{"id":81613,"date":"2024-10-14T00:00:00","date_gmt":"2024-10-14T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/logistics\/2024\/10\/14\/today-its-a-blockbuster-day-for-logistics-forums-asyad-breaks-ground-on-muscat-airport-freezone\/"},"modified":"2024-10-14T00:00:00","modified_gmt":"2024-10-14T00:00:00","slug":"today-its-a-blockbuster-day-for-logistics-forums-asyad-breaks-ground-on-muscat-airport-freezone","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/logistics\/2024\/10\/14\/today-its-a-blockbuster-day-for-logistics-forums-asyad-breaks-ground-on-muscat-airport-freezone\/","title":{"rendered":"TODAY: It\u2019s a blockbuster day for logistics forums + Asyad breaks ground on Muscat Airport Freezone"},"content":{"rendered":"

Good morning, friends. <\/strong>It\u2019s a bumper issue this morning as we unpack the latest emerging from KSA\u2019s Global Logistics Forum and UAE\u2019s Global Rail Summit, as well as a healthy dose of project updates in Oman and Saudi. First, the latest bad news from the Boeing saga\u2026<\/p>\n

<\/a><\/strong>THE BIG LOGISTICS STORY ABROAD- Boeing cuts nearly 10% of its workforce: <\/strong>Boeing said it plans to cut 17k jobs \u2014 nearly 10% of its workforce \u2014 and delay its delivery of the 777X jet as the embattled company enters its fifth week of a machinists\u2019 strike<\/a> that has brought production of two of its models to a standstill. The company is currently waiting for the US\u2019 National Labor Relations Board to rule on the unfair labor practice charge Boeing filed against the machinists\u2019 union last week.<\/p>\n

A bleak earnings outlook:<\/strong> The aviation giant\u2019s 3Q earnings, set to be released later this month, will be impacted by \u201cnear-term challenges\u201d due to the ongoing strikes and charges in the commercial aircraft sector, CEO Kelly Ortberg said in a preliminary earnings statement<\/a> released on Friday. The firm forecasts a topline of around USD 17.8 bn, but a better than expected negative operating cash flow settling at USD 1.3 bn, instead of the expected USD 3.8 bn, Reuters<\/a> reported on Saturday.<\/p>\n

There will be delayed 777x delivery dates:<\/strong> Boeing has pushed back delivery dates of its new 777x aircrafts, with first delivery of its 777-9 airplane forecasted to be in 2026 and its 777-8 freighter aircraft in 2028. The delays are attributed to setbacks in flight testing for the individual aircraft models and the labor strikes, says the statement. The manufacturer also announced plans to halt its 767 freighter program in 2027, after it completes and delivers the 29 planes on order.<\/p>\n

The story has grabbed a lot on ink in the int\u2019l press over the weekend:<\/strong> Financial Times<\/a> | Reuters<\/a> | CNBC<\/a> | Washington Post<\/a> | Le Monde<\/a> | Sky News<\/a> | Bloomberg<\/a> | CNN<\/a> <\/p>\n

HAPPENING TODAY-<\/p>\n

The <\/strong>Global Logistics Forum<\/a><\/strong> is wrapping today in<\/strong> Riyadh. <\/strong>The forum gathers key industry players, government officials, and industry experts to discuss optimizing operations and driving growth in the logistics sector with a specific focus on how the sector can adapt to global climate change and incorporate sustainability into their supply-chain operations. <\/p>\n

The <\/strong>Global Airport & Aviation Forum<\/a><\/strong> is kicking off on Wednesday and will run through to <\/strong>Thursday in Jeddah.<\/strong> The forum will bring together aviation leaders and experts to discuss future projects in the aviation industry, including new airport developments, capacity upgrades and expansions, new aircraft orders, and important airport services. <\/p>\n

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WATCH THIS SPACE-<\/p>\n

#1- Crown Prince Mohammed bin Salman will reportedly skip the BRICS summit in<\/strong> Russia next week. <\/strong>Instead, Foreign Minister Faisal bin Farhan Al Saudi will represent Saudi Arabia at the summit, which runs from 22-24 October, Reuters<\/a> reported on Thursday, citing a Kremlin statement. The Crown Prince\u2019s absence will make Saudi Arabia the only country not represented by its leader, according to Russian President Vladimir Putin\u2019s foreign policy aide, Yuri Ushakov. Although Russia extended an invitation to the Crown Prince<\/a>, no reason was given for his absence.<\/p>\n

REMEMBER- <\/strong>Officials in Riyadh said earlier this year<\/a> that the Kingdom is still considering an invitation to join BRICS. The remarks in February came after South Africa\u2019s foreign minister said the Kingdom had formally joined the alliance<\/a>.<\/p>\n

<\/a><\/strong>#2- <\/strong>KSA is <\/strong>set to begin construction <\/strong>on its USD <\/strong>7 bn <\/strong>land bridge project<\/a><\/strong> in early 2025<\/strong>, with negotiations for the final cost and financing of the project near the closing stages, MEED<\/a> reported last week, citing a source close to the project. The project, slated for completion in seven years, will connect the Kingdom\u2019s Red Sea coast to the Arabian Gulf and features six railway lines, and seven logistics centers.<\/p>\n

<\/a>MORE FROM THE GROUND- Egypt will reportedly launch trial operations of the first phase of its <\/strong>USD 1.8 bn Egypt-Saudi interconnection project<\/a><\/strong> in April 2025 instead of May<\/strong>, Asharq Business<\/a> reported on Thursday, citing an unnamed government source. The first phase of the project \u2014 which will see 1.5 GW of the planned 3 GW come online \u2014 is set to be completed by June instead of July 2025. <\/p>\n

IN OTHER EGYPT UPDATES- <\/strong>Egypt\u2019s General Authority for Investment and Freezoneswill set up five <\/strong>more freezones<\/strong> under the special freezones system in response to investor demand, an unnamed government official told Al Arabiya<\/a>. The new zones will be located in Greater Cairo and New Alamein and will cover various sectors. The in-the-works zones are in addition to the six areas<\/a> already listed in GAFI\u2019s plan for next year.<\/p>\n

#3-<\/strong> US announces a new round for sanctions against Iran: <\/strong>The US has expanded its targeted sanctions against Iran\u2019s petrochemical and petroleum sectors after Iran fired a missile on Israel earlier this month, according to a press release<\/a> on Friday. The new sanctions include measures against Iran\u2019s \u2018ghost fleet\u2019 that reportedly carries Iran\u2019s illicit oil to buyers around the world. The government is also designating 16 entities and 17 vessels as blocked property on the back of their involvements in shipments of petroleum and petrochemical productions in line with the national Iranian Oil Company. It also imposed sanctions on six entities involved in Tehran\u2019s petroleum trade and identified six ships as blocked property. <\/p>\n

It won\u2019t stop here: <\/strong>The US could possibly cut off Iran\u2019s oil exports through tougher enforcement of previously imposed sanctions and increased monitoring of vessels with transponders turned off, Eurasia Group told Reuters<\/a> on Friday. It could also try to yield pressure on other countries \u2014 including Malaysia, Singapore, and the UAE \u2014 to support its enforcement efforts. Other actions possibly include targeting Chinese firms shipping Iranian crude, as China buys nearly 90% of Iran\u2019s crude-oil exports. <\/p>\n

#4- Turkey goes ahead with anti-dumping duties: <\/strong>Turkey will impose anti-dumping duties on steel imports coming in from China, Russia, India and Japan to crackdown on unfair competition following appeals from domestic producers, Reuters<\/a> reported on Friday, citing an Official Gazette statement. The duties, which are valued at some USD 2 bn to USD 2.2 bn, are slated to impact some 4 mn tons of product imports, Turkish Steel Producers Association secretary general Veysel Yayan told the newswire. The duties vary from 6.10% to 43.3% of cost, insurance and freight prices, with the highest tariffs falling on Chinese imports.<\/p>\n

#5- <\/strong>Oman\u2019s OTTCO to award storage project consultancy by early next year<\/strong>:<\/strong> Oman Tank Terminal (OTTCO) is expected to award the FEED consultancy services contract for the Ras Markaz crude oil import and export storage terminal expansion project in 1Q 2025, sources close to the project told Zawya Projects<\/a> on Thursday. The facility, to be located some 70 km south of Duqm, is expected to be completed by 4Q 2027 and looks to boost the terminal's crude oil storage capacity. The tender was initially issued in August.<\/p>\n

#6- <\/strong>Peninsula expands Middle East operations<\/strong>: <\/strong>Global maritime fuel supplier Peninsula is launching new supply operation depots for conventional and alternative bunker fuels in Abu Dhabi and Jebel Ali, adding to its existing operations in Fujairah, CEO Kenny MacLean told Reuters<\/a> on the sidelines of SIBCON 2024 last week. The company will concentrate its LNG bunker services on established shipping routes and areas near LNG infrastructure and loading facilities.<\/p>\n

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MARKET WATCH- <\/p>\n

#1-<\/strong> Oil prices shed 1.5% in early morning trading in response to fears regarding <\/strong>weakened demand on the back of disappointing inflation data from China, <\/strong>Reuters<\/a> reports. Brent crude futures lost USD 1.26 trading at USD 77.78 a barrel at 040.20 GMT, while US West Texas Intermediate (WTI) futures fell USD 1.20 to USD 74.36 a barrel. Official data released on Saturday showed China's deflationary pressures worsened last month leaving investors in a tough spot when assessing the overall size of China\u2019s stimulus package to revive the economy.<\/p>\n

Opec+ is prioritizing high oil prices over market share<\/strong> amid weak demand and rising output from non-member oil producers, Salih Yilmaz, senior analyst at Bloomberg Intelligence, told Asharq Business (watch, runtime, 8:28)<\/a>. Opec+ does not anticipate long-term market share issues as high-cost producers are expected to exit the market by 2030, Yilmaz said, nodding to shares recently accumulated by US shale operations.<\/p>\n

Survey insights:<\/strong> Some 70% of respondents see Opec+ maintaining its price-supporting strategy, while 72% do not expect Opec+ to pursue market share growth at the expense of prices into 2025, according to a recent Bloomberg Intelligence survey.<\/p>\n

REMEMBER- <\/strong>Opec+ initially planned to start phasing out production cuts in October, but later scrapped<\/a> the plans as the price of oil sagged. The UAE is set to raise production in 2025, after Opec+ granted<\/a> it a higher production quota of 3.5 mn barrels per day in 2025, up from the current 2.9 mn.<\/p>\n

What to watch for next: Oped will release its October oil market report today<\/strong>, while the IEA will follow suit tomorrow. <\/p>\n

#2-<\/strong> Iraq has started exporting 800 to 1k metric tons per day of jet fuel to global <\/strong>markets as Middle East prices surge<\/strong>, according to a statement<\/a> released last week. The move is part of Iraq\u2019s plan to strengthen its global position as a producer and exporter of oil and its derivatives.<\/p>\n

#3-<\/strong> Baltic index sees slight bump<\/strong>: <\/strong>The Baltic Exchange\u2019s dry bulk sea freight index \u2014 which tracks rates for the capesize, panamax, and supramax vessel segments \u2014 rose 1.1% to 1,809 points<\/a> on Friday, breaking a nine-day losing streak. The capesize index was up about 80 points to 2,835 points, while the panamax index dipped 20 points to 1,435 points. The smaller supramax was down 5 points to 1,269 points.<\/p>\n

#4-<\/strong> The Drewry World Container Index fell by 4% to USD 3,349 per 40-ft container on <\/strong>Thursday<\/strong>, according to the latest index readings<\/a>. Spot rates for 40-ft containers are now 68% below the previous pandemic peak of USD 10.4k in September 2021, but remains 136% above the pre-pandemic rate of USD 1.4k. The average composite index YTD is USD 4,097 per 40ft container, which is USD 1,248 higher than the 10-year average rate of USD 2,831.<\/p>\n

DATA POINTS- <\/p>\n

#1- Shipping volume passing through the Suez Canal was <\/strong>down 70%<\/a><\/strong> y-o-y in 3Q 2024<\/strong>, as shipping lines continue to divert away from the route amid continued Houthi attacks on passing vessels, according to data from the IMF\u2019s PortWatch<\/a>.<\/p>\n

#2- <\/strong>Airbus deliveries were down 9% y-o-y in September to 50 jets<\/strong>, raising concerns that the manufacturer could fall short of its 770 aircraft delivery target<\/a> for this year, according to a statement<\/a> cited by Reuters<\/a> on Thursday. The manufacturer delivered 497 jets this year by the end of September, which means it needs to deliver 273 in the next quarter to reach its goal. The planemaker revised its annual target in July to 770 aircrafts, down from 800. The manufacturer has blamed shortages of engines and other parts for lags in deliveries.<\/p>\n

On a positive note: <\/strong>The firm has managed to boost its delivery figures by 2% y-o-y, delivering 487 jets to 77 customers this year, compared to 488 to 78 customers between January and September the year prior. <\/p>\n

PSA- <\/p>\n

UAE exporters will no longer be required to provide exit certificates from freezones or simil<\/strong>ar facilities to reclaim Value Added Tax (VAT)<\/strong>, following new amendments to VAT regulations (pdf)<\/a> by the UAE\u2019s Finance Ministry, set to take effect 15 November. Under the updated rules, exporters will only need to submit standard documentation to verify goods have left the UAE, including either:<\/p>\n