Singapore farmers exploring use of shared logistics to tackle rising costs

Key Concepts

• Shared Logistics Service: A collaborative approach where multiple entities share transportation and distribution resources to reduce costs and improve efficiency.
• Central Distribution Hubs: Designated locations where farmers can drop off produce, and buyers or distributors can collect it, consolidating deliveries.
• Singapore Agri-food Enterprises Federation (SAFE): An organization representing farmers, leading the initiative for a shared logistics service.
• Third-Party Logistics (3PL): External companies that provide logistics services, such as transportation, warehousing, and distribution.
• Aquaculture: The farming of aquatic organisms like fish and shellfish.

Shared Logistics Service for Farmers

The Singapore Agri-food Enterprises Federation (SAFE), representing at least 50 farmers, is spearheading a new shared logistics service. The primary goal is to address rising expenses faced by farmers by reducing delivery runs, cutting distribution costs, and ultimately making local produce more affordable. This initiative aims to transform the farm-to-table food movement.

Challenges Faced by Local Farms: The Case of Meal

A local farm, Meal, exemplifies the current logistical challenges. Workers at their Linthicum farm are busy delivering vegetables to multiple locations, including a wet market in one-north and a supermarket in Great World City. Meal's two lorries make at least 20 trips daily to supply and in homes to ensure produce freshness. These extensive trips incur significant costs, estimated at around $10,000 per month for the farm.

Proposed Solution: Centralized Distribution Hubs

The proposed solution involves establishing central distribution hubs. Under this model, farmers would deliver their produce to a single, consolidated location. Buyers or distributors would then collect the produce from these hubs. SAFE intends to implement this by setting up more small distribution centers to shorten transport distances between farms and other stakeholders in the supply chain.

Additional Shared Services and SAFE's Efforts

Beyond logistics, SAFE is exploring other shared services, including manpower and a potential private shuttle bus service to transport workers to farms. SAFE has been in discussions with companies for the past three months to advance these projects.

Existing Examples of Collaboration

Some smaller farms in Lim Chu Kang are already sharing vehicle space to save money. This highlights a growing recognition of the benefits of collaborative logistics.

The Critical Role of Transportation in Farming

Transportation is identified as a critical factor that can significantly impact a farming business. A farm that previously supplied vegetables experienced difficulties when its third-party logistics (3PL) provider, Klia, ceased services, stating it was no longer commercially viable. The farm owner noted, "We humbly thank the even more of a new situation for a few months and then we it to something else. Now we are in the business of helping a lot of our customers built farms and maintain fun for them."

Difficulties in Establishing Shared Systems

Previous attempts to establish a shared distribution system with other small farms faced obstacles. Challenges included varying volumes of produce from different farms, a lack of consistency, and differing business models. As one individual stated, "It's quite difficult because every from the volume is different. The constancy is not there. And so if you want to run route like that, yeah, just the delivery and their business model is different from so it's very difficult to to justify the investment." To survive, this farm now sells seedlings to other farms.

Expansion to Aquaculture

SAFE is also considering centralized distribution points for aquaculture at two jetties. This would streamline the process for buyers of seafood products.

Conclusion

The initiative by SAFE to create a shared logistics service is a strategic response to the economic pressures faced by local farmers. By consolidating deliveries through central distribution hubs and exploring shared resources, the aim is to reduce operational costs, enhance efficiency, and make local produce more accessible and affordable. While challenges exist in coordinating diverse farming operations, the potential benefits for the sustainability of Singapore's agri-food sector are significant.