Support for SMEs to Manage Rising Vehicle Costs
Ministry of Trade and IndustrySpeakers
Summary
This question concerns support for SMEs facing rising commercial vehicle Certificate of Entitlement (COE) prices and the evaluation of last-mile delivery consolidation pilots. Minister for Trade and Industry Gan Kim Yong clarified that no specific COE schemes exist, though businesses can utilize the Enterprise Financing Scheme and Enterprise Development Grant for operational needs. Regarding the 2018 consolidation pilot, the Minister noted low adoption as companies preferred existing logistics contracts for better service control. He explained that the pilot failed to provide cost efficiencies due to the multiple handling of goods, which hindered further expansion of the programme. Consequently, the Ministry encourages SMEs to use the GoBusiness portal to access broad-based and sector-specific support for innovation and growth.
Transcript
44 Mr Edward Chia Bing Hui asked the Minister for Trade and Industry in light of increasing COE prices for commercial vehicles (a) what support is available for SMEs to manage these rising costs; (b) whether the Ministry has evaluated the overall system effectiveness of previous pilot programmes for consolidating last-mile delivery via third-party logistics (3PL); and (c) if these pilots have been successful, how does the Ministry plan to encourage greater adoption of 3PL services among SMEs.
Mr Gan Kim Yong: The Government does not have specific schemes to help businesses with higher Certificate of Entitlement (COE) prices. Instead, we have broad-based and sector-specific programmes to assist businesses. These include schemes to support companies with their operational cash-flow needs, such as the Enterprise Financing Scheme-Working Capital Loan. There are programmes to help companies invest in upgrades, innovation and growth, such as the Enterprise Development Grant. Businesses can visit the GoBusiness portal (gobusiness.gov.sg) for more information on these schemes.
In 2018, Enterprise Singapore and the retail industry collaborated to develop the Urban Logistics Offsite Consolidation Centre pilot, which consolidates last-mile delivery through third-party logistics (3PL). The programme aimed to improve productivity for companies by consolidating deliveries at an intermediate site, thus reducing the number of total deliveries made to malls. However, the adoption rate for this pilot was low, with only 13 companies participating. Feedback from companies indicated a preference for maintaining existing long-term logistics contracts with 3PLs or their fleet, as this option provides them with greater control over service requirements like frequency of delivery. In addition, the companies did not enjoy cost efficiencies from the pilot due to multiple handling of goods.