A Resources-Based View of Competitive Advantage at The Port of Singapore

Singapore has important natural resources include its large protected harbor, its location in major trade
routes (Singapore is located where the ship traffic between Europe and South East Asia and the US West
Coast and South East Asia must pass) , and the skills of its well-educated workforce.
As shipping became containerized, a port required massive infrastucture development like berths,
cranes, trucks, storage, and so on. In 1972 Singapore open its first container berth and in 1997 the Port
of Singapore Authority was privatized and its name was changed to PSA Corpration eventhough the
Singapore government still own 100% of the shares in this company. Moreover, Singapore was named as
the best container port in Asia for the 14th time and thebest seaport for the 15th time in 2004 by the
Asian freight industry.

Performance Data
Singapore is the busiest port in the world in terms of shipping tonnage and compares quite favorably on
metrics of port operation. At any one time, there were more than 800 ships in port. In 2001 port
recieved 146.265 vessels with a shipping tonnage of 960 million gross tons. Singapore is handling a
throughput of 18,1 million TEUs in its four container terminals in 2003. PSA facilities can provide on
average 100 container moves per hour. Recorded 280,4 container moves per hour with the ship AOL
Sardonix in 2001. PSA Marine, a wholly-owned subsidiary, performed 108.048 pilotage jobs and 94.904
tug jobs in 1997. The company provides high standards of services as 99% pilotage jobs were serviced
within 30 minutes and 96% tug jobs were serviced in 15 minutes.
The Productivity of Port Singapore

The Financial Measures of Port Singapore Operations

Analyzing PSAs Strategy

As we can see the PSAs performance data above, both productivity and financial were increasing. Of
course, it cannot be separated from the excellent operation in the Port, PSA developed the Ports
attributes and enhanced the attraction of its location.
Key operations. Being sited in a strategic location has its advantage. More than 200 shipping lines with
connection to 600 ports in 123 countries choose to call PSA, this kind of high volume traffic requires
efficient port operations. Customer requirements include frieght rates, frequency of services, shipping
options, turnaround time, port charges (20%), support services (ship maintenance and ship supplies),
and feeder operations.
Port Operations

These operations have to be well coordinated to minimize the ship turnaround times. Before ship arrives
in Singapore, the shipping companies send a message to PSA through the PortNet system, the company
indicates when the ship will be arriving and applies for berthing spaces. Information to PortNet includes
how many container are on board, how they are arranged, their destination, and their promised arrival
date, it can be made between one month and 24 hours before the ship arrives.
PSA has been anticipating the globaization since 1960s and they built the first container port in the
region. PSA also made early preparations to harness information and technology on a major scale and
used it strategically in its port operation in the 1980s. Thre are some support features that make port
operations highly effective and help sustain its competitive edge. There are:

Singapore has a large merchant fleet, 3.037 ships with 25, 572 millions gross tons at the end of
2003.
PSA manages over 500.000 m2 of Tanjong Pagar, Alexandra, and Pasir Panjang Distriparks wich
cater to a host of distribution operators, manudafcturers, traders, and freight forwarders.
PSA personnel is prepared to focus on customers. It has a programs, Key Customers Managers
and Chat Time.
PSA has been developed several web solutions to intensify its operations and also link the
customers operation to its own thus creating long-term strategic tie-in with customers. They are
EZShips, GEMS, EZBill, CargoD2D, TRAVIS, and so on. These enable PSA reducing the time.
PSA invested in information and operation technology to reduce operating problems and to
remove conctraints on the growth of container traffic. They are TradeNet, CITOS (The Computer
Integrated Terminals Operations Systems), The Container Number Recognition System, The Ship
Planning Subsystem, The Yard Planning, CIMOS (The Computer Integrated Marine Operation
System).

The Analysis
The primary resources of PSA are the Singapores natural harbor and location, the location is good for
shipment between Asia and Europe and between Asia and the west coast of US, beside that, Singapore is
one degree North on the Equador which is not subject to thypoons and major storms. The harbor is well
protected and provide large anchorage for many ships. Singapore combined capital with its location and
natural harbor to invest in its operations. The investment helped to generate the capital needed. Below
are the combination of the PSAs resources for its sustainable competitive advantage. This table explains
the PSAs resources.
Resource Attribute
Primary resources
Location
Harbor
Additional resources
Capital for
infrastructure (foreign
investment)

Rare

Valuable

Inimitable

Nonsubstituable

Yes
Yes

Yes
Yes

No
No

No
No

Yes

Yes

No

No

IT and operation
capabilities

Yes

Yes

No

No

IT management skills

Yes

Yes

No

Yes

Yes

Yes

No

No

Yes

Yes

Difficult

Difficult

Yes

Yes

No (in general);
Yes (for running
a large port)

Yes

Combined resources
Location, harbor,
capital for
infrastructure
Infrastructure, IT,
operations, and port
equipment
IT management skill,
port technology and
operations

The competitors will always try to compete and go further than our company, so does the PSAs
competitors. The port of Malaysia take on Maersk Sealand and Evergreen Marine , the reason is the
government of Malaysia offered the two a say in managing the port along with the dedicated berths. PSA
responded this loss by dropping the handling rate for empty containers by 50%, it cut fees by total of S
$300 million for one year and began a new policy. Then in December 2003, PSA worked with China
Ocean Shipping Group Company to establish a terminal for berthing arrangement COSCO ships.

Conclusion
From this case we can conclude that the limited natural resources owned by a company is not an
obstacle. Companies can look for other resources in the form of artificial natural resources that can
increase the capacity of the natural resources that already exists.
For example, the narrowness of the port does not preclude Singapore has a good port. They are looking
for other resources that information and technology and then use it to the maximum so that they
managed to increase port capacity and usability. Then this success is also supported by the government
is to provide good infrastructure and clear regulations, and not forget, the highly trained human
resources both internal enterprise and human resources in touch with the customer.
This combination of all these resources generate competitive advantages for the Port of Singapore
Authority (PSA). Further, the PSA and the other companies must sustain this achievement so as not to be
defeated by the competitors.