Malta should explore state aid to ease freight costs, C-level logistics experts suggest

Malta should explore possible state aid intended to ease the costs of freighting in and out of the island, industry experts have suggested. 

Speaking during an industry-focused panel event, leading shipping and logistics experts agreed that as an island reliant on sea and air freighting, Malta faces a competitive disadvantage. 

Other EU member states, the panelists said, have benefited from different support and aid schemes to help ease this burden on their economies. 

The European Commission has in recent years approved two Italian public support schemes to encourage a shift of freight transport from road to rail and sea.

“As a country, we need to look at state aid positively, and, rather than being scared of it, consider it as something that can help us achieve what we want to achieve,” said Malta Chamber CEO Marthese Portelli.

She was moderating a panel co-hosted by the Malta Chamber and the Malta Business Network.

The event, entitled “The current state of logistics in Malta”  is part of the MBN’s industry-focused discussion series.    

Dr Portelli was joined by panelists Norman Aquilina, Group Chief Executive of Simonds Farsons Cisk Plc, Jonathan Shaw, CEO of Retail Marketing Ltd, and Pierre Attard, Commercial Manager at CMA CGM.

Opening the event, Chris Meilak, Partner at EY specialising in Valuation, Modelling & Economics, gave an economic overview of the logistics sector in Malta. 

He said, that while the rate of growth of inflation is levelling out, 80 per cent of the food supply in Malta is imported and this is still highly vulnerable to inflationary pressures. 

Other sectors are also heavily impacted. 

During the panel discussion, Mr Aquilina was the first to advocate for some form of state intervention, pointing to the so-called ‘Marebonus’ program that had seen funds allocated to direct road transport of goods towards sea freight instead. 

In mainland Europe, he said, businesses run the 100-meter sprint. “In Malta, we run the 100-meter hurdles”.

In addition, Mr Shaw, as CEO of Retail Marketing Ltd, which owns and operates Welbee’s Supermarkets, suggested Malta could also explore joining forces with other island states that face similar challenges. 

On his part, Mr Attard suggested even larger island states such as Ireland could help lobby in this direction. 

The panel discussion also touched upon the reality of retailers and businesses in Malta, with the panelists suggesting that centralised logistics centres, similar to industrial estates, could help streamline deliveries of goods across the island. 

This was particularly worth exploring, the panelists argued as Malta registers an uptick in the already 50,000 registered delivery vehicles.

The MBN’s next event, scheduled for May 20th, will focus on whether businesses can make a genuine positive contribution to society.