Last-mile AVs are coming to Dubai

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What we're tracking today

TODAY: Ukraine could impose more sanctions on Iran + Boeing could sell USD 8 bn in jets to Riyadh Air

Good morning, friends. It’s a quiet day in the logistics world, with just a few updates on the diplo and startup fronts — but we have a meaty story on Dubai’s ambitious autonomous vehicles strategy to sink your teeth into this morning.

THE BIG LOGISTICS STORIES- Israel and Morocco have inked three agreements in the field of maritime shipping, road safety and transport. Meanwhile, Emirati logistics startup Cargoz has raised an undisclosed bridge round to fuel its expansion to Riyadh.

HAPPENING TODAY-

More sanctions on Iran? Ukrainian President Volodymyr Zelenskiy put forward a bill on Sunday that would impose sanctions on Iran for 50 years in response to Tehran’s alleged supply of weapons to Moscow, Reuters reports. If the bill is passed by Ukraine’s parliament, it would stop Iranian goods transiting through Ukraine and its airspace as well as impose trade, financial, and technology sanctions against Iran and its citizens. Ukraine and its allies are alleging that Iran has been supplying Russia with arms, including hundreds of drones, since last year, allegations that Iran denies.

Oman’s Public Establishment for Industrial Estates (Madayn) has completed OMR 5 mn of construction work on Nizwa Industrial City, including the third and fourth phases, according to a press release. The project spans an estimated 4 mn sqm, including the construction of 6.3 km of internal roads, with 90 truck parking areas covering 13k sqm that will serve cargo owners and investors, according to the release. Nizwa Industrial City has tenants from manufacturing service and commercial sectors, with investments of over OMR 480 mn, according to the statement.

What’s next: Madayn will launch a tender for the consultancy services project for phase five, which covers an estimated area of 4 mn sqm, the press release said.

SCZone deputy works to drum up investments during roadshow in Sweden: Ibrahim Abdel Khalek, deputy chairman of the Suez Canal Economic Zone (SCZone), met with Swedish officials during his visit to Stockholm to discuss investments and trade policies in a bid to encourage Swedish companies to invest in Egypt, according to a statement. Abdel Khalek also met with representatives from Business Sweden, a firm that facilitates Swedish companies’ expansion into international markets to discuss exploring potential investments in the pharma industry within the zone.

WATCH THIS SPACE #1- Boeing could be selling USD 8 bn worth of jets to Riyadh Air: US-based planemaker Boeing is in talks to sell at least 150 737 Max aircraft to Saudi-based startup Riyadh Air for an estimated USD 8 bn, as the airline is on the hunt for 300-400 single-aisle jets, Bloomberg reports. However, the discussions are “complicated,” with timing and structure remaining uncertain, while there’s also a possibility of Airbus claiming a share of the order, sources told Bloomberg. If Boeing secures the sale, it would mark the second major purchase agreement for the company in Saudi, after it previouslypromised 787 dreamliners to Riyadh Air and national carrier Saudia.

WATCH THIS SPACE #2- Hungary’s Prime Minister Viktor Orban is seeking financial help from Qatar in acquiring Budapest Airport as part of a planned acquisition that has been delayed for two years due to Hungary’s growing budget deficit, Bloombergreports. Hungary’s government has been seeking financing or partners to help it repurchase the airport from its current owners — a consortium led by AviAlliance, a Germany-based airport management company and the airport’s largest shareholder. Hungary is currently in advanced discussions to reacquire the hub for EUR 4.44 bn, and is planning to finalize the agreement by year-end. Hungary would “welcome” Qatari involvement, Orban told Bloomberg, adding that the transaction is “not just to buy out but to have a big scheme to develop it,” he added.

WATCH THIS SPACE #3-Oman provides tax breaks for EVs: Electric vehicles in Oman will be exempt from value-added tax, customs tax, and registration fees nationwide starting 1 July, Oman News Agency (ONA) reported on Sunday. The exemption, which will also apply to EV spare parts, will remain in effect for three years and will be subject to renewal, according to ONA. The move is part of the sultanate’s efforts to transition to zero-emission vehicles and encourage residents to purchase EVs. It also aims to encourage car suppliers to import a wide range of EVs to ensure diversity and stability in the market.

DATA POINT #1- Jordan’s total exports, including re-exports, increased 6.3% y-o-y in 1Q 2023 to JOD 2.12 bn, according to figures from Jordan's Department of Statistics picked up by Jordan News Agency (Petra). Imports rose 5.6% y-o-y to JOD 4.51 bn, while national exports rose 8.8% to JOD 1.98 bn during the quarter, according to Petra. Total monthly exports during March, including re-exports, fell 15.6 % y-o-y to JOD 655.2 mn.

DATA POINT #2- Qatar’s trade surplus rose 3.5% m-o-m in April 2023 but declined 35.6% y-o-y during the month, according to the country’s Planning and Statistics Authority. Qatar’s total exports of goods stood at around QAR 30.7 bn in April, slipping 0.5% m-o-m and 29.4% y-o-y, while imports fell 9.3% m-o-m and 6.3% y-o-y to QAR 8.7 mn.

MARKET WATCH-

Saudi Arabia is cashing in on cheap Russian diesel by re-exporting shipments to Singapore, according to ship tracking data picked up by Reuters. Saudi Arabia has been exporting record volumes of Russian diesel — which has been diverted from its original routes on the back of sanctions due to the war in Ukraine — to Singapore. It is expected to import 500k more tons in May, and to export some 400k tons, which is an “unprecedented level,” Reuters quotes industry sources as saying.

CIRCLE YOUR CALENDAR-

The Made in Russia + Innoprom business mission kicked off yesterday at the Riyadh Chamber of Commerce in Riyadh and ends today. This event brings together participants including the Russian industry and trade ministers, the Saudi industry and mineral resources minister, and representatives of business unions and councils, to enhance Russian-Arab cooperation, develop business ties and export sales channels, and improve international competitiveness of products.

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

Emirati logistics startup Cargoz receives bridge funding to expand to KSA

UAE-based logistics startup Cargozhas secured an undisclosed bridge funding from Saudi VC firmsNama Ventures and Raz Group, and other angel investors involved in the logistics industry, according to a press release. Cargoz did not respond to Enterprise Logistics’ request for details on the value of the round ahead of dispatch time.

Where will the money go? The funds will be used to finance the company’s growth in the UAE, and to prepare for launch in Riyadh by 3Q 2023, according to the statement.

Background: Cargoz raised an undisclosed sum in a pre-seed round from Nama Ventures in August 2022, which was used to grow the company and expand its operations outside of Dubai to other emirates.

About Cargoz: Founded in 2022 by Premlal Pullisserry (Linkedin) and Lijo Antony (Linkedin), Dubai-based Cargoz is a warehousing and logistics startup that connects SMEs who need flexible, on-demand warehouses to warehouse owners and operators who have empty or unused space.

OTHER STARTUP NEWS-Morocco’s PrestaFreedom secures USD 1.1 mn to improve logistics operations: Moroccan home services startup PrestaFreedom has secured USD 1.1 mn (MAD 11 mn) in funding from Azur Innovation Fund, Agence Marocaine de Presse reports. The funds will be used to enhance the startup's logistics and technology infrastructure, optimize its supply chain, and grow its operations, which includes expanding into several African markets starting next year.

Alexandria Container and Cargo Handling reports surge in income in 9M 2022-23

Alexandria Container and Cargo Handling’s bottomline rose 152% y-o-y toEGP 3.2 bn in 9M FY 2022-23, according to a disclosure to the EGX (pdf). The EGX-listed company recorded a topline of EGP 3.4 bn, up 85.4% y-o-y.

The breakdown: The company’s storage unit recorded a 162.8% y-o-y increase in revenues, reaching EGP 1.7 bn. Revenues related to discharging activities increased 37.61% y-o-y to EGP 558.8 mn, with the shipping sector’s topline increasing 55.5% y-o-y to EGP 263 mn. Transit revenues, on the other hand, fell 85.1% y-o-y to EGP 836k.

REMEMBER- Abu Dhabi wealth fund ADQ acquired stakes in Alexandria Container and Cargo Handling, alongside five other Egyptian state-owned companies, for around USD 1.8 bn as part of the USD 2 bn investmentthey had agreed to back in March 2022.

2023 could be a big year for autonomous vehicles in Dubai

Dubai is spearheading the adoption of autonomous vehicles (AV) based logistics solutions in MENA as it pursues one of the world’s most ambitious programs in the field. The city is angling to have 25% of all of its trips automated by 2030 through a government-backed strategy that will see widespread use of multimodal AV transport. Despite promising many benefits — particularly in terms of safety and efficiency — the path still remains riddled with hurdles, from legislative ones to issues of practicality.

First things first: What are autonomous vehicles — and what potential do they offer for the logistics sector? AV-based solutions are set to deliver big upgrades to logistical performance in the near future, according to a report (pdf) authored by Senior Economist and Applied Scientist at Uber Freight Mazen Danaf. Chief among these is better safety, helping potentially reduce human errors that have caused some 87% of 5k deaths due to trucking accidents in the US in 2019. AV-based logistics also mean better operations in terms of reduced traffic congestion, and can also help fill gaps in labor shortages, the report explained. Dubai’s government estimates that autonomous vehicles could help it save some AED 22 bn per year in costs, according to its roadmap (pdf).

Enterprise Logistics spoke to Ismail Zohdy (LinkedIn), the program manager for Dubai’s self-driving transport strategy to discuss the emirate’s plans for AV development, and how it plans to tackle the challenges that lie ahead. Zohdy offers his opinions in his capacity as an AV expert, and not as a representative of a specific entity or organization.

Two facets of Dubai’s strategy make it a world first:

#1- It’s government-backed. Unlike private sector-led AV, Dubai’s SDT strategy gets its momentum from the government. That means that many of the bureaucratic, legislative, and regulatory potholes that hold up private sector initiatives elsewhere in the world are streamlined in Dubai’s case.

#2- It encompasses a wide range of transport modes, amounting to seven in total, from buses and metro to watercraft and flying taxis, Zohdy told Enterprise Logistics. Dubai’s strategy plans to integrate “the full portfolio of modes,” Zohdy said.

The strategy also benefits from solid infrastructure: Zohdy also mentions that Dubai’s physical infrastructure is among the best in the world, providing an ideal platform for the application of AV-based logistics.

In terms of readiness, first-mile-last-mile and ridesharing AV solutions are closest to hitting the road, Zohdy said. “A big initiative in that regard will be released this year,” he noted, while cautioning that timeframes are always tricky to nail down where such a dynamic field is concerned. Nevertheless, preliminary tests have been promising with the successful roll out of Talabat UAE’s “talabot” pilot program and Aramex’ test of a robo-delivery program. Another milestone Zohdy mentions is Dubai’s passing of the region’s first AV-related legislation this year, regulating the operation of AVs.

Autonomous vehicles mean more efficiency + improved safety: Dubai hopes to realize substantial benefits from widespread application of AV-based logistics, includingimprovements in safety and operational savings, as AV-based logistics systems assign routes using advanced algorithms that maximize efficiency, Zohdy said. These translate into faster deliveries, less down time, and more efficient use of resources.

Dubai’s SDT strategy is also a big plus as far as sustainability is concerned as all transport modes included in the strategy are electric, he added.

Challenges — including legislative, cultural, and infrastructure-based (both digital and physical) — abound, Zohdy said, while noting that most of these challenges are similar to those faced by AV-based logistics programs anywhere in the world. As far as legislation is concerned, Zohdy explains that the question of liability is particularly problematic as switching out humans for automated components makes it difficult to determine who is responsible should accidents involving AVs occur.

Dubai’s multiculturalism also presents difficulties, Zohdy adds. The city hosts hundreds of nationalities, each with their own distinct driving and pedestrian cultures. As AVs need to predict driver and pedestrian behavior, the multitude of contradicting patterns makes it difficult for AI to judge how human actors will interact with their routes and immediate vicinity. Also relevant to the “people pillar” is widespread acceptance of AVs, which also presents challenges. In terms of infrastructure, Zohdy notes that AVs must be made to interpret road signs in both English and Arabic, for example.

AVs are also expensive: The business model is “not easy,” Zohdy says. AV systems are expensive to install and operate, making their feasibility as investments hard to justify when compared to the relatively low cost of hiring a human driver. Zohdy cites advanced sensors and a 24-hour control center as examples of significant one-time and operating costs that must be accommodated.

Nevertheless, it’s full steam ahead: 2023 is a “big year” with more milestones than any other year since the program started in 2017, Zohdy told us, adding that we will likely see the roll out of some AV systems after the successful conclusion of tests.

Dubai is not the only city with an ambitious AV strategy: KSA’s USD 500 bn megaproject NEOM is also looking to roll out automated logistical solutions at its multiple sites. These will include the world’s first fully automated seaport, autonomous ground and air shuttles and a carless city. NEOM recently invested USD 175 mn in a joint venture with eVTOL company Volocopter. The investment will see both sides working together on “fleets, operations and infrastructure to localize industry innovation,” according to NEOM. Although the near future will likely see a slew of such concrete steps, few details of NEOM’s integrated AV-based logistics strategy have been released thus far.

Israel + Morocco ink transport agreements + Kuwait, Saudi officials talk trade + aviation cooperation. PLUS: More cooperation between UAE + Czech Republic, Oman and Bangladesh, and Oman and Iran

Morocco and Israel signed three transport, shipping, and road safety agreements during Israeli Transport Minister Miri Regev’s visit to Morocco, according to an Israeli Transport Ministry statement. The first agreement will see the two countries recognize drivers’ licenses issued from each country for visitors and residents, which they say will contribute to strengthening business relations and tourism. The two countries also signed a shipping agreement to boost maritime trade and directly connect Israel and Morocco’s seaports, as well as encourage the exchange of knowledge in maritime logistics and ports, and facilitate joint research between the countries. The third and final agreement will establish guidelines for cooperation in the field of transportation by integrating innovative technologies and upgrading data collection in the shipping sector, as well as urban planning and infrastructure.

ALSO WORTH NOTING-

Officials from the UAE and the Czech Republic discussed boosting cooperation in trade and investment, and established working groups to help advance both, during theUAE-Czech business forum. (WAM)
Oman and Bangladesh discussed boosting cooperation in trade, investment, food security, and labor relations. (Ministry statement)
Oman and Iran inked four agreements to boost cooperation in investment, freezones, and energy.(Mehr News)
Kuwaiti and Saudi officials discussed boosting cooperation on trade, energy and aviation during high-level talks held as part of a coordination committee in Kuwait. (KUNA)
Officials from Jordan and Romania discussed building on their bilateral relations including trade during a phone call yesterday (Statement)

Container ships are moving at all time slow speeds

Container ships have been moving at all-time low speeds in 1Q 2023 to face “structural overcapacity” and high fuel prices, maritime and shipping research Clarksons said, according to Splash247. Average sailing speeds have slowed to 13.8 knots, down 4% y-o-y, with the possibility that this could further decrease to 10% by 2025, according to analysis from shipping association BIMCO. The slowing of services is a result of container ships absorbing capacity that would otherwise be a surplus as well as new environmental regulations and carbon taxes which increase fuel prices, Alphaliner analyst Jan Tiedemann told the news outlet. The transition to new and more expensive fuels such as LNG, ammonia, and methanol also will favor slow speeds, Tiedmann added.

SCZone continues roadshows in Sweden + Dubai Customs implements new X-ray scanning system. PLUS: News from PrestraFreedom, FAB, King Abdulaziz Port and IranAir

SHIPPING LINES-

Dammam added to Upper Gulf Express service: MSC has added King Abdulaziz Port to its Upper Gulf Express shipping service, the Saudi Ports Authority (Mawani) said in a statement. The new route launching at the end of May will connect Dammam to the Arabian Gulf ports of Khalifa, Sharjah, and Umm Qasr. The shipping service includes one vessel with a holding capacity of 4k TEUs.

ICYMI- King Abdulaziz Port was also recently added to the India-South Africa freight route operated by MSC, which began operating in early May — with five vessels operating with an average holding capacity of 6k TEUs.

CUSTOMS-

Dubai Customs gets a state-of-the-art X-ray system to enhance inspections: Dubai Customs introduced an advanced X-ray scanning system at the Jebel Ali and Tecom Customs Center to inspect heavy and light vehicles, equipment, and yachts in a bid to double the center's inspection capacity and enable faster procedures, according to a statement. The system allows the scanning of vehicles and large machinery measuring up to 5.9 meters by 5.5m, and can detect, identify, and locate radioactive substances, identify customs declarations using container numbers, and remotely control image analysis.

BANKING-

FAB launches new electronic payment platform for e-commerce players: First AbuDhabi Bank (FAB) launched an electronic payment portal called Access, providing electronic payment solutions to e-commerce businesses, small and medium enterprises and micro-enterprises,Daily News Egyptreports. The portal enables businesses to accept online electronic payments, follow up on transactions as well as oversee their payments. Access will also offer website tools solutions and payment link services to facilitate the creation of online stores.

FINANCE-

UAE’s DP World Trade Financehas partnered with Standard Bank to provide trade finance solutions for African businesses, according to Construction Business News. The financing will be provided through DP World Trade Finance’s single window digital platform to African businesses who require logistics and financial support to connect to global trade routes, according to the news outlet. The partnership will enable DP World to offer Standard Bank “access to data on cargo movements, enabling them to lend confidently,” Senior Executive Officer of DP World Financial Services, Sinan Ozcan is quoted as saying.

ALSO WORTH KNOWING-

Iran Air isadding one weekly flight from Tehran Imam Khomeini International Airport to London Heathrow Airport (LHR) starting 31 July. (Financial Tribune)

Calendar

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.

29-30 May (Monday-Tuesday) Made in Russia + Innoprom business mission, Riyadh Chamber of Commerce, Riyadh, Saudi Arabia.

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): Adnoc L&S’ shares will debut on the ADX.

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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