The freight and logistics sector in Malta is an important pillar of the country’s economic set-up which employs approximately 5,000 people. But what are the challenges facing this sector? Is there potential for growth?
Kevin Filletti, sales manager at Attrans, believes an increase in ferry services and connections from mainland Europe would help the business grow.
“At the moment, one of the main problems local transporters are facing is that just one solitary shipping line operates into and out of our port. Due to having no other form of competition, the shipping line has complete control of the market and the prices it charges. Furthermore, the ship departure and arrival days are fixed.
“The Valletta Grand Harbour also suffers from a number of bottlenecks such as old practices, lack of discipline and procedures, gate limitations and lack of quay space to organise professional cargo operations. The port and all associated costs are quite high; for example, port charges in Malta are double what they are in Spain,” Mr Filletti says.
In the past 10 years, he adds, the number of cargo vessels calling in Malta have declined. But the amount of TEUs handled has doubled during that time, partly due to larger vessels entering the port.
“The government would do well to invest more and develop Malta as a true transhipment hub, in the hope that the imbalance of trade will no longer be problematic, especially since a very sizeable amount of trailers still leave Malta empty.
“Aside from lowering port costs, the transport and logistics industry will flourish should the companies be allowed to set up their very own bonded area. As things stand, there are currently only very few bonded areas in Malta besides the ports and Ħal Far, all of which have limitations and associated high costs. Malta is the only country in the EU where a transport company needs a customer escort to transport goods from outside a port; in other countries, it would be taken care of by a simple transit procedure.”
Asked whether finding drivers is a problem, Mr Filletti replies: “Aside from obvious barriers such as language and the long time away from home, one of our major struggles in finding appropriate drivers is experience. Since our trucks and drivers are required to travel all around Europe, not many local drivers have the required road knowledge or experience, especially since speed and efficiency are pivotal in all our operations.
“On another note, not many individuals are aware that in order to be a driver of such goods, one must be certified, such as for hazardous material and different types of pharmaceuticals.”
Mr Filletti says that the industry is continually evolving and that technology has allowed organisations to reduce huge amounts of indirect costs from travelling by replacing face-to-face meetings with remote technologies.
Some of the market’s most popular and prominent transporters have already begun to shift to a web-based business
“Modern communicative technologies have made anyone in the world a quick telephone call away. Still, we can’t simply transfer existing ways of working – management styles, work practices, collaboration technologies and workplaces – into our offices and hope to be successful. We make sure to support each office, with a diversity of needs.
“Attrans invests heavily in different components we use on board our vehicles, as well as out. I believe e-commerce will play a very large role in transport in the years to come. Some of the market’s most popular and prominent transporters have already begun to shift to a web-based business.”
Charles Schiavone, Malta country manager for DHL, explains that the demand for the transportation of physical documents today is growing. He says: “When the fax machine was developed, one would imagine that technology could have been a serious threat to documents by courier. This was not the case, not even when the internet evolved.
“The demand for the transportation of physical documents today is growing and we are seeing an increase in this product line year on year. Parcel carriage is another product line, and this was also unaffected by technology.
“Today we are experiencing a different reality with online shopping. It’s more on the receiving end where we are delivering hundreds of parcels every day to the local community, a B2C phenomenon that we see as a big challenge.
“A real threat today for our business model is the global economy, as well as the country’s economy where you operate from. If this is not doing well, we will feel it directly.
“Another threat nowadays is the fact that international companies are increasingly becoming targets for criminals, and we respond to this by focusing on our security and safety, which are paramount to our customers, shipments and staff.
“Notwithstanding this, spare parts, samples and other goods have to be shipped out and received at the other end every day, and DHL has used the technology advances to make sure that its service is kept at optimum levels,” he says.
For GMC Transport Co. Ltd, which specialises in services to the pharma industry, distribution is an important activity in the integrated supply-chain management of pharmaceutical products. Sara Buttigieg, a director at GMC, says:
“To maintain the original quality of pharmaceutical products, all entities involved in the distribution process have to comply with the principles of Good Distribution Practice (GDP). GDP can be described as that part of quality assurance that ensures that the quality of a pharmaceutical product is maintained by means of adequate control of the numerous activities, which occur during the distribution process.
“With respect to transportation, requirements include care of the product during transport, control of temperature, risk assessments of transport routes and control over the vehicle used. These are ensured through investment in technology and written procedures, which allow for continuous training of key personnel, appropriate storage conditions, and regular maintenance and calibration of vehicles and equipment,” she says.
Ms Buttigieg says that to reinforce the company’s efforts inmaintaining high quality standards GMC Transport has worked extremely hard on gaining accreditation through ISO 9001:2008 Certification.
She adds: “We have based our foundations on a tradition of commitment to our customers. Inspection, auditing and certification of compliance with such a quality system based on GDP principles strengthens that commitment and provides a formal mechanism for improvement by triggering appropriate corrective and preventive measures.
“In the highly regulated pharmaceutical industry, quality and consistency are absolutely vital to meeting best-practice standards. ISO 9001:2008 Certification assures companies in this field that we have met these high standards to provide them with the highest quality of transportation service.”
Jet Freight Ltd offers project cargo services for one-off, non-standard, much of which was aimed at Libya. Has this business line been hit or is the company still working for the offshore platforms?
Chief executive officer Olvin Galea says: “We have serviced major operators in the oil and gas industry for the past years. The instability in the African region has brought new challenges in the way shippers and agents operate, but the business still managed to service its operations.
“Our project cargo department services also import and export to Malta and other countries such as Scotland with a competitive direct import and export service. Our team is optimistic about Malta confirming its role as a main hub in the Mediterranean area and we are focused on delivering our services in time every time.”
Importers still lament that there are bottlenecks at the ports and that costs are still high. What is the way forward? Joe Gerada, managing director of Thomas Smith, explains that the entries to Malta are mainly of three types: container sea freight, trailer sea freight and air freight.
There is optimism about Malta confirming its role as a main hub in the Mediterranean
“In each case, if the shipping agent, freight forwarder and importer are organised, speed of entry – which is what I am understanding is referred to by ‘bottlenecks’ – should not be an issue, particularly if goods are of EU origin.
“As shipping service suppliers we should know what our customer needs, what his time tolerances are; and there is no reason why these should not be met. We have some very fast transit times available and you will find airfreight competing with trailers sometimes,” he says.
Mr Gerada says the buyer will always complain unless it’s a glamour, luxury, fashion item, which unfortunately shipping is not. “In my opinion competition is dealing with any cost issues except where they are a result of inefficiencies because of old unnecessary practices or if some government institutions or departments work limited hours – summer is a case in point.
“I feel the private sector which includes overseas shipping lines, airlines, trailer companies, local shipping agents and freight forwarders have sharpened their act, and today offer many efficient and cost-effective solutions. Some prices for moving freight are actually unreasonable from a supplier point of view, but then market forces are what they are and they dictate.”
Maltapost believes it plays an important role in the logistics sector. Chief commercial officer Mark Vella says Maltapost offers a fast and secure local courier delivery service to anywhere in Malta and Gozo to local businesses, shops and individual customers. Services are available within Malta, within Gozo, and between the two islands.
“Maltapost also offers a range of international courier services, which are available to hundreds of countries worldwide with guaranteed delivery times. These services include integrated insurance as well as pick-up of the client’s parcel from any address in Malta and Gozo.
“This service delivers to a final destination within an established timeframe and offers full traceability and proof of delivery. An altern-ative economic service offered by Maltapost is the registered mail service; it is fast, secure, can be insured, and provides a signature from the addressee as a proof that the item has been successfully delivered. Tracking facility is available on the Maltapost website,” he says.
“With the collaboration of partners worldwide, a national retail network across Malta and Gozo, an extensive delivery fleet and a dedicated team of delivery specialists, Maltapost offers flexible courier solutions for all delivery requirements.”
With online shopping steadily on the increase, and with the launch of hubs in the UK and US, Maltapost offers an alternative address in these countries for customers who would like to shop from online stores which do not deliver to Malta.
“As e-commerce continues to drive up the demand for parcel deliveries, Maltapost’s vision is to provide flexible solutions designed around clients’ needs and lifestyles by investing in technology and innovation,” the spokesman says.