The age of cargo drones

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What we're tracking today

TODAY: Lots of road improvements and events cause diversions in the region + shipping container volumes are expected to fall this year and in 2024

Good morning, friends. We close out the week with a mixed bag of news, with more acquisitions from Saudi Arabia, Qatar Airways Cargoinking the world’s first interline agreement with an autonomous aviation startup, and good news for Egypt’s transit trade ambitions.

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

A FEW PSAs-

#1- Trucks and labor buses will be barred from entering Abu Dhabi Island from 12pm on 1 December till 1am on 4 December, according to a statement. Logistics and general cleaning company vehicles are exempted.

REMEMBER- Abu Dhabi is hosting COP28 this year, which kicks off today and wraps on 12 December.

#2- Railway services have resumed between Quetta, Pakistan and Iran after they were suspended yesterday due to flooding caused by heavy rainfall, ARY reports, citing railway officials.

#3- Planned diversions on UAE roads: Dubai’s Road and Transport Authority (RTA) is temporarily rerouting traffic from the Trade Centre roundabout to the Expo Intersection on Sheikh Zayed Road towards Abu Dhabi, according to a statement. The diversion will take effect from 7am to 11am between 1-3 December. RTA and Dubai Police have mapped out alternate routes to ensure smooth traffic flows.

#4-Bahrain’s Ministry of Works is fully closing Al Fateh Highway for 20 days starting 30 November due to renovations, in a statement. Traffic will be diverted at the junction of Al Fateh Highway with Awal Avenue in Manama.

DATA POINT #1-Bahrain registered a BHD 275 mn trade deficit in 3Q 2023, compared to a BHD 54 mn surplus during the same period last year, according to figures published by the Information eGovernment Authority (iGA) of Bahrain. Bahrain’s exports for the period saw a 24% y-o-y fall to BHD 943 mn, while imports fell 5% y-o-y to BHD 1.4 bn, iGA said.

DATA POINT #2-GCC annual trade surged to USD 140 bn in 2023, upfrom USD 6 mn in 1995, Gulf Daily News reports. GCC non-oil trade reached USD 81.9 bn in 2023. The GCC aims is working with joint financial and economic committee meetings between member states to achieve a more unified economy. Preparations are also underway to finalize all requirements for the GCC Customs Union, which should be launched by the end of 2024. Member states of the customs unions will apply a universal system for all or almost all imports, exports, and transit goods.

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 cartel is reportedly continuing to hold talks to determine whether deeper production cuts would be necessary in 1Q 2024, Reuters reports.

Will the meeting happen? 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.

Antwerp XL kicked off yesterday and wraps today 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-

The global pool of shipping containers is expected to contract in both 2023 and 2024, with a 2.6% decline expected in 2023 and a further drop in 2024, Hellenic Shipping News reports, citing maritime research consultant Drewry. Inflation-driven depressed demand and geopolitical instability have impacted investor sentiment. Both ocean carriers and leasing companies have curbed container purchasing programmes considerably, with Drewry forecasting both to take delivery of just some 1.1 mteu of new containers this year, Drewry adds.

Reefer market set to shrink for second year in a row: Seaborne reefer cargoes are projected to see a 0.5% y-o-y decline in 2023, according to a recent Drewry report. This marks the second consecutive annual decline following last year’s 0.8% contraction. Transit restriction along the drought-affected Panama Canal, climate impacts on fruit crop yields, weak Chinese demand, and geopolitical tensions are weighing down forecasts for the reefer market, Drewry says. Panama Canal and EU Emissions Trading System (ETS) surcharges are expected to further impact the sector.

Fujairah oil stocks slump to 2-week low: Stockpiles of oil products at the Port of Fujairah inched down 7.7% to a two-week low over the week ending 27 November, according to S&P Global data. The total oil inventory has fallen 16% since the beginning of the year, with stockpiles now down to 17.406 mn barrels a day.

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.

Qatar Airways Cargo + Dronamics ink cargo interline agreement

Qatar Airways Cargo + Dronamics ink interline agreement:Qat ar Airways Cargo has signed an interline agreement with Bulgarian autonomous aviation startup Dronamics, the first such agreement between an international airline and a cargo drone airline, according to a press release.

The agreement will give each airline access to more destinations: The agreement, which will extend both sides' delivery networks, will enable Dronamics to offer cargo services from any of its droneports, beginning with Greece to Qatar Airways Cargo destinations, including Singapore, China, Hong Kong, JFK in the US. Qatar Airways Cargo will also be able to access remote locations, such as Greek islands, via Dronamics’ network.

The details: The agreement allows Dronamics’ customers to make a single booking to transport goods from a Dronamics droneport to a destination covered by the interline network agreement, and vice versa. The added flexibility will enable the flow of goods including pharma, food, e-commerce, mail, parcels, and spare parts to destinations that are not adequately covered by existing air freight services, the statement said.

About Dronamics: Dronamics styles itself as “the world’s first cargo drone airline,” according to its website. It is expected to kick off commercial operations early next year, with a same-day service connecting Athens with industrial hubs in the north of Greece and islands in the south, a separate statement said. The outfit’s flagship Black Swan aircraft can carry some 350kg at a distance of up to 2.5 km.

Dronamics has been making waves in the region: The company recently inked a terms sheet with the UAE’s Strategic Development Fund to form a JV to manufacture 300 of its flagship Black Swan cargo drones by 2025. It also signed a letter of intent with Aramex to provide it with drones for same-day middle-mile and long-range deliveries, in addition to another letter of intent with Emirates Post Group to establish a cargo drone delivery network in the UAE and GCC.

South Korea’s STX to help develop Egypt’s Gargoub port + logistics zone

South Korean firm to develop Gargoub industrial zone + port: Egypt’s transport ministry has inked an MoU with South Korean trading company STX Corporation for developments and a strategic partnership at Gargoub Special Economic Zone (GSEZ), according to a transport ministry statement. As per the agreement’s terms, STX will engage with Egypt’s government to upgrade Gargoub’s port and establish an industrial-logistics zone in the area.

This is a big project for Egypt’s transit trade ambitions: Described by the ministry as “an integrated economic, industrial, development and agricultural zone,” the plan will see the establishment of an industrial zone, a container terminal for the transshipment of East Asian goods bound for North and South America, an oil pipeline linking oil fields in Libya with export terminals at the port, a logistical center for the consolidation of shipping routes, as well as agricultural, residential and tourist developments.

Who’s doing what? Gargoub Port Company will equip, manage, operate and maintain the port’s infrastructure, while STX will submit a feasibility study for the development of the project in all its stages. The statement did not disclose a further breakdown of STX’s specific roles in the project.

What else is going on at Gargoub? Asides from the agreement with STX,Egypt’s plans to develop Gargoub includes the addition of 8 km of terminals at the port, a grain production and trading hub, as well as facilities for the production and export of green hydrogen, the statement added.

KSA’s PIF set to acquire 10% stake in London’s Heathrow airport

KSA’s PIF set to grab 10% stake in loss making Heathrow airport: Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is set to grab a 10% stake in London’s Heathrow airport as Spanish infrastructure company Ferrovial looks to offload stakes in the one of Europe’s busiest travel hubs, a statement by the PIF read.

What we know: Ferrovial said it will be selling its entire 25% stake in FGP Topco, the airport’s parent company, for GBP 2.4 bn, according to a statement. It named the buyers as the PIF, which will be acquiring a 10% stake, and Paris-based equity firm Ardian which will be acquiring a 15% stake through separate vehicles, it said.

The transaction is still subject to complying with the Right of First Offer (ROFO) and prerogatives that could be exercised by other Topco shareholders, PIF said. It will also need to clear regulatory conditions, it added.

Qatar’s sovereign wealth fund also holds stakes in Heathrow: The airport’s shareholders include Qatar Investment Authority, which owns a 20% stake, Singapore sovereign wealth fund GIC and the Australian Retirement Trust, each holding a 11.2% stake, and others.

Ferrovial has been divesting bits and pieces: The Spanish company had an initial stake of 56% in Heathrow but it had to lower it to 25% by 2013. Aside from Heathrow, it owns a 50% stake in UK’s Aberdeen, Glasgow and Southampton airports. Its airport ownerships also stretch further overseas, owning 60% of Turkey’s Dalaman and a 49% stake in New York’s JFK airport’s Terminal 1.

Heathrow had it coming: Ferrovial executives have reportedly been dissatisfied with the British regulatory scene after Heathrow was obliged to slash its landing charges by almost a fifth on the back of a conflict with airliners, the Financial Times reported. The airport continued to run losses this year on the back of higher servicing costs on its significant debts due to rising interest rates. Heathrow’s losses come despite a recovery in passenger numbers to pre-pandemic levels. The travel hub received 59.4 mn passengers in the first nine months of the year, up from 34.4% y-o-y. It also handled 1.02 mn metric tonnes of cargo during the same period, down 0.02% y-o-y, according to the airport’s tracking data (pdf).

Bahri subsidiary gets supplier award + Milaha receives eight awards from BSC

Bahri subsidiaryBahri Line has been granted theSupplier Spirit of Alliance Award at the 2023 General Electric Onshore Wind Supplier Conference and Awards in Florida, becoming the only shipping line to receive the award, according to a statement. The award acknowledges the company’s “operational excellence, efficiency, and reliability,” as a shipping partner, the statement said.

ALSO WORTH NOTING-

Qatar’sMilaha received eight prestigious awards in health, safety and environmental management from the British Safety Council. (Statement)

Qatar talks transportation at the IMO Assembly in London

Qatar has been busy at the IMO assembly: Qatari Transport Minister Jassim Al Sulaiti met with several of his counterparts at the International Maritime Organization (IMO) Assembly in London to discuss maritime transport, ports and more.

#1- Qatar x Namibia and Equatorial Guinea: Al Sulaiti met with Namibian Works and Transport Minister John Mutorwa and Equatorial Guinean Post Office and New Information and Communication Technologies Minister Honorato Evita Oma separately to discuss boosting maritime transportation and ports ties, according to a statement.

#2- Qatar x Brunei and Indonesia: Al Sulaiti also met with Indonesian Transport Minister Budi Karya Sumadi and Transport and Infocommunications Minister of Brunei Pengiran Mustapha on the sidelines of the event to discuss maritime cooperation and the latest technologies in marine environment protection, according to a separate statement.

ALSO FROM QATAR IN LONDON- The minister also inaugurated the Qatar Mission to the International Maritime Organization Office in London. The office will serve to enhance Qatar’s cooperation with IMO member states to ensure the safety, security, and efficiency of maritime transportation, according to a statement.

Amazon beats UPS and FedEx in US parcel delivery volumes

Is e-commerce king? E-commerce giant Amazon topped UPS in parcel delivery volumes in 2022, and FedEx in 2020, with margins set to widen further this year, reported the Wall Street Journal (WSJ), citing Amazon data disclosed by an unnamed internal source. Internal forecasts see Amazon handing over 5.9 bn parcels by the close of this year, outstripping both UPS and FedEx, the WSJ said.

But the US Postal Service (USPS) is still US parcel delivery king: USPS, which also delivers packages for Amazon, UPS, and FedEx, handles more parcels than any other courier, the New York Post reported. This is despite the company reporting a shocking USD 6.5 bn loss for FY 2023, Reuters reported.

Amazon is banking on tech to stay at the head of the game: The company recently rolled out two new robotic solutions, dubbed Sequoia and Digit, as it looks to refurbish its warehouses with AI-backed technologies to boost operational efficiency and roll back delivery times.

General Motors is planning a USD 10 bn share buyback program among a package of measures to regain Wall Street’s confidence after a tumultuous 2023, according to a press release. GM has faced a volatile year this year, experiencing labor strikes and setbacks in plans for electric and autonomous vehicles, due to market-wide supply disruptions.

Three-strand strategy: The company also plans to increase its quarterly dividends next year by 33% to 0.12 USD per share, and reinstating its 2023 guidance to include an estimated USD 1.1 bn in earnings before interest and tax.

The news got a lot of ink in the foreign press:FT | NYT | CNBC | WSJ.

Andoc, Etihad Rail to establish Abu Dhabi-Al Dhannah railway + Saudi Arabia invests in OMNIC for parcel lockers. PLUS: More from Iran, Fleeto, AD Ports, Mawani and DP World

RAIL-

Adnoc and Etihad Rail to establish Abu Dhabi-Al Dhannah railway services: The distribution arm of the Abu Dhabi National Oil Company (Adnoc) and Etihad Rail have joined forces to establish railway services connecting Abu Dhabi and Al Dhannah, Emirati news agency Wam reports. The two companies will also share knowledge and expertise, Wam said, adding that Adnoc employees will make ample use of the railway line between Abu Dhabi and Dhanna in the future.

LAST MILE-

Logistics R&D company Omnic is investing USD 6 mn to install 2k parcel lockers across Saudi Arabia’s cities, according to a statement. The partnership will create a shared open network of parcel lockers, accessible to multiple stakeholders, focused on logistics providers, including postal services, e-commerce platforms and retail companies. The joint parcel collection sites remove the need for companies to invest into standalone infrastructure, and will also allow customers to receive parcels from a single joint parcel collection site, the statement added.

COMMODITIES-

Russian company to supply 26 mn tons of grain to Iran in 2024-2035: Food Export Trade, a production-export firm based in Russia’s Novosibirsk, will supply Iran with some 26 mns tons of grain from 2024 to 2035 with a potential increase to 55 mn tons, Russian News Agency (Tass) reports. The agreement, inked by Iranian logistics firm Iranian Eurasia Trading and Logistics, “stipulates the joint Russian-Iranian creation of facilities of inland grain and transport-logistics infrastructure in [Iran’s] Sarakhs Special Economic Zone, including with the use of cutting-edge Russian experience and technologies,” Food Export Trade said. The agreement is part of efforts to ensure Iranian and Russian food security, enhance bilateral trade, and contribute to the development of the North-South International Transport Corridor, the company said.

STARTUP WATCH-

Dubai-based Royex Technologies subsidiary Fleeto, a newly launched intelligent fleet management system, has completed its first undisclosed round of investment from private investors, according to a press release. Fleeto has partnered with Netherlands-based mapping company TomTom to provide mapping services for its users, and with Lithuanian-based GPS hardware company Teltonika to allow Fleeto to offer real-time vehicle data. Fleeto did not respond to Enterprise Logistics’ requests for details ahead of dispatch time.

About Fleeto: The fleet management software arm aims to provide end-to-end solutions tailored to various user segments including car rental agencies, fleet management companies, school transport services, and other transport providers, according to the release.

ALSO WORTH KNOWING-

The board of the GCC Customs Union convened in Riyadh to discuss the results of ministerial meetings and to follow up on the implementation of the union's decisions. (BNA)
Managing Director and CEO of Abu Dhabi Ports Group Mohamed Juma Al Shamisi met with Kazakhstani President Kassym-Jomart Tokayev to discuss cooperating to develop Kazakhstan’s Aktau and Kuryk ports. (Statement)
A delegation of Saudi Ports Authority (Mawani) led by Mawani President Omar Hariri visited Belgium's Port of Antwerp-Bruges to discuss increasing operational efficiency of ports, digital transformation and the port’s competitiveness. (Stateme nt)
DP World launched a rail freight service from Hazira to India’s north capital region, including . The service assures door-to-door delivery within 72 hours. (Transport and Logistics News India)

Russia transports 21% of LNG exports through EU ports, despite sanctions + US-China decoupling is leaving a mark

EU ports are helping facilitate transshipments of Russian LNG, despite imports being banned by the UK and Netherlands, Financial Times reports. EU-Permitted Russian LNG shipments are regularly transferred between tankers in Belgian, French and Spanish ports, before being transported to buyers in other countries, like China, Japan and Bangladesh. This accounted for 21% of Russian LNG exports, the equivalent of 17.8 bn cubic meters, between January and September of this year.

Loophole?Transshipments of Russian LNG have not been placed under EU-sanctions, as the EU are “not thinking about [it] when they are talking about a ban. They don’t count a transshipment,” lead energy analyst at IEEFA, Ana-Maria Jaller-Makarewicz told the Financial Times.

This is happening despite Russiadiversifying its transshipment routes of crude oil away from EU ports, in means of circumventing G7-sanctions, resulting in Fujairah, UAE becoming a growing hub for oil exports.

US-China decoupling is having an impact: US companies are steering away from using Chinese suppliers, sourcing products from elsewhere in Southeast Asia, Eastern Europe, and Mexico, as the US treasury implements “de-risking strategies,” which are aimed at making their supply chains more resilient “It was always ‘China plus one,’” the CEO and co-founder of Florida-based Industry West, Jordan England, told Reuters, explaining that trade tariffs implemented on China in 2018 have always affected supply chains between the countries. Now with US companies implementing diversification strategies, it's more “like ‘plus-10’ and then China,” he added.

The details: China’s manufacturing unexpectedly contracted and exports declined in October, as Reuters reported. China also recorded its first-ever quarterly deficit in FDI during the July to September period, Reuters respectively reports.

Russia expects to export up to 65 mn tonnes of grain between July 2023 and June 2024, Interfax quoted Agriculture Minister Dmitry Patrushev as saying. The minister said that 140 mn tonnes of grain were harvested this year, including 93 mn tonnes of wheat.

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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