Welcome to the first Enterprise Logistics issue

1

What we're tracking today

TODAY: Welcome to the debut issue of Enterprise Logistics

Good morning, wonderful people, and welcome to the very first issue of Enterprise Logistics, your essential morning read on the MENA region’s dynamic logistics and supply chain industry.

The central role that the movement of goods play in our daily lives — and in the health of the global economy — was made concrete to just about every single one of us when covid-19 derailed global supply chains and threw into question the way companies (and nations) do business.

Crises like the Ever Given getting stuck in the Suez Canal for six days — which cost Egypt some USD 15 mn in foregone daily revenues and disrupted over USD 9 bn worth of global trade per day — underline the importance of the industry to the global economy.

We’re here to unpack key trends — from AI to green fuel, from ports and inland warehouses to last-mile delivery — and challenges facing an industry that cuts across almost every other sector. And what better place to do it than from the Middle East — home to some of the world’s largest ports as well as the Suez Canal, through which more than 30% of all global container traffic (and 12% of all global trade) passes?

Enterprise Logistics offers a daily roundup of news, analysis, and insight into the biggest stories from logistics players — from maritime shipping firms to port operators and cargo handlers — from around the Middle East and North African region, four days a week.

We’re delighted to be launching Enterprise Logistics in association with our friends at Hassan Allam Utilities, a leading investor in the sectors that are powering the new economies of Egypt, the Middle East, and beyond. Hassan Allam Utilities invests in sustainable infrastructure and clean energy, including logistics, mobility, renewable energy, water, and social infrastructure assets. You can learn more about the company, a unit of Hassan Allam Holding,on their website here.

Enterprise Logistics is published at 6:15am UAE / 5:15am KSA / 4:15am CLT Monday through Thursday by the same people who bring you Enterprise Egypt and Enterprise Climate.

THE BIG LOGISTICS STORY on this fine morning- Adnoc Logistics is providing Adnoc Offshore with logistics services under a USD 2.6 bn contract, as it unveils its integrated logistics platform from its base in Mussafah, Abu Dhabi.

^^ We have chapter and verse on this and plenty more in this morning’s news well, below.

HAPPENING TODAY-

Trucks can now book online to gain entry to Riyadh and Jeddah during restricted Ramadan hours, according to the Saudi Press Agency. The new system allows trucks to schedule their entries and routes through restricted areas via the Naqlcargo e-portal, helping reduce traffic during the unrestricted hours, according to the statement. Hourly restrictions on the movements of trucks vary depending on vehicle type. The full set of restrictions in Riyadh and Jeddah, which came into effect last Saturday, are spelled out here.

Syria’s port authority has closed down all of the country’s ports due to bad weather and high winds, according to state news agency SANA. Authorities had earlier exempted the key port of Tartous — on the Mediterranean coast — from the shutdown, but backtracked after weather conditions worsened. Oil terminals will remain open and are not affected by the decision.

The Saudi Port Authority (Mawani) is planning to reduce carbon emissions at Jeddah Islamic Port by c.1k tons by the end of this year, after putting in place measures to reduce the average movement of cranes and truck turnover at the port, according to a statement. Mawani plans to decrease the average movement of yard cranes by 33% and reduce truck turnover rates by 17% at the port, with plans to implement the same measures across all Saudi ports. Mawani’s green ports initiative aims to cut energy consumption at ports by 15%.

Storage fees at Fujairah’s oil hub jumped to record highs in 1Q 2023 on the back of an influx of Russian oil, Reuters reports, citing industry sources. Fees jumped to an all-time record of USD 12 per cubic meter during the first quarter of the year, the sources said. Restrictions on Western shippers and ins. providers for Russian energy exports have pushed traders to rout3 Russian crude shipments through Fujairah, leading to a sharp rise in the demand for storage space at the hub’s facilities.

DATA POINT-MENA’s e-commerce market value was worth USD 37 bn in 2022 and is forecasted to grow to USD 57 bn by 2026, according to a recent report (pdf) by EZDubai. Robust internet usage, the increasing popularity of online payments platforms, and a young tech-savvy population were among the drivers for the rise of e-commerce in the region, according to the report.

SOUND SMART- The UAE, KSA, and Israel alone accounted for 72.1% of e-commerce activity in our region, underlining how much room for growth there is across the rest of MENA.

STAY SMART- CINS publishesguidelines for the safe transport of lithium-ion batteries: The Cargo Incident Notification System Network(CINS) is out with guidelines (pdf) for the shipping and transport of lithium-ion batteries to help prevent risks like fires, explosions, and emissions of toxic gasses. The guidelines cover areas such as classification of batteries, regulation, quality compliance, container packing, stowage onboard ships, and incident detection and fire suppression. This publication is the first in a series of reports, and will be followed by three additional documents covering regulatory compliance checklists, risk assessment and emergency response, and training and educational awareness.

The global maritime shipping industry can save USD 50 bn a year and substantially reduce emissions, according to a recent report (pdf) by Copenhagen-based think tank Global Maritime Forum. The study — which is first in a regular series — outlines practices by which the maritime shipping industry can realize massive savings in fuel costs and cut annual emissions by upwards of 200 mn tons. The recommendations highlighted in the paper include speed optimization, improved data transparency and standardization, better legislative frameworks and contracts, and refined policies and regulations.

MARKET WATCH-

The Baltic Dry Index, the Baltic Exchange’s main sea freight index (which tracks rates for ships carrying dry bulk goods) fell to a three-week low this week due to faltering demand across all types of vessels, Reutersreports. The overall index — which takes into account the rates for capesize, panamax, and supramax shipping vessels — fell around 3.7%, its lowest since 9 March. “The markets may be hit by a curveball, with the potential threat of a cut in China’s steel production looming,” Reuters cites shipbroker Allied as saying in a weekly report, adding that “such a development would mean a reduction of iron ore imports, leaving some large dry bulkers under utilized.”

CIRCLE YOUR CALENDAR-

Breakbulk Middle East unveils its 2024 dates: The two-day conference will kick off on12-13 February 2024 at the Dubai World Trade Centre, bringing together over 2k companies from across the industrial supply chain and logistics and procurement decision makers.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Adnoc Logistics + Adnoc Offshore sign USD 2.6 bn logistics services contract

Adnoc’s maritime logistics arm, Adnoc Logistics and Services, is providing Adnoc offshore oil and gas subsidiary Adnoc Offshore with integrated logisticsservices under a USD 2.6 bn, five-year contract, according to a press release.

The details: Under the contract, Adnoc Logistics will provide port services, warehouse operations, heavy lifting, material handling and shipping, rig and barge moves, marine terminal operations and waste management services to Adnoc Offshore. The agreement will initially run for five years, with the option of a five-year extension.

The contract is the first agreement under Adnoc Logistics’ newly-launched Integrated Logistics Services Platform, which provides offshore end-to-end management of logistics and maritime operations. Adnoc Logistics is operating the platform from its 1.5 mn sqm base in Mussafah, Abu Dhabi.

Egypt taps firms for EGP 1.6 bn road paving work at Ain Sokhna Port

Egypt’s Suez Canal Economic Zone (SCZone) has contracted three local firms for EGP 1.6 bn-worth of road paving work at Ain Sokhna Port, with construction set to be complete within a year, the business outlet Al Mal quotes sources it says are close to the matter as saying. Several unnamed firms had submitted offers after the SCZone issued tenders for the work, Al Mal says.

Who was awarded the contracts?Concrete Plus for Engineering & Construction took half of the contract value (EGP 800 mn),while the remaining half of the contracts will be split equally between two other firms the sources did not name, Al Mal reports.

Background: Egypt has been on a major drive to improve the country’s ports and recently signed USD 1.6 bn in contracts with international players to develop and operate new container terminals at Sokhna and Dekhelia. Those developments will almost triple the ports’ capacities and add 2k direct and indirect jobs. AD Ports (ADP) also recently signed a 30-year concession agreement that will see it investing USD 200 mn to develop and maintain a new container terminal at Egypt’s Safaga Port. There are also talks of further investments by ADP in Egypt’s port infrastructure including cruise terminals at Sharm El Sheikh and Hurghada as well as RoRo, cruise, and multi-use terminals at Ain Sokhna Port.

AD Ports launches shipping service to ports in Qatar + Kuwait. PLUS: New shipping line between Tanger Med and West Africa

AD Ports launched a new weekly shipping service from Khalifa Port to Qatar’s Hamad Port and Kuwait’s Shuwaikh and Shuaiba ports, according to a company statement. The group will provide a digital appointment booking system for the new shipping service through the Advanced Trade and Logistics Platform (ATLP), which is developed and run by its digital arm, Maqta Gateway.

A Ramadan offer: AD ports will offer the service for cargo transported by land between the ports via container vessels without charge throughout the month.

This is the second shipping service launched from the UAE port in the span of a week, after AD Ports launched a Ro-Ro shipping service from Khalifa Port to Shuwaikh Port on Saturday. The new services come as part of plans to boost trade through Khalifa Port.

IN OTHER SHIPPING NEWS-

Hapag-Lloyd launched a new service connecting the Moroccan port of Tanger Med with West Africa, according to a company statement. The shipping firm launched a new Container WA1 Service, operating every two weeks, that will depart Tanger Med Morocco and make its way to Nouakchott, Mauritania, Freetown, Sierra Leone, Conakry, Guinea, Monrovia, and Liberia before returning to Tanger Med. The first sailing in the service is scheduled for 15 May.

The container shipping giant also revised its rotation and timing for its West Africa Express shipping service, which departs from Tanger Med, Morocco and makes its way to Dakar, Senegal, Tema, Ghana, Abidjan, and Ivory Coast on a weekly basis. The new rotation is scheduled for 7 May.

Swift Egypt spins off a unit of its business into new startup (exclusive)

EXCLUSIVE- Egyptian logistics solution provider Swift Egypt is spinning off a portion of its business into a new logistics startup, FreePL, the startup’s founder and CEO and Swift Egypt’s General Manager Abdelrahman Morsy (LinkedIn) told Enterprise Logistics. Swift will focus operations on helping customers obtain import and export licenses, while FreePL will act as an end-to-end tech-driven provider of logistics support, from asset and facilities management to managing distributors and freight forwarders, Morsy told us.

About the startup: The startup will act as a logistics back office for trading companies, providing them with support on everything from regulatory procedures (including product registration, customs clearance, and shipment approvals) to transport, warehousing, and distribution, Morsy explained. Customers will manage operations via an online platform where they can track shipments and receive updates and invoices in real-time.

The big picture: “Even in the midst of a global economic downturn, both imports and exports continue to increase in Egypt and across the region,” Morsy said. “This is a market with huge room for growth and the last few years have taught us that in times of supply chain disruptions, more specialization, collaboration and consolidation are inevitable, and that is precisely the space that FreePL looks to operate in.”

What’s next? The startup wants to scale up over the next year, grow its team, and help increase exports from Egypt to the rest of the world, Morsy said. The company has already kickstarted negotiations for seed funding and aims to close a funding round by 1H 2024, he added.

MENA countries’ globalization levels were not hit hard by the pandemic, DHL report says

The MENA region fell one place in terms of overall connectedness in trade, capital, people and information in 2021 from 2019, coming in fourth out of a total of seven world regions, according to DHL and NYU Stern’s recently published Global Connectedness Index 2022 (pdf). This came as countries were continuing to recover from the covid-19 pandemic and its impacts on trade flows and supply chains.

IN CONTEXT- The report does not clarify why the MENA region slid back a spot, but the general analysis looks at international flows along the four broad-based pillars of trade, capital, information, and people. Trade flows represent the figures around exports and imports of goods and services, while capital flows are calculated based on FDI and portfolio flows. Information flows are proxied by the minutes of international calls and the scale of international collaboration on research. Finally, people flows are represented by statistics on migration, numbers of foreign students, and tourism.

On the bright side: The region climbed one spot in terms of size of flows relative to economic size, coming in third in the global index’s depth measure. The region also retained a strong second place in trade and people flows, while capital and information flows continued to be relatively weak — coming in fourth in both categories.

Hydrocarbon-rich GCC economies buoyed the region’s ranking: High-performing GCC economies, which benefited from rising oil prices on the back of the war in Ukraine, played a strong role in global trade and capital flows, according to the report. Their reliance on foreign workers also meant that they scored high on the index’s people flow measure.

The UAE was the region’s strongest performer,coming in sixth in the ranking of most connected countries worldwide in 2021,retaining its position from the last ranking in 2019. The country came in third in terms of depth of global connectedness. The oil-rich state also featured on the list of the top 10 most overperforming countries in terms of structural predictors — which include GDP, geographical location, and population size, among others — of global connectedness.

Contrary to predictions, covid didn’t kill globalization: “Globalization has proven far more resilient than many expected through the covid-19 pandemic,” the report says. There was also evidence that despite visible US-China decoupling, that trend has not yet resulted in the development of rival trading blocs.

The report also rebuts another common prediction — that globalization is giving way to regionalization, orthe rise of trade within regions instead of between them.There was no evidence of a shift from globalization to regionalization, or from long distance global flows to short distance intra-regional flows, in 2021, the report said. In fact, “trade flows stretched out over longer distances during the covid-19 pandemic,” according to the report.

MENA had the second-lowest intra-regional flows of any region. Flows within the region represented 24% of the region’s total flows. Only South and Central Asia scored lower, with 17% of total flows taking place within the region.

This could change soon: Steps towards the normalization of ties between Israel and countries in the region could open new avenues for intra-regional exchange, the report notes, name-checking the UAE-Israel 2022 trade agreement. Israel is also developing diplomatic and economic ties with Egypt, Bahrain, Sudan, and Morocco.

Who was MENA’s biggest trade partner? India was the region’s largest partner, partaking in 9% of the region’s total flows. South Asia as a whole receives substantial commodity exports from the GCC and contributes foreign workers to the region.

The region still needs to tap the potential it has in trade with the EU: France is currently MENA’s largest partner in Europe, the report said.MENA countries on the Mediterranean basin have excellent potential for trade and exchange with Europe — a much larger market than South Asia — but these are largely untapped, it added.

Lebanon’s global ranking shot up five places, but for all the wrong reasons. Paradoxically, the rapid rise occurred on the back of a collapse in the domestic economy. A series of shocks and bad policy decisions led to the country’s GDP at market exchange to fall to about a third of its pre-crisis level, the report explains. While this meant that the economy was doing considerably worse, it also meant that the relative contribution of trade and capital flows to the economy were much higher than before as those activities were tied to foreign actors and accordingly less affected by a collapse in the domestic economy than other sectors.

The report reached a two-fold conclusion from the current situation in Lebanon: Despite indicating that the globalization index may at times suggest overperformance, the play out of events in Lebanon also highlights the importance of global connectedness as a factor of stability that could help economies weather domestic crises.

Not doing great in the rankings: Egypt saw significant falls in the latest ranking, tumbling seven places overall and 15 places in trade flows. Meanwhile, Algeria and Iraq were among the list of 10 worst-performing economies in terms of structural factors.

Iran ranked as the world’s worst-performing economy based on structural factors, despite recent gains in breadth and information flows. This means that Iran’s connectedness is far lower than what would be expected given the country’s income level, geographical location, population size, and other structural factors — all of which suggest that Iran’s economy should be much better connected globally.

SOUND SMART- Despite being well positioned economically and geographically to partake heavily in global exchanges, a sanctions regime imposed on the country by the US and the EU has effectively isolated the country from the global economy.

US supply chain shortages are pressuring the infrastructure + defense sectors. PLUS: Retailers track inventory with RFID

Supply chain shortages in microchips + cement pile on pressure for infrastructure + defense in the US: Supply shortages in microchips and cement are debilitating the auto, defense and non-residential construction industries in the US, Reuters reports, citing industry players and subject matter experts. The shortages are also making it difficult for the country to continue producing weapons for Ukraine, which itself is set to drive up demand for semiconductors and usher in a new wave of supply chain disruptions.

ALSO WORTH KNOWING-

Clothing retailers are using RFID chips to keep track of inventory: Retailers are using radio frequency identification (RFID) to track items in stores amid a rise in the growth of e-commerce, The Wall Street Journal reports.

BP + Adnoc bid for Israel’s NewMed could be good for Egypt. PLUS: Bahraini businesses can soon pay customs duties online

Egypt’s energy hub plans might get a shot in the arm: Energy giants BPandAbu Dhabi National Oil Company (Adnoc) have submitted a USD 2 bn non-binding offer to acquire 50% of Israel’s NewMed Energy, NewMed said in a disclosure (pdf) to the Tel Aviv stock exchange. The transaction would make NewMed a 50-50 partnership between the consortium and Israel’s Delek Group. NewMed CEO Yossi Abu told Reuters the transaction is “a sign of confidence in the East Med becoming a major supplier of gas to Europe.”

Background: Egypt aims to increase LNG exports by 40% by 2025, and already has an agreement in place with Israel and the EU to boost exports. NewMed plans to increase production from Leviathan by 75%, with some of the production earmarked for Egypt's LNG plants.

One development could hinder Egypt’s ambitions: NewMed also has plans to build a floating LNG terminal that would allow direct export to the EU to bypass Egypt’s processing plants.

Businesses can soon pay customs duties and VAT on Bahrain’s Informationand eGovernment Authority app, AlTajir, next month, Alayam quotes Zakaria Al Khaja, deputy CEO at the country’s Information and Electronic Government Authority, as saying. The features will be added to the app, which provides e-services to businesses. Since its launch in November, some 9k users have downloaded the app, most of whom are merchants, businesses, and entrepreneurs, Al Khaja told Alayam.

ALSO WORTH NOTING-

UAE vessel operator and oil supplier Gulf Marine Services (GMS) was awarded two new contracts for one of its vessels in the GCC, with the first contract commencing at the end of 1Q 2023, and the second at the start of 3Q 2022, spanning a cumulative period of 272 days. (Press release)
Bahrain's Gulf Air has launched its newest destination to Goa in India, from Bahrain International Airport, helping strengthen “tourism, business, and trade exchange” between the two countries. (Press release)

Russia + India to develop Northern Sea trade route. PLUS: KSA warms ties with China + Belgian tanker firm accused of carrying Iranian oil

Russia and India are looking to develop the Northern Sea trade route— the shortest route between East Asia and Europe — with a focus on shipping from Vladivostok port, Russia’s Interfaxreports. Russia’s Minister of Development of the Russian Far East and Arctic Alexei Chekunkov discussed the route with Indian officials this week. Reuters also has the story.

AND- Saudi Arabia strengthens ties with China with SCO membership: The Saudi cabinet has approved the decision to join the Shanghai Cooperation Organization(SCO) on Wednesday, according to state news agency SPA. The Kingdom is now a “dialogue partner” in the SCO, a first step in the process ahead of granting it full membership “in the mid-term,” sources told Reuters. The SCO is a union spanning most of Eurasia, including China, India, and Russia, to discuss political and security matters.

PLUS- Belgian tanker company Euronav accused of carrying Iranian oil: Pressure group United Against Nuclear Iran has accused the NYSE-listed Euronav of bypassing US sanctions and shipping and trading in Iranian oil by shipping and trading in Iranian oil. (Associated Press)

Calendar

MARCH

28-30 March (Tuesday-Thursday): Mediterranean Ports and Shipping 2023, Grand Hyatt, Athens, Greece.

APRIL

18-20 April (Tuesday-Thursday): Intermodal Africa, Durban International Convention Centre, South Africa.

25-27 April (Saturday-Monday): World Cargo Symposium, Hilton Istanbul Bomonti Hotel and Conference Centre, Istanbul, Turkey.

MAY

4 May (Tuesday): Deadline to submit proposals for the design, construction, finance, operation, and maintenance of the Salalah-Thamrait trucking road in Oman.

9-11 May (Thursday-Saturday): Airport Show, Sheikh Saeed Halls 1-2, DWTC, Dubai.

9-12 May (Thursday-Sunday): transport logistic, Trade Fair Center Messe München, Munich, Germany.

10-12 May (Friday-Sunday): The African Aviation Summit: Air Finance Africa Conference & Exhibition, Sandton Convention Centre, Johannesburg, South Africa.

15 May (Wednesday): Exports + FDI Forum, Four Seasons Hotel Cairo at Nile Plaza, Cairo, Egypt.

15-16 May (Wednesday-Thursday): Middle East Rail, Abu Dhabi National Exhibition Centre, Abu Dhabi.

15-16 May (Wednesday-Thursday): Mobility Live Middle East, Abu Dhabi National Exhibition Centre, Abu Dhabi.

15-17 May (Wednesday-Friday): Global Fleet Conference, Cascais, Portugal.

16-18 May (Saturday-Monday): Baltic and Black Sea Ports & Shipping, Radisson Hotel & Suites, Gdansk, Poland.

16-18 May (Saturday-Monday): Seatrade Maritime Logistics Middle East, Dubai, UAE.

16-18 May (Saturday-Monday): IATA Ground Handling Conference, Abu Dhabi National Exhibition Center, Abu Dhabi.

18 May (Monday): UN-Turkey-Russia Black Sea grain agreement extension expires.

24 May (Friday): Fleet and Mobility Summit, Dubai.

JUNE

6-7 June (Tuesday-Wednesday): Ports and Customs Week, Cape Town, South Africa.

JULY

16-17 July (Thursday-Friday): The Levitate Conference and Exhibition, St. Regis Amman Hotel.

24-25 July (Monday-Tuesday): ICSG Istanbul, Istanbul Lutfi Kirdar Convention & Exhibition Centre, Istanbul.

SEPTEMBER

20-22 September (Wednesday-Friday): Transport Evolution Africa Forum and Expo, Inkosi Albert Luthuli ICC Complex (Durban ICC), South Africa.

OCTOBER

3-5 October (Tuesday-Thursday): Smarter Mobility Africa Summit, South Africa.

EVENTS WITH NO SET DATE

2H2023: Construction of Neom’s first hydrogen fueling station will kick off.

2024

12-13 February (Monday-Tuesday): Breakbulk Middle East conference, Dubai Trade Centre.

2025

Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

Sections

About

Privacy & Support

Get EnterpriseAM daily