TODAY: PIF and Ardian hammer out Heathrow acquisition + DP World was busy during the Eid break

Good morning, ladies and gents. We hope you’re ready for a powerhouse of an issue after a lengthy break, there was no rest for the regional logistics sector while we were enjoying some time off. First, let’s check in on the latest in the brewing trade war between China and… everyone?

THE BIG LOGISTICS STORY ABROAD- China + EU initiate talks on EV tariffs: China and the EU have agreed to start talks on the planned imposition of tariffs on Chinese-made EVs entering the European market, as confirmed by EU Commissioner Valdis Dombrovskis to Germany’s Economy Minister Robert Habeck. The EU passed a decision this month to push tariffs on imports of Chinese EVs to up to 48% on some vehicles. The move follows an anti subsidy investigation initiated by the supranational political union last year against Chinese EVs.

The tariffs are not a “punishment”: Habeck reassured Chinese officials that proposed EU tariffs on Chinese-made EVs are not punitive but are intended to level the playing field. The EU claims not to implement punitive tariffs the way that the US, Brazil and Turkey have. “Common, equal standards for market access should be achieved,” Habeck said.

Are the tariffs already hitting trade volumes? German exports to China dropped 14% y-o-y last month, FT reports. Although tensions could be rising between Beijing and Berlin over the EV tariffs, analysts and economists suggest the export decline is likely attributable to other factors, including weaker auto sales in China or “a lagged impact of the Red Sea blockage.” It doesn’t look like this reading is the start of a new downtrend,” Oxford Economics economist Oliver Rakau said.

As one door opens, another door closes: The Canadian government is also mulling passing its own set of fresh tariffs on Chinese-made EVs, in a bid to match actions by the US and EU, Bloomberg reports, citing people familiar with the matter. The decision is still pending, with public consultations about the matter expected to kick off soon, the business information service cites officials as saying.

The story grabbed headlines worldwide in Reuters, The Financial Times, Bloomberg, The New York Times, CNBC, and BBC.

WATCH THIS SPACE-

#1- Agility eyes a dual listing for ADX-listed subsidiary: Kuwaiti logistics firm Agility is mulling a dual listing for its ADX-listed subsidiary, Agility Global, on Saudi Arabia’s Tadawul stock exchange, in a move to provide wider investment exposure for its investors, Agility Vice Chairman Tarek Sultan told the National, revealing that the logistics firm’s board could discuss the dual listing at the board level “in the very near future.” It plans to work with regulators both in the UAE and Saudi Arabia.

REMEMBER- Agility Global made its debut via a technical listing on ADX in May. Agility Global’s share price jumped more than fourfold on the first day of trading following its technical listing on ADX.

The Saudi bourse is key for exposure: “At the end of the day, [investors] want exposure to the emerging markets, they want exposure to the big economies of the Middle East, and you can’t have that in a fundamental way if you’re not present in the Kingdom,” Sultan said.

#2- Denmark’s freight company DSV and Neom’s USD 10 bn logistics joint venture has been delayed due to missing regulatory approvals from KSA and Egypt, Bloomberg reports. The partnership was initially slated to receive regulatory approvals and kicked off in the 2Q, but DSV says the delay will not impact its 2Q earnings. “It’s not unusual for delays to occur in projects of this size, and this doesn’t change our preparations and long-term expectations for the collaboration,” a spokesperson told the outlet.

REMEMBER- The JV is set to provide ground, sea, and air logistics services for the delivery of goods within the city, as well as supply chain management, development, and investments in infrastructure and logistics and transport assets. A portion of the JV’s revenues will also be allocated to developing technologies and commercializing new sustainable next-generation logistics solutions, including establishing an innovation center at the Neom’sOxagon, according to the press release.

#4- Shanghai-based planemaker Comac has a good chance of breaking the Boeing-Airbus duopoly over the jet market within the next 10 years, Dubai Aerospace Enterprise CEO Firoz Tarapore told Reuters on Friday. Despite difficulty in obtaining certifications from European and US regulators, Comac is garnering attention as the other planemakers face labor shortages and engine issues resulting in delivery delays and disrupting airline growth plans, the newswire added. “Over the next decade Comac has a unique [chance] to break this duopoly into a triopoly because on the one hand Airbus is sold out, and Boeing is having production problems,” Tarapore said.

#5- The FAA opens probe into titanium sourced by Boeing and Airbus: The US Federal Aviation Administration (FAA) is looking into documents used to verify the authenticity of titanium utilized in developing recently manufactured Boeing and Airbus jets, Reuters reports, citing exclusive reporting by the New York Times. Boeing has released a voluntary disclosure highlighting the “procurement of material through a distributor who may have falsified or provided incorrect records,” the FAA said. The aircraft manufacturer issued a bulletin noting ways in which suppliers should remain alert to the potential of falsified records, the FAA added.

The aviation giants are quelling the issue: Boeing argues this is a broader industry issue affecting only some titanium shipments from a limited set of suppliers which affect a small number of airplane parts. Airbus said “numerous tests have been performed on parts coming from the same source of supply” in question. Titanium is used to make aircraft landing gear, blades, and turbine discs.

Boeing is also looking into snags with its 787 Dreamliner after discovering hundreds of fasteners were improperly installed on the fuselage of some undelivered jets, two insider sources told Reuters. Boeing is looking into what caused the problem and the level of rework that will be needed, but there is currently no urgent concern about flight safety, the sources said.

Trouble is piling on: Boeing’s outgoing CEO Dave Calhoun was attacked by senators at a US Senate hearing over a series of safety failures that have rattled confidence in the company, Reuters reports. Prosecutors are set to inform a federal judge in Texas of plans to proceed on a potential criminal case against the company by 7 July. The US Justice Department said last month that Boeing had not adhered to the terms of a 2021 agreement that safeguarded it from liability for the two deadly 737 Max accidents.

#6- General Electric subsidiary GE Aerospace is building a hybrid electric engine to power next-generation narrow-body jets, which could reach markets as soon as the middle of next decade, Reuters reported. The firm says it has concluded the initial tests of the hybrid components and a baseline test of the engine, and now plans to test the two together, the newswire says. The company is working with France’s Safran to test open-bladed jets for medium-haul jets, which could cut down on fuel use and emissions by up to 20%.

DISRUPTION WATCH-

US forces destroyed three uncrewed Houthi surface vessels in the Red Sea, Reuters reports. The Houthis launched three anti-ballistic missiles into the Gulf of Aden, yet no significant damage or injuries were reported by cargo vessels or US Central Command.

Greek-owned bulk carrier The Tutor has sunk after being struck by a Houthi boat-borne bomb and missiles last week as it transited the Red Sea, Reuters reported last week. The vessel was attacked by an unmanned surface boat, a number of drones, and ballistic missiles, Reuters reported at the time of the attack. The bombardment caused “severe flooding and damage to the engine room,” according to a CENTCOM statement.

Two civilian ships and an American destroyer were targeted last week, Reuters reports, citing a statement from spokesperson Yahya Saree. The group said they fired ballistic missiles at the American destroyer, missiles at a ship dubbed Captain Paris, and drones at a ship named Happy Condor. The US has since said the Houthis’ statement is “categorically false,” and that the group was not able to carry out a successful attack on the destroyer, according to a separate Reuters report.

Houthi drones more recently targeted two cement tankers and two cargo ships docked at Haifa Port on Saturday, Reuters reports, citing a statement from Houthi spokesperson Yahya Saree. The Israeli military has yet to comment on the incident and Reuters has not independently verified the attack, which the Houthis say was a joint operation with the Islamic Resistance in Iraq, the newswire writes.

Vessel attacks in the Red Sea have doubled this month, with 10 Houthi strikes recorded so far, up from five in May, marine war risk and insurance analyst Vessel Protect operations head Munro Anderson told Reuters.

Seafarers are increasingly becoming less willing to sail through the Red Sea region, an unnamed industry source told Reuters. “I weighed what was more important – my life, or a better income?” seafarer Costas Rassias told the newswire, after surviving a Houthi missile attack on a vessel he was manning.

MARKET WATCH-

Oil prices eased in early morning trading amid concerns on sustained high interest rates and a strong greenback, Reuters reported. Brent crude futures dipped to USD 85.19 a barrel, while US West Texas Intermediate (WTI) futures settled at USD 80.66. “The USD has opened bid this morning and appears to have broken higher following better US PMI data on Friday night and political concerns ahead of the French election,” IG market analyst Tony Sycamore told the newswire.

Baltic index makes gains buoyed by capesize: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 0.7% to 1,997 points on Friday, logging a weekly gain, Reuters reports. The capesize segment rose 2.1% to 3,142 points, the highest level since 10 May, while the panamax index fell 2.1% to 1,827 points. The smaller supramax index rose 0.7% to 1,398 points.

CIRCLE YOUR CALENDAR-

Lebanon will host the East Med Maritime Conference on Thursday, 27 June in Beirut. The event will gather industry leaders to discuss the latest developments in shipping, maritime, and offshore industries to discuss industry innovations, alternative fuels, and decarbonizing emissions in the maritime sector and ports.

Turkey will host the ACI Europe Annual Congress on Tuesday, 2 July to Thursday, 4 July in Istanbul. The event will bring together 500 C-level airport executives, as well representatives from businesses engaged with airports, airlines, aircraft manufacturers, and other stakeholders. The event will highlight discussions on the current state of the airport industry, geopolitics, the Turkish market, resilience, sustainability, and the diversification of revenues.

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