Over 70% of respondents in a survey conducted by The Malta Chamber feel that the European Union is not conscious enough of the logistical challenges Malta faces as a small peripheral island state.

The topic was debated at a conference on Friday morning, with several key industry players speaking about the challenges they face, particularly with regard to the increase in costs of imports and exports and the disadvantage Malta faces as an island state with no road or rail link to the main European markets.

One hundred and ten people coming from the manufacturing and services industries took part in the survey, whose findings were provided to The Malta Independent on Sunday.

Only 10% believe that the EU is aware of Malta’s challenges, while another 20% were unsure.

90% of respondents said that transportation issues are hampering or threatening the viability of manufacturing operations in Malta. None of the respondents disagreed with this statement, while 10% said they were unsure.

Participants were also asked to what extent they believe that the cost of foodstuffs in Malta is permanently inflated by higher costs related to transportation and a small market size, not as a result of the pandemic.

57% said prices are inflated by 10-20% as a result of transportation and small market size, 26% said by more than 30% and 17% replied by between 0% and 10%.

A staggering 98% said they believe that the cost of essential products, such as foodstuffs and medicines, has risen by 5% to 10% over the last six months. 2% said they believe that prices increased by 10% or more.

Just under half of respondents (49%) feel the EU market is the most attractive to Maltese exporters, 33% chose North Africa, 17% chose the Middle East and 1% chose Sub-Saharan Africa.

36% believe that digitalisation could mitigate some of the logistical challenges and cost increases that are materializing. 10% said this would not help, and 37% said it would, but not significantly. 17% said they were unsure.

Speaking on Friday, Chamber president Marisa Xuereb said that, whereas mainland Europe has the facility of delivering its goods through land transport, we are limited to the air and sea. The manufacturing industry is feeling the brunt of this and a small port like Malta is often overlooked when it comes to certain shipping routes.

“This causes problems for manufacturers who will have to close off manufacturing lines due to the lack of income when exporting goods and exaggerated costs when importing them,” Xuereb said, adding that 11% of employment in Malta is in the manufacturing industry.

CEO Marthese Portelli said Malta faces constant problems of connectivity, frequency of routes, delays, ever increasing costs and now also EU directives that disincentivise air transport due to the impact of the environment.

Portelli said that, at a local level, there must be more digital investment to help businesses upscale, but on an EU level, there must be a level playing field with manufacturers from mainland Europe.

The conference heard several industry players speak about their own challenges, including a panellist who said that the company they represent has seen the cost of every container imported or exported rise by €800.

Another panellist said companies sometimes find it hard to stock up on the raw materials needed to manufacture their products, while another claimed the problem has become so bad that “it feels like the Santa Maria convoy has arrived whenever we get a shipment in Malta”.