The Value of the Local Maritime Industry – a Critique

In a study commissioned by the Malta Maritime Forum and which is to be published in the coming weeks, the conclusions derived from the analysis and economic assessment are that the Maltese maritime sector is a mature and robust industry that contributes substantially to the Maltese economy.

Quoting from the study which was conducted by Dr Gordon Cordina and his team at E-Cubed Consultants: “The maritime sector was found to have directly generated around Euro 853 million in value added in 2018. This translates to approximately 11,864 jobs in full time equivalent. Including the indirect effects, the value added generated is estimated at Euro 1,566 million, sustaining around 14,579 jobs.

The overall economic contribution, including also the induced multiplier effect across the economy, is estimated at Euro 2,163 million, generating 20,515 jobs. The 2018 direct economic contribution of the maritime sector is equivalent to eight per cent of the total economic value added and six per cent of the total economic gainfully occupied in full-time employment.”

The analysis undertaken in the course of this study highlights another interesting factor of the maritime industry. This is the linkage that there is between the maritime and a wide range of other economic activities which explains the relevance of the maritime service to the rest of the national economy. There is no doubt that the maritime industry is a backbone to most of the economic activity which is manifested through the increase in the economic contribution and employment generation once the multiplier effect is introduced into the equation.

It is interesting to note that the sector which exhibits relatively higher linkages with the maritime sector is the financial and insurance sector which covers also the legal profession. The activity generated by the maritime industry in the legal, financial and insurance sectors is underestimated and barely realised.

The international maritime activity by its very nature is capital-intensive and highly regulated – hence the need for legal guidance and direction. Malta has contributed and continues to do so through illustrious legal personalities who do credit not only to Malta but to the international maritime industry. Furthermore, Malta’s fiscal, legal and corporate support structures are an attraction to foreign investment within the maritime industry where the total effort can be stalled through bureaucracy. Malta does have some way to go in the dismantling of bureaucracy which is still, unfortunately, stifling development and initiative.

One can cite a list of examples which are stifling expansion in the maritime sector, but suffice to highlight two topical examples that can be drawn from the local scene, namely the procurement of services for cargo consolidation and the port facilities. From time to time, we hear about the promotion of Malta as a logistics hub or the setting up of a consolidation hub. These activities are so fraught with bureaucracy that the time and money invested in the promotion of same, go to waste.

The last international tender issued for expressions of interest to establish a consolidation hub in Malta drew a nil response as far as we are aware.

This activity entails the manipulation of cargoes which are imported into Malta and re-exported to other countries. There are various methodologies of undertaking such operations by using sea-air or sea-truck combinations.

In a preliminary study undertaken by our company on multi-country consolidation, it resulted that what Dubai can do for €850 for a container, Rotterdam can do for €1,000 and Malta comes at over €1,500. This is not bad publicity for maritime Malta but a wake-up call to address reality and put things right. Unfortunately, it all starts with political decisions because unless there is direction from the top, the rest cannot follow. The Maritime Forum can bring to the table sufficient expertise if it were to be consulted on the matter.

A similar situation is to be found in the development of facilities in the Grand Harbour. The port situation in Malta is a direct derivative of our limited size. This limitation is further compounded by bureaucracy, vested interests to defend the status quo and lack of determination to get things done.

Some feathers may be ruffled but it all depends how one wishes to address a situation. It is not all gloom and doom because there are landmarks in our ports which have been achieved, but whatever regeneration and port development plan is in the latest edition, this needs to be translated into strict time schedules and delivery periods, so that maritime Malta can move on, market and attract more investment that generates wealth and employment.

The high value of the maritime industry to the national economy is empirically proven and factual notwithstanding the negative PR that unfortunately stigmatises this industry. Recent events that played out over the last COVID-19-ridden months proved what we all fear, namely that as an industry, and even more as a maritime forum, we are not given the due respect from the authorities.

The underlying strain caused by lack of consultation created a disruption to the level of trust that has been built over the years between the private and public sectors. 

This is a pity because it is only through dialogue and consultation that we can hand over this industry to the younger generation to continue creating wealth through our prime national resource – the sea that surrounds our islands.

Godwin Xerri, managing director, Focal Maritime

Source: Times of Malta

Original Article: https://timesofmalta.com/articles/view/the-value-of-the-local-maritime-industry-a-critique.809601

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