Jewel of the Mediterranean

Malta has a long history associated with shipping, going right back to Phoenician times, when Malta was already an important trading station. Nature has been very kind to us. We have great ports in this country which have been used by conquering civilisations through the ages whether these were the Romans, Carthaginians, Arabs, the Spaniards, the Knights of St. John or the British. The British recognised Malta’s strategic location and excellent ports not just for their military purposes but also as part of their strategic trading network. Many of these colonisers have made improvements and put in infrastructure that now we, as an independent nation, still use and benefit from. 

The Valletta Waterfront was commissioned in 1752 by the Portuguese Grandmaster of the Knights of Saint John Manuel Pinto de Fonseca, which is the reason why it is often known as Pinto Wharf. There were nineteen stores built with doors painted in different colours signifying the different goods stored in them – blue for fish, yellow for grains, green for other agricultural produce and red for wine. Some years ago these beautiful historical buildings were restored and their doors repainted in their original colours, albeit now serving very different purposes. 

Malta remains a very important shipping hub, today more than ever. Its role as a transhipment hub is appreciated internationally by ship owners and traders though it seems to be less appreciated by the Maltese people themselves.  Even decision makers need to give it greater importance. Sullivan insists we need to appreciate the fact that “shipping is an important pillar of Malta’s economy and give it the importance it deserves.”

Port facilities

In the south of Malta, in Birzebbugia, one finds the Malta Freeport. Its two container terminals are among the biggest in the Mediterranean. Terminal One has a mainline quay length of 1,000 metres with a water depth of 17 metres, a total area of 489,000 square metres, 10,270 container ground slots and 597 reefer points. Terminal Two has a total operational quay length of 1,173 metres, 4,866 ground slots, 344 reefer points and a total area of 224,000 square metres.  

In the Valletta and Three Cities area, one finds Valletta Gateway Terminals, a joint venture between Portek Group of Singapore and Tumas Group of Malta. Established in June 2006, it operates and manages the Grand Harbour Terminals.

Also in the south of Malta one finds the Marsaxlokk oil terminals, with the oil storage facilities managed by Enemed & Oiltanking.

In the scheme of things, Malta’s ports have a tiny fraction of the world’s shipping business. Factoring in both the volume of ships and the number of other ports each is connected to, Malta does not make the top 20 list. However the business is still worth millions of euro for the island’s economy and for a small economy like ours, this is substantial. 

Asked why Malta is so attractive within the shipping industry, Sullivan said there are two primary factors: its location and its efficiency in the provision of services. Our location – on the main shipping route between the Suez canal and the Gibraltar straits – is a happy accident of geography, one we should be thankful for. The second factor however needs some work. And Sullivan insists that “efficiency is key to a successful shipping industry.”

So the focus of the industry should be on making our services more efficient. 

Malta as a transhipment hub

Sullivan explained that one can divide Malta’s transhipment business into three categories: oil, containers and the tourism cruises. To this, one could also add transhipment for other resources offshore within bunkering/anchorage areas making use of our coast for ship-to-ship transhipment transfers of bulk cargoes, generating further income for transport Malta and deviation of operations to our competing ports.

Managing the Marsaxlokk Oil terminals, Enemed & Oiltanking lease out oil storage facilities to third parties, these being the petroleum companies that store product for transhipment destined to  other countries and for the local market.

There’s currently big demand for Malta to increase facilities for oil and container transhipment. Sullivan said that one cannot overstate the importance of looking into the future and planning LNG infrustructue for bunkering, especially since Malta’s new power station will be run on LNG.

Cruise tourism is also on the increase in Malta and this has a number of positive ripple effects for the economy. The Malta-to-Malta cruises, meaning that ships leave from Malta for their cruising voyage and end it in Malta, also contribute greatly to the economy, through ancillary expenses. Malta has all the elements to establish itself as a principal cruises port, being itself a major tourism destination.

Asked about Malta’s comparative advantages as a transhipment hub, Sullivan identified a number of these. As already mentioned Malta’s geographical location is an important one, with ships able to avoid unnecessary deviations enroute to the Gibraltar straits from the Suez, or vice versa. The other would be our EU membership, with a common regulatory system allowing easy access between EU member states. 

Another important factor is the high standard of berthing facilities the country offers at the Freeport, in Valletta and the Oil Terminals. Also important is Malta’s commercial flexible structure allowing for efficiency in the provision of services. It is extremely important that we maintain or even improve that efficiency. “Delays cost ship operators a lot of money. The cost for certain ships can go as high as €50,000 per day in demurrage fees,” Sullivan explained.

Malta is also ideal for container transhipment ,where large main liners use Malta as a hub to discharge containers that are then loaded onto smaller feeder ships, which then go to various other ports according to the destination of the containers. Some containers are also discharged for the local market.

Sullivan also identified the Hurd Bank as another important natural feature for shipping. This shallow area outside Malta’s 12-nautical-mile territorial waters allows most ships to drop anchor and wait for orders, without having to pay any port charges. However this is often used for carrying out safe ship-to-ship transfer operations (petroleum/bulk cargoes) and Malta is in an ideal position to service them with their needs. Launch providers benefit greatly from this as they provide transport for spare parts, supplies and provisions for crews, discharge of slops for oil recycling, and other such services.

For these reasons and others, shipowners prefer Malta for crew changes, to recieve supplies and provisions, to carry out repairs, and to collect waste for proper recycling and disposal. All these services are provided by local service providers who benefit greatly from the volume of business passing through their facilities. A number of port workers and their families rely on the business generated at our ports for their livelihood. 

One must add to these the business that is generated to the airlines, taxi drivers, buses, hotels, retailers, ship provision suppliers, freight forwarding, spare parts suppliers, repair shops, doctors and health providers, skip services, restaurants and bars, and the local banks (as crew need to be paid and supplies need to be bought). Add to these the class surveyors, insurance firms and the law firms specialising in maritime law, and the number of people who owe their income (or substantial parts of their income) to the shipping industry is enormous. Ship registration for a Maltese flag also brings considerable income to the country. Ship owners and operators also need to pay a number of fees to Transport Malta, pilot and tug boat fees, mooring fees, waste management fees, bunker tax, port authority charges, and others.

Malta’s opportunities

In recognition of this contribution to country’s coffers, Malta needs to invest in facilities. “We need to provide more space for ships,” Sullivan insisted. “We should be working on providing more lay-up facilities including moorings, more quay space, and more bunkering areas. The privatisation of Malta Ship Buliding is a move in the right direction as more quay space is now available for vessels to come alongside.”

The Increase in quay space automatcially stimulates all sectors of the industry, be it for repairs, lay ups and also oil and gas logisitics. 

He suggested intensification of dredging at certain areas to create more quay space. As an example Sullivan mentioned an area in Marsa, near Menqa, known as it-Tinda tal-Patata. 

Marsaxlokk’s oil facilities could also be developed further to allow for an increase in the transhipment of oil. 

Sullivan said that these developments can start happening immediately, although of course with caution. Certification and enforcement of regulations is paramount to avoid oil leak disasters.

Sullivan also suggested that Malta increase its offshore bunkering areas around the islands, including possibly one off Gozo. Allowing vessels to bunker off Gozo,  especially during the winter months, will allow for the possibility of crew changes and other services to take place from the island. The more bunkering areas available on different sides of the island, the greater the number of ships that can be serviced in inclement weather and different wind direction with alternative bunkering areas being available. 

Sullivan predicts that if these improvements are put in place, the business will increase immediately as currently the demand is higher than what the country can supply. It would also help if Malta embarked on the preparation of a strategic plan to maximise the shipping industry in the country.