slate of countries that "goods transshipped to evade a higher tariff will be subject to that higher tariff".

In particular, his administration will put a 40 per cent tax on any goods found to be transshipped through Vietnam, in what analysts view as a move targeted at China. It is unclear how this directive would be enforced.