Logistics plays a significant role in global business operations. In the local context, the logistics process can be optimised by improving maritime transportation, which is regarded to be an important component of a logistics system. The value of maritime logistics is reflected in its contributing role to other logistics services, so that the flow of goods from the supplier to the consignee is efficient and effective. In this respect, maritime transportation can be regarded as a strategically significant part of the logistics integration system within the global supply chain.
Maritime logistics goes beyond sea transportation activities, such as contracting, shipping, moving cargo and loading/unloading. It also includes supplementary services such as warehousing, stripping/stuffing, distribution centres, testing and quality control, light assembly, packaging and re-packing, as well as inter/intra modal transportation facilitation.
As the Island is strategically located along main Mediterranean trade routes, particularly being the first port of call into the EU for East-West bound shipping trade, there is potential for Malta to establish itself as a leading logistics hub, providing higher quality and competitive services to the value and supply chains. This is also reaffirmed by the announced plans for the extension of the Suez Canal, which will increase maritime traffic in the Mediterranean.
The Maritime Transport sector is going through a volatile period with changing patterns in international trade, global logistics and supply chain. Changing rules of the game with larger and fewer players would thus, require new strategies to continuously develop and evolve in order to ensure increased competitiveness and long-term sustainability. Hence, the Government is committed to maximise opportunities for the development of such value-added logistics services by encouraging the active participation of maritime operators, and by reviewing national port policies and the respective infrastructures. This will be carried out in the context of a strengthened framework of legislation having the common goal of fostering economic and employment growth and increasing commercial activities. Furthermore, maximising opportunities in the value-added maritime logistics Moreover, establishing and promoting Malta as a highly efficient logistics hub in the Mediterranean, would attract new global business.
Maritime transport ensures the security of supply of energy, food and commodities and is the main vehicle for European imports and exports. Ports are vital gateways, linking its transport corridors to the rest of the world. In fact, 74% of goods entering or leaving Europe do so via the sea. In Malta, it has been a catalyst of economic development and prosperity throughout its history. Malta has two main ports: the Port of Valletta and the Port of Marsaxlokk, which are also listed as core ports in the Trans-European Transport Network. Over 90% of all goods entering or leaving the Island pass through these ports.
The Port of Valletta is a natural deep water harbour in the Mediterranean. It is a multi-purpose port equipped to offer a large spectrum of maritime services, which include cruise liner/ferry and cargo berths, specialised grain and cement silos, petroleum installations, bunkering facilities, ship repair and building yards, and warehousing and open storage facilities. The Port of Valletta is equipped with container facilities; however, the container handling area is specifically at Laboratory Wharf, operated by Valletta Gateway Terminals.
The Port of Marsaxlokk, located in the south-eastern region of the Island, provides berthing facilities for the Malta Freeport Terminals, Oiltanking, San Lucian Oil Co., Delimara Power Station, MX Dolphins and and Enemalta’s 31 March Installation. This port is considered also as the major base port for 70% of the Maltese fishing fleet.
The Malta Freeport, located at the Port of Marsaxlokk, has established itself as a major maritime trans-shipment hub in the Mediterranean. Today, the Freeport Terminal is handling approximately 2.8 million TEUs and is working close to its full capacity. Further development of the Freeport will lead to an increase in the volume and value of its activities, as well as job creation. It is important to note that the Freeport’s activities are regulated by the Malta Freeports Act, which is continuously being updated to ensure that the necessary legislative tools are in place efficiency and the provision of the right business. A review of the Act is currently being undertaken, taking into consideration the opportunity to increase competitiveness and service diversification by further expanding the Freeport area, facilitating connectivity to air cargo and to identifying possible additions to the current operations.
Furthermore, the Government of Malta will consider infrastructural expansion at the Port of Marsaxlokk by extending the current footprint of the existing facilities and by encouraging the establishment of other zones that may be developed for added-value logistics services. This expansion will be done in line with EU initiatives, including: the ‘Motorways of the Seas’ concept aiming to improve short sea shipping connections with those ports that have strong hinterland infrastructures; the ‘Blue Belt’ initiative focusing on shipping movements between EU ports and ensuring that the treatment received is similar to land border crossings within the internal market; and ‘e-maritime’ and ‘e-freight’ initiatives aiming to reduce administrative bottlenecks through the effective use of Information Technology (IT).
Increasing such capacity will open the way for new strategies to delve into new added value opportunities. Given the size of the Island and the proximity of the airport to the Freeport, it would be ideal to render the necessary infrastructure to cater for a variety of inter-modal transport operations by means of an efficient and flexible network. In line with this objective, the Government will seek to conclude the National Single Window and proceed with the development of Port Community Services with the aim of providing services leading to business-to-business information exchange. These developments will also potentially attract foreign direct investments in the logistics sector, whilst also improving Malta’s ranking in the Global Logistics Performance index.
The bunkering business is another maritime economic activity that has experienced remarkable growth in recent years and all indicators show that there is room for further growth. Over the years, local suppliers have maintained a good business relationship with various European bunkering brokers operating in the Mediterranean and have also supplied all sorts of vessels (such as cruise liners, tankers etc.) for such activities. Bunkering operations take place alongside quays and outside ports. A number of bunkering zones have been designated by the Maltese authorities to accommodate and create the necessary conditions for this business activity to flourish. Bunkering procedures need however to be further regulated in order to ensure increased transparency and reduce the risks associated with these operations.
The Government will strive to build on the success achieved so far by facilitating new business linkages and relationships. The Government will endeavour to ensure that Malta’s market share is properly sustained by taking the necessary actions to improve monitoring and surveillance of these operations. It is imperative that ship owners are provided with high quality service in a professional manner and it is high time that certain litigation issues relating to quantity and quality discrepancies are addressed by the local competent authorities.
Moreover, the Government will take the necessary actions to support suppliers to provide ship owners with product quality requirements, in accordance with internationally recognised bunkering standards. Directive 2012/33/EU amending Council Directive 1999/32/EC as regards the sulphur content of marine fuels foresees a number of opportunities and challenges for this sector, which could lead to the identification of new avenues for introducing alternative measures such as electrical shore supply, abatement measures (e.g. the use of scrubbers onboard ships and the use of natural gas in liquefied form (LNG) along the coast of Malta). In addition, the Directive anticipates the use of low sulphur fuel as early as 2015 for ships operating in the Northern European emission control area to use bunker oil with a maximum of 0.1% sulphur or apply alternative methods in order to achieve the same effect.
LNG development can improve reliability and consistency of energy supply in general. It also offers a cost-efficient alternative to diesel for waterborne activities with lower pollutant content and CO2 emissions, particularly to meet the new limits for sulphur content in marine fuels. LNG in shipping is economically viable, especially when considering that the current EU tariffs are considerably lower than those for heavy fuel oil and low sulphur marine gasoil. However, the lack of fuelling infrastructure and common technical specifications on refuelling equipment is hampering present market uptake. In accordance with Directive 2014/94/EU on the deployment of alternative fuels infrastructure, the development of LNG bunkering is another emerging business venture, which will deserve consideration in the years to come. In addition, the conversion to more efficient and environmentally friendly LNG operated vessels will become a priority and it is thus crucial for Malta to recognise this opportunity at an early stage in order to benefit from the timely entrance into the market.
LNG bunkering necessitates further studies for the establishment of onshore/offshore LNG terminals leading to the establishment of such terminals that would position Malta as a potential market leader, particularly when considering our geostrategic location, infrastructure and expertise. Directive 2014/94/EU stipulates that an appropriate number of refuelling points for LNG are to be put in place at maritime ports, to enable seagoing ships to circulate throughout the TEN-T Core Network by 31 December 2025. Malta will aim to be an early first-mover in this sector in order to attract new business opportunities.
Transhipment of Petro-chemical Products
The transhipment of petroleum products is undoubtedly an economic activity which deserves recognition and promotion. Petroleum product transhipment takes place at different berths in the port of Marsaxlokk. The jetties can handle vessels with a deadweight of 2,500 tons to approximately 100,000 tons. Malta’s strategic position has always played a vital role in attracting international traders to make use of the local storage and handling facilities, such as those of Oil tanking Ltd. and Enemalta Corporation, in order to supply their customers, particularly to clients in North Africa and the Middle East, with a variety of petroleum products. We can confidently state that over the years Malta has established a good reputation in the international market as a reliable and efficient partner.
A service offered in this sector is ship-to-ship (STS) transfer operations, which involves the transfer of a vessel’s cargo, be it petroleum, chemical and gaseous cargoes, to another vessel moored alongside it. Presently, the majority of these operations take place at Hurds Bank, outside Maltese territorial waters. STS transfer operations generate considerable ancillary support services, such as fendering, provision of supplies, launch service, ships’ agency services and so forth. Vessels are also subject to anchorage fees on a 24 hours basis when collecting the fenders from outside the Valletta Port. Collection of fenders takes place within territorial waters. STS transfer operations are frequently subject to operational disruptions due to the unpredictability of sea conditions resulting in delays in operations and financial losses. Disruptions impinge on the business commitments of traders. Thus, the Government will consider revising the current framework to allow these operations to take place within territorial waters. Moving along this direction will motivate more oil traders to use Malta as a transhipment hub. Operations within territorial waters will be much safer and will provide better operational and planning conditions due to the fact that disruptions caused by bad weather will be minimized. Building on the earned reputation and Malta’s geographical position, the Government will strive to continue promoting Malta as a hub for petro-chemical transhipment.
Kordin Grain Terminal
Strategically located at Valletta Grand Harbour, the Kordin Grain Terminal (KGT) is Malta's unique grain storage and trans-shipment silo terminal. KGT is involved in the logistics of grain handling, storage and transhipment. The cargoes handled include wheat, barley, maize and similar grains. Since the closure of Medigrain Silo, KGT was also entrusted with the storage of grains imported by local companies intended for local consumption. As a result, its capacity intended for transhipment purposes has been reduced and hence, the business has been on the decline for a number of years.
It is evident that the decline in the terminal’s business activities calls for more promotion on the basis of its reputation of professionalism and efficiency, with the aim of improving its visibility in the market to attract new clients. An international market research study will be conducted to explore and determine emerging market opportunities and trends. Related diversification will also be explored and studied in depth in an effort to reinvent the terminal into a success story. In this regard, public private partnership collaborations will also be considered. Moreover, the Government will explore possible solutions and/or alternatives to address the anomaly with respect to KGT’s berthing facilities currently being shared by different operations to mitigate the costly disruptions in operations.