Iran inks Chabahar port development agreement with India

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TODAY: Iran inks Chabahar port development agreement with India

Good morning, nice people. The news cycle has slowed considerably as we hit a mid-week lull, but there is a bit of major port development news emerging from Iran that will have repercussions on trade with Central Asia. Let’s jump right in.

HAPPENING TODAY-

UAE will host Data Center Nation today in Dubai. The event gathers regional data center hyperscalers, enterprise end-users, consultants, and developers to network and get up to date on the latest products and services offered by vendors.

WATCH THIS SPACE-

#1- The Jordanian cabinet has extended exemptions on custom duties and sales tax on maritime freight till 30 June, Petra reported last week. The exemptions — which were issued on 21 January — come in a bid to control rising prices of basic commodities on the back of Red Sea disruptions.

The kingdom has been working hard to mitigate the aftershocks: A special group tasked with following up on the Red Sea crisis’ impact on Jordanian trade — which includes the Jordan and Amman Chambers of Commerce, the Jordanian Navigation Syndicate, and the Jordanian Logistics Association — urged Aqaba Container Terminal late last month to provide incentives for marine routes that continue to serve Aqaba Port despite disruptions. The group also proposed waiving storage fees for shipping providers and owners of empty containers prepared for export.

#2- EU greenlights emissions-free truck mandate for 2040: EU nations have approved a law mandating a 90% cut in CO2 emissions from new heavy-duty vehicles sold in the EU by 2040, Reuters reports. The law stipulates truck manufacturers will have to sell a large share of fully CO2-free trucks — including electric vehicles and those running on hydrogen fuel — in order to offset any unsold CO2-emitting vehicles in 2040. The European Automobile Manufacturers’ Association describes the policy as the “world’s most ambitious,” emphasizing the need for rapid infrastructure development, including 50k truck-suitable public electric charging points by 2030.

The transition will happen gradually: The law will phase-out emissions from trucks gradually, with targets set for a 45% emissions reduction by 2030 and 65% reduction by 2035. New buses sold will also have to cut emissions by 90% in 2030 and 100% in 2035.

Most of Europe is on board: Only Italy, Poland and Slovakia opposed the new policy, while Germany agreed to back the law following the addition of a preamble stating that the European Commission would consider counting trucks that run on CO2 neutral fuels towards the targets. The Czech Republic abstained from Monday’s vote.

MARKET WATCH-

#1- Oil prices edged up Tuesday after shedding USD 1 the previous session on the back of diminished hopes over incoming US interest rate cuts, Reuters reports. Brent crude futures notched up to USD 83.40 a barrel by 03.15 GMT, while US West Texas Intermediate (WTI) crude futures slid up to USD 79.17 a barrel, the newswire said. Despite oil rallying last week due to stalled efforts to reach a ceasefire in Gaza, improved demand in the US and China are driving benchmark contracts higher, Reuters added.

#2-UAE’s Fujairah Port oil inventories dipped 2.5% for the week ending 6 May to 20.2 mn barrels, hitting its lowest in six weeks, S&P Global reported last week, citing Fujairah Oil Industry Zone and tracking data. Exports of oil products at Fujairah — except for fuel oil — hit 1.3 mn barrels for the week beginning 29 April, the highest seen since 2016, with the ramp up in exports eroding stocks. Oil stocks at the bunkering hub are up 17% since the end of 2023, S&P Global also said.

DATA POINT-

Qatar recorded a 7.8 % y-o-y growth in air cargo and mail in April 2024, hitting 200.8k tons, Qatar Civil Aviation Authority (QCAA) said on X. Aircraft movement boosted 18.6% during the period to 22.3k, while passenger numbers surged 31% to 4.3 mn.

CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Maritime & Logistics Congress from Wednesday, 18 September to Thursday, 19 September in Dammam. The two-day event looks to gather up to 10k attendees and 200 exhibitors, and will discuss topics including interlinked logistics, developments in supply chains, digitalisation, decarbonisation, the energy transition, and workforce development.

Iran will host the International Exhibition of Rail Transportation and RelatedIndustries from Saturday 18 May to Tuesday 21 May in Tehran. The exhibition looks to attract domestic and international firms to showcase Iran’s local rail manufacturing capabilities and to acquaint industry players with developments made in the industry worldwide.

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.

Saudi Arabia will host the Future Aviation Forum from Monday, 20 May to Wednesday, 22 May in Riyadh. The event, organized by the General Authority of Civil Aviation, will see the Kingdom showcasing some USD 100 bn worth of investment options in the aviation and logistics sector at large.

Barbados will hostUNCTAD’sGlobal Supply Chain Forum from Tuesday, 21 May to Friday, 24 May in Bridgetown. UNCTAD is holding the event in collaboration with the Government of Barbados, which aims to evaluate the role global supply chains have in supporting economic growth, creating jobs, and reducing poverty. Global industry leaders, policymakers and experts will convene to discuss forthcoming issues and explore innovative solutions.

Oman will host the Comex Technology Show from Monday, 27 May to Saturday, 30 May in Muscat. The event will see representation from industry leaders and decision makers to showcase buyer potential in innovative technology, in transportation, logistics, energy and healthcare sectors.

Egypt will host ProPak MENA from Sunday, 26 May to Tuesday, 28 May in Cairo. The conference will see F&B manufacturing industry professionals network and discover the latest equipment and logistic solutions for processing and packaging.

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

Iran inks 10-year agreement with India for Chabahar port operation and development

Iran has inked a USD 370 mn 10-year contract with India to manage and develop Chabahar port, Reuters reports. The agreement was signed between Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran.

The details: IPGL will invest nearly USD 120 mn into the project with an additional USD 250 mn in financing on offer, Iranian Minister of Roads and Urban Development Mehrdad Bazrpash said.

IPGL has history in Chabahar: IPGL has been operating the port since late 2018, handling over 90k TEUs and over 8.4 mn tonnes of bulk and general cargo, an Indian government official said. A total of 2.5 mn tonnes of wheat and 2k tonnes of pulses have been shipped from India to Afghanistan through Chabahar Port, the official added.

The contract has been brewing: Iran and India have been holding talks on investments at Chabahar Port since late 2023, and were reportedly close to reaching an agreement in mid-January after working out most contractual issues. Proposals at the time were for self-renewing 10-year contact that would also see India shell out USD 25 mn in investments at the port.

Why is this important? India has been developing the port in a bid to secure a gateway for trade with Iran, Afghanistan, and Central Asia while bypassing the ports of regional rival Pakistan in Gwadar and Karachi, the newswire writes.

US sanctions have been delaying the development of the port, Reuters writes. “Any entity, anyone considering business deals with Iran – they need to be aware of the potential risks that they are opening themselves up to and the potential risk of sanctions,” US State Department deputy spokesperson Vedant Patel told reporters when asked for comment on the inked agreement.

Other countries are eyeing the port: The landlocked state of Tajikistan has also expressed interest in Chabahar, with Tajik investors looking to leverage the port for transit trade via a logistics compound at the facility. Afghanistan was also looking to pump USD 35 mn in investments at the port in late February.

The regional data center market is primed for substantial growth

MENA is the next frontier for data center growth: The MENA region is poised to develop into one of the fastest growing markets for data centers in the coming years, with ballooning demand and so-far limited supply, according to JLL’s The Future of Data Centers in MEA 2023 report (pdf). There are currently 73 colocation facilities across the UAE, KSA, Qatar, Oman, and Kuwait. Colocation facilities are specialized data centers where organizations can rent space for their servers, network equipment, and other hardware, the report says.

The region is primed for the expansion: The MENA region’s growing digital transformation, including 5G and IoT, along with increased investment in submarine cables and fiber connectivity, is driving a surge in data demand. This resulted in investor interest in expanding data center operations, heralding a new era of growth in the upcoming decade.

UAE plays an important role: The UAE data center market has seen substantial growth in recent years, emerging as a key digital infrastructure hub in the region, according to Knight Frank’s Data Centers The MENA report (pdf). The establishment of Dubai Internet City (DIC) in October 2000 was a turning point, pulling in innovative technology companies to the country. Subsequent government initiatives, including tax incentives and regulatory frameworks, further fueled the industry’s growth. During the 2010s, international data center providers entered the market, improving the quality and global connectivity of data center services.

The UAE’s supply in 3Q 2023: Between the start of the year and 3Q 2023, the UAE saw a 64 MW increase in aggregate supply, with half translating into additional live IT capacity. This marks a 12.1% rise in aggregate supply and a 15.3% growth in live IT capacity. The country now boasts a total IT capacity of 592 MW, with 235.3 MW live and 180.3 MW under construction.

KSA is the region’s fastest-growing data center market: The Kingdom saw a 29.7% surge in live IT capacity between the beginning of 2023 and 3Q 2023, achieving 109 MW capacity, Knight Frank said. The data center market is primarily centered around three main hubs — Riyadh, Jeddah, and Dammam — which together host some 80% of live IT supply. Riyadh leads with 40 MW capacity, followed by Jeddah at 29 MW, and Dammam at 19 MW.

MENA data center market: The UAE hosted 28 operational data centers as of 2023, with an additional 26 in development, JIL says. KSA has 22 active data centers and is developing another 40, while Qatar holds 10 and is set to see 3 upcoming data centers. Oman operates 7 centers, with 5 in development and Kuwait hosts 6 operational data centers with 1 in the pipeline.

Beyond key markets: The MENA region is also seeing increased interest in data center development in countries such as Bahrain, Jordan, Kuwait, Lebanon, Oman, and Qatar. These countries are strategically positioning themselves as regional technology hubs, supported by government initiatives, cloud-first policies, and partnerships with global tech giants, driving significant growth in their data center markets. Together, these nations boast a combined live IT capacity of 101.17 megawatts (MW) in 3Q 2023, Knight Frank also said.

Egypt is leveraging its location as a regional crossroads: Egypt’s strategic location as a portal between Europe, Africa, and the Middle East has also seen the country come forth as a leading destination for investments in data centers, Knight Frank adds. Growing demand for cloud services, digital transformation, and the expansion of e-commerce and mobile technologies are also driving growth in the country’s data center sector. The country has some 13 MW of live IT as of 3Q 2023, with pipelines that could see that number boosted by a factor of ten. Tap or click here to read Enterprise Egypt’s deep dive into what’s being done to make Egypt a hub for green data centers.

Factors fueling data center demand in the MENA region: A boost in urbanization has driven demand for data centers in the region, with expanding urban areas standing as focal points for economic growth, JIL says. As online participation increases, the demand for efficient data storage, processing power, and network connectivity continues to rise. Data centers offer the necessary infrastructure to accommodate the increasing data traffic generated by a growing population. The region is also undergoing rapid digitalization, in terms of smart cities, e-commerce, telemedicine and industry.

An increase in the internet economy is also driving the need for data centers, along with a boost in mobile and internet penetration. The MENA region, in particular, has witnessed a rise in mobile and internet penetration rates, pushing demand for data centers upwards.

Regulatory Landscape: Data privacy regulations, data sovereignty regulations, and compliance frameworks all impact the future of data centers within the MENA region. The UAE, for example, has implemented the “National Cyber Security Strategy” to boost the nation’s cybersecurity ecosystem.

Emirates Group reports a record bottomline jump in 1Q 2024

Emirates posts record earnings: Emirates Group’s net income rose 71% y-o-y to a record AED 18.66 bn in its fiscal year ending 31 March 2024, marking its “best financial results ever,” according to the company’s annual report (pdf). The company posted a 14.6% y-o-y jump in total revenues to AED 137.34 bn during the period. The performance was attributed to heightened customer demand across markets and the group’s divisions.

Emirates + dnata results: National airline Emirates’ net income rose to AED 17.23 bn, up 62.9% y-o-y, with revenue growing 12.9% y-o-y during the period to AED 121.22 bn. Emirates Group’s air services provider subsidiary dnata saw its net income jump more than 300% during the fiscal year to AED 1.42 bn. The company logged AED 19.24 bn in revenues, marking a 29.1% y-o-y increase.

Thank the post-pandemic travel rebound: Emirates carried 51.9 mn passengers during the year, marking a 19% y-o-y increase, the airline said. Capacity also increased by 20%, “closing [the] gap to pre-pandemic levels,” the statement said.

Looking ahead: The company forecasts significant growth, driven by the Dubai government’s AED 128 bn investment to expand Al Maktoum International Airport. It plans to onboard 10 new A350 aircraft during 2024-25 to offer new routes, and five new 777 freighters from mid-2024 onward to boost cargo operations. Emirates Group is also eyeing international expansion, with plans to commence construction of advanced cargo facilities in the Netherlands and Iraq, the company said.

AIR ARABIA-

Budget carrier Air Arabia’s net income fell 22% y-o-y to AED 266 mn in 1Q 2024, according to its earnings release (pdf). The carrier attributed the sluggish growth to “seasonality shift during the month of Ramadan, higher fuel price, currency fluctuations in key markets, and ongoing supply chain challenges that contributed to higher inflationary costs across the industry.” Air Arabia reported 8% y-o-y growth in revenues, turning in AED 1.54 bn over the three-month period.

JTC-

Kuwait-based port management, logistics, and warehousing outfit JTC saw its bottomline boost 18% y-o-y to KWD 1.8 mn (USD 5.85 mn) in 1Q 2024, according to a Kuwait Stock Exchange (KSE) disclosure (pdf). Topline for the period was down 5.3% to KWD 7 mn, the disclosure said.

Behind the numbers: Despite the drop in revenues, the company saw a boost in net income on the back of a cost optimization drive, which saw operating costs and general expenses fall 7% and 14% y-o-y, according to a press release. The company also boosted its GCC presence, with operations in KSA and Qatar seeing double digit growth. The company also cited “geopolitical events” as having indirect effects on operations and operating revenue.

About JTC: Founded in 1979, JTC operates across Kuwait, KSA, and Qatar, catering to logistics sectors including ports management, contract logistics, warehousing, equipment leasing, and power rental, the statement said. JTC is part of investor Kuwait Projects Company Holding (KIPCO Group).

Iran to open eight more trade centers globally

Iran’s Trade Promotion Organization (TPO) has issued licenses for opening trade centers in eight different countries, Tehran Times reports, citing the TPO portal. The trade centers are opening in Basra and Mosul in Iraq, Mumbai in India, Almaty in Kazakhstan, Tianjin in China, Hanoi in Vietnam, Bangkok in Thailand, and Muscat in Oman. Iran has also appointed commercial attachés to Indonesia, Iraqi Kurdistan, Shanghai, Nigeria, Poland, and Serbia. The country will also reportedly appoint attachés to Brazil and Uzbekistan, with Saudi Arabia also on the agenda. Iran aims to boost the number of commercial attaches it has abroad from 17 to 30, the outlet reports.

Ooredoo Qatar + DDN eye partnership, Yango to debut warehouse robots

DATA CENTERS-

OoredooQatar is set to ink a strategic partnership with US company DataDirectNetworks (DDN Storage) to boost Qatar’s data storage and smart technology, QNA reports. The partnership will also involve streamlining the implementation of AI infrastructure and large-scale applications, Regional Director for the Middle East and Africa at DDN Ankur Arora said.

ROADS-

Dubai’s Roads and Transport Authority explored potential partnerships and investments with the China State Construction Engineering Corporation to improve the emirate’s road infrastructure and public transport during a meeting between the authority and the construction firm’s heads, according to a statement (watch, runtime: 0:37).

AVIATION-

Indian budget carrier Akasa Air has added Saudi as its second international destination on its network, it said in a post on X. The airline said it will launch two direct routes from Mumbai and Ahmedabad to Jeddah starting July. Akasa Air will fly to Jeddah from Mumbai starting Monday, 15 July while flights from Ahmedabad will start on Sunday, 20 July. The airline added Doha as its first international destination earlier this year.

STORAGE + WAREHOUSES-

Yango brings its logistics + e-commerce tech to MENA: Last mile delivery platform Yango will debut its robotic pick-and-place platform and other solutions for streamlining warehouse automation at the Dubai Seamless 2024 event, Transport and Logistics reports. The platform is designed to improve warehouse efficiency by using computer vision that allows any off-the-shelf stationary robot to operate with human-like capabilities. These robots can accurately navigate warehouse environments and make real-time decisions.

Yango looking to expand in the region: Yango is actively seeking partnerships in the Middle East. “We believe that our delivery solutions have the potential to transform the industry and serve the diverse needs of businesses and consumers in the GCC region,” Yango’s Regional Head of Autonomous Delivery Solutions, Middle East, Nikita Gavrilov said.

Hapag-Lloyd adds an ultra-large LNG new-build to its fleet

German shipping giant Hapag-Lloyd has added an ultra-large 24k TEU LNG-powered container ship from South Korean shipbuilder Hanwha Ocean to its fleet, according to a statement. The vessel is equipped with an LNG fuel tank manufactured from manganese steel, which is around 10 times cheaper than the more widely used nickel. Hapag-Lloyd had inked a contract with Hanwha Ocean for a total 12 LNG dual-fuel vessels, ordering six in 2020 and another six in 2021. Deliveries of the vessel started this year.

An expanding regional LNG market: The move comes as regional players are inking deals to boost supply chains of LNG to Europe. Abu Dhabi National Oil Company (Adnoc) inked a preliminary 15-year agreement last week with German energy giant Energie Baden-Württemberg to supply it with 0.6 mn tons of liquefied natural gas (LNG) per year.

Calendar

MAY

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

14-15 May (Tuesday-Wednesday): Pre-LoadingAdvance Cargo Information session, Abu Dhabi, UAE.

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

18-21 May (Saturday-Tuesday): Exhibition of Rail Transportation and Related Industries, Tehran, Iran.

20-22 May (Monday-Wednesday): Future Aviation Forum, Riyadh, Saudi Arabia.

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

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

21-24 May (Tuesday-Friday): Global Supply Chain Forum, Bridgetown, Barbados.

26-28 May (Sunday-Tuesday): ProPak Mena 2024, Cairo, Egypt.

27-30 May (Monday-Saturday): Comex Technology Show, Muscat, Oman.

JUNE

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

2-3 June (Sunday-Monday): Offshore Support Vessels Conference, Abu Dhabi, UAE.

5 June (Wednesday): The Optimism Forum, Cairo, Egypt.

5 June (Wednesday): Digital Transformation Summit, Riyadh, Saudi Arabia.

5-7 June (Wednesday-Friday): Sustainability World Summit, Frankfurt, Germany.

6-7 June (Thursday-Friday): Supply Chain Innovation Summit, Amsterdam, Netherlands.

6-7 June (Thursday-Friday): International Symposium on Sustainable Logistics, Mersin, Turkey.

11-13 June (Tuesday-Thursday): Terminal Operations Conference & Exhibition, Rotterdam, Netherlands.

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

26-27 June (Wednesday-Thursday): Decarbonizing Shipping Forum, Rotterdam, Netherlands.

27 June (Thursday): East Med Maritime Conference, Beirut, Lebanon.

29 June (Saturday): The Investment Conference in cooperation with the European Union, Brussels.

JULY

2-4 July (Tuesday-Thursday): ACI Europe Annual Congress, Istanbul, Turkey.

14 July (Friday): AI Integration and Autonomous Mobility, Berlin, Germany.

SEPTEMBER

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, KSA.

OCTOBER

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

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi, UAE.

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

8-10 October (Tuesday-Thursday): AntwerpXL Expo, Antwerp, Belgium.

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh, Saudi Arabia.

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

22-24 October (Tuesday-Thursday): Global Ports Forum, Singapore.

NOVEMBER

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

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

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

DECEMBER

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

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

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.

The Cross-Border Digital Trade Forum, Dubai.

2025

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

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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