TECH & INNOVATION  /  SUSTAINABILITY

By Eric Tan | March 13, 2025

Singapore’s logistics sector is undergoing a major transformation, driven by AI-powered tech and the rise of circular supply chains. As the industry evolves, businesses across Asia can embrace these trends to stay competitive in a digital-first and eco-conscious world.

• Singapore's logistics sector is becoming increasingly tech-driven, with AI-powered automation and predictive analytics.
• At the same time, green initiatives like EV adoption, renewable energy and reusable packaging are transforming how supply chains are managed and measured.
• Data-driven strategies for reverse logistics and waste reduction are shaping a more sustainable, resource-efficient delivery ecosystem that aligns with Singapore’s recycling and emissions goals.

Singapore’s logistics sector is on an upward trajectory. According to the Logistics ITM 2025, the industry is projected to grow by 2%, reaching SGD 6.9 billion and adding 2,000 new jobs by the end of 2025. But beyond the numbers, the industry is undergoing a transformation driven by digitalization, sustainability, and the shift towards circular supply chains.

As a global logistics nerve centre, Singapore is at the forefront of these changes. Its strategic location, world-class infrastructure, and forward-thinking policies make it a testbed for next-gen logistics. Here are three trends that are transforming the logistics industry right now.

Trend 1: AI-driven logistics 

The future of logistics is AI-driven. In Singapore, 57% of organizations are prioritizing AI adoption, the highest rate in Asia, creating an ideal environment for logistics innovation. The government’s recent Budget commitment to AI, including SGD 150 million in funding under the Enterprise Compute Initiative, will accelerate AI-driven advancements.

AI-powered robotics transform logistics by improving sorting accuracy and accelerating processing times, especially during peak periods like 11.11 and Black Friday. At FedEx Singapore, our AI-powered intelligent sortation arm is enhancing efficiency.

Coupled with innovations like FedEx Surround, these technologies will help logistics companies to monitor shipments in near real-time, anticipate disruptions, and improve reliability.

As Singapore strengthens its position as a global logistics hub, these advancements are critical. Major infrastructure projects, such as Changi Airport Terminal 5 (T5), set to open by the mid-2030s, and the second Airport Logistics Park, expected to be developed from 2030, will significantly boost the country's cargo handling capacity from 3 million to 5.4 million tons per year. 

With AI-driven logistics embedded in these new facilities, Singapore is securing its place at the forefront of global trade.

AI-driven logistics is particularly vital for high-value industries like pharmaceuticals, aerospace, and high-tech manufacturing. As a global biomedical production hub, Singapore manages high volumes of cold-chain shipments. AI-powered monitoring systems prevent spoilage by minimizing temperature deviations. 

In aerospace, predictive AI is streamlining parts availability and maintenance workflows, reinforcing Singapore’s position as a key aviation maintenance hub.

Trend 2: Sustainability as a strategic priority

As sustainability takes center stage, businesses are making it a core priority. Singapore has set ambitious targets to cut greenhouse gas emissions and achieve net-zero by 2050. The country also plans to peak emissions at 65 million tons of CO2 equivalent around 2030, with the land transport sector alone accounting for 15% of the country’s carbon footprint. 

To align with regulatory requirements and market expectations, logistics companies are integrating more sustainable practices into their operations. A valuable resource guiding this endeavor is the Sustainability Playbook for Logistics Enterprises, jointly launched by EnterpriseSG and the Singapore Logistics Association.

One of the biggest shifts in sustainable logistics is the transition to electric vehicles (EVs). Singapore aims to replace all diesel buses with cleaner energy alternatives by 2040, accelerating the adoption of EVs for logistics. Investments in charging infrastructure and vehicle technology will enable logistics firms to reduce emissions while maintaining efficiency. 

Supporting this transition, FedEx Singapore replaced 31 of its diesel-powered pickup and delivery vans with EVs in November 2024. This is an important contribution to our global goal of carbon-neutral operations by 2040, a decade ahead of the Paris Climate Agreement.

Beyond EV adoption, digital tools are revolutionizing last-mile deliveries, making operations smarter and more sustainable. Innovations such as delivery lockers, paperless customs processes, and data-driven carbon tracking platforms allow businesses to streamline operations while minimizing environmental impact. 

Sustainability efforts extend beyond transportation. Logistics hubs are enhancing their infrastructure with renewable energy systems and energy-efficient designs.

At our FedEx South Pacific Regional Hub in Singapore, solar energy now powers about 60% of the facility’s total electricity demand, saving an estimated 3+ million kilowatt-hours of electricity per year. We also reduce carbon emissions by about 1,280 metric tons annually (based on typical emission factors for Singapore's energy grid).

Trend 3: Driving the circular economy in urban logistics

As a major e-commerce hub, Singapore is leading efforts to make logistics more circular by reducing waste and increasing resource efficiency. By 2030, the country aims to increase its recycling rate to 70% and cut landfill waste by 30%. Logistics will play a crucial role in achieving these goals.

A key enabler of circular logistics is reverse logistics, defined as reusing, refurbishing, or recycling returned products and packaging. In Singapore, companies are implementing programs to promote sustainability, such as our FedEx Reusable Paks, which enable the reuse of packaging materials. 

These efforts reduce waste and burden on landfills and extend product lifecycles, which contributes to a more sustainable economy.

An efficient returns process is key to circular logistics. Companies that successfully integrate recycling and refurbishment into their supply chains can reduce waste while strengthening their competitive edge.

Looking ahead: 2025 and beyond

Singapore’s logistics sector is evolving rapidly, driven by AI, sustainability, and circular economy practices. With investments in digital transformation, green infrastructure like Changi Airport Terminal 5, and reverse logistics, the nation is setting new standards. 

The future of logistics is smarter, faster, and cleaner. In Singapore, that future is already in motion.