pushing shipping to new heights
Carmelo Caruana Company Chief Executive Beppe Hili
speaks to DAVID LINDSAY about what the advent of globalisation and containerisation
has meant for Maltas shipping industry
The Carmelo Caruana firm has been at the forefront of
the shipping industry since the company was first conceived back in
1923. Now headed by Beppe Hili, himself involved in the industry for
the last 30 years, the company is looking forward to the future of shipping,
with Malta now about to accede to the European Union and with globalisation
pushing the need for transnational and transcontinental shipping to
At the helm of Carmelo Caruana, Mr Hili has seen the shipping industry
change drastically over the years, thanks particularly to the advent
of containerisation in the industry.
Asked to what extent the industry has developed, Mr Hili explains, "Things
have certainly developed. I wouldnt say that in those days things
were primitive, but they were close to it. Back then we used to handle
shipments by discharging them on barges, with cargo coming in loose
boxes a state of affairs that led to all sorts of problems such
as theft and breakages.
"Now the advent of containerisation has changed the face of the
industry when it comes to general cargo. The oil shipping business,
however, has remained the same but the vessels have become larger, more
sophisticated and safer - especially now with more stringent safety
measures being introduced. But, personally speaking, the single and
double hull issue all boils down, at the end of the day, to how well
the company maintains its vessels and how experienced the crew is. You
can have a 40-year-old vessel in tiptop condition, is well maintained
and which is as safe and strong as any vessel.
"The main change in the industry has been in general cargo transportation.
For example, it was even unheard of 30 years ago to have cargo transported
by trailer. And as time passes, more and more commodities are being
transported by means of containerisation. Up to about four or five years
ago, I would say particular commodities, such as sugar, were still being
imported in bulk in loose bags as opposed to utilising containerisation
methods. Today this has changed and much of these commodities are coming
in containers as well.
"In this respect, also because of the Freeport, local industry
has been assisted greatly. As an example, if you had a factory or bottling
plant and you were ordering large amounts of sugar, you would have had
to bring in no less than a 2,000 tonne parcel, as it wouldnt have
been feasible to bring in a smaller quantity. That obviously meant these
companies needed more storage area and a larger capital outlay for the
"Nowadays the same bottling plant or factory can buy sugar to suite
its weekly needs, as opposed to ordering in such bulk. Because the service
is reliable, you can bring in just one container if you need only 20
tonnes. Other commodities have also gone in the same direction."
More and more cargoes are being containerised for this very reason,
coupled by the fact that freight rates, although increasing slightly
of late, are still low enough to be attractive.
Mr Hili also sees a large scope for growth due to Maltas impending
EU membership come May next year and the ensuing increased business
from China and the Far East.
Mr Hili explains, "At the moment, you can have a Chinese factory,
for example, competing with a European or North African factory. These
Far Eastern countries manufacturing industries stand at a disadvantage
given the 17-day shipping distance from Europe, especially for short
"However, if these companies were to already have their goods in
Malta, they would be in a better position to compete with European factories
and have their goods sent over in a mere day or two."
Containerised world trade has increased tremendously since its introduction
and forecasts predict the segment to continue increasing at 10 to 12
per cent a year.
This growth is, in part, the result of increasingly globalised trade.
Mr Hili explains, "Before you would have a factory manufacturing
goods in Germany, now these are moving to China. As such the goods have
to be transported and this is a two way stream, with raw materials being
shipped from Europe to China and with the end product has to be shipped
back to Europe. This is one of the main reasons why containerisation
is doing so well at the moment, how long this will last, we dont
know, but it should last at least for the next few years.
Port competition in the Mediterranean region has undoubtedly been on
the increase lately, I ask Mr Hili how he sees the Malta product weathering
He comments, "I see no reason why Malta wont fare well with
the competition levels in the Mediterranean, there is lots of room for
improvement, but with the right management there is no reason why we
wont continue to compete healthily."