Transport and Logistics

Malta’s strategic position in the centre of the Mediterranean makes it a natural regional maritime and logistics centre, and on-going investment in top-end facilities gives the country an advantage against its competitors in the region.

Globalisation and the increase in world trade it brought have helped drive Malta’s rapid growth as a regional maritime and logistics centre, and despite the sharp drops in international trade registered as a result of the economic recession that began in 2008, the sector remained stable through 2009 and 20l0. Malta is ideally located to take advantage of the opportunities that trade between Europe, Africa and the rest of the world brings. Recognising the potential this generates, the country has invested heavily in the sector and today Malta’s solid shipping industry, flourishing Freeport and excellent airport cargo handling facilities present businesses with efficient and convenient multi mode sea and air logistics solutions as the sector continues to grow at a healthy rate.

New Holistic regulation

Previously regulated individually by the Malta Maritime Authority, the Malta ‘Transport Authority and the Department of Civil Aviation, the Maltese transport sector now falls under one Authority in an initiative that aims at making transport policies more homogeneous and coordinated. The move, merging the regulation of the three branches of the transport sector, land, sea and air transport, is expected to harmonise government policy, decrease administrative burdens and enhance the performance of all three sections of the sector. The new Transport Authority, which was in place by January 20l0, will, according to Austin Gatt, Minister of Infrastructure, Transport and Communication, put Malta in sync with European Union concepts of inter-modal transport.

Major transshipment centre

Malta’s geographical position in the centre of the Mediterranean has always played a pivotal role as a hub for business and commerce in the region and today Malta Freeport has become an important container transhipment hub. Many companies use Malta as a stepping stone for trading, regional storage, distributing and marketing for international operations in Southern Europe and North Africa.

Since it was established in 1988, the Malta Freeport has become one of the key players in the region. Now one of the largest transhipment and logistics centres in the Mediterranean handling close to 3 million TEU per annum, the Freeport is the focus for containerised transhipment traffic. The terminal management was privatised in 2004, and is now handled by Terminal Link, after CMA CGM, a French line was awarded a 65-years concession on the port. Connected to 69 Mediterranean and Black Sea ports and 130 ports worldwide, only 5 to 8 per cent of the Freeport’s traffic is cargo originating in or destined for Malta.

Investment for expansion

Between 2004 and 2010, Malta Freeport invested around 170 million euro in expansions and new equipment, such as quayside cranes and yard cranes and an increase in water depth. This expansion has resulted in steadily growing capacity levels and traffic volume, with the Freeport seeing the volume of traffic rising by 71 per cent since 2005. With the heavy investment undertaken to date Malta Freeport is now able to accommodate containership giants such as the CMA CGM PEGASUS, the largest containership ever to sail under the Maltese flag that was christened in October 2010.

The hub concept

The Freeport can handle various types of cargo, including container traffic, Ro- Ro and conventional cargo. The container traffic is transhipment business as it focuses on the ‘hub’ concept whereby cargo is discharged from large mother vessels and relayed to a network of regional ports by regular and frequent feeder vessels. Malta’s strategic location in the centre of the Mediterranean astride one of the major shipping highways in the world is proving an attractive draw card for the major shipping lines. Servicing shipping lines from all four corners of the globe, the island is now connected to practically every major port in the Far East, Europe, North America and North Africa.

Malta is strongly promoting the EU-proposed Motorways of the Sea concept. The country sees itself as uniquely placed to serve as an Intra-European Logistics hub where mother vessels from Asia, or ships crossing the Atlantic, are able to make one stop in Malta, at the Freeport, to deliver their full shipment and pick up cargo from Europe bound for Asia.

Capitalising on the success of the Freeport and the islands’ unique location as a strategic gateway to both North Africa and Europe on the main trade routes in the Mediterranean between Gibraltar and the Suez Canal, the Freeport’s distripark facilities represent a crucial link in Malta’s ambition to become a key player in the global warehousing and logistics chain.

Serving the energy industry

The Oil Terminal, which is the largest oil bunkering facility in the Mediterranean with a storage capability of 360,000 cubic metres, is operational round the clock and has an annual handling capacity of around two million metric tonnes of products. Products handled include gasoline, jet fuel, feedstock, industrial alcohols, heavy fuels, crude oil and other products. The Oil Terminal’s principle activity is tank rental but it also provides other services such as blending, storage, botanizing, circulation, ship-to-ship transfer, leading and injecting of additives or dyes.

Excellent air links

Malta International Airport (MIA) is connected by direct flights to most major European and regional cities with the majority of destinations less than three hours flying time away. Leveraging off the success of the Freeport, MIA believes it can repeat that same success in using Malta’s strategic location as a hub for cargo traffic especially between North and West Africa to Europe via Malta. In addition, the vicinity of the airport to the ports means that multimode distribution is within easy access. Goods can be shipped in by sea, possibly finished and then forwarded on to the final destination by air.

Located just six kilometres from the Freeport, the development of a specialised freight village at the

airport where time-sensitive exports – flowers and fish or batches of semiconductors for example- can be shipped fast and with ease, opens up excellent opportunities to exploit multi mode sea and air logistics solutions. The islands’ excellent air cargo links provided by Air Malta, Lufthansa and Emirates, well developed airfreight handling capability and smooth customs clearance offer clients trading in time-sensitive cargo a productive and cost- effective route to market. All this is an opportunity that goes a long way towards achieving MIA’s objective of becoming a leading regional cargo hub.

Developing the MIA business park

Enhancing the MIA’s attractiveness as a cargo and business hub, the company has started constructing a 33,000 square metre business park on company grounds within easy reach of the airport itself. 14,000 square metres will be available for rent. The business park, which is scheduled for completion end of 2011, will cost some 16 million euro to build, and will offer nine floors of space, for retail outlets, food and beverage operations, office space and parking. The business park already has its first customer Signed up: Vodafone Malta will be taking up 2,500 square metres of the available space and the MIA is confident that the signing of a major multinational client such as Vodafone will help attract a steady stream of further tenants to the park.

Reviving Valletta port

The Port of Valletta, or Grand Harbour as it is also known, is also experiencing a reversal of fortune. Management of the Port of Valletta has been in private hands since Tune 2006, when Valletta Gateway Terminals (VGT), a joint undertaking between Portek International of Singapore and the Maltese Tumas Group, was established. Here again, a programme of investment plus an overhaul of procedures and work practices have begun to bear fruit. The VGT team has also started to actively market the Port of Valletta, and their efforts are already beginning to payoff. Traffic through the port is increasing, and regional transhipment is beginning to pick up. This is in line with current trends, replacing road traffic with short sea shipping routes.

Increasing connections

Ro-Ro operations, general cargo and a small proportion of unitised cargo, mostly directed to the local market, are handled through Malta’s historic Grand Harbour. VGT is also managing to attract car transshipments, a sector that had until now eluded Malta, with over 12,000 vehicles being transshipped via Malta per year. Malta Motorways of the Sea, a Maltese company set up by the Grimaldi Group Naples and Sullivan Maritime, have continued to increase the frequency of their services, with more than ten weekly sailings, for both passengers and freight, to Italy; making it more feasible for cargo to be brought to Malta by road, rather than in containers by sea.

Specialist grain terminal

The Kordin Grain Terminal located in the Port of Valletta offers modern handling, storage and transhipment of all types of free flowing grains such as wheat, maize and barley. Substantial investment in Kordin Grain Terminal has also been undertaken in recent years in a bid to exploit fully Malta’s potential for storage and transhipment of commodity goods. Capable of accommodating Panamax vessels in excess of 60,000 DWT the grain terminal is keen to exploit its natural advantages and develop the facilities into the premier commodity storage and transhipment hub for the Mediterranean.

Partner of Choice for Global Logistics Solutions

Over the past couple of decades Malta has emerged as one of the major players in the Mediterranean providing a gateway to North Africa and Europe for third party country goods, especially those from the Far East and North America. The country’s Logistics providers offer a full suite of regular and customised services that range from simple duty-free storage of products to facilitating custom cleared just-in-time ordering in European markets. In particular the islands’ service providers are targeting companies who require added-value services such as storage of cargo or equipment, stock monitoring, relabelling and re-packing, consolidation break bulk and distribution documentation services, international clearing and forwarding, light assembly and repairs, inspection of goods and verification of purchase order requirements.

Malta also offers a number of other advantages. Considerable time and efficiency gains can be achieved by using Malta for customs clearance into the EU compared to other locations. Once goods are cleared, they are free for circulation in the EU while using Malta companies can reduce transit times and be more competitive. Malta’s long-term vision is to develop marketable and highly innovative global logistics solutions that are flexible enough to meet the challenges of the future. Building on the islands’ rich maritime history and advanced infrastructure Malta is determined to remain not just relevant but the partner of choice in the global logistic chain.