More non-USD trade

Good morning, friends. The news slowdown has not abated as we wrap the week, but there are a few updates from the UAE on the trade and diplo front worth noting, so let’s dive in.

THE BIG LOGISTICS STORY- The UAE and Iraq agreed to finance imports and trade in AED, in keeping with a trend in the region towards dedollarization.

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

Close call for jet fuel-laden tanker near Yemen: Two missiles fired from Houthi-held territory in Yemen missed a commercial tanker near the Bab El Mandeb strait, ABC News reported citing unnamed US officials. The Marshall Island-flagged tanker, dubbed Ardmore Encounter, was carrying Indian-manufactured jet fuel and traveling through the Bab el-Mandeb Strait in preparation for transiting the Suez Canal. The Ardmore Encounter was also targeted by speedboats and an American warship shot down a drone that was headed in the vessel’s direction, ABC also said.

ICYMI: A Norwegian tanker, the Strinda, was struck by a Houthi-fired rocket 60 miles north of the Bab El Mandeb strait earlier this week. Houthi attacks on ships transiting the Red Sea strait have escalated, following the group’s announcement that it will target Israel-bound ships in the Red Sea regardless of their nationality, amid Israel's ongoing war in Gaza.

UKMTO warns vessels to remain “vigilant”: Voluntary reporting mechanism United Kingdom Maritime Trade Operations (UKMTO) also received a report of an entity describing itself as the Yemeni Navy directing vessels to divert to a port in Yemen, according to a statement. Accordingly, the UKMTO has advised nearby vessels to be vigilant.

US lobbies for a multinational naval force to counter Houthi threat: The Biden administration is calling for a multinational naval force to protect shipping in the Red Sea and the Bab El Mandeb Strait, following a spate of Houthi-led attacks, the Washington Post reports. The administration plans to expand pre-existing Combined Task Force 153, which is focused on the Red Sea and Gulf of Aden.

The move has been described as “aspirational” and lacking a clear timeline, an American defense official close to the matter said.

PSA-SCA amends transit fee reductions for petroleum derivative tankers: The Suez Canal Authority (SCA) has extended transit fee reductions granted to loaded petroleum derivative tankers from the US Gulf Coast, the Caribbean, and Latin America to destinations in Asia, with some amendments going to effect in January and continuing until June 2024, Al Borsa reports. The rundown:

Tankers from the US Gulf Coast and the Caribbean boundfor ports on the western coast of the Indian subcontinent, beginning with Karachi Port and ending with Cochin Port, will receive a 30% reduction on transit fees;
Tankers from the US Gulf Coast and the Caribbean with cargoes bound for ports east of India’s Cochin Port until just west of Malaysia’s Kalang Port will receive a 65% reduction on transit fees;
Tankers from the US Gulf Coast and the Caribbean bound for Kalang Port and eastward; as well as those loaded in Latin America and bound for Karachi Port and eastward, will get a 75% discount;

ICYMI:In October, the SCA also rebated transit fees for dry bulk ships moving between Egypt’s Red Sea ports and continental Africa by 20-45% until June 2024.

DP World Australia calls on arbiter to intercede to end strikes: DP World has requested that the Fair Work Commission (FWC), a workplace umpire that arbitrates industrial disputes in Australia, mandate a 90-day “cool off” from strikes to allow for the resumption of talks with the Maritime Union of Australia, Australia’s Financial Review reported. The strikes, which have been ongoing since 1 October, have caused a backlog of 45k containers at terminals throughout Australia, more than the 30k containers left stuck by the cyberattack DP World Australia witnessed last month, the outlet said.

DATA POINT- Dubai’s Hatta Customs Center processed 50.8k trucks loaded with goods in 2023, according to a press release. The center also processed 655k vehicles and 1.8k passenger buses amid an increase in tourism to Dubai.

HAPPENING THIS WEEK-

#1- Food Africa Cairo 2023 wraps up today at the Egypt International Exhibition Center in Cairo, Egypt. The three-day agro-food exhibition brings together wholesalers, distributors, and retailers to create a network between international traders and vendors with their counterparts from Egypt, MENA, and Africa. The event aims to address the different needs of buyers and importers and to serve new markets in Egypt and Africa.

#2- Egyptian trade mission to Saudi wraps up tomorrow: The Engineering Export Council of Egypt’s weeklong trade mission to Saudi Arabia kicked off on Saturday and is set to end tomorrow. The delegation hopes to drum up orders and investments from the Kingdom for pumps, car parts, boilers, and everything in between.

MARKET WATCH-

DATA POINT- Oil stockpiles at Port Fujairah dipped to a four-week low hitting 9.2% in 4Q 2023, with a notable decrease in oil residues, according to a report by S&P Global. Fuel oil reserves used for power generation and shipping hit a seven-week low at 8.8 mn barrels. Heavy distillates experienced a 13% decline in 2023, while light distillates saw a 22% drop, and middle distillates recorded a significant 31%.

CIRCLE YOUR CALENDAR-

Iranian President Ebrahim Raisi will visit Turkey this 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 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 Exhibition of Transportation, Logistics, and Related Industries (Iran Trans Expo 2023) will take place on 18-20 December at the Imam Khomeini Grand Prayer Campus (Mossala) in Tehran, Iran. The event is organized by Iran’s Trade Promotion Organization, the Transport and Urban Development Ministry, and the Fund for Innovation and Prosperity of Unions and Associations.

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

Iraq to finance its trade with AED + UAE to start trade talks with Australia

The UAE and Iraq agree to trade in AED: First Abu Dhabi Bank (FAB) and the Central Bank of Iraq agreed on Wednesday to finance trade and imports in AED, Iraq’s state news agency reports. The banks also signed an agreement to move funding between their accounts, with the first transfer going through yesterday with five Iraqi banks.

REMEMBER- Iraq has been suffering from an ongoing FX shortage, with Trade Bank Iraq (TBI) receiving USD shipments just last week to curb the shortage. The country has been exploring the potential of trading with countries in currencies other than the USD, as well as implementing measures like limiting FX withdrawals, in a bid to dedollarize its economy.

Meanwhile, the UAE has been actively shifting away from the USD in its trade with several countries, including India. The two countries started to pay for crude oil shipments in local currencies last August.

OTHER UAE DIPLO NEWS- Australia will initiate negotiations on a trade agreement with the UAE in 2024, Australia's Trade Minister Don Farrell said in a ministry statement. The decision is part of Australia's strategy to broaden its export markets and reduce dependence on China.

Background: Negotiations with the UAE began after the collapse of trade talks with the European Union in October. Australia attributed the breakdown to inadequate market access for its agricultural products, Reuters reports. “The Government is committed to securing a trade agreement with the UAE to drive Australian exports, economic growth and create more well-paying jobs across the country,” Farrell said in the statement.

Saudi Arabia + China ink logistics and rail agreements. PLUS: Iran, Russia talk boosting trade

KSA + China ink USD 25 bn worth of agreements: The China-Saudi Investment Conference in Beijing saw some 60 agreements inked worth USD 25 bn, following Saudi Investment Minister Khalid Al Falih’s visit, the National reports. The signed agreements covered arrangements on logistics, infrastructure, technology, mining, energy, agriculture, and other key sectors and look to bolster bilateral trade and ties as the Kingdom pursues efforts to diversify away from oil, the National said.

Among the agreements:

A USD 7.5 bn arrangement between investment holding company Ajlan and Bros Holding Group and China’s Oriental Energy on manufacturing.
A USD 2 bn agreement between Saudi’s Investment Ministry and China’s state-owned rolling stock manufacturer CRRC Group to develop projects focused on renewable energy and sustainable mobility.

The conference also saw KSA dole out 9 regional HQ licenses to Chinese outfits: The Kingdom handed out regional HQ licenses to Huawei, Dahua, China Railway Construction Corporation, China Comservice, China Harbour Engineering Company, China Civil Engineering Construction Corporation, BGI, Nuctech and iMile. The awards come under the Saudi regional headquarter programme, an initiative led by KSA’s investment ministry and the Royal Commission for Riyadh City, which looks to attract multinational companies by offering incentives including a 30-year tax break.

ALSO WORTH KNOWING-

Iran’s Envoy to Moscow Kazem Jalali met with Russian Deputy Minister of Foreign Affairs Alexander Pankin to discuss boosting trade and economic ties. (Mehr News Agency)

Shipping has been on the decline this year, and 2024 doesn’t look much better

Global shipping growth is expected to remain sluggish in 2024 due to geopolitical developments, protectionism, and supply chain reconsiderations, Dutch financial institution ING said in a report. However, the MENA region’s trade is poised to surpass the global average in 2023 and 2024, the report adds.

That doesn’t mean there’s a lack of demand: Major diversions in shipping routes driven by Russian sanctions are pushing demand up for shipping, especially for liquid bulk, which includes oil and gas. Russia’s oil and gas are still being traded in markets but to different buyers. More Russian sanctions have been coming into effect in 2023, potentially increasing seaborne shipping distances by more than 3% y-o-y. This is likely to carry on through 2024 with no indications of a policy shift.

REMEMBER- Western countries have been ramping up G7 price cap sanctions, with the US imposing sanctions on UAE-based Lumber Marine and Turkey-based Ice Pearl Navigation in the first instance of such penalties back in October. The UK followed the US’s footsteps with new sanctions on UAE-based shipping firms including Sovcomflot and three other Dubai-based firms.

There could be more diversions with the war in Gaza + the Panama Canal drought: Bulk grain shippers transporting cargoes from the US Gulf Coast to Asia have been sailing longer routes due to the drought paying increased freight costs to avoid vessel congestion, and record-high transit fees in the Panama Canal, which has been facing a drought for months. Israel's war on Gaza is also impacting shipments going through the Red Sea, with several shipping firms diverting their ships from the Red Sea following a string of attacks from Yemen’s Houthis.

The longer shipping routes are mostly affecting tanker shipping, particularly for Russian oil heading towards China and India where it is sold at reduced rates. The G7 nations are ditching Russian oil and are opting for US and Saudi crude and Indian diesel. This will drive global oil product shipping up by double digits in 2023, while tonnage demand will grow by 4% y-o-y.

Container trade is seeing mild contractions in 2023, but is on track for 3% y-o-y growth in 2024, according to another ING report. The growth is expected to be driven by the normalization of consumption, destocking, improved global trade conditions and recovery from sanctions imposed on Russia are all set to drive a 3% y-o-y rise.

Heavy fuel oil (HFO) prices dropped by almost 30% y-o-y in 1H 2023 despite inflationary pressures, helping container shipping companies’ costs. Low sulfur compliant fuels like very low sulfur fuel oils (VLSFO) and marine gas oil saw even larger drops, narrowing fuel spreads. The oil market does, however, remain volatile to inflationary pressures with a constant risk of increased prices.

Demand for LNG shipping, on the other hand, has been strong this year, with ING expecting it to rise more than 4% in 2023, according to the report, The rise in demand is coming on the back of more floating LNG terminals popping up in regions like Africa, the US and Qatar, to ramp up production to replace Russian gas.

Grain trade has been holding up well: After the disruptions in 2022 that came with the Russia-Ukraine war, port disruptions have been easing, with grain trade on the rise 4% y-o-y this year, the report said. Without any further significant interruptions, a a similar increase is expected next year, it explained.

The number of new tankers in 2023 hit its lowest point since 1996, especially very large crude carriers, on the back of increased concerns among investors due to the tankers’ long lifespan, as well as the risks related to shifting to cleaner energy, the report said. Orders

The tanker market’s main elements remain strong: The drop in order books, existing fleet inefficiencies and continued high demand for oil is positioning the market to continue growing financially. Orders for new product tankers picked up a bit during the year, but the rise in demand for shipping goods across longer distances has raised utilization rates and market pressure, the report said.

Rates are also poised to stay high: The cost of utilizing tankers to transport goods stood at some USD 40k a day in July since the Russia-Ukraine war, double the average of the past 10 years. The tight market conditions are expected to keep tanker rates at elevated levels. The oil market does, however, remain turbulent and oil prices could fluctuate in the future.

Months-long Logistics Unleashed competition wraps + Agility CEO listed on Logistics News ME Power 40

Emirates Post Group wraps its “Logistics Unleashed” robotics competition: The Alpha Team members took first place in the competition, which was held by Emirates Post in partnership with the UAE Education Ministry, AI-solutions provider Bayanat, drone outfit Skygo, and advanced manufacturer Strata, according to a press release. Team RoboPost took second place, while MASH Innovators came in third.

About the competition: The competition looks to bridge the gap between academia and industry and boost innovation in logistics and supply chains, the statement said. Participants took part in educational tours and were tasked with developing robots and technical solutions to streamline postal operations, with shortlisted finalists showcasing their products in front of a panel of judges.

Dubai Integrated Economic Zones (DIEZ) has received the “Blueprint of the Future” award from Johnson Controls, WAM reports. The award from digital technology provider Johnson Controls marks DIEZ as an OpenBlue Pioneer and recognizes the organization’s visionary thinking and digital transformation, WAM said.

ALSO WORTH KNOWING-

Agility CEO Tarek Sultan was named on Logistics News ME Power 40 list of top industry leaders. (Statement)

Iranian ship stuck at Turkish port for three years is gearing up to leave

US sanctioned Iranian ship stuck at Turkish port for three years prepares to leave:Iranian container ship Shamim, which has been stuck at Istanbul's state-operated Haydarpasa Port since unloading there in January 2021 is preparing for departure, Bloomberg reports. The vessel had experienced an engine fault off the coast of Spain in late 2020 and was tugged 3.5k km to Istabul, likely because closer ports in Europe would have declined it due to its blacklisted status. Sanctions hindered repairs and efforts to sell the ship, with the ship being fined multiple times and raking up USD 1.3 mn in port fees since its arrival. Shamim has been performing tests this week ahead of its anticipated departure, Bloomberg wrote.

Ryanair goes domestic in Morocco in summer of 2024 + Careem launches e-bike delivery fleet. PLUS: More M&A, rebranding, and aviation news

AVIATION-

Ryanair approved for Morocco domestic flights: Ireland-based budget carrier Ryanair will kick off domestic flights in Morocco next summer, after receiving the greenlight from Morocco’s government, according to a statement by Morocco’s Tourism Minister, Fatima Zahra Ammor. The airline will launch 11 domestic routes, linking the Moroccan cities of Agadir, Errachidia, Essaouira, Fez, Marrakesh, Ouarzazate, Oujda, Tangier, and Tetuan.

Ryanair looks to double annual air traffic in Morocco: Ryanair is set to expand its operations in Morocco, aiming to more than double annual traffic from 4.5 mn passengers to 10 mn passengers by 2027, MAP reports. The airline plans to add 24 new international routes, connecting Morocco to markets in Germany, France, Italy, the Netherlands, Portugal, Sweden, and UK.

ICYMI: We first got wind of Ryanair’s plans to boost its operation in Morocco late last month. The move comes as demand in Morocco’s aviation market is expected to surge leading up to the 2030 World Cup which the country is looking to host in a joint bid with Spain and Portugal.

EBS to build two hangars at Abu Dhabi Airport: Steel structure manufacturer Emirates Building Systems (EBS)has been awarded an AED 34 mn contract to build two aircraft hangars at Abu Dhabi Airport, Construction Business News reports. EBS will be responsible for engineering, fabrication, supply, construction, and the application of fire-rated paint, with the fast-tracked project slated for completion in early 2024, the outlet writes.

LAST MILE-

Shiplifier kicks off 45-minute delivery product in Dubai: UAE-based shipping solutions provider Shiplifier has launched ShiplifierX, a new feature that offers shipment and delivery services within a 45 minute time-frame at a standardized rate, according to a press release. The platform is geared towards e-commerce business and individual end-users and provides express delivery within a 20 km radius for parcels under a seven kilogram weight limit, the statement said.

Ride-sharing app Careem has launched Dubai’s first electric motorbike delivery fleet,according to a statement. The initiative, which is a collaboration with Dubai’s Roads and Transport Authority (RTA), will see e-bikes hitting the road later this month with plans to ramp up their numbers to 1k by the close of 2024. The move looks to curb emissions and cut delivery costs, the National reported.

M&A WATCH-

Mobility solutions player EasyLease acquires a 60% stake in Ripe: International Holding Company (IHC) subsidiary EasyLease obtained a 60% of Ripe, which offers various services including container and commercial kiosk rentals, food trucks, management of parking facilities, events management and drive-through services, according to a press release. The value of the investment was not disclosed.

The move is in line with EasyLease’s plan to broaden its presence in the mobility sector. The partnership enables the company to expand its range of services and explore new avenues for expansion, both domestically and internationally, particularly in the GCC.

ALSO WORTH KNOWING-

Qatar’s offshore and marine repairs facility N-Kom has rebranded as Qatar Shipyard Technology Solutions. (Statement)
Royal Jordanian Airlines is launching direct routes from Amman, Jordan to London Stansted and Manchester in March 2024. (Business Traveller)
Etihad Energy Services is collaborating with Dubai Airports for a retrofit initiative and a solar integration project.(Statement)
Al Futtaim Automotive has inked an MoU with UAE University to train UAE nationals on electric mobility.(Construction Business News)

Calendar

DECEMBER

9-15 December (Saturday-Friday): The Engineering Export Council of Egypt’s visitto Saudi Arabia.

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

13-15 December (Wednesday-Friday): IICS Exhibition - India International Cargo Show, Mumbai India.

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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