Good morning, friends. It’s another busy Monday morning here in logistics land, with plenty of news on new zones planned in Egypt and Saudi Arabia.

THE BIG LOGISTICS STORY ABROAD- Boeing ups its offer: Boeing has made striking machinists a new pay hike offer, with workers set vote today, Reuters reported on Thursday. The worker’s union has endorsed the offer, stressing it had gotten all it can from the manufacturer.

What’s on the table: The offer is a 38% pay rise spread over four years and a USD 12k ratification bonus, which includes a USD 5k lump sum into the workers retirement accounts. This is the closest workers have got to achieving their goal of a 40% wage increase and the return of a defined-benefit pension. Boeing factory workers voted 64% to reject an offer last week for a 35% pay hike over four years.

What they said: “It’s time we all come back together and focus on rebuilding the business and delivering the world’s best airplanes. There are a lot of people depending on us,” Boeing CEO Kelly Ortberg told workers in an email cited by Reuters on Friday.

ICYMI- The strike is taking place at Boeing’s 737 Max Jets production hub, worsening the company’s already existing supply chain issues and delivery delays. Purchase orders for the company’s 737, 767 and 777 jets have been halted to preserve the company’s credit rating.

The story grabbed a lot on ink in the international press over the weekend: AP | Bloomberg | The Guardian | Wall Street Journal | The New York Times | Washington Post | CNN | BBC

HAPPENING TODAY-

#1- Adipec will kick off today and run through to Thursday at Adnec Center in Abu Dhabi. The event will bring together over 40 ministers and over 200 C-suite executives and technology leaders from the Middle East, Asia, Africa, Europe, and the Americas, focusing on innovation and partnerships to advance the energy transition. The event will feature three new conferences that include perspectives from finance, technology, youth, and the Global South.

The maritime and logistics conference will take place on Wednesday, with a focus on trade conflicts, maritime decarbonization, and digitization. 

 #2- The Road Safety and Sustainability Conference and Exhibition wraps up today, bringing global experts together to discuss technological advancements, AI applications, and sustainability in the transport sector.

PSAs-

Two new Salik toll gates at the Business Bay Crossing and Al Safa South on Sheikh Zayed Road in Dubai will be operational on 24 November, according to the Dubai Media Office. The toll gates are each expected to divert traffic away from congested roads by 15%.

WATCH THIS SPACE-

#1- KSA greenlights 2.4 mn sqm industrial city: Saudi Arabia’s Eastern Province Municipality has awarded a project to an undisclosed company for the establishment of a 2.4 mn sqm integrated industrial city in Dammam, SPA reports. The planned industrial area will feature facilities including factories, light industries, employee housing and various support services. The project will support local industry without government capital investment, reducing budget expenditure, Eastern Province Mayor Fahad Al Jubeir told SPA.

#2- Adnoc gears up to expand its oil trading business: The UAE’s state-owned oil firm Adnoc is in talks with Switzerland-based commodity trading house Montfort Group to expand a tolling agreement between them that would see Adnoc send more outsourced shipments to be processed at a partially Montfort-owned refinery in Fujairah, Bloomberg reported last week, citing people it says are familiar with the matter. Under the current agreement, Adnoc reportedly processed at least one cargo of Sudanese Nile crude at the refining facility, where the produced fuel is then sold by Adnoc.

Adnoc’s trading operations expansion is already underway, with the state-run company signing agreements to buy Nigerian crude to be processed at the facility and is reportedly looking to secure more supply agreements.

#3- Egypt activates oil agreement with Fujairah: Egypt has welcomed the first oil tanker as part of an MoU inked with Fujairah earlier this year, according to a statement on Friday. The MoU, signed in August, outlines plans to transform Al Hamra port on the Mediterranean coast into a USD 3 bn petroleum logistics zone. The construction of the zone is reportedly expected to kick off in 1H 2025, with an estimated completion time of three years.

#6- CBE quietly relaxes import restrictions for non-essential items: The Central Bank of Egypt is reportedly allowing local banks to issue letters of credit for the import of non-essential goods — including cars — based on each lender’s USD reserves — its first such move in two months, six bankers told Asharq Business. The move is expected to help clear the backlog of non-essential import requests that have been piling up since 2022, one CEO of a private bank told the news outlet.

The shift is not set in stone: The directive was informally communicated through phone calls — rather than through an official statement — to at least four individual banks hours before the presser with IMF Managing Director Kristalina Georgieva in the new capital. This may indicate the controls could be reinstated, an unnamed credit manager at a state-owned bank told Asharq Business.

REMEMBER- The CBE reportedly eased import restrictions on 12 out of 13 non-essential goods it has previously prohibited banks from issuing credit lines for back in August. Banks were reportedly allowed to issue letters of credit for items like mobile phones, seeds, fresh fruits, cocoa, jewelry, appliances, garments, furniture, and heavy equipment — though vehicle import restrictions were kept in place.

#7- Maersk expects to continue to suspend shipping through the Suez Canal “well into 2025,” Maersk’s Chief Executive Vincent Clerc told reporters, adding that high demand for shipping goods is expected to continue in the next few months, Reuters reported on Thursday. “There are no signs of de-escalation and it is not safe for our vessels or personnel to go there,” he added. The company reported robust demand in the third quarter, particularly fueled by exports from China and Southeast Asia, and noted no indications of a decline in volumes from Europe or North America in the upcoming months.

And he’s not alone: Jeremy Nixon, CEO of shipping firm Ocean Network Express, similarly predicted last month that disruptions to Red Sea container shipping and reroutes around the Cape of Good Hope will persist well into next year. “There seems to be no political breakthrough” to indicate that disruptions will be easing anytime soon, Nixon said.

In context: Since the end of 2023, ships have been diverting from the Suez Canal to evade Houthi attacks. This longer route around the Cape of Good Hope adds approximately two weeks to travel times, resulting in increased freight and ins. expenses.

Maersk’s bottom line is unaffected by the disruption: The shipping firm’s bottom line shot up 445% y-o-y in 3Q 2024 to USD 3 bn on the back of rising freight rates and volume growth, according to its financial statements (pdf). Maersk recorded improvements in the ocean, logistics and services, and terminals segments, with the company's revenues increasing 30% y-o-y to USD 15.8 mn, according to the statement.

#8- Opaz launches tender for Ezad: Oman’s Special Economic Zones and Freezones Public Authority (OPAZ) has issued a tender for Omani and Saudi firms interested in the development of an infrastructure and utility network for a fishery port at Oman’s Duqm port on its Esnad platform, according to a statement released last week. The deadline for bidding was set for 30 December.

PLUS- Opaz also launched a tender for Omani and Saudi outfits for the construction of the main road and wadi channel at Ezad, with the deadline for submission set for 2 January 2025, according to a statement.

MARKET WATCH-

[wwtt5] #1- Opec+ confirms output hike delay: Opec+ pushed back its planned 180k bpd output hike for December for another month amid persistent concerns of soft oil demand from China and a glut in supply, according to a statement. The group still intends to move forward with its plan to revive 2.2 mn bpd of idle supply over the year, it said.

REMEMBER- Opec+ initially planned to start phasing out production cuts in October, but later pushed the plans back to December as oil prices fell.

Oil prices rose by more than USD 1 in early trading on the news, Reuters reports. Brent crude futures rose 1.6%, to USD 74.28 a barrel, while US West Texas Intermediate (WTI) crude rose 1.73% to USD 70.69.

#2- Baltic index continues to ease: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — dropped 0.7% to 1,378 points on Friday, its lowest reading since September. The capesize index fell five points to 1,848, while the panamax index lost another 5 points to 1,199 points and the smaller supramax fell 19 points to 1,163 points.

#3- The Drewry World Container Index rose by 4% to USD 3,213 per 40-ft container on Thursday, according to the latest index readings. Spot rates for 40-ft containers are now 69% below the previous pandemic peak of USD 10.4k in September 2021, but remain 126% above the pre-pandemic rate of USD 1.4k. The average composite index YTD is USD 4,017 per 40ft container, which is USD 1,178 higher than the 10-year average rate of USD 2,839.

DATA POINTS-

#1-Worldwide air cargo demand increased 9.4% y-o-y in September, marking the 14th consecutive month of growth, data by The International Air Transport Association (IATA) showed. Capacity measured in available cargo ton-kilometers (ACTKs) rose by 6.4% y-o-y on the back of a 10/3% increase in international belly capacity.

Latin American carriers showed the highest y-o-y demand growth for air cargo at 20.9%, followed by Asian-Pacific Airlines and European carriers, both recording an 11.7% increase. Middle Eastern carriers saw growth of 10.1% y-o-y. North American carriers saw growth of 3.8% y-o-y and African airlines grew by only 1.7%.

#2- Abu Dhabi airports’ cargo volumes rose 23% y-o-y in 9M 2024 to 572k tons amid heightened demand for both belly-hold capacity and freighter services, according to a press release.

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Airport Exhibition on Monday, 11 November and Tuesday, 12 November in Riyadh. The two-day exhibition will bring together global industry leaders to discuss the latest technologies around the world in the aviation industry. It looks to encourage discussion between Saudi aviation leaders and the global supply chain industry.

Bahrain will host The Bahrain International Airshow on Wednesday, 13 November and Friday, 15 November near Awali. The three-day event is bringing together over 180 participating companies from over 59 represented nations globally.

Egypt will host the Autotech Exhibition on Sunday, 17 November until Tuesday, 19 November in Cairo. The event will bring together prominent local and international companies to discuss and evaluate the latest developments and trends in the automotive aftermarket and feeder industries.

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