Transport, particularly sea transport, is the life-link of the Maltese islands. Just mention sea transport, and a plethora of service-providers in the transportation industry, including government agencies, spring to mind. This infinite list would include the ports, their terminals and the service-providers employed thereat, the shipping agents, the cargo agents, the hauliers, the customs brokers.

Scores of independent bodies and entities, operating both commercially or otherwise, are supposed to coordinate their activities and remits within a seamless logistics chain to satisfy the exigencies of an esteemed client, whether this be an exporter or an importer and irrespective of whether he is a regular client or just a one-off user.

Of course, one would ask: where does the freight forwarder feature in all this? The classic definition of the freight forwarder is a firm engaged in arranging to forward parcels of cargo by sea, land and air from one place to another on behalf of its clients. The freight forwarder is more of a logistics chain component, developing door-to-door transport, brokering and concluding shipments in accordance with the needs of his client. To the exporter and importer, he is the expert in the selection of the most efficient and cost-effective means of transport, including the shipping lines available, the routing of cargoes, the clearance of same and their final delivery. In a nutshell, the freight forwarder is the all-important functionary who assists the client in reaching his goals.

The freight forwarder has to adapt himself and his activities in line with the evolving transport trends, whether these be air, sea or land or whether this is a combination of one or more transport modes within an inter-modal logistic chain.

Conscious of the fact that, particularly in shipping, the events of six months ago are just history, the successful modus operandi of yesteryear may not necessarily be the solution today.

For a small country like ours that depends on its sea links for around 95 per cent of all its trade, particularly with just two major ports involved in international trade that, apart from serving the local needs of our manufacturing and consumer economy have to thrive on devising added-value activities, the freight forwarder has to act as a guiding light to the shipper or importer.

The ports in Malta, as described above, encompass a situation whereby most visiting shipping lines use them for trans-shipment purposes, while also catering for the local industry. Given the present cut-throat competition in container business, it is not unusual to experience a fast turnover in the number of shipping lines doing business here.

Shipping lines change ports for more lucrative destinations bearing commercial considerations, others opt for Maltese ports for purely commercial or start-up operations that could be the stepping stone for further market penetration.

Within this scenario, problems may arise for the exporter or importer when, all of a sudden, a satisfactory service, that has been provided for him by a particular shipping line on a particular route for many years, all of a sudden disappears from the scene. In similar circumstances, to which the Maltese have now become accustomed, the exporter/importer requires the services of the freight forwarder to devise alternative effective transport routes in co-ordination with other transport players.

Hence, up to what extent is the importance of the freight forwarder recognised throughout? What is the way forward for this particular sector, once an overall appraisal has been made? In which respects could Government assist or act as a catalyst for change, if this is deemed to be required?

In line with an open-market economy propagated by Government, freight forwarding is among those commercial activities that, to date that, are not regulated. Like other sectors in the transport chain, including shipping agents and cargo agents, one requires no authorisation from any government agency or government-recognized organisation to carry on this business. Should this remain as is? What are the possible diverse opinions of the sector? Is this lack of legislation an asset or a problem to an overall competitive market? Is the industry being served satisfactorily or is government intervention desired?

When it comes to shipping agency services, for example, it is generally felt that there exists an inherent need for legislation and in this respect may I announce that, in the not too distant future, my Ministry will be proposing draft legislation. Discussions in this respect have already been held with individual ship agents and the Ship Agents Association, but further discussions are expected following the publication of the first draft. As most would recognise, the enactment of legislation is not the all-encompassing solution; this has to be adopted and accepted by the industry at large, particularly in the absence of a self-regulatory regime. The proposed legislation would place no numerus clausus, it would certainly not debar a small enterprise from furthering its commercial/professional activities, but it would determine qualitative benchmarks that are required for anyone who wishes to provide these services and would certainly introduce a level-playing field to the sector.

Striving towards a more organised and professional service, one cannot but mention the need for the provision of training to individuals employed in this particular sector as being also relevant to the provisions of similar transport services. Similar training modules are available in Malta through a number of institutions, and freight forwarders are encouraged to make use of such services. Similar training certification may be entry qualifications to the trade.

Moreover, in today’s e-Economy it is essential that service providers equip themselves in such a way, and through such communication modes, that facilitate the timely exchange of information. Government agencies are leaving no stone unturned in the introduction of such electronic data interchange, the success of which, to a large extent, depends on the outcome of its acceptance and compliance with the diverse users. Similar systems not only provide real-time information and reduce human error but, more importantly, they facilitate trade.

Today it is recognised that the role of government agencies is no longer that of acting simply as regulators, but more importantly of also acting as facilitators to trade. Government is committed to introducing reforms in the ports sector. Similar initiatives would include providers of services in ports, terminal operators and, indeed, government agencies. The wider port-industry players, including freight forwarders, have to adapt to the changing times and hence coordinate their businesses in a way that they will complement the global inter-modal transport chain.

One recent similar initiative by Government was the setting up of a Shortsea Promotion Centre within the Ports Directorate of the Malta Maritime Authority. For the last few years, the EU has been promoting short sea shipping as a possible solution for shifting the transport of cargo from the roads to the sea. There are various factors that mitigate in favour of such solutions, including: the reduction of road congestion on the continent, the reduction of air pollution and the reduction in public sector spending in road construction. This perceived modal shift would be in favour of a less-costly means of transport and a more environmentally-friendly transport mode. Certainly Malta, being so strategically located, could tap such transport innovations to its benefit. This could require the long-term input of freight forwarders and hauliers.

In order for such shift to succeed, the shipping and transport industry has to adapt itself to this new reality by the provision of less costly ports, the elimination of bottlenecks in the transport chain, the facilitation of electronic data interchange and a reduction in bureaucracy .

The Malta Shortsea Promotion Centre will be linked to other Shortsea Promotion Centres through the EU Shortsea Network that acts as a focal point. The objectives of the centre will include the development of awareness of the benefits of short sea shipping, the provision of data-bases that provide information on available shipping routes, including the lines’ itineraries and the ports and facilities thereat. The industry is invited to start making use of similar facilities when these come on line. This centre could also, in time, be the lobby group with Government and its agencies in order to overcome the existing bottlenecks in our ports and transport industry.

Another EU project under the Trans-European-Networks – Transport (TEN-Ts) is the “Motorways of the Sea” that seeks to link shipping lines through a cluster of ports to the TEN-T road and rail networks. In this respect, Government has already submitted a number of proposals involving the upgrading and expansion of facilities in our ports. Economic feasibility and environmental impact assessments are expected to begin in the not too distant future.

With the introduction of the EU regulation on security at the ship-shore interface in ports, now being extended to the whole port area through a further EU directive, industry players, including freight forwarders, hauliers and shippers, are advised that cargo security procedures within an inter-modal chain are due to be introduced. Initiating security procedures from the shipper’s warehouse will facilitate port cargo clearance and, moreover, reduce port transit times.

This government consistently places emphasis on our transport industry, as also indicated in the recent launching of a National Reform Programme in line with the Lisbon Agenda.

Censu Galea is Competitiveness and Communications Minister