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TODAY: DP World breaks on logistics park in Egypt’s Ain Sokhna port + Israeli shipping firm reroutes vessels amid attack threats

Good morning, lovely people. We have another relatively tight issue for you this morning, with some updates on maritime tensions in the region, the ongoing drought in the Panama Canal, and a lot of collaboration and consolidation happening in Saudi Arabia.

THE BIG LOGISTICS STORY- There’s no single big logistics story this morning, but attention is split between news of DP World breaking ground on its logistics park in Egypt’s Sokhna Industrial Zone, Saudi conglomerate Asyad Holding’s acquisition of a stake in Swissport Saudi Arabia, and more collaboration between Saudia Cargo, Cainiao, and WFS for cargo handling in Belgium.

^^ We have everything on this story and more in the news well, below.

DP World breaks ground on Sokhna logistics park: Emirati port operator DP World has broken ground at its USD 80 mn DP World-Sokhna Logistic Park at Sokhna Industrial Zone, according to a Suez Canal Economic Zone (SCZone) press release. The 300k square meter project looks to provide services to local and regional logistics, commerce, and distribution sectors, bolstering supply chains and trade. The first phase of the project is slated for completion by the close of 2024 and will see investments worth USD 50 mn, Regional Director of DP World Group Urs Moll added. Operations at the logistics park will kick off after the construction of the project’s first phase is completed, the statement said.

Background: DP World had inked the construction agreement for the investment with the SCZone Main Development Company in August 2022.

Heavy rainfall has caused the railway service between Pakistan and Iran to besuspended due to flooding alongthe track, ARY News cites Pakistan Railways officials as saying. A cargo train transporting sulfur from Iran had to stop midway and an Iran-bound train from Quetta had to stop at Dalbandin, the outlet writes.

DISRUPTION WATCH- Israeli shipping company Zim is temporarily rerouting some of its vessels due to threats to shipping in the Arabian and Red seas, according to a press release. The company says it remains committed to serving Eastern Mediterranean and Israeli ports, though longer transit times are expected due to the rerouting.

REMEMBER- At least two Israeli ships have been targets of attempted seizures over the past two weeks, after Yemeni Houthis warned they would attack Israeli ships in regional waters amid the ongoing war in Gaza.

WATCH THIS SPACE- Abu Dhabi Airport has big expansion plans: Abu Dhabi Airport is looking to attract more airlines to fly to the UAE capital as well as increase its passenger capacity from 45 mn to 65 mn within 10 years, managing director and interim CEO of Abu Dhabi Airports Elena Sorlini told The National. The airport is eyeing Asia and China in particular as targets from which to attract airlines, Elena Sorlini, managing director and interim chief executive of Abu Dhabi Airports, told The National. “The target is to enhance the connectivity of Abu Dhabi and to unlock its potential from a tourist, trade and air cargo perspective,” Sorlini added.

ICYMI-Twenty-eight international airlines are now fully operational from Abu Dhabi International Airports Terminal A, making it the primary terminal serving the airport. The transition to Terminal A aims to boost the airport's capacity, with the ability to process some 45 mn travelers annually and handle 79 planes at once. The terminal launched operations at the start of November.

HAPPENING THIS WEEK-

It’s OPEC+ o’clock: OPEC+ member states are meeting tomorrow to discuss how the cartel of oil-producing nations will respond to falling oil prices, decide on next year’s production targets, and make a decision on whether to prolong production cuts.

The experts are still banking on a cut: “With fundamentals softening and market sentiment bearish, OPEC+ may need to announce another formal cut,” analysts at Eurasia Group said in a report Monday cited by Bloomberg.

But there’s finally some good market news for OPEC+: After nearly two months of almost daily drops, oil prices reversed course and rose yesterday above the USD 80 a barrel mark. The rally in oil prices was on the back of warming market sentiment as it seems increasingly likely that OPEC+ will prolong or deepen production cuts, a weak USD, combined with a 56% weather-related drop in daily output from Kazakhstan’s largest oil fields, according to Reuters.

Another delay is still on the cards: Reuters picked up chatter from OPEC+ sources that the once-delayed meeting may be delayed again as African member states seem to be remaining firm on their refusal to cut production quotas for 2024.

Pakistan’s Prime Minister Anwaar ul Haq Kakar is in Kuwait to meet Crown Prince Meshal Al Sabah and Prime Minister Ahmed Al Sabah, where they will ink MoUs on manpower, information technology, mineral exploration, energy, defense, and food security, according to a statement.

TOC Asia kicked off yesterday and will end today at Marina Bay Sands in Singapore. Representatives of the maritime and logistics industry will focus on challenges in the sector across the Asia-Pacific region as well as network with supply chain experts.

The China Trade Week Saudi Arabia 2023 kicked off on Sunday and will wrap today in Dammam, with over 200 Chinese firms in attendance. The Chinese companies aim to expand their presence and explore potential investments in Saudi Arabia, according to the event’s website.

Antwerp XL will kick off today and run until Thursday at Antwerp Expo Hall 4 in Antwerp, Belgium. The event provides a platform for breakbulk, roro, heavy lift, and project cargo industry members to discuss important industry topics, talk to experts, meet top cargo owners and freight forwarders, and discuss trends and solutions as well as how to overcome challenges in the industry.

The International Maritime Organization (IMO) Assembly kicked off earlier this week, and will run till 6 December in London. The event is open to all 175 IMO members and will also be attended by observers from intergovernmental and non-governmental organizations. The assembly will look at approving the work program and budget for the IMO, while electing members of the 40-member council of the IMO. The assembly will also adopt several resolutions on key matters of the IMO’s work.

MARKET WATCH-

Russia’s weekly seaborne crude exports rebounded prior to a meeting of OPEC+ oil ministers that had been delayed due to disagreements by the group over output targets, Bloomberg reports.

Global dry bulk fleet growth will not surpass 3% in 2023,Hellenic Shipping News reports, citing shipbrokers Intermodal ’s weekly report. For the first 11 months of 2023, the industry commissioned some 416 bulk carriers with a DWT of 30.72 mn, and an increase of 2.59 mn DWT is expected by the end of the year, totaling 33.31 mn DWT. The sector also decommissioned 86 bulk carriers with a total DWT of 5.62 mn. This has all resulted in a fleet growth of 3% y-o-y. For 2024, the dry bulk trade is poised to add some 495 vessels with a total of 34.8 mn DWT, Intermodal’s head of research department Yiannis Parganas is quoted as saying by the outlet.

CIRCLE YOUR CALENDAR-

Iranian President Ebrahim Raisi will visit Turkey next month to discuss bilateral ties, as well as proposals by the Iran-Turkey Joint Chamber of Commerce for boosting bilateral trade, including through a potential trade agreement, state-aligned Tasnim News Agency quotes chairman of the chamber Mehrdad Saadat as saying. Saadat said that Iran’s trade with Europe could grow by taking advantage of Turkey’s trade capacities.

The third Iran-UAE Joint Economic Cooperation Commission meeting will be held in the coming weeks in a bid to develop bilateral cooperation, deepen commercial ties, and boost trade. The location has yet to be announced.

The International Conference on Air Services Negotiations (ICAN) 2023 will take place between 3-7 December at the Hilton Riyadh Hotel and Residences in Saudi Arabia. The event is hosted by the Saudi General Authority of Civil Aviation, and will serve as a meeting point for bilateral, regional air services talks and consultations, as well as a networking platform for policy makers, regulators, air operators, service providers and other stakeholders.

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

Saudi conglomerate Asyad Holding Asyad nabs 49% stake in Swissport Saudi Arabia

Saudi Asyad Holding has inked a binding agreement to acquire a 49% stake in Swissport International’s Saudi division, according to a press release (pdf). The acquisition by family-owned multi-sector player Asyad is subject to the approval of Saudi regulatory authorities, the release adds. The value of the acquisition and the timeline of its completion were not disclosed.

The transaction is expected to fund the growth of Swissport’s Saudi division: “We expect that the collaboration with a strong national partner will accelerate our growth in this fast-growing market,” President and CEO of Swissport International Warwick Brady said. Swissport is looking to expand its air cargo handling, airport ground services, and lounge operations in the Kingdom, particularly in cooperation with Saudi-based carriers, the statement explained.

About Swissport Saudi Arabia: Cargo handling and airport ground services provider Swissport first broached the Saudi market in 2016, when it kicked off operations in Riyadh and Jeddah. The company now provides passenger and ramp handling services at five major airports in Riyadh, Jeddah, Dammam, Medina, and Buraidah. 2022 saw Swissport Saudi Arabia serve some 5 mn passengers and handle 20k aircraft, the statement said.

Saudia Cargo, Cainiao, and WFS are collaborating to enhance logistics at Belgium’s Liege

Saudia Cargo, Cainiao, and WFS collaborate on cross-border e-commerce shipments in Liege: Saudia Cargo, Chinese e-commerce logistics provider Cainiao, and global air cargo logistics provider Worldwide Flight Services (WFS), will “reinforce and increase” their collaboration to optimize the processing of e-commerce shipments in Liege, Belgium, according to a press release. The new arrangement is set to kick off on 1 March 2024.

#1- A new dedicated cargo space: The agreement will see the establishment of a dedicated area in the air cargo station of Cainiao Liege eHub, Cainiao’s regional hub for Europe, the statement said.

#2- An extension to a cargo handling contract: WFS will also see an extension to its contract for handling 50k tonnes per year of cargo on flights between Riyadh and Liege in coordination with Saudia Cargo, the statement said, without disclosing the period for which it was extended. WFS/STATS subleases part of Cainiao’s Liege hub, the statement said.

The arrangement also doubles down on a pre-existing Saudia Cargo and Cainiao strategic partnership: Specific Saudia Cargo freighter flights from Hong Kong to Riyadh and Liege will get precedence in terms of cargo handling, as per the new framework’s terms, the statement added.

Growing demand for cross-border e-commerce logistics services in the Middle East and Europe is the driver behind the new agreement, as the trio of companies look to exploit explosive demand in the sector.

What they said: “Our collaboration ensures a seamless flow of e-commerce materials from Hong Kong to Liege. With high frequency flights on our Hong Kong to Liege Via the Riyadh route, we have a significant capacity exclusively dedicated to Cainiao,” Saudia Cargo CEO Teddy Zebitz said.

KSA’s PIF secures USD 3 bn syndicated loan to finance Korean imports

PIF gets syndicated loan to boost Korean imports for Saudi projects: The Public Investment Fund (PIF) — Saudi Arabia’s sovereign wealth fund — has secured a loan of up to USD 5 bn from a syndicate of nine unnamed international banks to finance its imports from Korea for projects that are partially or fully run by the fund, according to a joint statement released yesterday. Information about the specific type of exports and projects the agreement is targeting as well the advisors on the transaction wasn’t made public.

The details: The lenders will initially disperse USD 3 bn, while the loan size can later be expanded to USD 5 bn, according to the agreement. This carries a door-to-door 13-year tenor and is covered by the Korea Trade Ins. Corporation (K-SURE) – the official export credit agency of South Korea. The financing by K-SURE is the first for the PIF by an export credit agency.

What they said: “Through this financial support, Korean companies have not only gained technological competitiveness but also financial competitiveness to increase orders,” said President of K-sure Inho Lee.

Background: K-sure and PIF agreed to strengthen collaboration back in 2022, with the goal of promoting Korean exports of goods and services ot projects funded by PIF, the statement said.

KSA + South Korean trade has been on a roll: The Kingdom’s trade with South Korea totalled USD 46.5 bn in 2022, according to Korea International Trade Association data cited by Nikkei Asia. South Korea’s exports to KSA rose 46.3% y-o-y to USD 4.9 bn in 2022, and imports to South Korea from KSA jumped 71.6% to USD 41.6 bn.

The story got ink inBloomberg andReuters.

KSA + Uzbekistan ink transport infrastructure agreements + Pakistan, UAE agree to cooperate on logistics and port operations. PLUS: More from Iran and Kuwait

Saudi Arabia and Uzbekistan signed agreements to the tune of USD 12 bn that will see the Kingdom roll out substantial investments in Uzbekistan, including in transport infrastructure, Uzbekistan’s News Agency (UzA) reported on Monday. The exact proportion of investments slated for boosting Uzbekistan’s infrastructure was not disclosed.

Information is scant: The two countries agreed to promote new projects and programs in transport infrastructure and other sectors. It’s unclear what promote means or whether Uzbekistan has the institutional capacity to organize an effort of that size.

Where the funds are coming from: A joint fund to scale-up Uzbekistan’s economy is in the works, UzA reported. The Saudi Fund for Development (SFD) is also weighing in by backing projects in healthcare, water supply and education and others.

KSA has had rising appetite for Uzbekistan for a while now: Trade turnover and inbound Saudi FDI has been on the rise, mainly in green energy, Uzbekistan President Shavkat Mirziyoyev noted.

OTHER DIPLOMACY NEWS-

UAE + Pakistan have also inked a number of multi-bn USD agreements: Pakistan's Prime Minister Anwaar ul Haq Kakar met with UAE’s President Sheikh Mohamed bin Zayed in Abu Dhabi, where the pair witnessed the signing of a slew of MoUs on investments, including in logistics and port operations, according to a statement from the Prime Minister’s office. The signed MOUs will grant Pakistan access to multi-bn USDs in investments, the statement said.

Kuwait and San Marino’s civil aviation authorities agreed on terms for a formal agreement to regulate bilateral air operations and boost cooperation in civil aviation, Kuwait News Agency (KUNA) reports. The two countries also inked an MoU regulating shared operating rules and transport rights. The frameworks are expected to boost Kuwait’s air connectivity, an official said.

ALSO WORTH KNOWING-

Iraqi Trade Minister Atheer Daoud Al Ghurairy met with Iranian Minister of Information and Communications Technology Issa Zarepour to explore boosting ties in e-commerce and a joint digital economy freezone. (Mehr)

US retailers are getting more selective with their inventories this holiday season + Maersk divests stake in Hoegh in latest in cost-saving measures

Wary of overstocking, US retailers have reworked their inventory strategy for this year’s holiday season:Big-box retailers such as Walmart and Target, and specialized stores such as Best Buy, are trimming their inventories ahead of the busy holiday shopping season, opting to zero-in their supply chains on products with high demand, the Wall Street Journal reported. Retail outlets spent a considerable part of this year working through overstocked inventories carried over from 2022.

Supply-chain flexibility is the new mantra: Buying trends are more unpredictable now than they were before the pandemic, global leader of the retail practice at consulting firm AlixPartners David Bassuk told WSJ. The volatility in consumer spending patterns has motivated executives to apply more adaptable inventory strategies. “What is driving our top line sales is our ability to keep our inventory fresh and clean,” Dick’s Sporting Goods CEO Lauren Hobart said on a 21 November investors’ call. Macy’s executives are gearing their inventories to emphasize “variety versus redundancy,” president and CEO-elect Tony Spring said.

Holiday sales are expected to show muted growth this year: Retail sales for the 2023’s holiday season are expected to grow between 3-4% over 2022’s figures to between USD 957.3 bn and USD 966.6 bn, WSJ reports citing National Retail Federation projections. Holiday sales grew 5.3% y-o-y in 2022 to USD 936.3.

Danish shipping company AP Moller-Maersk has sold its remaining shares in Norwegian shipping firm Hoegh Autoliners, Reuters reports. Maersk, the second largest shareholder of Hoegh Autoliners, sold its 20 mn shares for NOK 90 (USD 8.3) a share. The shares accounted for 10.5% ownership and voting rights in the Oslo-listed company.

Dig deeper: The move comes as Maersk works to prepare for “challenging times ahead,” CEO of Maersk Vincent Clerc said during the company’s Q3 presentation in November. “Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base. Given the challenging times ahead, we accelerated several cost and liquidity-saving measures to safeguard our financial performance.”

The news got a lot of ink in: Reuters, Splash, Marine Link, and TradeWinds.

Panama canal holds first auction for queue jumping + The US isn’t happy with Turkey’s exports to Russia

The Panama Canal Authority (ACP) is holding auctions for vessels looking to jump the queue to transit the congested waterway, with the base price for the first auction set at USD 55k and the awarded bid worth USD 1.1 mn, reports Seatrade Maritime. For a vessel to qualify to bid it needs to have arrived in Panamanian waters, without a prior reservation, before 17 November, according to a statement. ACP says the auction will be announced three days before the transit date and will be held two days prior. ACP has released an application form for waiting vessels to register their bids. Bidding will be available to regular vessels and Panamax vessels that have been in the queue for at least 10 days.

Background: The Panama canal has placed significant limits on vessels transiting the waterway due to a drought decreasing its water levels, which has caused a growing queue of vessels. The sale of slots to transit the canal have netted USD 235 mn from shipping companies in 2023, Bloomberg reports.

The US and its allies are concerned over the increase in Turkey’s military-linked exports to Russia, which have reportedly soared in 2023, the Financial Times reports. US Treasury under-secretary for terrorism and financial intelligence Brian Nelson is set to visit Istanbul and Ankara this coming week to discuss “efforts to prevent, disrupt and investigate trade and financial activity that benefits the Russian efforts in its war against Ukraine.” Turkey’s exports to Russia reached USD 158 mn in 45 goods that the US regards as “high-priority” in the first nine months of 2023. The 45 categories of dual-used goods include communication equipment, microchips, and telescopic sights.

Calendar

NOVEMBER

Mid-November: Third Caspian Economic Forum, Iran.

November: Iran-UAE Joint Economic Cooperation Commission.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

28-30 November (Tuesday-Thursday): Antwerp XL, Antwerp Expo, Hall 4, Antwerp, Belgium.

30 November-3 December (Thursday-Sunday): Handling Expo, Egypt International Exhibition Center, Cairo, Egypt.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

DECEMBER

3-7 December (Sunday-Thursday): The International Conference on Air Services Negotiations (ICAN) 2023, Hilton Riyadh Hotel and Residences, Saudi Arabia.

4-6 December (Monday-Wednesday): ACE 23 Air Cargo Conference, Yas Island Hotel, Abu Dhabi, UAE

4-7 December (Monday-Thursday): Eurasian Economic Union (EAEU) exhibition, Tehran Permanent International Fairgrounds, Tehran, Iran.

10-11 December (Sunday-Monday): Invest in Logistics, St.Regis Almasa Hotel, New Administrative Capital, Egypt.

12-14 December (Tuesday-Thursday): Food Africa Cairo 2023, Egypt International Exhibition Center, Cairo, Egypt.

18-20 December (Monday-Wednesday): International Exhibition of Transportation, Logistics, and Related Industries (Iran Trans Expo 2023), Imam Khomeini Grand Prayer Campus (Mossala), Tehran, Iran.

EVENTS WITH NO SET DATE

2H 2023:Construction of Neom’s first hydrogen fueling station will kick off.

2H 2023: Expansion of Baghdad International Airport to begin.

Before the end of the year: The first phase of the Ain Sokhna port redevelopment will wrap.

2024

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.

King Salman Energy Park is set to become operational.

FEBRUARY 2024

13th World Trade Organization Ministerial Conference, Abu Dhabi, UAE.

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

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

28 February-1 March (Wednesday-Friday): MENA Transport Congress and Exhibition 2024, Dubai, UAE.

MARCH 2024

5-6 March (Tuesday-Wednesday): MRO Middle East, Dubai Trade Center, 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 2024

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

MAY 2024

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

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

JUNE 2024

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

OCTOBER 2024

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

NOVEMBER 2024

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

DECEMBER 2024

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

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.

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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