Another Suez Canal rival, courtesy of Iraq

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What we're tracking today

TODAY: Iran eyes multinational transport fund + Google Cloud to establish data centers in Kuwait

Good morning, everyone — we hope you had a nice, restful weekend. We have a packed issue for you this morning, with tons of updates from across the region. Let’s dive in.

THE BIG LOGISTICS STORY- Iraq launched a USD 17 bn road development project, which will involve 1.2k km of railways and highways linking Asia to Europe.

ICYMI-Suez Canal traffic back to normal after stranded ship towed: Three tugboats towed a large vessel that had been stranded for several hours in the Suez Canal on Thursday, according to a Suez Canal Authority statement. The ship suffered a technical malfunction at around 5:30am and was towed two-and-a-half hours later, Reuters reports. Canal traffic returned to normal by 11am. The ship was identified as Xin Hai Tong 23, a 190m bulk carrier sailing under the Hong Kong flag and operated by shipping agent Leth Agencies.

PSA- UAE calling on residents to register transport vehicles: The UAE’s Federal Authority for Identity, Citizenship, Customs, and Port Security is calling on UAE residents own trucks or other vehicles used to transport goods to register on the Electronic National System for Tracking Trucks and Shipments before 30 October, WAM reports. The system helps Emirati authorities track the movement of trucks and shipments through electronic tracking devices that are installed on shipments and trucks at the country’s ports.

Iran calls for multinational transport fund: Iranian officials are calling for the establishment of a multinational fund for logistics companies in countries in the region to improve transit, according to Tasnim News Agency. In a regional ministerial meeting in Iraq, Iran’s Deputy Roads and Urban Development Minister Shahriyar Afandizadeh said governments should promote trade and supply chain management through multinational agreements and aligned policies. The Iranian proposal also involves establishing a joint steering committee to manage and supervise the initiative.

WATCH THIS SPACE #1-Google Cloud to establish data centers in Kuwait:Google Cloud is set to establish three data centers in Kuwait to support the country’s digital transformation, Kuwait’s Communication and Information Technology Regulatory Authority said in a statement. Google Cloud will also hold an annual cloud computing training program, the first year of which will involve training 1k government employees, 1k fresh graduates, and 1k women.

Google Cloud is doubling down on the region: The move follows Google’s launch of its first Middle East cloud region in Qatar last week.

WATCH THIS SPACE #2-Saudi Public Investment Fund to invest in DigitalBridge:The Saudi Public Investment Fund will invest in digital infrastructure investment firm DigitalBridge to develop data centers in Saudi Arabia and the GCC, according to a press release. The investment is meant to support the development of digital infrastructure in Saudi Arabia.

WATCH THIS SPACE #3- UAE port terminal operator wants direct UAE-Pakistan shipping route: UAE-based port terminal operator Gulftainer is planning to establish a direct shipping route between Khor Fakkan in the port of Sharjah and Karachi, Pakistan, Arab News quotes CCO Andrew Hoad as saying. The port terminal operator is trying to “hook up with shipping line services that are looking to directly connect the UAE with Pakistan,” Hoad said. He said the short steaming time — just 25-26 hours — between the two destinations and the quick clearance procedures makes this a rational alternative to going through the Strait of Hormuz.

Roadshows to lure exporters: Gulftainer will hold roadshows in Pakistan to attract exporters. The operator will be “talking to the exporting community for various commodities and trying to sell to them the benefits of that fast transaction into the UAE through Khor Fakkan,” Hoad said.

WATCH THIS SPACE#4- Pakistan looking to GCC for USD 500 mn for port projects:Pakistan is reportedly negotiating a government-to-government agreement with the UAE to fund USD 500 mn worth of port projects, Pakistani news outlet The News International quoted Pakistani Maritime Affairs Minister Faisal Sabzwari as saying. Work on three projects is reportedly underway, including bulk terminals, Sabzwari said, adding that 1.2k acres of industrial parks are set to be built in Port Qasim, Pakistan.

DATA POINT #1- DP World slashed 4% of its total emissions and 5% of its gross carbon emissions in 2022, according to its Environmental, Social, and Governance report (pdf). The company joined the Green Shipping Challenge last year, pledging an investment of up to USD 500 mn to reduce CO2 emissions by around 700k tons within five years.

DATA POINT #2- Saudi Arabia’s merchandise exports 2023 fell 25.3% y-o-y in March to SAR 106.1 bn, according to trade figures (pdf) published by KSA’s General Authority for Statistics. The drop was due to a decline in oil exports, which fell by SAR 30 bn, or 26.5% y-o-y. Merchandise exports in March rose 4.4% on a monthly basis to SAR 4.4 bn.

MARKET WATCH-

The Baltic Exchange’s main sea freight index fell at its fastest rate in four months on Friday as shipping rates declined across the board,Reuters reports. The index fell 3.5%, while the overall index, which factors in rates for capesize, panamax, and supramax vessels hauling dry bulk, fell 15.3% on a weekly basis — its biggest tumble since 20 January. The capesize index — which is the index’s largest component — was down 20%. Meanwhile, the panamax and supramax components of the index fell 8.4% and 12.3% for the week, according to Reuters.

Drewry’s weekly World Container Index (WCI) is down 2% this week and 78% y-o-y, according to Drewry. The composite index value is 84% below its peak in September 2021, but remains 37% higher than the 10-year average, indicating a return to normalcy following the pandemic. The index is 19% above average pre-pandemic rates.

LNG exports from the US in the first four months of 2023 saw the country become the biggest LNG exporter in the world, pulling ahead of Australia and Qatar, according to ship brokerage reports and Refinitiv data cited by Hellenic Shipping News. The US exported 28.8 mn tons of LNG in the first four months of 2023, which was enough to put the country as the world’s top exporter despite only representing a 2.5% increase from the same period last year. Seaborne LNG transfers started to surge in 2022 on the back of higher demand from Europe as the region sought to diversify away from Russian pipeline supplies. LNG loadings in the first four months of 2023 continued to grow and were up 3.8% y-o-y at 140.3 mn tons, according to data cited by Hellenic Shipping News.

Iraq unveils ambitious USD 17 bn road and rail initiative to connect Asia and Europe

Iraq has launched a USD 17 bn project to link Grand Faw Port in Iraq’s southern Basra province to Turkey in the north through rail and road infrastructure, Reuters reports. The project’s launch was announced at the Development Road Conference in Baghdad this weekend, according to the Iraqi News Agency. By significantly reducing travel time between Asia and Europe, this project aims to compete with Egypt’s Suez Canal and to revitalize the country’s economy following years of war and crisis.

The details: The project will involve high-speed trains that can transport goods and passengers at speeds of up to 300 km per hour, while the road network is anticipated to facilitate the transportation of some 5-6 mn containers and mns of passengers annually, Bloomberg reports. This plan also includes establishing connections to local industrial hubs and incorporating an energy component that may involve oil and gas pipelines, according to Reuters.

The timeline: The project will be completed in three stages, with the first stage slated for completion in 2028, the second in 2038, and the third in 2050, according to Bloomberg. The project could after 2028 be expanded to become a “new window for exporting gas and crude oil from Iraq and neighboring countries to Turkey and Europe to meet future energy consumption requirements,” government spokesperson Basim Al Awadi told reporters, according to the business information service.

Iraq aims to secure financing from neighboring countries for the project, which is expected to generate around USD 6 bn in annual revenue, Al Awadi said. Some USD 10.5 bn will be allocated towards the construction of 1.2k km of rail infrastructure and the procurement of new trains. The remaining USD 6.5 bn will be allocated for 1.2 km of highways, according to Bloomberg.

The Grand Faw port is crucial to the project: The government plans to make the first phase of the port — which was planned over 10 years ago — operational by mid-2025, Iraqi Transport Minister Razzak Al Saadawi said at the presser announcing the project (watch, runtime: 00:52). The port is currently halfway finished, Director General of the General Company for Ports of Iraq Farhan al Fartousi said, according to Reuters.

The project represents a major shift from Iraq’s current outdated transportation system: Iraq’s train service currently has only a few operational routes, including “slow oil freight” and one overnight passenger train that makes the 500 km journey from Baghdad to Basra in 10 to 12 hours, Reuters writes.

What’s next: “In the next stage, the GCC will study the mechanism of benefiting from this project,” the Undersecretary of Qatar’s Transport Ministry Hamad Issa said, INAreports.

Adnoc L&S draws historic demand in IPO, raising USD 769 mn

Adnoc L&S raises USD 769 mn in 163x oversubscribed IPO:Adnoc Logistics & Services sold a total of 1.41 bn shares — or a 19% stake — at AED 2.01 per share in its IPO, raising some USD 769 mn following a bookbuilding process that saw shares 163x oversubscribed, the company said in a statement (pdf). The offering values the company at USD 4.05 bn (AED 14.9 bn). The company will debut its shares on the ADX on 1 June under the ticker ADNOCLS.

Most in-demand IPO globally this year: The company drew orders worth USD 125 bn (AED 460 bn) from institutional investors in a number of countries, including from the UAE, and from retail investors including Adnoc employees and its retirees. The company also saw the highest-ever oversubscription rate for an IPO in the UAE, Adnoc Group CFO Adnoc Khaled Al Zaabi said. The retail tranche alone drew in some USD 31 bn in demand, which indicates a 269x oversubscription level, the statement added.

Refresher: The number of shares being sold was upped to 1.41 bn shares (a 19% stake) from 1.11 bn shares (a 15% stake) due to strong investor demand across all tranches.

Post-IPO ownership structure: Once the company’s shares begin trading on the ADX, Adnoc will continue to own an 81% majority stake in Adnoc L&S. The 19% stake sold in the IPO will be split between shares traded on the ADX (76.6% of the IPO offering) and cornerstone investors — which include Al Seer Marine Supplies & Equipment, National Marine Dredging Company, Alpha Oryx, and Abu Dhabi Pension Fund (23.4% of the IPO offering).

This IPO is the sixth company Adnoc has listed within five years, Al Zaabi notes. The company’s landmark IPOs of Adnoc Distribution, Adnoc Drilling, Fertiglobe, Borouge, and Adnoc Gas have together raised more than USD 8 bn, state agency Emirates News Agency (WAM) writes.

Advisors: Moelis & Co has signed on as the independent financial advisor for the offering. Citigroup, First Abu Dhabi Bank, HSBC Bank Middle East, and JP Morgan Securities are acting as global coordinators and bookrunners, while Abu Dhabi Commercial Bank, Arqaam Capital, Crédit Agricole, EFG-Hermes UAE, International Securities and Société Générale will also offer their services as bookrunners. Abu Dhabi Islamic Bank, and Al Maryah Community Bank have been appointed as receiving banks, while First Abu Dhabi Bank was chosen as lead receiving bank.

SARCO invests USD 50 mn in new logistics center in Khazaen

SARCO to set up USD 50 mn logistics center in Oman’s Khazaen: Oman-based Al Seeb Technical (SARCO) — a subsidiary of Al Mana Qatari Group — inked a USD 50 mn agreement to establish a new logistics center in Oman’s Khazaen Economic City, according to a statement. The new 37k square meter center will provide storage and distribution services for SARCO, Zawyareports.

About SARCO: Al Seeb Technical — a subsidiary of Al Mana Qatari Group — provides services including trading, contracting and turnkey ventures, according to its website. It is also the official distributor of companies such as Samsung, Casio, Citizen, Haier, Acer, Candy and BenQ.

About Khazaen: Khazaen Economic City serves as an integrated logistics and industrial hub and is situated in Barka on the Muskat-Batinah expressway.

US-based eVTOL outfit Odys will set up assembly plant in Abu Dhabi

Odys Aviation to set up assembly plant in Abu Dhabi: US-based hybrid-electric VTOL aircraft manufacturer Odys Aviation will set up its headquarters, along with a high-volume assembly and maintenance plant, in Abu Dhabi,WAM reports. This comes as part of its participation in the UAE’s Economy Ministry’s NextGen FDI program, which helps businesses launch and scale their operations in the UAE.

The details: Odys’ aircraft — which are designed for passenger, cargo, and emergency services — will be able to deliver all-electric propulsion for 320 km and hybrid-electric propulsion for upwards of 1.2k km, WAM reports. The company plans to export an undisclosed number of aircraft, which will be the first aircraft assembled in the UAE, it adds. The move is expected to create upwards of 2k direct and indirect jobs.

The timeline: Odys’ current timeline sees a full-scale prototype being available for testing in 2025 and a final product going into service in 2027.

A boon for decarbonization efforts: The introduction of Odys’ aircraft to the UAE and GCC could help reduce carbon emissions from air travel within the GCC by as much as 76%, WAM writes.

… and for regional connectivity: “Our aircraft will also mean brand new opportunities for domestic air connectivity in the UAE and regional flying between key GCC cities, cutting door-to-door times in half compared to conventional travel options today, and doing so in a carbon friendly way,” commented Co-Founder and CEO at Odys Aviation James Dorris.

KSA + Canada restore diplomatic ties + KSA, Iraq mull special economic zone

Saudi Arabia + Canada restore diplomatic ties: Saudi Arabia’s Foreign Affairs Ministry plans to restore diplomatic relations with Canada for the first time since 2018, according to a Saudi governmentstatement.This would end a five-year rift with Canada, which began when it accused Riyadh of human rights violations over jailed activists, damaging relations — including trade — between both countries. The decision followed discussions held between Crown Prince Mohammed bin Salman and Canadian Prime Minister Justin Trudeau at the APEC Summit in Bangkok last November.

Saudi Arabia + Iraq discuss establishing special economic zone: Iraqi and Saudi officials said they intend to work on establishing a special economic zone on the border between the two countries, Union of OIC News Agencies reports. The officials, who spoke at a meeting of the Saudi-Iraqi Coordination Council, also agreed to strengthen their trade, security, political, cultural, educational, tourism, and energy cooperation.

Also from the Saudi-Iraqi Coordination Council: Saudi Arabia will double the number of flights it has with Iraq by the end of the year, Iraqi News Agency reported, citing statements by KSA Transport Minister Saleh Al-Jasser.

ALSO WORTH KNOWING-

Qatar and Oman look to boost trade: Qatar FreeZones (QFZ) Authority Chairman Ahmad Al-Sayed and an Omani Commerce Ministry official discussed enhancing trade and investment during Mssen’s visit to QFZ. (Statement)
Qatar’s Minister of Commerce and Industry Mohammed bin Qassim Al Thani met with KSA’s Economy and Planning Minister Faisal bin Fadel Al Ibrahim to discuss enhancing bilateral cooperation in trade, investment, and industry. (Statement)
Saudi Arabia’sTransport and Logistics Deputy Minister Rumaih Al-Rumaih inked an agreement with Chilean Transport and Telecommunications Minister Juan Carlos Muñoz to enhance cooperation in air transport. (Statement)
Governor of China’s Yunnan province Wang Yubo andOman’s Commerce, Industry, and Investment Minister Qais Mohammed Al Yousef discussed boosting trade and cooperation in business, industry and investments in Oman’s freezones, Oman News Agency reports.
Iran and Uzbekistan are looking to remove trade barriers through a Preferential Trade Agreement. (Tasnim News Agency)
Saudi Deputy Transport Minister Rumaih Al-Rumaih and SpanishTransport Minister discussed boosting cooperation between the two nations. (Ministry statement)

China is not off the global trade map just yet. PLUS: E-commerce giants are scaling back their logistics plans + UAE becomes gold trade hub

Companies continue to rely on China despite its strained ties with the US: Companies like Chicago-based first aid kit producer Acme United say decoupling from China is no easy task given the country’s position as the world’s top exporter, Bloombergreports. The company recently invested in a Chinese-made printing press at less than half the cost of a similar machine from the US or Europe. This new machine will quadruple their capacity to produce alcohol wipes. While the company is exploring the potential for production in the Indo-Pacific region and East Africa, China’s dominance in steel production makes it impractical for the scissor producer to decouple from the country entirely.

Others echo the same sentiment: Policymakers at the Qatar Economic Forum have also acknowledged varying levels of closeness with China given its significance as an exporting powerhouse. The UK’s secretary of state for business and trade emphasized the pragmatic nature of their relationship, while the Saudi investment minister highlighted his country’s deep-rooted trade ties with China.

ALSO WORTH KNOWING-

The UAE has emerged as a gold trade hub, as Russian gold shipments divert from traditional export routes on the back of the war. (Reuters)
Several companies — including American Eagle, Blue Apron and Shopify— are going back on earlier plans to scale e-commerce fulfillment services as online shopping sees demand fall from pandemic highs. (Wall Street Journal)

MSC adds King Abdulaziz Port to India-South Africa service. PLUS: News from Qatar Airways Cargo, Aramex, Etihad Cargo, Etihad Rail, Menzies and Deliveroo

SHIPPING-

Dammam added to India-South Africa freight route: The Saudi Ports Authority (Mawani) has announced the addition of King Abdul Aziz Port to the India-South Africa freight route operated by leading container shipping company MSC. Dammam will be linked to major terminals including Mundra, Hazira, Nhava Sheva, Colombo, Port Louis, Durban, Khalifa, Jebel Ali, and Khalifa bin Salman. The shipping route — which began operating in early May — operates five vessels with an average holding capacity of 6k TEUs.

PORTS-

The region’s first port fully powered by renewables? APM Terminals Bahrain, the operator of the Khalifa Bin Salman Port, plans to launch a USD 10 mn solar power plant to help the port reach energy self-sufficiency by the end of the year, Al Watan reports. The port’s operator will install 20k solar panels capable of generating 18.5 GW of electricity annually to power various operations at the port, including container handling, cargo transport by cranes, and lighting. The project will help slash the port’s carbon emissions by 65% while securing a reliable and sustainable source of energy. This will be the region’s first seaport to fully rely on renewable energy, the news outlet notes.

All part of a decarbonization push by APM Terminals: The project is part of plans by APM Terminals to slash total emissions by 70% by 2030 and reach zero-carbon emissions by 2040. The project in Bahrain is among its main decarbonization efforts, the operator was quoted as saying.

AVIATION-

Qatar Airways Cargo + Envirotainer partner to transport temperature-sensitive pharma products: Qatar Airways Cargo and cold chain pharma transport company Envirotainer have partnered to transport temperature-sensitive pharma products, according to a press release. The companies will transport pharma products by using Envirotainer’s Releye and RLP solutions, which will ensure precise temperature control throughout the entire transport process.

ALSO WORTH KNOWING-

Etihad Cargo has been recognized by Freightweek’s Sustainability Awards as the Middle East’s sustainable cargo airline of the year for developing and launching sustainable solutions for customers and partners. (Statement)
Qatar Airways and Gulf Airwill resume direct flights between Doha and Bahrain on 25 May after a six-year hiatus. (Statement)
Etihad Rail has inked an MoU with UAE’s Interior Ministry to enhance security and safety measures. (Statement)
(Aramexhaslaunched Aramex Medical Express (AMX) to transport specimens on express routes for laboratories, clinics and hospitals. (Statement)
Agility subsidiary Menzies Aviation has entered into a joint venture with MYAirline to establish a ground services company in Kuala Lumpur International Airport (KUL). (Statement)
Food delivery giant Deliveroo is expandingacross Qatar, to the cities of Lusail, Old Airport, Nuaimi, Maamoura, Al Rayyan, and Umm Salal. (Doha News)

US-led Indo-Pacific trade talks end with agreement to boost supply chain resilience. PLUS: New terminal in Malaysia, Iran on de-dollarization, France ends short-haul flights

IPEF settles talks on supply chain coordination: Fourteen countries included in the Indo-pacific economic framework (IPEF) — the US’ new trade pact initiative for the region — have reached an agreement on supply chain collaboration, Bloomberg reports. The US initiative comes as a response to China’s growing influence as well as to compensate for withdrawing from previous efforts to set regional trade regulations. The IPEF supply chain agreement includes a “response network” to provide emergency communications on supply chains and the creation of a labor rights advisory board, US Commerce Secretary Gina Raimondo told Bloomberg.

ALSO WORTH KNOWING-

Malaysia is pushing forward with a fourth terminal at Port Klang on Carey Island comprising both container and conventional berths capable of handling 30 mn TEU and 20 mn tons of conventional cargo. (Seatrade Maritime News)
Iran is calling for Asian Clearing Union member states to move away from using the greenback in global trade. (Tasnim News Agency)
France has banned short-haul flights — public internal flights between French destinations — to reduce its environmental footprint. (Statement)

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.

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

29-31 May (Monday-Wednesday): Electric Vehicle Innovation Summit 2023 Adnec, Abu Dhabi

JUNE

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

1 June (Thursday): Adnoc L&S’ shares will debut on the ADX.

4-6 June (Sunday-Tuesday): IATA Annual General Meeting and World Air Transport Summit, Hilton Bomonti Hotel, Istanbul, Turkey.

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

8 June (Thursday): Fleet and Mobility Summit, Dubai.

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.

1 July (Saturday): New UAE Federal Tax Authority VAT Ecommerce rules take effect.

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

5 September (Tuesday): The Leaders in Logistics KSA Summit, Riyadh.

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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