1 What is the current state of the shipping industry in your country?
The shipping industry in Malta is generally performing well and has been consistently so for a number of years. Like other industries operating in and from the Maltese Islands, the shipping industry has been negatively impacted by the spread of covid19. Nevertheless, the recent relaxation of measures has contributed to its recovery as, for instance, cruise liners and other passenger vessels arriving in Malta from specific countries are not banned anymore, while crew changes have now become more efficient since these are not subject to mandatory quarantine. Also, Maltese marinas are open again for yachts arriving from certain countries while transiting yachts, with only crew members on board, are allowed to berth in Malta for the purpose of refuelling, servicing, customs procedures, flagging and other necessities irrespective of their country of origin. According to a recent government paper titled 'Integrated Maritime Policy – Making Malta a Centre for Maritime Excellence', it is estimated that Malta's maritime industry contributes to the employment of more than 20,000 people, with a value-added benefit to the national GDP of approximately 14 per cent.
The traditional sectors, namely tourism, fishing and ship-register activities, will continue to flourish; however, it is also expected that new areas, such as research and development and biotechnology, will experience growth over the coming years. Clearly, the maritime and shipping industries play a key role in Malta's economy.
The shipping industry is not new to the Maltese archipelago. Owing to its strategically placed geographical position and its natural harbours, Malta has always been at the heart of the Mediterranean's commercial and mercantile activity. Providing a point of convergence between the European and African continents, Malta has developed a strong maritime tradition that has evolved into an international centre for the maritime and shipping industries.
Malta's shipping and maritime industry is spread across various sectors that vary in size, competitiveness and growth potential. Malta Marittima, a government agency created in 2016, has divided Malta's maritime industry into the following principal 'clusters':
- maritime commercial cluster – legal, financial, insurance, broking, chartering, shipowners, surveyors, adjusters, crew management;
- logistics cluster – freight forwarders, terminal operators, ship agents, warehouse operators, bunkering;
- marine engineering cluster – marine engineering, IT, ship repair, technical services mechanical and electrical, sailing and motorboat clubs, marinas, boat sales and chartering;
- fisheries and aquaculture cluster – fishing boat owners, fishing coops, fish farming, aquaculture, fish processing, fisheries management and biotechnology; and
- energy cluster – oil and gas exploitation and servicing, offshore renewable and emissions.
"The relaxation of covid-19 measures has contributed to the shipping industry's recovery."
The above categorisations give a broad outline of the diverse sectors of the industry and illustrate Malta's attempts to offer a varied range of maritime services.
Although the current state of the aforementioned sectors can only be described as healthy, success is particularly evident in the flag-related services that are offered by Malta. In a world where there are an increasing number of available flags for ship registration, Malta has sought to become one of the world's largest ship registries.
According to recent statistics, Malta is now Europe's largest merchant flag and the sixth largest in the world. There is no doubt that the growth of Malta's maritime industry, specifically the growth of the Maltese merchant shipping register, has resulted in a host of legal professionals capitalising on the boom. The need for legal expertise in this sector has led to the proliferation of legal professionals specialising in the maritime and shipping law fields. The maritime legal industry is now mature and highly competitive. The reality today is that Malta boasts a number of highly specialised law firms and other professionals whose practice has grown around international shipping and the maritime industry in general.
Other specialised sectors forming part of the Maltese maritime industry that are currently doing particularly well are the yachting marinas and offshore bunkering sectors that have all seen tremendous steady growth in the past few years, encouraging the government to continue focusing both its attention and resources on these areas.
Malta also hosts a number of international maritime institutions including the International Maritime Organization's (IMO) International Maritime Law Institute located within the grounds of the University of Malta, the International Ocean Institute and the Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea.
2 What are the prevailing shipping market trends affecting your country?
The increased reluctance of international banks to provide traditional finance to shipowners is a downside of the recession caused by the pandemic, while many national economy policies have started following a path towards austerity, which has resulted in a negative impact on ship mortgage activity and consequently on the flag registration of new builds.
Domestic shipping trends have, likewise, left their mark on Malta. Indeed, the past few years have seen a general willingness by local maritime industry stakeholders and the government to strengthen Malta's existing maritime industry and advance it further. The intention is for this industry to grow into one of the major pillars of Malta's economy.
Malta's maritime industry has faced tough competition from other sectors within the Maltese economy. It may be argued that, although in previous generations a career path in one of the maritime sectors was considered to be one of the more natural, accessible and advantageous career paths to follow, this has now changed with the advent of many IT and 'desk-based' jobs in other economic areas.
Fortunately, this is not the case for all of the maritime sectors comprising Malta's maritime industry. The service-oriented sectors have grown considerably in recent years. As previously mentioned, Malta is now Europe's largest merchant flag and is the sixth largest in the world. According to recent statistics, at end of December 2019, the number of ships registered in Malta's shipping register was increased to 8,594 vessels with a total gross tonnage of 82.93 million gross tonnes and the average age of the vessels registered under the Maltese flag was 13.7 years.
Moreover, during 2019, the Malta flag registered an increase over the previous year in the registration of super yachts over 24 metres in length, as over 806 super yachts were flying the Maltese flag. Malta's comprehensive legislation on shipping and maritime matters has greatly contributed to the expansion and success of Malta's merchant flag. The legal industry has now developed into a mature sector of the economy assisting shipowners, ship operators, financiers, port operators, yacht owners, insurers, carriers and many other players within the maritime industry.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.