Interview | Wednesday, 11 March 2009

Coming in line with shipping

Former Lee and Wrangler Jeans importer Jean Cali has dabbled in many businesses throughout his life, but he had never tried shipping. Shortly before retiring, he receives a phone call which would change his life. Only weeks later, he found himself owning Bluewave shipping line. Interview by DAVID DARMANIN

What led you to set up a shipping line at this time? How long ago have you set up the firm? Under what circumstances?
Last summer, my Sicilian partner Giovanni Calcaterra – whom I have been doing business with over a number of years now, approached me to look for a ship since he knew of a request for regular shipping of high-quantity grocery items to Malta. Now I’ve done quite a few things in my life – including hitch-hiking up to England when I was 17 – but I had never done shipping. Still, the idea enticed me – not only for the prospect of business, but also because I am very passionate about Sicily, where I now visit much more often due to the nature of our work.
We started by chartering one ship – the Antonia, but we now upgraded to the ex-Sea Malta vessel – called Zebbug, whose name we changed to Fehim Bey.

Is that not bad luck?
Not so far, that’s for sure. The Zebbug has always been very much praised by the Maltese. The ship works in a clockwork fashion, weather permitting. We have become very punctual with it – since it allows us to make it to Pozzallo in three and a half hours if we wanted to. To keep our costs down, and therefore our prices low, it takes us between four and a half and five hours to reach our destination. In any case, a good number of ships change their name from time to time.

Do you think there is potential in this line of business? How are you exploiting this potential?
With Malta being an island, everything must be imported. We needed to use the shortest possible route to increase efficiency for importation, and we managed. It was very encouraging for us to see that when we went to pick up our first ship from Sicily, after it was delivered to Pozzallo from Albania – we had already had four or five pieces of cargo on our maiden trip. Even on our first trip, we got business coming from nowhere.

There have been many fluctuations in the market since you started. The price of oil has slumped, while the performance of the European economy was dismal in the fourth quarter and thereafter. How have you been affected?
I cannot say I am not worried about the situation, because I am sure we will notice a slump in the volume of work. However, our key client imports low cost food items in high quantities – which are expected to increase as consumers start looking for lower cost items. Besides, our prospective direct clients will invariably start looking for cheaper transport, thus increasing our opportunities. The decrease in the price of oil has helped substantially, of course. That said, everyone is now watching their mark-ups and strive to become more competitive.

You compete Grimaldi and Virtu Ferries, which both enjoy the benefits of strong branding and market penetration. Do you think there is space for a third operator?
We cater for roll-on, roll-off cargo. We are not after passengers. Island Seaways and Sea Malta have unfortunately moved out and created a vacuum, so we went in to try to take a share of the market. Our intention is not to fight with any competitors, but to provide an alternative.

But surely, you must have entered into an arena where competition is tough. Word is out that you are after cost leadership vis-à-vis your competitors. Is this true? How are you competing? What is your strategy in this aspect?
We are a small company giving personal attention, and this is value added. I would not say we are necessarily after cost leadership – just reliability, consistency and value for money. This is the service we are trying to provide.

Why should one use your services and not anyone else’s?
We tried not to conflict with our competitors by providing our service at times and destinations in which and where they do not operate. Besides, there is only one competitor working in Pozzallo – which is a more economic destination since our clients don’t have to pay highway fees once on land – as opposed to Catania. Besides, with us, clients can send any cargo unaccompanied – which makes it cheaper for all involved.

Shipping entails complex logistics. How much of them do you actually handle?
We have given Medsea our sole agency in Malta. They handle all the bookings, take care of ship chandling and all that is related to logistics on land. We are in charge of operations of the shipping line which leaves three times a week from Malta - Monday, Wednesday and Friday; and returns from Pozzallo every Tuesday, Thursday and Saturday or Sunday – the latter depending on the volume of cargo. If work increases, we would be able to operate everyday. There is potential for this. There is a fixed cost attached to the charter but then we fork out fees pertaining to port workers, berthing, bunkering and loading fees among others.

How many people do you employ? What human resource policies do you have in place? How do you recruit them?
Because of the way ship chartering works, we indirectly employ about 35 people. Directly, my partner and I are the only ones involved so far. The crew comes with the charter. We are very happy with our captain – our chief officer happens to be Maltese. My partner and I are 24 hours on call however – with the weather being a prime factor disrupting our schedules.

Where do you get most business from – outgoing or incoming goods?
Unfortunately, most of our cargo is incoming. We want to increase the outgoing side as export only makes up for 20 per cent of our business. That said, either way it does not make much of a difference to us. We still leave with a high load factor, since trucks would be leaving empty to come back full. We probably go out at 80 per cent capacity if we come back at 100 per cent capacity.

How do you market your services?
Word has spread and people came looking for us. Before we expose ourselves we wanted to make sure that our service is up to scratch. Now we are ready to go all out to market ourselves.

Have you benefited from any government or EU schemes? How are you supported?
We have not been supported yet. I would like us to receive some support in any possible way however. From what I read, EU schemes are available from Catania to Valletta. I don’t know if anything applies to Pozzallo, but we’re looking.

Do you think enough support measures are offered for start-up companies of your type? What would you like to see improved?
To be honest I don’t think enough support is in place. From Italy we’ve only had trouble so far. Actually, some people have been putting spokes in the wheels since day one. But this can only make us stronger. People thought we were only going to last two weeks. They have made our lives difficult by changing rules and regulations from day to day. I even went to the Italian Ambassador to lodge a complaint. We’re working on this. We haven’t spoken to anybody in Malta yet – but I am sure that there are avenues where we can be supported. Funnily enough, in both destinations, we have to pass through bureaucratic procedures which do not seem to apply to all shipping lines.

Where do you want to see your business grow? Where do you want to take this setup?
We are interested in creating new lines – from Malta to Augusta and from Malta to Trapani. If the volume increases, we would like to see our lines working everyday – and who knows – we could also venture into chartering another ship. But we are moving step by step.

Is this type of business lucrative?
I have to see the whole year before I judge. I think it is too early to comment at this stage, since our work is very much affected by seasonality.



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11 March 2009

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