Jordan’s Joramco inks 10-year MRO agreement with Ryanair

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What we're tracking today

TODAY: Joramco extends MRO agreement with Ryanair

Good morning, nice people. It’s a much quieter day on the regional logistics front, but we have all the latest afoot on the Red Sea along with a deeper look at how events are hammering the ins. and shipping markets.

HAPPENING TOMORROW- The UAE will kick off the Ship Finance and Trade Conference tomorrow in Dubai. The summit will gather decision makers from the shipping, ports, ship finance, maritime law, ins., shipbroking, and trade sectors to discuss challenges and opportunities that arise as the region ramps up infrastructure and services to cater to global trade.

PSA-

#1- Abu Dhabi Island will see a temporary ban on truck and heavy vehicles movements today, with restrictions in effect from 12:00 noon to 11.59 PM, Wam reports. The ban includes entrances to Sheikh Zayed Bridge, Sheikh Khalifa Bridge, Musaffah Bridge, and Al Maqta Bridge, WAM said.

#2- Maersk launches digital air freight booking service: A.P. Moller-Maersk has launched a new service allowing customers to digitally purchase air freight solutions, according to a press release. The service allows customers to book air cargo services online and see instant prices for some 70k airport connections across 90 countries, according to the release.

WATCH THIS SPACE-

#1- Iran’s IRISL inks agreements with domestic shipyards: The Islamic Republic of Iran Shipping Lines (IRISL) has signed agreements worth some USD 86 mn with Iranian shipyards for 10 newbuilds to bolster the national shipping fleet, Fars News Agency reports, citing comments made by IRISL head Mohammadreza Modares-Khiabani. Arvandan Shipbuilding Industries has been awarded contracts for six vessels and Sadra Neka Shipbuilding Industries has been handed contracts for four vessels. Negotiations are ongoing with a domestic shipyard for a USD 75 mn contract for a further four vessels, the official also said.

#2- The Middle East will see 2.9% GDP growth this year, outdoing last year, Wam reports, citing statements by International Monetary Fund (IMF) managing director Kristalina Georgieva at the pre-summit day of the World Governments Summit. Resilience in the global economy is bolstering forecasts despite headwinds, Georgieva said, while global inflation is also expected to cool down in 2024 and medium-term growth in the global economy stands at 3%, below the historical average of 3.8%.

MARKET WATCH-

Drewry’s Dry Bulk Equity Index rallied 2.1% in January, outperforming S&P 500’s 1.6% rise for the month, as charter rates see higher-than-expected boosts on the back of Red Sea disruptions, according to a recent report by supply chain advisory Drewry. The index was also bolstered by appreciations in assets, with values for five-year-old capesize and panamax vessels hiking 20.7% and 12.5% in 2023, with the upward trend continuing in January, on the back of limited space for newbuilds at shipyards, Drewry said.

CIRCLE YOUR CALENDAR-

The UAE will host The World Trade Organization's 13th Ministerial Conference from Monday, 26 February to Thursday, 29 February in Abu Dhabi. The event will gather ministers from around the world to assess the operation of the multilateral trading system and make key decisions regarding the future tasks of the WTO.

The UAE will host theTradeTech Forum on Tuesday, 27 February in Abu Dhabi. The forum will see some 180 trade leaders and experts discuss the technologically advanced trade environment and a showcase of trade tech solutions.

The UAE will host The Logistics Middle East Award on Wednesday, 6 March in Dubai. The awards ceremony brings together industry experts to celebrate the sector’s biggest accomplishments over the previous 12 months.The deadline for submitting nominations is Friday, 19 January.

KSA will host a special World Economic Forum event from Sunday, 28 April through to Monday, 29 April in Riyadh. The event will focus on global collaboration and energy.

The UAE will host The Electric Vehicle Innovation Summit from Monday, 20 May to Wednesday, 22 May in Abu Dhabi. The event will see industry leaders come together to discuss sustainable mobility and tapping into groundbreaking advancements in electric vehicles while engaging with key decision-makers.

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

Jordan’s Joramco inks 10-year agreement with Ryanair amid a regional MRO boom

Joramco extends maintenance agreement with Ryanair: Jordan-based Maintenance Repair and Overhaul (MRO) outfit Joramco has extended their aircraft maintenance agreement with Ryanair to undertake 10 lines of heavy maintenance over the next decade, according to a statement. Joramco will facilitate heavy maintenance for Ryanair at their 110k sqm Amman facility and provide greater flexibility for aircraft placement in the winter maintenance season, the statement said. The Irish budget carrier plans to ramp up its fleet to include 800 aircraft.

This is the latest in a string of similar agreements: Joramco inked an agreement with Emirates last November to provide nose-to-tail Boeing 777 maintenance services until the end of 2025, while also expanding an MRO partnership with Gulf Air that same month. Joramco also closed an agreement with Philippine Airlines and a partnership with Boeing for a passenger-to-freight (P2F) conversion line in Amman last year.

The UAE is also doubling down on MROs: Emirates unveiled plans to establish a USD 95 mn MRO engineering facility at Dubai World Central last November, allowing the carrier to become entirely self-sufficient in maintenance, repair, and overhaul, and covering its needs into the 2040s. Flydubai also said it would establish a similar USD 190 mn facility in Dubai by 2026.

Why is the region seeing a surge in MRO investments? The Middle East’s MRO market is forecasted to account for 11.5% of global demand between 2024 - 2033, and to surpass China by 2030, according to a report released last year by Aviation Week. Middle Eastern aircraft fleets are expected to increase from some 1.76k aircraft in 2024, to 3.29k in 2033, an 87% increase. The larger regional fleet is expected to boost MRO spending by upwards of 66% during the period, Aviation Week said. Rather than outsource these services to external outfits, regional players are investing in their own regional MRO hubs to localize services.

Vessels continue to avoid Red Sea transits despite a decrease in attacks

Yemen’s Houthis struck a bulk carrier, dubbed Star Iris, in the Red Sea,Reuters reports, citing a Monday televised statement by the group’s military spokesperson Yahya Saree. Despite Saree identifying the vessel as American, tracking data indicates that the Marshall Islands-flagged vessel is Greek-owned, the newswire writes. The attack saw damage to the ship’s starboard, British maritime security firm Ambrey reported, while also adding that the vessel was probably enroute to Iran. No crew were harmed in the attack and the Star Iris is proceeding on its journey, the newswire added, citing UKMTO.

Oops? The Houthi’s targeting of the Star Iris is poised to raise eyebrows, with the group previously stating that it would limit attacks to UK, US, and Israel-linked vessels while those from Russia, China, and “all other countries” would not be targeted. The Star Iris’ owner is listed on the US NASDAQ index which may have contributed to the vessel being targeted, Reuters wrote citing Ambrey.

Commercial ships continue to avoid Red Sea transits, despite reduced risk amid a slowdown in Houthi attacks, the Financial Times reports, citing security experts and senior shipping executives. US-led strikes have significantly reduced Houthi abilities to target ships, but attacks by the Houthis still represent a threat to commercial shipping, Sedna Global risks specialist Jon Gahagan told the FT. Shippers will likely only return to the traditional Red Sea route after a “prolonged period of stability,” chief executive of Danish bulk carrier Norden Jan Rindbo told the news outlet. Container ship arrivals at the Gulf of Aden for the week ending 5 February were down 92% compared to average entries in the first half of December, the FT added, citing Clarksons figures.

Andvessels are applying new measures to sidestep Houthi attacks in the Red Sea,Bloomberg reports. A Togo-flagged livestock carrier, dubbed Cattle Force, changed its destination to signal “All Crew Muslims” in a bid to be granted safe passage by the Iranian-backed group as it approached the Bab El Mandeb strait. The vessel later changed its destination to signal Iraq’s Umm Qasr port after safely transiting the strait. Previous weeks have seen other vessels signal messages such as “No Relation to Israel” in order to avoid being targeted, Bloomberg added.

Red Sea disruptions are impacting Europe’s crude market: Europe’s oil refineries are ramping up crude purchases from suppliers closer to home following Red Sea disruptions, with the trend tightening up the crude market and seeing backwardation in Brent futures whereby spot prices overtake futures contracts, Bloomberg reported earlier this week. Two diesel-rich West African crude grades — Forcados and Egina — fetched USD 5 and USD 7 a barrel premiums to Brent in recent trading, up from USD 4 and USD 6 a month ago, the outlet said. “The physical market’s awakening to the fact that the Red Sea disruptions are indeed disrupting physical flows and Europe needs more than it has right now,” lead crude analyst at Kpler Viktor Katona said. The trend may be short lived however, as an upcoming refinery maintenance season could see buying scaled back, the outlet wrote.

Disruptions along major trade routes are rattling the ins. and shipping markets, and risking inflation

Disruptions along the Red Sea and Panama Canal global trade chokepoints are exerting pressure on global supply chains, hiking spot shipping rates and ins. costs, driving inflation, and weighing down macroeconomic outlook, according to a report (pdf) by Swiss ins. Group Swiss Re. Economic headwinds are set to get worse if the disruptions continue into peak shipping season in 2H 2024, the report said.

Spot shipping rates have doubled and quadrupled: Rerouted journeys around the Cape of Good Hope have added some 20 to 30 days and 11k to 15k km to round trips between Asia and Europe, delaying shipments and hiking shipping costs, according to the report. Spot shipping rates between Northeast Asia and Western Europe surged some 440% between October 2023 — before attacks on shipping started — and January 2024, the report said citing Drewry World Container Index (WCI) data. Further afield, drought in the Panama Canal has cut daily transit slots by a third to 24 and doubled spot rates for shipments between Asia and the US East Coast, the report said citing IMF Portwatch.

How have the disruptions affected the ins. market? Marine ins. has continued to cover Red Sea transits, but on a case-by-case basis and with higher rates to account for the upped risk, the report notes. Accumulation risks due to port congestions and greater exposure on the back of longer journeys are two factors that will affect ins. decision making. Despite exporters absorbing most of the disruption-driven delays and cost hikes so far, ins. losses may surge if disruptions continue and firms may also have to contend with stickier claims inflation if core goods inflation bumps up due to the disruptions.

Inflation is also looming: Disruptions to supply chains are putting pressure on goods prices, as high volume trade routes see turmoil, according to the report. Manufacturer PMIs in Europe and the US have started to reflect longer supplier delivery times and an uptick in input costs, with the automotive and retail sectors particularly affected. Food and energy prices are also susceptible to the disruptions. The longer the disruptions last, the more likely it is that goods inflation will trickle down to the rest of the economy, the report explained.

UAE + Egypt move to prevent double taxation, SCZONE eyes Belgium road trip

UAE + Egypt ink taxation agreement: Egypt and the UAE have signed an agreement on preventing double taxation and income tax evasion to boost bilateral investment, according to a statement released earlier this week. The agreement was inked during the Arab Fiscal Forum in Dubai by Egyptian Finance Minister Mohamed Mait, who highlighted the need to simplify tax and customs processes for UAE investors in Egypt.

The Suez Canal Economic Zone (SCZone) is set to launch a promotional tour to Belgium to drum up investments for targeted sectors, according to a statement released last week. The news came following a meeting between chairman of the General Authority of the SCZone Waleid Gamal Eldien and Ambassador of Belgium to Cairo François Cornet to discuss boosting collaboration between the two countries.

BGN secures USD 100 mn facility for UAE energy exports

TRADE-

BGN secures financing for energy exports from UAE: The Abu Dhabi Exports Office (ADEX), UAE’s Mashreq bank, and the Abu Dhabi Commercial Bank (ADCB) have inked a USD 100 mn financing facility agreement with international energy and commodities trading firm BGN, Wam reports. The USD 100 mn agreement aims to facilitate the export of energy commodities from the UAE, bolstering its position in the global energy and commodities market. The financing agreement is equipped with an accordion feature, allowing for regional banks and their international affiliates to pour in additional funding.

OTHER STORIES WORTH KNOWING THIS MORNING-

Turkey’s ECS + UAE’s WTCI to boost bilateral trade: The UAE’s Expo Centre Sharjah and Turkey’s World Trade Center Istanbul have agreed to expand cooperation to jointly organize events, conferences, and trade fairs. (WAM)

Calendar

FEBRUARY

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

12-14 February (Monday-Wednesday): Sustainable Aviation Futures MENA, Dubai, UAE.

12-14 February (Monday-Wednesday): The Arab Postal Leaders Forum, Oman.

12-14 February (Monday-Wednesday): The International Search & Rescue Conference & Exhibition, Abu Dhabi.

14 February (Wednesday): Ship Finance & Trade Conference, Dubai.

12-15 February (Monday-Thursday): Future Warehouse & Logistics, Dubai, UAE.

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

22-24 February (Thursday-Saturday): International Freight Forwarders Conference, Dubai, UAE.

26-29 February (Monday-Thursday): World Trade Organization's 13th Ministerial Conference, Abu Dhabi, UAE.

27 February (Tuesday) :TradeTech Forum, Abu Dhabi, UAE.

28 February (Wednesday): Industrial and Building Technology event, Dubai, UAE.

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

MARCH

3-5 March (Sunday-Tuesday): Sustainable Green Blue Infrastructure Conference 2024 (Marlog), Green Plaza Mall, Egypt.

4-8 March (Monday-Friday): Logistics & Transport Management 2024, Dubai, UAE.

5-6 March (Tuesday-Wednesday): ShipTek International Conference & Awards 2024, The Address Dubai, UAE.

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

6 March (Wednesday):The Gulf Ship Finance Forum, Waldorf Astoria Dubai International Financial Centre, UAE.

6 March (Wednesday): The Logistics Middle East Awards, Dubai, UAE.

7 March (Thursday): Truck and Fleet Conference 2024, Dubai, UAE.

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

20 March (Wednesday): Construction work scheduled to begin on the 162 km Rasht-Astara Railway in Iran.

APRIL

27 April- 1 May (Saturday-Wednesday): Iran Expo 2024, Tehran International Permanent Fairground, Iran.

28 April - 29 April (Sunday - Monday): World Economic Forum, Riyadh, KSA.

29 April- 2 May(Monday-Thursday): GLA Global Logistics Conference, Dubai, UAE.

30 April- 2 May(Tuesday-Thursday): Autonomous E-mobility Forum, Doha, Qatar.

April: Driftx. Abu Dhabi, UAE.

MAY

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

2-4 May(Thursday-Saturday): The International Conference on Logistics Operations Management: smart, sustainable and green logistics (GOL), Marrakesh, Morocco.

3-5 May (Friday-Sunday):2024 IEEE 15th international conference on Logistics and Supply Chain Management, University of Sousse, Tunisia, Tunis.

7-9 May (Tuesday-Thursday): Annual Investment Meeting (AIM) Congress, Abu Dhabi, UAE.

14-15 May (Tuesday-Wednesday): Seamless Middle East, Dubai World Trade Centre, UAE.

14-16 May (Tuesday-Thursday): Airport Show, DWTC, Dubai, UAE.

20-22 May (Monday-Wednesday): The Electric Vehicle Innovation Summit (EVIS), Abu Dhabi, UAE.

21-23 May (Tuesday-Thursday): WAGA 2024, Riyadh, Saudi Arabia.

JUNE

2-4 June (Sunday-Tuesday):IATA Annual General Meeting (AGM) and World Air Transport Summit, Dubai, UAE.

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

OCTOBER

6-8 October (Sunday-Tuesday): Routes World 2024, Bahrain.

7-9 October (Monday-Wednesday): AFSIC – Investing in Africa, London.

22-24 October (Tuesday-Thursday): Asean Ports and Logistics 2024, Johor, Malaysia.

NOVEMBER

11-14 November (Sunday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi.

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

DECEMBER

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

20 December (Wednesday): The 5th Iran-Senegal Joint Economic Cooperation Commission, Dakar.

EVENTS WITH NO SET DATE

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

1Q 2024: Egypt’s Transport Ministry to launch pre-qualification tender for Cairo-Alex freight railway.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

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.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

2027

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

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