Good morning, wonderful people. We have a brisk issue for you this morning, with a lot of updates from across the region on the shipping and aviation fronts.

We also have a big read for you this morning on how the war in Gaza is impacting shipping in the region, and how shipping companies are responding to the changes.

THE BIG LOGISTICS STORY- RSGT inks concessions with CPAto operate Patenga Container Terminal: Saudi terminal operator Red Sea Gateway Terminal International (RSGT), has inked a 22 year concession agreement with Bangladesh’s Chittagong Port Authority (CPA) for Patenga Container Terminal (PCT) in Chittagong.

^^ We have everything on this story and more in the news well, below.

HAPPENING TODAY-

Suez Canal saw another collision last night, but navigation went uninterrupted: The Suez Canal authority deployed four tug boats last night to tow the container ship One Orpheus after its rudder broke down, causing it to collide with Mansi Bridge across the Suez Canal, Suez Canal Authority Chairman Osama Rabie said in a statement. Movement through the canal was not affected by the situation, Rabie said. The vessel, which was on its way from Singapore to the Netherlands, is 336 m in length, 46 m in width, and has a carrying capacity of 101k tons.

The International Conference on Air Services Negotiations (ICAN) 2023 kicked off on Sunday and is running till today at the Hilton Riyadh Hotel and Residences in Saudi Arabia. The event is hosted by the Saudi General Authority of Civil Aviation, and will serve as a meeting point for bilateral, regional air services talks and consultations, as well as a networking platform for policy makers, regulators, air operators, service providers and other stakeholders.

ON THE FIRST DAY- GCAA inked several MoUs + lots of air transport agreements: Saudi Arabia’s General Authority of Civil Aviation (GCAA) has inked MoUs with Uzbekistan, Tanzania, and Kenya to enhance air transport cooperation, Wam reports. Qatar also inked several air transport agreements with several countries. We have full coverage on the agreement in Diplomacy, below.

THE LATEST ON THE GALAXY LEADER-“Modest contact” is being allowed between the families and crew members of the Galaxy Leader, a commercial vessel seized last month in the Red Sea, Reuters reports, citing the ship owner. The Bahamas-flagged carrier was boarded by Houthi gunmen and taken to the port of Hodeidah, Yemen on 19 November. The crew is made up of nationals from Bulgaria, Ukraine, the Philippines, Mexico and Romania.

ICYMI: Three other vessels were attacked earlier this week in the Red Sea amid a rise in Houthi attacks along shipping routes since the start of Israel’s war on Gaza.

DP World has commenced operations at its air cargo hub in Punta Cana, the Dominican Republic, according to a press release. The facility, announced earlier this year, is an air cargo logistics hub established in partnership with Punta Cana Freetrade Zone (PCFTZ) that aims to enhance the Domincan Republic’s position as a major logistics hub in the Caribbean. In its first operational stage, the hub is receiving cargo via land transport from across the country and is shipping it via air through Punta Cana International Airport, according to the release. By year end, all DP World cargo operations in and out of the country will be centralized to this hub, the release said.

More to come: The facility is set to expand with a logistics center warehouse and manufacturing facilities that are currently under construction and set to be operational by 2H 2024, the release adds. A maintenance and repair workshop will also be completed and become operational in two years.

DATA POINT #1-MENA airlines lead the pack with highest air cargo demand growth in October: Global air cargo demand, measured in cargo tonne-kilometers (CTKs), stood at 21.9 bn CTKs in October, registering a 3.8% y-o-y increase, according to a recent International Air Transport Association (IATA) report (pdf). Airlines from all regions recorded annual increases in their international CTKs during the month, with Middle Eastern carriers exhibiting the highest growth at 10.8% y-o-y. This marks the third monthly consecutive increase in air cargo demand, IATA said. Air cargo capacity measured in available CTKs (ACTKs) also increased 13.1% y-o-y, reaching some 48.6 bn in October on the back of strong international passenger belly capacity.

IATA sees airline’s net income rising y-o-y in 2024: IATA is also expecting airlines’ net income to reach some USD 25.7 bn in 2024, a small improvement over 2023’s USD 23.3 bn projection, according to a separate release. Total airline revenues are also expected to grow 7.6% y-o-y in 2024 to USD 964 bn. Cargo volumes are expected to reach 58 mn tonnes in 2023, and 61 mn tonnes in 2024, while cargo revenues are expected to fall to USD 111 bn in 2024, as yields continue to fall due to the rise of belly capacity on the passenger side of the businesses, and as trade slows, according to the release.

Middle Eastern airlines are safe: IATA forecasts that Middle Eastern carriers will rake in USD 2.6 bn in net profits in 2023, growing to USD 3.1 bn in 2024, as regional carriers have been swift to recover.

DATA POINT #2-Egypt’s trade deficit widens in September: Egypt’s trade deficit widened by 10.3% y-o-y in September, reaching USD 3.24 bn, according to Capmas data picked up by Ahram Online. The rise is attributed to a 33.7% y-o-y decline in the country’s exports in September to USD 2.94 bn. Certain areas of the exports were particularly affected, including ready-made clothing, which was down 11.1% y-o-y, petroleum products, down 68.2%, and fertilizers, down 65.9%. Imports also experienced a 16.5% decrease to USD 6.08 bn, with wheat down 8.8%, meds and pharma supplies down 0.1%, and chemicals down 38%.

WATCH THIS SPACE #1- Masdar + TotalEnergies debut Methanol-to-SAF powered flight: A consortium comprising Masdar, TotalEnergies, Airbus, Axens, and Falcon Aviation Services have successfully completed the first flight test powered by sustainable aviation fuel (SAF) produced from methanol, according to a statement. The UAE General Civil Aviation Authority worked with the companies on the pilot flight.

We knew this was coming: Masdar and TotalEnergies were amongst the companies that were reportedly working to obtain licenses to certify the production of SAF from methanol gas earlier this year. Masdar also partnered up with Airbus in May to develop SAF as the company wants to capture what it can of the global SAF market which is expected to grow to USD 14 bn by 2032.

IN OTHER SAF NEWS- A new tool to measure SAFs’ impact: Illinois-based United Airlines Holdings and other carriers including Microsoft, RMI, and the Environmental Defense Fund launched the SAFc Registry which measures the emissions benefits of new SAFs that airlines blend into jet kerosene, Bloomberg reports. SAF can be made from a variety of feedstocks that have different emissions profiles and need more sophisticated methods to accurately assess the amount of CO2 reduced.

WATCH THIS SPACE #2-Iran and Oman are looking to ink a PTA: Iran is looking to ink a preferential trade agreement with Oman to expand bilateral and economic ties, head of Iran’s Trade Promotion Organization Mehdi Zeyghami said, Mehr News Agency reports. The countries will begin talks on the agreement in the near future, Zeyghami said.

WATCH THIS SPACE #3-Iran is set to attract USD 700 mn in investment to develop Shahid Rajaee Port, with contracts to be inked by 21 December, Tehran Times reports. The investment will go towards the third phase of the port’s development plan, which will expand container capacity to 8 mn TEU, up from 6 mn TEU. Shahid Rajaee currently accounts for around 85% of total loading and unloading at Iranian ports.

MARKET WATCH-

Baltic Dry Index is on a “crazy” roll: The Baltic Dry Index stood at 3,192 points at the close of trading on 1 December, its highest since 24 May, Hellenic Shipping News reported. The aggregate index has more than doubled since 1 November, surging 128%. The Baltic subindex rallied for 20 consecutive days, while Panamax rallied for 18 consecutive days and Handysize has seen 13 consecutive positive closings. All three indices are at their highest in more than a year, with the Capesize index outperforming all others, surging 228% to its highest in more than two years, and more than tripling since 1 November. The Baltic Dry Index’ rally has been described as “crazy”, shipbroker Xclusiv commented.

Russian four-week average seaborne crude exports fall to three-month low, as storms in the Black Sea disrupt shipments for a third week, Bloomberg reports. Russian ports shipped 3.04 mn barrels per day (bbl / d) the four weeks ending 3 December, a total that was 125k bpd lower than export figures revised for cuts for the month ended 26 November. Weekly shipments were at their lowest in 15 weeks.

This drop is over and above voluntary cuts: OPEC+ agreed to production cuts in 1Q 2024, after KSA unilaterally prolonged 1 mn bpd production cut. Russia has said that it will roll out a 500k bpd cut to exports in the first quarter of 2024, with crude shipments assuming 300k bpd of the cuts and refined products taking on the rest, a Russian official said. Cuts for the rest of 2023 are set at 300k bpd.

EU Emissions Trading Scheme (ETS) costs begin to factor into Suezmax fixtures: ETS-related costs have been factored into fixture contract rates for two Suezmax tanker voyages between West Africa and the UK-Continent/Mediterranean (UKCM) regions, Hellenic Shipping News reported. The contracts, reported on 29 November and 1 December, are for Shell and Total cargoes loading at Nigeria and discharging at UKCM. The full effects of the ETS scheme on the shipping market will still only become apparent after it kicks off in January. ETS will apply to all vessels with a gross tonnage of 5k or above, and covers 50% of greenhouse gas emissions for voyages that begin or end outside of the EU and 100% of emissions for voyages within the EU.

CIRCLE YOUR CALENDAR-

Iranian President Ebrahim Raisi will visit Turkey this month to discuss bilateral ties, as well as proposals by the Iran-Turkey Joint Chamber of Commerce for boosting bilateral trade, including through a potential trade agreement, state-aligned Tasnim News Agency quotes chairman of the chamber Mehrdad Saadat as saying. Saadat said that Iran’s trade with Europe could grow by taking advantage of Turkey’s trade capacities.

The Iran-UAE Joint Economic Cooperation Commission meeting will be held in the coming weeks in a bid to develop bilateral cooperation, deepen commercial ties, and boost trade. The location has yet to be announced.

Food Africa Cairo 2023 is set to take place on 12-14 December at the Egypt International Exhibition Center in Cairo, Egypt. The three-day agro-food exhibition is set to bring together wholesalers, distributors, and retailers to create a network between international traders and vendors with their counterparts from Egypt, MENA, and Africa. The event aims to address the different needs of buyers and importers and to serve new markets in Egypt and Africa.

The International Exhibition of Transportation, Logistics, and Related Industries (Iran Trans Expo 2023) will take place on 18-20 December at the Imam Khomeini Grand Prayer Campus (Mossala) in Tehran, Iran. The event is organized by Iran’s Trade Promotion Organization, the Transport and Urban Development Ministry, and the Fund for Innovation and Prosperity of Unions and Associations.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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