The maritime industry in a modern world

Although considered one of the most fundamental aspects of the Maltese economy, the ‘shipping’ industry is both miscategorized and often underutilized. Grouped informally as a set of trades rooted in their proximity and dependence on the sea, the maritime industry is nonetheless one of the most successful in the modern economy of the Maltese islands and continues to be a sector with vast opportunities despite already exponential growth. .

The base of the maritime industry in Malta is strong and supported by reliable statistical growth seen over the past few years. Basically, the maritime industry is a historic industry for the Maltese; the island nation has provided an invaluable strategic naval base to many empires over the centuries, even more attractive as a trading hub for trade between the levant and the rest of europe[1]. This naval tradition has largely endured, as evidenced by the modern prosperity of the Maltese maritime economy.

The Maltese maritime industry, without an economic multiplier effect, represents approximately 15% of Maltese GDP, with a production growth rate of 13.9% alongside a total production of €2,303.67 million according to an in-depth research paper from April 2020. “Adding value” is another aspect where the maritime industry shines, beating the rest of the economy year on year with a 12% growth rate and 853 million euros in added value. Finally, the maritime industry provided approximately 12,000 full-time equivalent jobs, constituting 5% of total employment in the economy. When including indirect and induced (economy-wide impacts of the maritime industry) as multipliers compared to current figures, we can expect almost doubled results compared to value added and employment: €2,163 million and 20,000 jobs respectively[2].

The shipping industry has seen widespread expansion globally. However, some segments are growing faster than others. While warehousing, which includes storage and bunkering services, remains the most important area in terms of employment and value added, there is a clear trend towards the “maritime services” sector.

The “maritime legal and management services” sector, on the other hand, has seen continuous growth in the Maltese Islands and has gradually overtaken the more traditional sectors in terms of growth rate. Although partially the result of a general increase in global demand for maritime infrastructure, the strength of the Maltese flag and Maltese corporate structures greatly accentuates this trend, as law firms are often burdened with the process. The Maltese flag is also a flag of proven trust and reduced bureaucratic restrictions, attractive largely due to its status as an EU country with relative ease in ship registration procedures and ship mortgages.[2]. This is best highlighted by raw statistics; the Maltese flag is the the largest in the EU and 6th The biggest in the worldof a registered total gross tonnage of 84.27 million in December 2020[3]. Alongside this is the Maltese corporate structure, with similar advantages in terms of EU membership and ease of investing and setting up companies coupled with strong tax incentives. As continued growth permeates the shipping industry, there is no doubt that a strong business infrastructure and strong legal support will be essential in the modern shipping economy.

A clear sign of the economic prospects of most countries is the direction of its capital: private and public sector investment. Many projects have been carried out on the islands, ranging from relatively modest investments in the infrastructure surrounding the deep-water quay and the breakwater ports of Valletta and Marsaxlokk, to the 50 million euros shore power supply in the Grand Harbour, significantly reducing the environmental impact of cruise liners visiting Valletta, important to the environmentally conscious modern world. This is also accentuated by the monumental €303.4 million invested in the Malta Freeport terminal since its privatization in 2004. Most of the capital has since been developed into equipment such as several modern cranes and quay rails as well as land infrastructure development, gradually increasing its size and influence.

Although the “maritime” aspect of the Maltese economy is already recognized and capitalized on, some believe that the potential of the maritime sector is not yet fully realized. Logistics, from one angle, is a great opportunity for the Maltese Islands. Centralized location in the Mediterranean gives Malta the ability to provide competitive value chain and supply chain services[4]. This has only been accentuated by the technological concentration of the Maltese islands in recent years, in combination with the flourishing commercial sector. This reputation presents the possibility of future developments in research and innovation in the maritime sector, one of many exciting future avenues even including various areas such as LNG bunkering and petrochemical transshipment, areas where global investment has already expressed interest.

The business, legal and maritime environment of the Maltese Islands is comprehensive, but often lacks the government structure to truly take advantage of all the mentioned opportunities. In line with this perspective, the reform of Transport Malta announced by Minister for Transport, Infrastructure and Investment Projects Ian Borg on 14 October 2021 outlines a plan to separate Transport Malta into three authorities: land, air and sea. This news holds promise for the industry[5].

Additionally, restructuring is considered by some to be essential to the growth of the maritime industry, discussed in detail in a 2020 research paper titled “Realizing the potential of the maritime sector for the growth and development of the Maltese economy[2]. With such fundamental differences present in both past and future concepts of “transportation”, how can one expect a single entity to handle the distinctions of each sector equally? Transport Malta’s separation between maritime, land and air authorities will inevitably allow for a more precise focus on each sector, which for the purposes of this article presents an interesting opportunity for the creation of a better national framework surrounding the industry. maritime and the use of its resources.

In summary, the Maltese maritime economy is one where great success is already present and just as visible. However, the future of the sector is less assured. While particular concessions, such as the reform of Transport Malta, have been introduced in an attempt to organize the industry, the need to regroup is still relevant, in order to continue to rely on the maritime economy. to unleash its full potential.