It’s PMI week in the region + Maritime and shipping are in the spotlight

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What we're tracking today

TODAY: PMIs are out for the region and it’s (mostly) good news + Shipping and maritime are in the spotlight

Good morning, wonderful people. It’s a busy day for logistics in our neck of the woods and elsewhere, providing plenty of news to get the day started with.

THE BIG LOGISTICS STORY- Purchasing manager indices (PMI) tracking non-oil private sector activity in the UAE, KSA, Qatar, and Egypt told a mixed tale but with all-round hopeful notes. The UAE, KSA, and Qatar saw better performance on the back of higher domestic demand and lower inflationary pressures. Meanwhile, Egypt remained in contraction — albeit at a slower rate — and there were signs that rampant inflation had finally bottomed out.

^^ We have the full rundown in this morning’s news well, below.

The Enterprise Exports & FDI Forum, our latest industry-specific conference, is taking place on Monday, 15 May. The Enterprise Exports & FDI Forum will give insiders and newcomers alike the chance to talk about how to develop an export-centered business and how their companies can help Egypt build an export-led economy that makes us a magnet for foreign direct investment (FDI). The event will take place atthe Four Seasons, Nile Plaza.

Why exports & FDI? In the wake of successive floats of EGP, exports and FDI have never been more important to our economy — or our businesses. We’re gathering some of the CEOs, top execs from local companies and multinationals, investors, bankers and finance folks to speak on how businesses can adapt their strategies to be export-oriented and what Egypt as a country can do to draw foreign investment and much-needed FX. Expect it to be heavy on lessons learned in Egypt and other global growth markets — and lots of success stories.You can learn more on our conference website here.

ON THE AGENDA- We have seven panels where we discuss the steps these leaders and companies are taking to pull in FDI and to make their business export-driven. There will be several “lessons-learned” panels that include an Egyptian product focused one that looks at white goods, consumer electronics, fertilizers and garments. Another intends to extend the steps taken to create an export and FDI strategy through listening to the advice of other c-suite executives who have successfully made their business move in that direction. More panels include how to identify and pull in the right foreign partner, how to become part of a multinational’s supply chain, how industrial clusters can offer a way for SMEs to be part of our export economy and what industries of tomorrow we can leapfrog into. You can check out the full agenda here.

Some of the biggest names in business and finance are on board: The Enterprise Exports and FDI Forum is taking place with the generous support of our friends, including:

Banking partners: Banque Misr | Al Baraka Bank | Emirates NBD | HSBC

WANT TO BECOME A COMMERCIAL PARTNER? Ping a note to Moustafa, our head of commercial, here.

HAVEN’T REQUESTED AN INVITE YET? If you’re a C-suite exec, business owner, DFI staff, export executive, investor or banker, please fill out the form here to signal your interest, letting us know your name, title and where you work.

DATA POINT #1- Qatar’s total private sector exports grew 17.5% y-o-y in 1Q 2023 to reachQAR 9.08 bn, according to a Qatar Chamber of Commerce report. The growth was driven primarily by exports of essential and industrial oils, which soared 222.6% y-o-y to QAR 5.6 bn. Asia, excluding the GCC, was Qatar’s biggest export market overall, representing a 68.15% share. On a country level, the lion’s share of exports were earmarked for China (34.1%) and India (26.8%). The GCC was the second largest export bloc, representing 16.8% of Qatar’s total private sector exports for the quarter.

DATA POINT #2- The number of e-commerce licenses issued in Qatar in 1Q 2023 grew 25% y-o-y, Al Sharq reports, citing a source it says has knowledge of the matter. Rising commercial real estate prices and costs of outfitting shops were cited as reasons for the surge, with more growth expected by the end of this year. New license issuances were concentrated primarily in the food, apparel, cosmetics, and marketing industries, Al Sharq’s source said, adding that women entrepreneurs are also applying for e-commerce licenses in record numbers.

DATA POINT #3- Jordan’s Aqaba Port saw 14% y-o-y growth in vessel arrival numbers in 1Q 2023,according to a Aqaba Economic Zone statement. The number of containers also grew 15% y-o-y during the first quarter of the year.

PSA #1- Some of Maersk’s shipping services are getting more expensive: Maersk Line will increase the rates of its shipping services from Pakistan, the Middle East, and the Indian subcontinent to the US and Canada, effective 1 June, according to a company statement. The increase applies to various commodities and container types: 20DC containers will be charged USD 500, while the rate for 40DC, 40High, and 45HDry containers will be USD 600.

PSA #2- Yemen’s PIL is up and running again at Hodeidah Port: Yemenishipping companyPacific International Lines (PIL) resumed yesterday operations through the port of Hodeidah via the port of Djibouti, a Transport Ministry statement says.

PSA #3- Dubai wants to make local sea container charges more transparent: The Dubai Maritime Authority (DMA) has issued a new directive requiring all service providers to declare their container charges to the DMA through a secure trade single window portal, according to a statement. The directive, which came into effect at the beginning of May, aims to allow the DMA “to analyze data submitted by service providers and determine whether they reflect commercial best practices and fair competition,” according to the statement. The directive applies to all providers of local sea container services within, outside, or through any port in the emirate. All current service providers must submit a list of their existing local sea container charges to the DMA within 30 days from the effective start date of the directive, while new service providers must submit within 30 days of being licensed.

Turkey, Russia, and Ukraine’s deputy defense ministers are set to discuss the Ukraine grain agreement tomorrow,as Russia’s deadline to withdraw from the Black Sea crop export corridor approaches, Bloomberg reports. Russia is also scheduled to hold talks with UN representatives on the same day. Russia has threatened to opt out of the pact if its demands to increase its own food and fertilizer exports are not met. The warning has not had much of an impact on benchmark grain futures due to excess supplies and good harvest predictions for next season.

MARKET WATCH- OPEC’s oil output declined in April: The temporary suspension of Iraqi exports and the delays in Nigerian shipments contributed to a drop in OPEC’s oil production last month, a Reuters survey found. This further added to the impact of major producers sticking to the OPEC+ supply cut agreement. OPEC pumped 28.62 mn barrels per day (bbl / d) last month, down 190k bbl / d from March. Output is down over 1 mn bbl / d from last September.

CIRCLE YOUR CALENDAR-

The Arabian Travel Market 2023 (ATM) is on its last day today at the Dubai World Trade Centre in Dubai, UAE. Theconference is gathering attendants from more than 100 countries from the travel trade to attend 63 sessions across the global stage, travel tech stage, and a sustainability hub to explore travel trends, opportunities, new destinations and sustainable growth.

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

Non-oil private sector activity continues its boom in KSA + UAE + Qatar, while contraction softens in Egypt

Domestic demand boosts non-oil sectors in UAE + KSA + Qatar, while Egypt’s contraction eases on the back of lower inflationary pressures: Purchasing Manager Indices (PMI) tracking non-oil private sectors in UAE, KSA, Qatar, and Egypt told a mixed tale but with all-round hopeful notes. The UAE, KSA, and Qatar saw better performance on the back of higher domestic demand and lower inflationary pressures. Meanwhile, Egypt remained in contraction — albeit at a slower rate — and there were signs that soaring inflation is bottoming out.

Non-oil private sector activity in the UAE soared, backed by the fastest growth in new orders since November 2021, according to S&P Global’s UAE PMI (pdf). PMI readings for April came in at 56.6, up from 55.9 in March, putting the index just a notch below its 56.7 post-pandemic peak in August last year. New orders hit their highest levels since November 2021.

Remember: The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion and anything below indicates contraction.

The bulk of the new demand in the UAE came from the local market as inflationary pressures cooled, while foreign sales numbers remained steady since the close of 1Q 2023, the report said. Firms responded to the new demand by raising output, stockpiling inventories, and going on a hiring spree, which were just a notch below the seven-year-record observed in March. New hires helped put a dent in backlogs but raised staffing costs. Companies’ general outlook was the highest in seven months as respondents were hopeful that demand will keep rising. Better economic conditions, a boom in new constructions, and higher budgets for marketing were also cited as grounds for a cheery one-year forecast.

KSA told a similar story as local demand boosted the non-oil private sector, according to the Riyad Bank Saudi Arabia PMI (pdf). PMI figures in April leaped from the 58.7 seen in March to 59.6, just shy of February’s eight-year peak of 59.8. New orders increased at their fastest rate since September 2014, fed by hikes in domestic demand, which more than made up for a slight fall in export orders.

Managers surveyed in KSA pointed to several factors boosting new orders: Rising tourism, more lavish consumer spending, and new infrastructure projects topped the list of factors driving increased demand. Export sales, on the other hand, saw a slight setback, with respondents citing fierce competition and shaky economies overseas. Booming orders had knock-on effects as they pushed firms to hire more and stockpile inventories to stay on top of demand. New staff helped businesses put a dent in their backlogs and firms successfully negotiated more timely deliveries, particularly from domestic suppliers. Nevertheless, more expensive raw materials and higher staffing costs increased businesses’ input costs. Managers were upbeat about the future, citing solid sales pipelines, a good overall economy and supportive government policies as reasons for optimism.

Over in Qatar, a similar acceleration in sales saw PMI figures rise for the fifth time in six months, according to Qatar Financial Center (QFC) PMI released yesterday (pdf). April’s PMI reading came in at 54.4, up from 53.8 in March — the highest acceleration the index has seen since July 2022, placing the metric solidly above the long-run trend of 52.2. Despite some increases in prices of inputs, goods, and services, inflation seemed largely in check and the one-year outlook among managers was overwhelmingly positive.

Orders in April grew at their fastest rate in nine months with a broadened customer base, new projects, and new products driving the trend. As elsewhere in the GCC, businesses in Qatar hired more to keep up with the soaring demand with employment rising to a nine-month peak. Despite the deluge of new orders, businesses were able to reduce their backlogs thanks to new hires and better productivity.

Qatar’s financial sector was once again the star, with activity in that sector growing for its 22nd consecutive month and outpacing growth in the broader private sector economy, both in terms of total activity and new work,” QFC CEO Yousuf Mohamed Al Jaida said in his customary comment.

Egypt’s PMI reading was less sanguine as non-oil private sector activity remained in contraction territory, although the rate of contraction softened, according to S&P Global’s Egypt PMI (pdf). The composite index posted 47.3 in April, rising from March’s 46.7 and hitting the highest level since October last year.

New orders fell, but at the softest rate in four months. Likewise, firms’ output continued to decline but at the slowest rate in six months, while firms cut jobs at a significantly lower rate than in recent months. Managers surveyed continued to cite the usual suspects of high inflation and import controls as being responsible for tepid sales and impaired output.

The silver lining #1- The construction industry may have rounded the bend as it recorded growth for the first time in 10 months.

The silver lining #2- The report points to some signs that inflation may have finally bottomed out in Egypt. More stability in the FX market translated into more contained purchase price inflation for firms than the month prior. Put together with the softest increases in staffing costs in eight months, input costs increased at their slowest rate in one year and inflation was lower than the long-run trend. Nevertheless, persistently high prices for raw materials meant that firms’ purchases continued their downfall and businesses had to keep gnawing at their inventories to meet demand. The spare capacity also meant that backlogs decreased for a third straight month.

Despite the softening inflation, outlook is at rock-bottom: Negativity loomed as managers’ outlook continued to fall — reaching an all-time low. Respondents cited sluggish demand locally and abroad, as well as lingering inflation, as reasons for a gloomy one-year forecast.

Jordan looking to establish new port for the import of crude and derivatives

Jordan is studying constructing a new port on the Red Sea to import crude and petroleum, state-owned Aqaba Development Corporation (ADC) CEO Hussein Al Safadi told Jordanian daily Addustour. The new port could also serve as a conduit for the export of green hydrogen and ammonia, Al Safadi added. The new port could be constructed by ADC or with an external investor, depending on the outcome of the feasibility studies, Al Safadi said.

Crude and petroleum facilities at Aqaba Port have seen an upgrade spree. The first phase of improvements — completed in 2015 — saw throughput capacity at the port doubled to 14 mn tons per annum as well as upgrades to storage and distribution. ADC is about to begin the second phase of upgrades which will see revamps to fuel storage and safety features, Al-Safadi said.

Egypt’s SCZone Ports to begin rolling out bunkering services within coming days

Egypt’s Suez Canal Economic Zone (SCZone) ports will begin providing bunkering services to ships within days, Youm7 reports, citing what it says are high-level sources. The services will be offered at the Ain Sokhna and Port Said ports, the sources reportedly said. The SCZone is cooperating with the Suez Canal Authority (SCA), Egypt’s Oil Ministry, and international companies to roll out the service, the sources said, without naming the companies.

Background: The SCZone first announced plans to launch the new marine services — including bunkering and catering — back in January, as part of its 2020-2050 strategy.

Iraq and Syria talk trade at their joint-committee session

Trade and investment in the energy and agricultural sectors were on the agenda during Iraq and Syria’s joint-committee meeting yesterday, according to an Iraqi Commerce Ministry statement. Government officials from both sides recognized the importance of encouraging their respective private sectors to establish joint ventures in the industrial and agricultural sectors. The meeting comes on the heels of Syria promising to curb cross-border drug trafficking at its Iraq border.

The end of human-piloted aviation?

As the aviation industry embraces AI, planes may need no more than a single pilot, Emirates Airlines President Tim Clark tells CNBC. Although this may not happen for a while, it looks to be inevitable and Clark believes the industry needs to analyze how to best use AI to its advantage.

Airbus delivered 55 planes in April, a 10% drop from March, due to supplyshortages, hindering CEO Guillaume Faury’s goal of increasing deliveries to 720 jets this year. (Bloomberg)

Jazeera Airways reports 1Q earnings + Abu Dhabi Aviation merges with ADQ Aviation. Plus: GAC warehouses get solar panels and AP Moller-Maersk opens a new corporate office

AVIATION-

Kuwaiti low cost airline and freight service providerJazeera Airways’ net income dropped 39.7% y-o-y in 1Q 2023 to KWD 2.3 mn (USD 7.48 mn), according to the company’s earnings presentation (pdf). The airline’s revenue for the quarter rose 35.2% y-o-y to KWD 48.3 mn, underpinned by a 56.6% y-o-y uptick in passenger traffic to 1.1 mn passengers. Cargo revenues also contributed to the airline’s topline, coming in at KWD 536k, a 31.3% y-o-y increase. Despite high fuel prices, the airline has added new destinations to its routes including Moscow and Samarkand.

Looking forward: The airline has also announced new destinations for 2Q including Larnaca, Tirana, and Belgrade, and will resume flights to Prague and Sarajevo in the summer. The airline is also making four new additions to its fleet by the end of 4Q 2023.

ENERGY-

Global shipping and logistics services provider GAC has installed 550 solar panels on its warehouse roof in Bahrain, according to a company press release. An expected annual output of 487k kWh could reduce CO2 emissions from the facility by 485 tons and make 195 tons of standard coal savings in the first year.

M&A-

Abu Dhabi Aviation effectively merges into ADQ Aviation: Abu Dhabi Aviation’s shareholders approved issuing of mandatory convertible bonds valued at AED 4 bn to ADQ Aviation and Aerospace Services LLC, according to an ADX disclosure. The transaction will see ADQ Aviation transfer 100% of the issued share capital of Advanced Military Maintenance Repair and Overhaul Centre (AMMROC) and Etihad Airways Engineering (EYE), and 50% of the issued share capital of Global Aerospace Logistics (GAL) to Abu Dhabi Aviation. The bonds will convert into 652 mn Abu Dhabi Aviation shares at a conversion ratio of 6.14 for each new share. The issued share capital of the company will be increased to AED 1.1 bn, with the deal expected to finalize in 2Q 2023. The new shares will be listed on the ADX before 30 June.

ALSO WORTH KNOWING ABOUT-

AP Moller-Maersk opened a new corporate office at SOHAR Freezone in Oman,expanding its presence in the country with its third office after Muscat and Salalah. (Company statement)

Iran seizes another oil tanker + Bed Bath & Beyond seeks to recoup mns of USD to pay off creditors

Iran seizes second oil tanker in a week, according to US Navy: Iran has seized a second foreign oil tanker in the Gulf within a week. Oil tanker Niovi was sailing under the Panamanian flag when it was seized by Iran’s Islamic Revolutionary Guard Corps Navy while passing through the Strait of Hormuz. The tanker was transiting from Dubai to Fujairah when it was seized. The oil ship was seized based on a court order following a plaintiff’s complaint, Tehran’s prosecutor said in its initial statement, according to the Iranian judiciary’s Mizan news agency. No further details were provided. (Fox News | Reuters)

REFRESHER- The US and Iran have been engaging in a tit-for-tat seizure of oil tankers, with the US confiscating an Iranian tanker last week and Iran responding by capturing a US-bound vessel carrying Kuwaiti crude shortly after.

Bed Bath & Beyond seeking damages from Hong Kong shipping company:BedBath & Beyond is seeking over USD 31.7 mn from Hong Kong-based Orient Overseas Container Line, filing a complaint with US Federal Maritime Commission claiming that the shipping line abandoned its commitments during last year’s supply chain turbulence in the US, the Wall Street Journal reports. The filing claims that the container line’s “brazen price gouging and profiteering” cost the company some USD 31.7 mn in extra freight charges, along with additional charges and foregone income. The filing with the US maritime regulator comes days after the company filed for chapter 11 bankruptcy and began winding down operations.

But that’s not all: Last month, Taiwan-based Yang Ming Marine Transport filed a suit to block Bed Bath & Beyond from pursuing a claim of USD 7.8 mn over breach of contract, the Wall Street Journal notes. Bed Bath & Beyond is looking to recoup as much funds as it can to pay off its creditors after filing for bankruptcy.

Corvus Energy to launch no-carbon battery fuel system for ships next month

Norway’s Corvus Energy planning to launch no-carbon hybrid propulsion system:Norwegian maritime energy storage solutions provider Corvus Energy is planning to launch a zero-carbon battery-fuel cell hybrid propulsion system for several ships in June, according to Seatrade Maritime. The H2NOR fuel cell system can be combined with batteries to provide zero carbon propulsion with a performance range between 320 KW and 10 MW. The gas system will be suitable for use by offshore vessels, ferries, container feeders, chemical tankers, coasters, workboats, and ropax ships, according to the news outlet. The project has received EUR 5.9 mn in funding from state agency Innovation Norway and the Research Council of Norway, according to the company website. The partners on board with this project include Toyota, Equinor, LMG Marin, Maritime CleanTech, and Norled.

Timeline: The system will be showcased on board a vessel in 2023 and should be marine certified and available for commercial delivery by 2024, according to the company website.

Calendar

MAY

May: The Suez Canal Economic Zone (SCZone) plans to hand over a new 1k-meter container berth to the East Port Said Port.

May: The ArabAcademy for Science, Technology and Maritime Transport (AAST) will roll out its first locally-made electric cargo transport vehicle.

1-4 May (Monday-Thursday): Select USA Investment Summit, National Harbor, Maryland, USA.

1-4 May (Monday-Thursday): Arabian Travel Market, DWTC, Dubai.

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

8-10 May (Monday-Wednesday) Global Green Future Fuel (G2F2) Meridien Hotel, Dubai.

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

9-12 May (Tuesday-Friday): Transport Logistic, Trade Fair Center Messe München, Munich, Germany.

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

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

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

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

15-16 May (Monday-Tuesday): The Road and Traffic Expo, Abu Dhabi National Exhibition Centre, Abu Dhabi.

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

15-19 May (Monday-Tuesday):The UAE Maritime Week.

16-17 May (Tuesday-Wednesday): Africa Forum of Investment and Commerce, Sheraton Hotel, Algiers, Algeria.

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

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

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

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

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

18-19 May (Thursday-Friday): XIV International Russia—Islamic Wold: KazanForum, Kazan Expo, Kazan, Russia

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

29-31 May (Monday-Wednesday): Translogistica Libya 2023, Misurata, Libya.

JUNE

June: Suez Canal Economic Zone holds a roadshow in Delhi.

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

12-15 June (Monday-Thursday): Saudi Plastics & Petrochem, Riyadh, KSA.

14-16 June (Wednesday-Friday): International Conference on Models and Technologies for Intelligent Transportation Systems, Nice, France.

20-23 June (Tuesday-Friday): Conference on the Marine Transportation System Innovative Science and Technologies Toward Greater Sustainability, Washington, DC, US.

JULY

1 July (Saturday): A new greenfield liquid bulk terminal in Khalifa Port Abu Dhabi will kick off operations.

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.

NOVEMBER

1 November (Wednesday): Smart Maritime Network Dubai Conference, Conrad Dubai, UAE.

14-15 November (Tuesday): Supply Chain & Logistics Arabia, Narcissus, Riyadh, Saudi Arabia.

15 November (Wednesday): Leaders in Logistics UAE Summit, Dubai.

21-23 November (Tuesday-Thursday): Intermobility Expo 2023, Dubai World Trade Center, Dubai, UAE.

EVENTS WITH NO SET DATE

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

2H2023: Expansion of Baghdad International Airport to begin.

2024

FEBRUARY 2024

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

12-15 February (Monday-Thursday): African Air Expo, Cape Town.

28 February-1 March (Wednesday-Friday): MENA Transport Congress and Exhibition 2024, Dubai.

MARCH 2024

12-14 March (Tuesday- Thursday): IATA World Cargo Symposium, Hong Kong International Airport.

MAY 2024

2-3 May (Thursday-Friday): Geneva Dry, Geneva, Switzerland, Hotel President Wilson.

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.

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