The Freeport is experiencing a significant slowdown in business activity as one of its major clients – Maersk – has decided to move most of its operations from Malta to other ports in North Africa.
The Freeport’s management has informed unions and other clients that the departure of Maersk and another associated company, MSC, is expected to reduce business at Malta’s container terminal by some 35 per cent by the end of next month.
Efforts are being made by the Freeport authorities to try to attract new business to compensate for the massive loss, and some 10 per cent of the container business throughput has already been recouped through new clients.
Last year, the Malta Freeport handled more than 3.3 million containers in its transhipment activities.
A spokesman for the freeport confirmed the withdrawal of services by Maersk and MSC.
“Maersk recently informed us that it will be shifting some of the services that are being carried out through Malta Freeport to a new fully-automated facility in Tangier Med, Morocco, and to Port Said in Egypt."
Maersk, the world’s largest container shipping company, has been using the services of the Malta Freeport for many years.
Malta Freeport said the nature of the transshipment industry meant that it was not uncommon for shipping lines to opt to make use of different terminals for operational purposes. Malta Freeport was accustomed to operating in such an environment and, for several years, has managed to thrive within it.
Maersk, it stressed, is to retain a presence in Malta through services covering South America and Northern Europe and, furthermore, the Freeport will be significantly increasing its handling of services operated by the CMA CGM shipping line.
“Meanwhile, we remain optimistic about attracting further business opportunities and have absolutely no intention of downscaling our operations. On the contrary, we are continuing to plan for the future.”
Industry sources said that business has already slowed down at the Freeport.
“The slowdown can already be felt and there are already fewer people working, particularly on overtime,” the source said. The company, however, does not have plans to make any of its employees redundant.
While confirming that the Freeport management are doing their utmost to attract compensatory business through other shipping lines, the sources noted that “Malta has much more competition than it used to have and attracting new business will not be easy”.
Last January, the Freeport announced expansion plans, with millions of investment on new facilities including an extension of the Terminal Two North Quay. So far, no changes have been announced to the plans despite the expected reduction in business.
In 2018, the Freeport handled 20 weekly mainline services, providing network links to 130 ports around the world.
Joe Gerada, Group Managing Director at Thomas Smith, representing Maersk, explained that Malta-destined and originating cargo is presently serviced via Port Said Egypt versus a direct Far East to Malta call. The effect of this is that it adds a few days to the transit time of the service Far East to Malta. The feeder services that used to feed other Mediterranean ports from the Far East service via Malta automatically moved with the service.
Otherwise all other services have stayed and there is no intention for any of them to change in the foreseeable future.
Maersk Line still operates direct services from North Europe and South America besides being still connected worldwide via other transhipment ports.
Shipping, he said, is a dynamic business involving many international variables and nobody in the business is surprised by changes in shipping patterns.
"Maersk Line's contribution to Malta has been and still is that of giving worldwide container shipping connections to Maltese exporters and importers as well as bringing transhipment opportunities to Malta where Maersk has been and still is a significant player at Malta Freeport Terminal."