Battling the waves: Malta’s maritime industry’s time of reckoning | Godwin Xerri

What are the key challenges which the Maltese maritime industry faces?

The lack of experienced personnel is an increasingly worrying problem, which, if not addressed in time, will create serious consequences not for the sector on its own but to the wider Maltese economy.  Unfortunately, there is no concerted effort to showcase the value of a maritime career among our younger community. Let’s face it: should a class of students be presented with the question of whether they would rather captain a plane or a ship – the majority will opt for the skies. Yet, ironically, a ship captain’s responsibility and expertise are even more extensive: he or she would need to be well-versed not only in the technology of sailing a vessel (which today can be considered as a floating computer centre) but even in international law, international conventions and customs of the countries of call. As the owner’s representative on board the vessel, the master is the one who faces the law of a country when something, such as a pollution incident, occurs.

How are developments at an EU levels affecting local industry?

At an EU level there’s a strong determination to fight tax avoidance but in the pursuit of this objective, the EU at times risks of killing the hen that lays the golden egg. The international maritime industry is, in my humble opinion, over regulated and this risks alienating the shipping industry from Europe. In such a difficult environment, in the case of the Maltese maritime industry there is need for  stronger lines of communication with authorities and the politicians that are able to push forward Malta’s voice in Europe. Take tax reform for example. Within the Climate Pact context, the EU is pushing for new taxation on shipping lines operating in European ports to counter for the pollution they cause. While the principle might make sense, this will make European ports less competitive vis a vis Non-EU ports. Given the choice and possibility, shipping lines will choose Non-EU Ports.

We have to ensure that our voice reaches the powers that be. Our competitors in the Mediterranean have already understood this – Cyprus now has a dedicated Deputy Minister solely for Maritime affairs. Also, in this context, Focal Maritime has been a vocal supporter of the proposal, pushed by the Malta Maritime Forum of the need to detach the maritime industry responsibilities from Transport Malta and re-establish a National Maritime Authority. In this regard a note of appreciation to Aaron Farrugia, Minister for Transport, Infrastructure and Capital Projects who on the 23rd November convened a meeting for the stakeholders within the maritime industry to have an open discussion on this possibility of hiving off  Maritime from Transport Malta. It was a really interesting exchange with a lot of interventions from the stakeholders which the Minister took note of. We now look forward to the follow up.

Logistics transportation can be an important player in the fight against climate change. What approach are you adopting?

No industry is immune to the vicious circle of climate change – and I use this term, willingly. While transportation and logistics too contribute to this phenomenon, they are actually also victims of it. Fast-paced climate change impacts our delivery speed, it increases production costs and may negatively impinge on the quality of the goods we deliver to consumer. Yes, we are looking at the bigger picture too – but sometimes you need to start with simple, practical solutions rather than opting for grandiose commitments. We have been studying the impact of our operations for years, and have already come up with different proposals on the matter. Evidently, trucks and containers have a big impact on morning traffic and pollution. Most of today’s businesses rely on shift work and I see no reason why deliveries of cargoes cannot be carried out during silent hours as opposed to the rush hours were people are rushing to work and kids on their way to school. I am confident that cutting 25 to 50% delivery truck traffic would have a substantial impact on traffic congestion on our roads. We are willing to lend our assistance to government to implement such measures.

What’s your future prognosis for this industry on our shores?

Malta definitely needs to up its game to enhance its competitiveness in order to attract further maritime activity to its shores. A study carried out by the Malta Maritime Forum in the past months has found that the industry is responsible for around 12% of Maltese GDP – that’s a staggering impact in consideration that it does not get the fiscal and other support that other emergent industries are receiving. Entities such as shipyard companies, port service operators and shipping agencies contribute significantly to growth and job creation while getting few incentives. The list of stakeholders within the industry is endless – cargo terminals such as Malta Freeport and Valletta Gateway Terminals (Valletta Cruise Port), Shipyards (Palumbo), stevedores, pilots, tugboats, surveyors, insurance, supply boats, law firms and company services providers. This endless list explains why the maritime industry has a higher economic multiple effect than that generated by other industries. Thus, by supporting this industry Malta’s economy stands to gain. Maintaining the status quo will barely guarantee survival, let alone create new avenues for growth. And the opportunities are there! Despite the huge impact of the pandemic and now war, studies still anticipate further growth in this market.

How is Focal Maritime adapting to the new realities?

As our business portfolio grows, we have focused our efforts to ensure better and stronger governance. Our firm is growing into a group of companies providing a wide-range of services within the logistics industry to offer clients a one stop shop immaterial whether the transport is by sea, air or road and whether the client requires warehousing or just-in time delivery. In this context, we felt that it was imperative to restructure the group into separate, self-sustaining companies, each with its mission and specific focus – whether in logistics, transport, maritime agency and consultancy.

We are also strongly embracing the digital transition with a significant investment in modern, professional and digital tools and solutions to enhance our B2C and B2B relationships, while training our personnel to adapt to such developments.

We have also looked at matters related to business continuity. Although we are proud of our family roots and values on which this company is founded, we wanted to create an environment led by a professional management team. This gives peace of mind to the clients that trust us with their merchandise as well as to our employees that can feel that they are working within a forward-looking firm.

What’s next in the pipeline for your organisation?

To reinforce and be able to execute these significant changes, we have drawn up a strategy plan based on an extensive SWOT analysis and an assessment of the local and international business and economic environment. This will determine specifically targeted investment to extend the reach of the company and offer a comprehensive service through any possible means, by air, sea or land, while also looking at internationalising our operations. We have also looked at the qualities and talents of our staff to see how these can be further developed in our quest towards an ethical and sustainable growth which renders value added to our clients, a career development environment to our employees and of course a profit to sustain the development of the company.