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TODAY: HMM’s shipping line linking MENA ports with India and the Far East is launching in September + Houthi tariff hike could impact Yemeni ports

Good morning, friends. It’s a brisk news day in the logistics world in what’s shaping up to be a slow week as the summer lull continues.

THE BIG LOGISTICS STORY- There isn’t much going on, but we did take note of one big story out of Qatar: Qatar Post acquired an additional 40% stake in e-commerce platform Turkish Souq, a JV it established with Turkish postal service PTT in 2018.

HAPPENING TODAY-

WATCH THIS SPACE #1- Iran’s top diplomat to visit KSA soon: Iranian Foreign Minister Hossein Amirabdollahian is scheduled to visit Saudi Arabia “soon,” state news agency Mehr reports, citing statements from Foreign Ministry spokesperson Nasser Kanaani. Iran’s President Ebrahim Raisi has received an invitation from the Saudi king to visit the country, but no date has been set, Kanaani said The agenda will include “consultations between the two countries in the regional and international fields and the economic issues of the two countries is on the agenda of Iran and Saudi Arabia,” the foreign ministry spokesperson is quoted as saying.

WATCH THIS SPACE #2- New key MENA-Far East shipping line to launch in September: Korean shipping giant HMM’S new FIM service — linking MENA ports with the Far East, India and the Mediterranean — is set to launch during the first week of September according to a statement.The novel line will have a standard container capacity of 10k, with 12 allocated container ships linking ports across South Korea, China, Singapore, Malaysia, India, Saudi Arabia, Egypt, Greece, Italy, and Spain, within the span of 84 days.

Houthi tariff hike could strike blow to Yemeni ports : Houthi authorities’ 100% tariff on goods departing from territories controlled by Yemen’s internationally-recognized government could have negative repercussions on port operations, Asharq Al Awasat quotes sources as saying. The new tariffs — which are up from the 20% charged previously — will force traders to transfer their operations to the Houthi-controlled port of Hodeida or face overwhelming losses, which would severely impede activity at the country’s other ports, Asharq Al-Awsat explained.

Background: Since 2017, the Houthis have set up seven crossings to monitor the transit of goods into territory they control, according to Abu Dhabi’s Al Ain. The crossing points were used to levy tariffs on merchandise that Yemen’s government had exempted from fees in order to curb prices, Al-Ain wrote. The Houthis say the goal of the tariff hike is to boost imports via the Houthi-controlled Hodeida port, according to the circular carried by Al Ain.

DATA POINT #1- Iran has recorded a 2.2% y-o-y increase in loading and unloading to 82 mn metric tons at its ports during its fiscal year 2022-2023, which ended on 20 March, Mehr News Agency quotes Iran’s Ports and Maritime Organization CEO Ali Akbar Safaei as saying. Exports from Iran accounted for 70% of total activity at the ports, according to Safaei. Meanwhile, transit through Iran’s ports rose by 39% y-o-y, mainly on the back of a surge in shipments from Russia and Europe, Safaei added.

DATA POINT #2- Kuwait International Airport saw a 23% y-o-y increase in the number of flights in July, the director general of the Directorate General of Civil Aviation (DGCA) Emad Al Jalawi said, according to Kuwaiti news agency KUNA. A total of 16.1 mn kg of cargo was transported by air, with 12.7 mn kg being imports.

DATA POINT #3- Alexandria Port in Egypt saw a 20% y-o-y increase in ship traffic in July, receiving some 375 ships, according to an Alexandria Port Authority statement. General cargo vessels recorded the highest growth at 54.6% y-o-y, while container ships witnessed a 17.7% rise and bulk vessels saw a 19.3% increase.

DATA POINT #4- Oman Air Cargo saw a 42% y-o-y increase in cargo volumes in 1H 2023, according to a press release. The period saw total revenues from cargo exceed OMR 22.3 mn despite a dip in yield and challenging market conditions, according to the press release, which did not clarify how that compares to its performance during the same period last year.

MARKET WATCH- Pakistan has temporarily halted Russian oil imports due to “limited gains,” making more room for imports from the Middle East, Pakistan Today reports, citing sources in the know. Pakistani refineries reportedly found that Russian crude is reaping more furnace oil than petrol, several Pakistani news outlets quote sources as telling Pakistani daily The News. The country is, however, willing to restart oil imports with Russia if cheaper rates are offered, reports say.

This is good news for Gulf exporters: Other countries including Saudi Arabia, the UAE, and Kuwait have been supplying Pakistan with crude oil and petroleum products at more attractive prices, sources said.

NON-LOGISTICS REGIONAL HEADLINES:

UAE: An anticipated Comprehensive Economic Partnership Agreement (CEPA) between UAE and Pakistan — set to be signed in the fourth quarter of the year — is expected to boost bilateral trade by up to 20% annually. (Khaleej Times)
Egypt: Egyptian expats will be allowed to buy a USD-denominated pension plan in the country through Misr Life Ins. and the National Bank of Egypt, Egypt’s Financial Regulatory Authority chief Mohamed Farid said. (Enterprise)

CIRCLE YOUR CALENDAR-

CIRCLE YOUR CALENDAR- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial, or fill out this form and we’ll be in touch.

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

CIRCLE YOUR CALENDAR-

The Sustainable Maritime Industry Conference will be taking place on 4-6 September 2023 at the Ritz Carlton in Jeddah, Saudi Arabia. The three-day conference will bring together more than 50 speakers to discuss sustainability, new technologies, innovation and digitalization, and capacity building in the maritime industry.

LISTEN TO OUR PODCAST-

MISSED OUR PREVIOUS FORUMS? The EnterprisePodcast has you covered : The Enterprise Podcast’s forum series has been bringing you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum and Enterprise Climate Forum.

WANT TO LISTEN? Head to: Apple Podcasts | Spotify | Google Podcasts | Anghami.

IN THIS WEEK’S EPISODE- It’s the very first panel of the Enterprise Climate Forum: Egypt brought home major victories from COP27, signing framework agreements for about USD 85 bn worth of green hydrogen projects, and announcing more than USD 10 bn in funding for the Nexus for Food, Water and Energy (NWFE) program. While we have a long way to go before much of the wins from COP27 will be tangible to the private sector, the opportunities in green hydrogen and NWFE are “now.” Our panelists helped explain how these two can be made actionable. We were joined by Jorgo Chatzimarkakis, CEO of Hydrogen Europe, Khalid Hamza, Director and head of Egypt at the European Bank for Reconstruction and Development, and Khaled Naguib, CEO of Hydrogen Egypt.

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

Qatar Post acquires 40% of e-commerce platform Turkish Souq

Qatar Post has acquired an additional 40% stake in e-commerce platform Turkish Souq, a JV it established with Turkish postal service PTT in 2018, Doha News reports, citing Turkish daily Hurriyet. The reports did not clarify the size of the stake Qatar Post now has in the JV or the value of the transaction. However, the JV was previously “owned equally” between PTT and Qatar Post, according to an earlier Qatari Transport Ministry statement.

The move follows Turkish President Recep Erdogan’s recent visit to Qatar as part of his tour of Gulf nations, which also included Saudi Arabia and the UAE, and aimed at fostering economic collaborations and attracting investments.

About Turkish Souq: The e-commerce platform sells a range of Turkish goods, including furniture, clothing, sports equipment, and beauty products, to over 50 countries across the world, according to the ministry statement.

Agility’s net income rises 2% y-o-y 1H 2023 on the back of fresh acquisitions

Kuwaiti logistics outfit Agility reported a 11.7% y-o-y drop in net income to KWD 14.2 mn in 2Q 2023 due to increased financing costs and higher debt incurred for expansion, according to a Dubai Financial Market disclosure (pdf). Revenue however more than doubled during the quarter, increasing 136.8% to KWD 327.8 mn. The company’s net debt rose to KWD 881.5 mn, an 89% y-o-y increase, according to its earnings release.

Agility reported a 2.3% y-o-y increase in net income to KWD 29.5 mn in 1H 2023, attributable to the increase in company’s operating income,in addition to its newly acquired subsidiaries — Menzies and HG storage — contributing to earnings for the first time, according to the bourse statement.

REMEMBER- Agility acquired UK-based aviation services firm John Menzies in August 2022 and merged it with its subsidiary, National Aviation Services, to form the world’s largest aviation services provider, Menzies Aviation. The company also acquired a 51% majority stake in HG Storage International in March 2022. Agility’s Emirati subsidiary, Tristar, also acquired HG Storage International, a joint venture between HNA Group and Glencore Group last August.

Breakdown: Agility’s aviation unit — Menzies Aviation — saw revenues soar 861.8% y-o-y to KD 162.2 mn during the quarter as the aviation industry continues to experience a post-pandemic rebound, marked by increased flight volumes.The company’s fuel logistics unit Tristar also saw revenues rise 76.2% y-o-y during the quarter, driven by strong performance of its maritime and fuel farms segments and its acquisition of HG Storage International.

Agility’s other controlled businesses achieved a 9% y-o-y rise in revenue to KWD 82.1 mn: Notable contributors included Agility Logistics Parks (ALP), which reported 7.8% y-o-y revenue growth, although it faces challenges related to land disputes with the Kuwaiti government. United Projects for Aviation Services Company (UPAC) saw a 1.2% y-o-y revenue increase during the quarter, while Global Clearinghouse Systems (GCS), Agility’s customs-modernization and ports operation unit, achieved 6.3% y-o-y revenue growth.

OTHER EARNINGS NEWS-

The Bahrain Ship Repairing and Engineering Company recorded a 287.1% y-o-y surge in net income to BD 760.5k in 2Q 2023,according to its latest financials (pdf). The company’s total revenues during the period also saw a 43.1% y-o-y bump to BD 2.2 mn. Net income in 1H 2023 jumped 123.5% y-o-y to BD 1.3 mn, while revenues increased 29.24% y-o-y to BD 4.2 mn.

Enterprise Explains: What needs to be done to mitigate the impact of climate change on trade?

Enterprise explains: What shipping companies are doing to mitigate the impacts of climate change on trade (Part 2). Last week, we looked at the impact of climate change on global trade routes, and how logistics infrastructure — ranging from ports to canals — are seeing fundamental changes as the world warms up. Shipping companies and logistics firms have been exploring a vast array of solutions and alternatives to mitigate these impacts, from turning to new technology, such as AI, to opting for alternative trade routes and introducing new types of vessels to accommodate low water levels.

Shipowners are currently having to adapt to these changes before our eyes: The Panama Canal — which directly depends on the availability of freshwater for the passing of ships — has been forced to limit traffic as it faces low water levels during the summer. The traffic build up is causing congestion and pushing shipping companies to shift their routes to the Atlantic Basin, S&P Global writes. The traffic restrictions imposed by the canal Authority have caused wait times to surge to 20-21 days, and led shipowners to look for a “path of least resistance,” S&P quotes a ship owner as saying. Shipowners are even willing to charge less on rates from the US Gulf to Brazil or Europe to avoid the canal, S&P writes.

Beyond the Panama Canal crisis, shipping companies are looking ahead and adapting by introducing low-water tankers: Chemical company BASF recently launched a vessel with Stolt Tankers with a new design that can accommodate low water levels in Europe’s Rhine river.

The new tanker boasts larger dimensions of 135 by 17.5 meters to help achieve a high load-bearing capacity, as well as a hydrodynamically optimized, lightweight hull and a special propulsion system adapted to allow safe operation in extreme low water conditions. The design allows the tanker to optimize cargo capacity to some 5.1k tonnes, the statement said. The cost of the vessel, though, is hefty, at EUR 10 mn, Bloomberg reports.

Maersk is also working to optimize ship designs and operations to mitigate the impact of extreme weather, Maersk’s head of marine standards, Aslak Ross, is quoted as saying by technology solution provider Wartsila. “We have, for instance, strengthened the monitoring from our voyage center, lowered the threshold when seeking additional weather routing advice and taken an ever further conservation approach to balancing energy efficiency and navigational safety,” he explained.

But adoption is slow: Freight operator HGK, which operates 350 barges in European rivers, currently only has four low-water vessels, with three more underway, Bloomberg reports.

Infrastructure changes are not off the table — but they’re not ideal: Expanding and dredging shipping channels is another potential solution — but one that’s both expensive and harmful to the environment, CNBC quotes Deutsche Bank Economist Marc Schattenberg saying.

Other modes of transport are also more expensive: Switching to other modes of transport is an option but it is expensive — Schattenberg gives the example of a 135-meter long Rhine, with a 3 meter draft, which can carry some 2.7k tons of freight. It would need the equivalent of 110 large trucks to carry the same amount of freight, he adds.

SO WHAT COULD WORK?

Regionalization — or reshoring and nearshoring — is one of the most likely scenarios: One key way shipping firms are looking at making their supply chains more resilient is through reshoring, which involves moving production and manufacturing processes from abroad back to their original countries, and nearshoring, where a company moves production to a country closer to their location and time zones, Wartsila quotes Head of Utah State University’s management department Vijay Kannan as saying. This helps make supply chains shorter and can reduce lead times, freight costs, and emissions, while giving leverage to the companies to increase their control, responsiveness, and resilience, supply chain expert Mark Millar tells Wartsila.

Combating disruption to global trade routes also requires climate risk management: Relying on advanced weather modeling and predictive analytics will help organizations understand how climate change will impact their supply chains, according to Everstream Analytics. Shipping companies can leverage tech to anticipate risks, and make proactive decisions to minimize disruptions and delays. Investments in the expansion of predictive software are “conceivable,” CNBC quotes Deutsche Bank Economist Marc Shattenberg as saying.

Planning for the “new normal” with AI monitoring: High-impact weather and climate events — from heat to drought and flooding — are expected to be the new normal, Everstream writes separately. It will no longer suffice to rely on historical weather records for shipping companies to plan their operations, which is where AI modeling comes in, Everstream writes. An AI-powered supply chain can provide for maximum visibility, predictive analytics, and a foundation for autonomous systems to reduce costs to protect the supply chains’ hidden fragilities, according to an Everstream Report (pdf).

Again, time and money are of the essence: A number of companies are using predictive software, but these investments need time before they make substantial returns, Tim Beckhoff, a procurement and supplier management expert at McKinsey, told CNBC. “The ones who are really successful are the ones who started looking to this four or five, six years ago,” Beckhoff said.

Multinationals are upping use of AI to manage supply chains + China now has the world’s largest merchant fleet

Multinational firms are turning to generative AI to manage increasingly complex supply chains, the Financial Times reports. Unilever, Siemens, and Maersk are some companies that have begun employing AI to locate suppliers and negotiate contracts with suitable partners, helping them avoid tensions and problems with the law. This comes as geopolitical tensions and more stringent ESG requirements demand that companies work to make their supply chains more resilient, whether by pruning connections with suppliers linked to human rights and environmental abuses or by spotting vulnerabilities.

AI-based solutions can scour bns of data points to suggest the best supply chain routes, permitting scale and efficiency that is considerably higher than that available through human agents, FT explained. The method is gaining traction within the industry, with 96% of companies looking to roll out AI solutions to supply chain networks, according to a Freightos poll of 55 logistics executives cited by FT.

But AI is not as accessible as it’s touted to be: Shortages of high-powered microchips are holding back China’s AI industry, Bloomberg reported. The Biden administration has cut off the country’s access to the most advanced chips produced by Nvidia Corp and has also curbed investment by American firms in China’s AI and quantum computing industries. Alibaba is feeling the pinch, with CEO Daniel Zhang noting that the company was unable to meet demand for AI training from its clients due to the shortages, according to Bloomberg.

China edges past Greece with world’s largest merchant fleet: China has surpassed world leader Greece in terms of the gross tonnage (gt) of its merchant fleet, Splash reports, citing a Clarkson Research survey. Greece still holds the lead in terms of fleet deadweight (dwt), while Japan has kept third place in the ranking. The latest results put China’s fleet at 249.2 mn gt, Greece’s at 249 mn gt, Japan’s at 181 mn gt, and South Korea’s and the US’ at 66 mn gt. China is also acquiring vessels to bolster its merchant fleet at a faster rate than Greece, the Clarksons Research weekly report noted.

Aircraft lessor DAE inks agreement for 64 Boeing aircraft

DAE bolsters its Boeing fleet by acquiring Chinese order book: Regional aircraft lessor and aviation services firm Dubai Aerospace Enterprise (DAE) has acquired the rights, interests, and obligations of a portfolio of 64 Boeing 737 MAX aircraft from a China Aircraft Leasing Group Holdings Limited (CALC) subsidiary, according to a press release. The aircraft are slated for delivery in 2023. The financials of the transaction were not disclosed. The move is set to up the number of DAE-owned, managed, committed, and mandated-to-manage aircraft to approximately 550, valued at USD 20 bn, DAE’s statement explained.

Calendar

AUGUST

Oman will award Ras Al Hadd Airport consultancy contract.

27 August (Sunday): Last day for companies to bid for the construction tender for Kuwait’s Mubarak Al Kabeer Port.

28 August (Monday): Registration for Emirates Postal Group’s Logistics Unleashed competition concludes.

SEPTEMBER

4-8 September (Monday-Friday): Logistics and Transport Management, Dubai.

5 September (Tuesday): The Leaders in Logistics KSA Summit, Crowne Plaza Al Waha, Riyadh.

6-7 September (Wednesday-Thursday): Sustainability LIVE London, Business Design Centre, London.

11-14 September (Monday-Thursday): The Libyan Moroccan Forum for Trade and Business, Tangiers, Morocco.

11-15 September (Monday-Friday): London International Shipping Week 2023, International Maritime Organization, London, United Kingdom

12 September (Tuesday): Global Pharma Logistics Summit 2023, ITC Maratha, Mumbai, India.

18-19 September (Tuesday-Wednesday): Enterprise Finance Forum, St. Regis Hotel, Cairo.

20-21 September (Wednesday-Thursday): Saudi Maritime Congress, Dhahran Expo, Damman, Saudi Arabia.

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

20-23 September (Wednesday-Saturday): MTB Workboats, Hyatt Regency Dubai, Dubai.

25-27 September (Monday-Wednesday): Airline Economics Growth Frontiers Middle East & Africa, The Ritz-Carlton, Dubai, UAE.

25-27 September (Monday-Wednesday): Agriculture Horticulture Development Board’s trade mission to Kuwait.

26-28 September (Tuesday-Thursday): ProcureCon, Hyatt Regency Barcelona Tower, Spain.

26-28 September (Tuesday-Thursday): Breakbulk Americas, George R. Brown Convention Center, Houston, Texas.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

OCTOBER

Egypt’s Suez Canal Economic Zone (SCZone) goes on a roadshow to South Korea.

3-4 October (Tuesday-Wednesday): IATA World Sustainability Symposium, Madrid, Spain.

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

10-12 October (Tuesday-Thursday): Autonomous E-mobility Forum, Doha, Qatar.

24-25 October (Tuesday-Wednesday): Future Fuels Europe, Amsterdam, Netherlands.

26-29 October (Thursday-Sunday): International Congress of Aviation and Space Medicine, Conrad, Etihad Towers, Abu Dhabi, UAE.

30 Oct-2 Nov (Monday-Thursday): IAPH World Ports Conference, Abu Dhabi, UAE.

30-31 October (Monday-Tuesday): Gartner Supply Chain Planning Summit, London, UK.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

NOVEMBER

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

9-15 November (Thursday-Wednesday): Intra-AfricanTrade Fair, Cairo, Egypt.

13-17 November (Monday-Friday): Dubai Airshow, Dubai World Center, UAE.

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

14-17 November (Tuesday-Friday): IATA Slot Conference, Dubai World Trade Centre, Dubai, UAE.

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

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

21-23 November (Tuesday-Thursday): Touchdown Middle East, Gulf Hotel, Bahrain.

23 November (Thursday): Global Supply Chain and Logistics Summit, Grand Millennium Hotel Business Bay, Dubai, UAE.

30 November-3 December (Saturday-Tuesday): Handling Expo, Egypt International Exhibition Center, Cairo, Egypt.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

DECEMBER

10-11 December (Tuesday-Wednesday): Invest in Logistics, St.Regis Almasa Hotel, New Administrative Capital, Egypt.

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.

3Q 2023: Design and supervision contract for Oman’s proposed Musandam Airport to be awarded.

Before the end of the year: The first phase of the Ain Sokhna port redevelopment will wrap.

2024

1Q 2024: Construction of phase 3 of Agility’s logistic park in Abidjan, Côte d’Ivoire to be completed.

1H 2024: Work is scheduled to begin on the 162 km Rasht-Astara railway in Iran.

FEBRUARY 2024

13th World Trade Organization Ministerial Conference, Abu Dhabi, UAE.

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

5-6 March (Tuesday-Wednesday): MRO Middle East, Dubai Trade Center, Dubai, UAE.

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.

JUNE 2024

19-21 June (Wednesday-Friday): World Freezones Organization’s Annual International Conference and Exhibition, Bari, Italy.

NOVEMBER 2024

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

DECEMBER 2024

10-12 December (Tuesday-Thursday): Middle East Business Aviation, DWC, Dubai, UAE.

2025

Mid-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.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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