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How MENA ports fared in the World Bank + S&P Global’s Container Port Performance Index

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What we're tracking today

TODAY: Jeddah Islamic Port saw a boost in activity in April + Subscription period for final tranche of Adnoc L&S IPO ends

Good morning, wonderful people. We have a lighter issue for you today after a busy start to the week, with a couple of notable stories in the realm of trade financing and data centers, and a lot of diplomacy news.

THE BIG LOGISTICS STORY- Google has launched a cloud data region in Qatar in partnership with Qatar’s Communications and Information Technology Ministry and Qatar FreeZone Authority to house data centers. Over in Saudi Arabia, First Abu Dhabi Bank introduced its supply chain finance (SCF) program to boost regional trade finance.

HAPPENING TODAY-

DP World wraps up AED 954 mn Vancouver port expansion: DP World has completed the expansion of port of Vancouver’s Centerm terminal, which helped boost its handling capacity from 900k TEUs to 1.5 mn, while adding 15% to terminal’s total footprint, according to a statement.

DATA POINT- Jeddah Islamic Port saw a boost in performance in April: The number of containers processed through Jeddah Islamic Port increased 25% y-o-y to 465k containers in April, Saudi Ports Authority (Mawani) reported. The port also saw a 19% y-o-y increase in cargo volumes handled, reaching 5.3 mn tons. Mawani attributed the boost to increased capacity at the port.

WATCH THIS SPACE- An Arab investment fund is in talks to construct the Jordan National Railway connecting Amman to the port of Aqaba, Al Ghad reports, citing a source it says is in the know. The agreement would still require government approval, the source said.

Background: Plans to launch the 897 km freight railway were drafted in 2011 by the Jordanian Transport Ministry (pdf). The project is estimated to cost USD 2.96 bn over a four-year period, according to the Transport Ministry. The railway will connect Amman with major industrial cities and the port of, while also connecting with the railways of Saudi Arabia, Syria, and Iraq.

MARKET WATCH-

Oil exports from the UAE are expected to rise as Russian flows falter and as Middle Eastern pricing mechanisms become more transparent, speakers at S&P Global Commodity Insights’ Middle East Petroleum and Gas Conference said. Abu Dhabi National Oil Co (Adnoc) could triple shipments to over 3k barrels per day (bbl / d) in July, said Thomas Waymel, president of trading and shipping at TotalEnergies. Abu Dhabi’s decision to launch its Murban futures contract in 2021 — a secondary market that offers inter-commodity spreads — has sparked demand for Adnoc’s flagship light-sour crude grade, he added.

CIRCLE YOUR CALENDAR

The subscription period for institutional investors subscribing to Adnoc L&S’ IPO ends today.Retail investors’ subscription period ended yesterday, after the company upped its IPO size with the sale of a 19% stake in the company, from 15% previously. Retail investors got a 12% slice of the offering, while institutional investors can submit bids for 85%, and another 3% is saved for Adnoc L&S employees and retirees.

ICYMI: The company boosted the IPO size after the order book was oversubscribed within minutes of opening last week. The company is now offering 1.41 mn shares for AED 1.99-2.01 apiece in an IPO that could raise as much as USD 769.4 mn and value the company as high as USD 4.05 bn.

The Seamless Middle East 2023 summit kicked off yesterday at the Dubai World Trade Center and runs until today. This event brings together industry experts across the payment, fintech, banking, retail, e-commerce, digital marketing, home delivery, cards, and identity industries.

Bloomberg’s Qatar Economic Forum kicked off yesterday and runs until today. The event will see discussions about major economic issues facing CEOs, heads of state, and money markets. QFZ will be participating in the event to discuss the global economic climate and its impact on FDI globally, according to a statement.

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

This publication is proudly sponsored by

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Zones

Google launches new cloud region in Qatar

Google’s first Middle East cloud data region launches in Qatar:Google has launched a cloud data region in Qatar, according to a statement. The cloud data region, which will house data centers, was launched in partnership with Qatar’s Communications and Information Technology Ministry (MCIT) and Qatar FreeZone Authority. The statement does not disclose the number of data centers set to be established in the region, or the cost of their construction.

The details: The cloud region is connected to Google’s secure network infrastructure, with high capacity fiber optic cables underground and at the bottom of the sea, the statement said. This new region aims to bring high performance services and products to organizations and companies across the Middle East, according to the statement. The region will allow businesses in Qatar to leverage more data for business operations, and will also enable them to manage their supply chain digitally, according to an earlier statement.

The cloud region is expected to contribute USD 18.9 bn to Qatar’s economy by the end of the decade and open up 25k jobs, according to research done by Access Partnership.

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Finance

FAB launches supply chain finance program in KSA

First Abu Dhabi Bank (FAB) introduced its supply chain finance (SCF) program in Saudi Arabia to companies to boost regional trade finance, Wam reports. The program allows companies to monetize their receivables at competitive rates and get instant payments, without needing to borrow funds in a heightened interest rate environment, Wam said. Alfanar Construction already signed an agreement with FAB under the program, the news agency added.

SOUND SMART- Receivables finance is a trade finance method businesses can use to receive funds that match the amounts owed to it by its customers in outstanding invoices.

There’s a lot we don’t know: It’s not clear what industries the program is targeting or what the size of the financing agreements could be, though Alfanar’s treasury manager said the program helps improve “cashflows across the entire supply chain.”

What they said: “The launch of our supply chain finance program in KSA is a significant step forward in our regional expansion strategy,” Country CEO of First Abu Dhabi Bank (FAB) in Saudi Arabia Fahad Al Juwaidi said. “Our state-of-the-art FABeSCF platform and fully automated solutions will provide our clients with a seamless and integrated experience that strengthens connectivity across the entire supply chain,” he added.

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The Big Read

Five MENA ports secure top ten spots on the World Bank’s Container Port Performance Index

Five ports in the MENA region secured positions among the top 10 spots in the World Bank and S&P Global’s Container Port Performance Index(CPPI) 2022 (pdf), which assesses the operational performance of container ports worldwide. Topping the list is Salalah in Oman, which secured the second spot overall, unchanged from 2021. Following closely behind is Abu Dhabi’s Khalifa Port, which claimed the third position. Morocco’s Tangier-Mediterranean Port secured the fourth spot, Qatar’s Hamad Port secured the eighth position, while Egypt’s Port Said clinched the 10th spot.

In context: More than 80% of global merchandise trade is transported via sea routes, of which 35% is carried in containers, the index said. This means that the efficiency of container ports has become an essential “prerequisite for successful export-led growth strategies,” the index said.

The CPPI measures and ranks the efficiency and effectiveness of ports in handling containerized goods. The last index in 2021 (pdf) ranked the countries with two different methodologies — statistical and administrative — while the 2022 index relies on an aggregate score of both. This means that for some ports, which had different scores in 2021 depending on the methodology, we’re not able to accurately measure how their performance compares to last year.

Saudi ports — surprisingly — did not do well in this year’s ranking: King Abdullah Port in Saudi Arabia, which held the first place on the CPPI 2021 (pdf) index in 2021, saw a decline to the 17th position. Jeddah experienced a significant drop from 8th place in 2021 to 29th place in 2022. Similarly, Saudi’s Dammam’s ranking slipped from 14th place in 2021 to 31st place.

The discouraging declines in the operational efficiency of Saudi ports — after significant progress in the 2021 iteration of the index — comes despite the kingdom’s investments in its logistics performance and its ports. The kingdom wants to increase its port throughput to 40 mn TEU per year, Seatrade Maritime reports. Despite this setback, which serves as an indication that achieving the target could be challenging, Saudi Arabia made a noteworthy leap in the World Bank’s Logistics Performance Index (LPI), climbing 17 places to rank 38th globally.

Other GCC ports saw mixed performance, with Jebel Ali ranked in 38th place, the same ranking as in the 2021 CPPI’s statistical approach, and Sharjah ranked at 127, a significant improvement from both its rankings in 2021. Sohar Port in Oman experienced a slight decline, ranking at 49th, as opposed to 47th in 2021. Bahrain’ Khalifa Bin Salman Port ranked at 73. Meanwhile, Kuwait’s Shuwaikh Port stood at 142 and Shuaiba ranked at 121.

The Levant also saw mixed performance, with Lebanon’s ports scoring the worst between them on the index. Jordan’s Aqaba was ranked at 59, a downgrade compared with its position in the 30s in 2021. Lebanon’s Tripoli port was ranked 219th, while Beirut Port was ranked near the bottom 10 at 320, despite managing to reduce arrival time by 47.5% to 7.2 hours per port call. Syria’s Latakia stood at 177.

North African countries underperformed: Egypt’s Alexandria port is ranked at 268, with Sokhna just below it at 269. Bejaia in Algeria ranked at 256, while Morocco’s Casablanca stood at 159 on the index. Yemen’s port of Aden secured a position of 262. The Houthis have imposed a blockade on commercial goods transported from Aden to regions under their control, forcing merchants in Yemen to rely on Hodeidah Port, where the Houthis charge high taxes and fees. On the bright side, Aden was among the top 20 ports to reduce arrival times for ships, with a 77.2% reduction to just 13.8 hours.

Also included in the ranking: Iraq’s Umm Qasr, which is categorized as a medium port — with between 0.5-4 mn TEUs handled per year — held a ranking of 165, while Israel’s Haifa port was ranked at 56. Haifa was also one of the top 20 ports to reduce arrival times for ships, with a 47.6% improvement this year to 7.7 hours.

Overall, average port call times increased slightly in 2022 to 36.8 hours, up from 36.3 hours in 2021. The majority of ports in 2022 were still suffering from port congestion on the back of pandemic-induced demand and covid-19 restrictions. The fourth quarter of the year finally saw demand let up, with volumes reduced and many backlogs cleared.

Looking ahead: Average port arrival time globally is expected to continue to decline in 2023 to pre-2021 levels, the report estimates.

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Diplomacy

UAE, Malaysia to sign CEPA + Iran, Indonesia sign preferential trade agreement. PLUS: Ukraine, Morocco eye boosting trade

Iran and Indonesia signed a preferential agreement yesterday to boost their economic relations and increase trade between the countries during a visit, Iran’s official Islamic Republic News Agency reports. The countries agreed on a countertrade scheme, whereby goods and services can be exchanged without being constrained by scarcity or currency difficulties, Indonesian Trade Minister Djatmiko Bris Witjaksono said, according to Reuters. The agreement will enable Iran to grant Indonesia access to products including food, pharma products, textile, palm oil, coffee and tea, while Indonesia will reduce tariffs for Iran’s oil and chemical products, metals, and some dairy products, Reuters added.

UAE + Malaysia could sign a CEPA: UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi and Malaysian Trade and Industry Minister Tengku Zafrul Aziz have signed an agreement to establish a Comprehensive Economic Partnership Agreement (CEPA) between the two countries, Wam reports. The agreement will contribute to the consolidation of trade and investment relations between the two nations and allow for the acceleration of business opportunities in priority sectors in both countries.

Ukraine + Morroco look to boost trade: Ukrainian Foreign Affairs Minister Dmytro Kuleba and Moroccan counterpart Nasser Bourita agreed to hold negotiations between the two countries on increasing the volume of trade, strengthening communication between businesses, and visa simplification, according to the Ukrainian Foreign Ministry.

More CEPAs: The UAE has negotiated and signednumerous CEPAs with countries including India, Vietnam and Cambodia as part of plans to double the size of its economy by 2030 to USD 762 bn.

ALSO WORTH KNOWING-

  • Iran and Vietnam discussed boosting economic and trade cooperation,including enhancing banking cooperation, facilitating visas for business people, and operating direct flights. (Tasnim News Agency)
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Logistics in the News

Only one thousandth of 1% of containers were lost at sea in 2022

A record low number of containers were lost at sea last year: Only661 shipping containers were lost at sea in 2022, the lowest number of vessels lost since the World Shipping Council (WSC) began tracking in 2008, according to a WSC report (pdf).The number also represents “less than one thousandth of 1%” of the 250 mn shipping containers shipped a year, according to the report. The number of containers lost at sea averaged around 1.5k a year between 2008 and 2022.

Why do containers get lost at sea? The bulk of the losses occur as a result of sinking incidents during severe weather, WSC said, Despite the marked improvements, WSC cites ongoing efforts by shipping firms, governments, and stakeholders to reduce the number of containers lost at sea. Cargo transported via containers worldwide is valued at around USD 7 tn per year, according to the report.

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Also on Our Radar

Agility’s logistics park in Mozambique signs new facility agreement + Talabat, Khalifa Fund to support SMEs. PLUS: CMA CGM’s air cargo line is redeploying aircraft to MENA

PARKS-

Oceana Distribution to open new facility in Mozambique’s Agility Logistics Park:Mozambique food distributor Oceana Distribution Lda has chosen Agility Logistic Park in Maputo, Mozambique as the site for its new office and storage and distribution facility, according to a statement by Agility. The new 5k sqm facility can handle up to 3k pallet positions and has 600 sqm of office space and 400 sqm of cold storage that can meet the end-to-end requirements of Oceana’s local and multinational operations, according to the release.

E-COMMERCE-

Khalifa Fund + Talabat sign MoU to support SMEs in Abu Dhabi: The KhalifaFund for Enterprise Development in Abu Dhabi inked an MOU with Talabat UAE to provide SMEs with benefits like access to Talabat’s customer database and logistics network, according to a press release. Under the MoU, entrepreneurs will receive support through an annual contract that offers them subsidized fees and special benefits, including a dedicated account manager. The collaboration will allow Khalifa Fund businesses in the food and beverage industry to display and sell food items on the talabat app, enabling them to enhance their online presence and reach.

AVIATION-

CMA CGM’s air cargo line has redeployed some of its freight operations to the Middle Eastafter pulling out of the US market, the company said in a statement to news outlet FreightWaves. The company discontinued its services to the US in March to deploy its fleet in the Middle East, Asia and India, according to the statement. Two of the suspended aircraft that were used to transport cargo to Chicago and Atlanta, were utilized for work with Qatar Airways and DHL Express, according to the news outlet. The airline began airlift services to Abu Dhabi from 15 May as a stop on its way to Guangzhou, China, and will offer services from Abu Dhabi to Paris, in the near future, the outlet reportedly writes.


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.

16-23 May (Tuesday-Tuesday): Subscription window will be open for retail Investors for the Adnoc L&S IPO.

16-24 May (Tuesday – Wednesday): Subscription window will be open for institutional investors for the Adnoc L&S IPO.

23-24 May (Tuesday-Wednesday) Seamless Middle East 2023 summit, Dubai World Trade Center.

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): Listing of shares on ADX, Adnoc L&S IPO

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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