Article by Vanessa McDonald published on The Business Observer – The Times of Malta – incorporating comments by Thomas Smith Group Managing Director, Mr. Joe Gerada:

Logistics seems to be the buzz word at the moment. Conference workshops dedicated to it always seem to be the most dynamic, with a variety of stakeholders putting forward complaints about past limitations, updates on present opportunities and ideas for the future.

Warehousing and storage has until now been largely linked to the oil and gas industries, thanks to our geographical location, the Freeport and more recently Medserv. However, the government has already started to promote Malta as a hub for ‘third party logistics’, and has been promising legislative changes for some months, with a number of proposals on the table, ranging from the creation of free trade zones to the inclusion of logistics as a qualifying activity for incentives.

But it is clear that the sectors involved are not waiting idly by. They clearly believe that logistics can provide an exciting new range of activities and that it is never too soon to start working on the infrastructure this will require.

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The topic of port fees, however, is complex and Joe Gerada, the managing director at Thomas Smith, has spent long enough in the industry to be wary of the blanket statements that crop up regularly in the media.

“Port fees are a wide term and such statements should be more specific. Which port fees are going up? By how much have they done so over the last 10 years? How does that compare with other costs that have gone up which affect our competitiveness? In principle all costs effect our competitiveness,” he said.

“Costs are usually our suppliers’ selling prices, and those are determined by supply and demand. The larger the number of suppliers, i.e. the more competition there is, the more prices will trim themselves. Shipping services are supplied in a market of quite fierce competition and port fees are also partially determined by this.

“I would, however, also invite anyone who wishes to check if there are any components in port costs that are not influenced by supply and demand, but are a result of old port practices. This is a very old subject and having worked in shipping in Malta for so many years, I no longer have any aspirations that this part will change. All involved know the age old story,” he shrugged.

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Source: The Times of Malta