The skyrocketing costs of international shipping have made it impossible for Maltese retailers to compete with online stores, the small business lobby has warned.

The Malta Chamber of SMEs said that shipping costs have risen by as much as 10 times in recent months, disproportionately impacting island-states like Malta which cannot reroute imported goods along land-based routes. 

It said so in a statement in which it endorsed a Nationalist Party proposal to push the European Union to set up a €40 million fund to help Maltese entrepreneurs cushion the impact of exorbitant transportation costs. 

Maltese business owners traditionally find it hard to compete with massive online outfits such as Amazon or Asos, which can take advantage of massive economies of scale to bring prices down.

Malta’s relatively remote geographic location, as an island in the middle of the Mediterranean, also bumps up transportation costs of goods. 

Huge increases in the cost of international freight shipping have been attributed to huge backups at global shipping ports. With demand for container space vastly outstripping supply, shippers have indulged in bidding wars that have pumped freight costs to record highs. 

The Chamber of SMEs had first flagged concerns about skyrocketing prices back in May, warning at the time that the prices of many consumer goods would most likely rise as a result. 

Maltese importers have been especially badly hit as rising shipping prices kicked in just as they were weathering the impact of Brexit, which added red tape and costs to importing goods from the UK – traditionally one of Malta’s largest import markets. 

Malta is heavily reliant on imports. According to the National Statistics Office, the country imported €3.6 billion work of goods between January and July of this year and exported around half of that amount, €1.8 billion. 

Apart from endorsing the PN proposal, the Chamber of SMEs made three suggestions: 

- Malta must address the issue at EU level and seek permission for state intervention. The island should also reach out to ally states to draft shipping agreements that would benefit local importers. 

- Introduce measures that encourage local businesses to locally produce items that are usually imported.

- Ask for paperwork exemptions linked to Brexit procedures, based on Malta’ dependence and market limitations.

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