What: Ports evolution tells where logistics businesses are looking at: East.

Why it is important: Department stores are heavily relying on logistics to get their goods on time. A shift in the traditional relationships between logisticians and hubs will impact the way they operate and force them to adapt.

The Tuas Mega Port in Singapore is a vision of the future for ports worldwide, as it uses technology to meet demand in the face of obstacles to new developments. It is the first of 21 berths planned for completion by 2027, with an estimated cost of $15bn. PSA International, the Singaporean owner of the port, expects it to be the largest container port in the world when completed in 2040. The development is part of a larger trend in the logistics industry, which is betting on the rising importance of Asia, particularly South-East Asia.

The IMF expects the region's five largest economies to be the fastest-growing bloc in the world by trade volumes between 2022 and 2027. However, the expansion of seaports is becoming more difficult worldwide as space in the right locations is scarce and environmentalists are becoming more vocal in opposing new developments. One solution is to make existing logistics networks more efficient. Another is to reclaim land from the sea, but this is expensive. Some ports are choosing to build upwards, using automated cranes to stack containers higher. Another option is to build elsewhere and consider the options of “dry ports”, i.e. load the goods into containers well in advance and load them on ships as they arrive. For instance, a network of 13 dry ports has been built in China, with some being 2.400 km away from the sea.

According to The Economist, this points out the shift of gravity of the ports business eastward. Asia's trade has become more multidirectional, and Asian economies have become large markets. The logistics industry is investing in the region, with a focus on warehouses and distribution hubs. Global manufacturers are looking to diversify production away from China and India is likely to see a boost. Shipping giants are also investing in the region, with a focus on intra-Asian trade.

Investments in ports foretell the future of global