14 - 20 December 2000

33% of cargo handling costs unaccounted for

by Franco Aloisio

Nearly 33 per cent of total costs paid by companies at the ports goes unaccounted for, according to an analysis carried out recently on port handling charges.
The analysis was based on a study commissioned last year by the Malta Development Corporation, the Federation of Industry and the Chamber of Commerce.
Parts of this study have already been leaked to the media, however The Malta Business Weekly is today publishing details of an analysis made of the data emerging from this study. A final version is yet to be completed due to disagreement between the parties who commissioned the study.
The analysis shows that, when importing goods the private sector ends up paying more than it should in cargo handling charges that are imposed locally. The study shows clearly that at least 33 per cent of what companies pay at the ports cannot be accounted for by those involved in the handling of cargo.
The bulk of the charges are levied by the Cargo Handling Company Ltd and the port workers. In fact, these two account for 62 per cent of all import costs and 35 per cent of export costs at Grand Harbour, and 51 per cent of import costs and 23 per cent of export costs at the Malta Freeport. The Cargo Handling Company Ltd is owned by the General Workers’ Union.
Overall, the study states that port charges are very high when compared to other countries. It is considered a fact that transhipping a
container from Rotterdam to Malta is far more cheaper than transporting the same container from the Valletta port to the local factory or warehouse. According to the study, port charges in Grand Harbour and the Malta Freeport are 20 per cent more expensive than Marseilles, 49 per cent more expensive than La Spezia and 66 per cent more expensive than Southampton.
Meanwhile, the number of containers unloaded at the Valletta ports has been on the decrease over the past few years with the result that around 60 per cent of all goods imported for the Maltese market are being handled at the Malta Freeport in Marsaxlokk, shipping sources said.
Until a few years ago, nearly all goods for local use were unloaded at the Valletta ports, with the Freeport’s main focus being transhipment and export. However, over the last three years the amount of containers unloaded at the Valletta ports went down, and the freeport ended up taking more than half of Valletta’s workload.
Sources close to The Cargo Handling Company Limited said many workers employed with this company, as well as the stevedores and hauliers, had to transfer their operations to the Malta Freeport in the past months.
Business sources complained that this has created duplication of work, with containers moving from one area to another of the Malta Freeport before leaving the gate. This is creating extra costs for businesses.
The situation at the Valletta ports, in particular that related to cargo handling, has been described by business organisations and shipping operators as archaic and inefficient.
For instance, the Valletta ports are in dire need of new equipment. Another thorny issue is the general restructuring of the Valletta ports. Some of the long-standing issues include the excessive cargo-handling charges, the “closed-shop” port workers scheme, and the inefficiency of the whole system.