Every economic activity carries with it diverse challenges, opportunities, and rewards. To survive and possibly become the best or at least one of the best, one needs to be persistent and strong in the face of challenges that constantly arise.

Over the past decades a drastic change in the way business is conducted has been brought about with the onset of globalisation, the internet, and swiftly advancing technology. We are now going through another exciting phase with the adoption of AI which is rapidly evolving.

Maltese businesses have proven time and again that they are indeed very resilient, the main reasons being their agility and readiness to adapt according to the times. With the 2007-2009 global financial crisis, followed a decade later by the total disruption caused by the COVID-19 pandemic and supply-chain issues resulting from geopolitical shifts and disturbances, leading a business has become a daily challenge for survival of the fittest.

Supply chain issues and rising costs resulting from a shortage of raw materials, electronic components and other essential items further add to the pressure that most companies are facing. The European Union is realising, hopefully not too late, that the dependence on third countries for the supply of such crucial items could have disastrous consequences.

Leading a business has become a daily challenge for survival of the fittest

It is a known fact that one driving element for this is the general increase in worldwide demand. A typical example is that of ICs: up to a few years ago, a car would maybe require a handful of ICs, whereas today an electric car needs thousands of ICs.

With Malta’s natural insularity, many businesses are witnessing a trend towards an imbalance of negative aspects over the benefits that the country can offer. Salary costs may still be an attractive factor for some investors but over the last couple of decades this has become less appealing as salary costs continue to spiral upwards.

Having a limited local market makes it essential for companies that want to survive and grow, to look beyond our shores. However, persistent pressures to continue adding to the social costs that employers are made to bear is swiftly deteriorating the competitiveness of outward-looking businesses.

The relative lack of availability of skilled and highly qualified people when compared with the actual demand continues to exacerbate the problem. With the costs of importation and export rising exponentially, local freight costs remain one of the highest when compared with the remaining part of the total cost. One administration after the other has shown political reluctance to tackle this monopolistic matter. To add insult to injury, as a country we are at the mercy of commercial entities for shipping line connections.

Simply put, if during a particular week it does not make commercial sense for a shipping line to operate a trip to or from Malta, that trip is simply cancelled or diverted elsewhere. This has terrible effects on most economic operators. Manufacturing companies that are focused on the export market are obviously the worst hit, as they are impacted both at the importing and exporting stage.

It is unacceptable that in 2023 a company gets to know that their incoming goods will simply not make it to Malta because of such unilateral decisions. Throughout the years many companies have suffered from this in relative silence and have somehow survived through planning around these constraints.

However, due to growing global trends of low stock holding policies, a tendency for international customers to demand customised products at short lead times and the already very tight supply chain, such companies are approaching a critical breaking point.

While the EU is pushing for reshoring and near-shoring, we cannot continue ignoring the plight of local companies which have invested millions in this country, and which provide thousands of well-paid jobs and opportunities to our workforce, to have a decent and reliable maritime connection to leading Mediterranean ports.

As much as Operation Pedestal, or as most Maltese people know it ‘the Santa Marija Convoy’ was a crucial lifeline for the country at a time of crisis, albeit for very different reasons, 81 years later Malta is still dependent on external factors over which it has absolutely no control to ensure its continuity of supply to and from the island.

The Malta Chamber has been and will remain committed to finding sustainable solutions to address this matter once and for all.