TODAY: Egypt’s LNG tender yields results + Nvidia chips make their way into UAE data centers

Good morning, nice people. It’s a hefty issue this morning with updates from Egypt, the UAE, and a smattering of news from around the world. But first, let’s unpack big aviation news taking shape state-side…

THE BIG LOGISTICS STORY ABROAD- Boeing workers go on strike: Over 30k Boeing workers at the company’s US West Coast factory went on strike on Friday after rejecting a contract proposal demanding higher wages. The strike at Boeing’s 737 Max jets production hub worsens the firm’s already existing supply chain troubles and threatens to further lengthen delivery delays. Contract negotiations are slated to resume this week as the manufacturer looks to avoid potential damage to its finances.

Things could drag on: The strike “could go on for a while,” as workers remain confident they can nab larger wage boosts and improved pensions, Reuters reported, citing a National Public Radio interview with union leader Jon Holden.

A dark outlook: Boeing had been making progress towards boosting production levels back to 38 a month by the end of this year, but now “that’s going to take longer,” CEO Brian West said at a conference on Friday. The manufacturer has some 4.7k 737 MAX jets on order. The last Boeing workers’ strike, back in 2008, closed plants for almost two months and cut revenue by some USD 100 mn per day.

The effects are set to ripple through Boeing’s supply chain, with suppliers slated to feel the impacts of “delayed orders and financial strain,” Moody’s supply chain specialist John Doigian was quoted as saying by Reuters. Regardless, key Boeing supplier of 737 Max jet fuselage Spirit AeroSystems will “remain close to Boeing at this time,” spokesperson Joe Buccino was quoted as saying by Reuters.

Coverage of the strike grabbed a lot of ink in international press over the weekend: Reuters | AP | The New York Times | The Washington Post | Bloomberg | CNN | BBC | CNBC

IN OTHER BOEING NEWS- US FAA head to testify on Boeing next week: The head of the US Federal Aviation Administration (FAA) is set to testify before the US Senate panel on the FAA’s oversight of Boeing’s safety measures, Reuters reports. The hearing, set for on 25 September, comes as the FAA’s Michael Whitaker has ramped up scrutiny on the plane manufacturer. A production audit into Boeing fuselage supplier Spirit was launched after a 737 MAX 9 lost a door plug mid-air in January.

HAPPENING THIS WEEK-

#1- British trade ministers are in Riyadh for talks on a trade agreement with the GCC, according to a statement. Trade Secretary Jonathan Reynolds and Trade Policy Minister Douglas Alexander are both set to lead negotiations, with Reynolds saying he’s looking for a “high-quality trade [agreement] that supports jobs, helps UK companies sell their products to the region and increases choice for consumers.”

REMEMBER- The GCC and the UK are hoping to wrap trade talks by the end of this year, with six rounds of talks having taken place so far.

#2- The Intelligent Transport Systems World Congress will open its doors today in Dubai and run through to Friday.The Congress is expected to welcome 20k participants to explore innovations in smart mobility and transportation technology.

LATER IN THE WEEK- The Saudi Maritime and Logistics Congress will kick off on Wednesday in Dammam and conclude on Thursday. The event will gather international industry leaders in the maritime sector to discuss a range of topics including interconnected logistics, supply chains, digitalization, decarbonization and workforce development.

WATCH THIS SPACE-

#1- A logistics hub on the cards for Cairo International Airport? Chinese state-owned construction firm and China Energy subsidiary Gezhouba Group proposed establishing a “logistics cargo city” at Cairo International Airport during a meeting with Egypt’s Aviation Ministry, according to a statement. The statement did not provide any concrete details about the proposal, but said it would strengthen Egypt’s position as a logistics hub regionally and internationally, particularly in light of growing demand for air cargo services.

#2- Morocco is set to expand Tangier-Mediterranean Freezone’s Tanger Automotive City to address the growing demand from industrial investors, Morocco World News reported on Thursday. Under the plan, the zone will nearly double in size, with the area to be extended to 1.18 hectares, up from 517 hectares. Neither the timeline nor the investment ticket have been disclosed.

#3- Saudi Arabia’s second flag carrier Riyadh Air kicked off test flights on Thursday, with its maiden flight launching from King Khalid International Airport in Riyadh to King Abdulaziz International Airport in Jeddah, it said in a statement posted on X. The move is part of a process to secure the Air Operator Certificate from the General Authority of Civil Aviation. Riyadh Air plans to start commercial operations next year.

#4- The Red Sea crisis shifts fortunes in Asia’s freight industry: The Red Sea crisis affected the earnings for several Asian firms in 1H 2024 with companies who rely on exports reporting a costly impact, Bloomberg reported on Thursday. “We believe rates will return to below breakeven once supply chains normalize, due to the structural challenges facing the industry,” Bloomberg Intelligence noted, highlighting that the supply and demand gap will likely weigh on the outlook for container rates and liner earnings.

Transportation companies are benefiting from the higher freight rates: Chinese shipping firm Cosco Shipping Holdings saw a boost in earnings driven by higher revenues from its container shipping business, while Orient Overseas International’s transpacific trade route saw improved performance from higher freight rates. Port operator China Merchant Port Holdings saw an increase in transhipment cargoes in its Sri Lanka ports, while Adani Ports recorded a rise in overall volumes. Cathay Pacific Airways also saw a 10% y-o-y boost in cargo volume.

IN OTHER RED SEA NEWS- Towing operation begins on oil tanker stranded in Red Sea: Operations to tow the abandoned Greek-registered oil tanker Sounion have been launched in the Red Sea using at least two tugboats owned by a Greek-based salvage company, Reuters reported on Saturday, citing shipping sources. The oil tanker, which is carrying 1 mn barrels of crude oil, was abandoned after being struck by Yemen’s Houthis in August. The oil will be transferred from the ship upon the completion of the towing operation, which is being secured by the EU’s Aspides Red Sea Task Force.

Background: The Sounion was evacuated by Aspides following the initial attack last month. The vessel was struck by several projectiles off the coast of Yemen’s Hodeidah Port, causing a fire to break out onboard.

#5- US confirms tariffs on Chinese imports: The US has confirmed that steep tariff hikes on Chinese imports, including a 100% duty on EVs, will go into effect on 27 September, Reuters reported on Friday. Despite industry complaints the move could disrupt supply chains, US officials argue that these “tough, targeted” measures will reduce reliance on Chinese supplies and counter China’s market dominance. The tariffs will target key renewable energy components including solar cells, semiconductors, and EV batteries in a bid to protect domestic US industry from China’s imports propped up by state subsidies. The action also maintains Trump-era tariffs on USD 300 bn worth of Chinese goods, while offering temporary relief for US port operators and medical suppliers.

ICYMI- The Biden administration has postponed its final decision on imposing the tariffs multiple times, citing a statement from the US Trade Representative’s Office (USTR). The tariffs were initially set to take effect on 1 August.

MARKET WATCH-

#1- Oil prices inched up in early morning trading as expectations rose regarding a US interest rate cut this week, Reuters reports. Brent crude futures for November were up USD 0.03 to USD 71.64 a barrel, while West Texas Intermediate (WTI) crude futures for October increased USD 0.16 to trade at USD 68.81 a barrel.

#2- Saudi crude supply to China poised for a jump next month: The Kingdom’s oil exports to the world’s top consumer China are expected to climb to 46 mn bbl in October, up from 43 mn in September, Reuters reports, citing trade sources. The boost follows Aramco’s decision to slash the official selling price of its flagship Arab Light crude to Asian buyers to its lowest level in nearly three years.

The price cut spurred demand from Chinese refiners, including major players like Sinopec and PetroChina, keeping Saudi crude in close competition with Russia as China’s top suppliers.

#3- India’s oil secretary Pankaj Jain called for OPEC+ to raise its oil output to meet the rising fuel demand in countries like India, Reuters reports. India imports over 80% of its oil needs, and the country’s refiners will buy oil from suppliers that offer cheaper rates, Jain was quoted as saying. He added that Indian fuel retailers might lower gasoline and gasoil prices if crude oil prices stay low.

#4- Baltic index falls to two-week low: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 1.9% to 1,890 points on Friday. The capesize index fell 4.2% to 3,089 points, while the panamax index jumped by 1.9% to 1,428 points. The smaller supramax index added one point settling in at 1,264 points.

#5- The Drewry World Container Index decreased 13% to USD 4,168 per 40-ft container on Thursday, according to the latest index readings. Spot rates for 40-ft containers are now 60% below the previous pandemic peak of USD 10.4k in September 2021, but remains 193% above the pre-pandemic rate of USD 1.4k. The average composite index YTD is USD 4.1k per 40ft container, which is USD 1.3k higher than the 10-year average rate of USD 2.8k

DATA POINTS-

#1- The global air freight market is projected to grow at a 10.3% compound annual growth rate (CAGR) between 2024 and 2031 to reach USD 162.39 bn, up from USD 74.12 bn in 2023, according to a report by global tech group SkyQuest. The boost in e-commerce, global supply chains, and expansion of the manufacturing industry has increased demand for international air freight services.

#2- The UAE’s non-oil foreign trade volume increased by 10.3% to 273.5 mn tons in 2023, up from 248 mn tons in 2022, Al Khaleej reports, citing data from the Federal Competitiveness and Statistics Centre. Non-Arab Asian countries were top trading partners with a 44% share, followed by European countries at 17%, and GCC countries at 12%. Imports rose 20% to 129.3 mn tons, while exports grew 13% to 120 mn tons.

THE FINANCE FORUM-

Headlining the EnterpriseAM Finance Forum: We’ll be joined for the first time on stage by a senior government official, who’s joining us to outline a vision for where we’re going as a community and as an economy. The keynote interview will get underway at 9am sharp, and you won’t want to miss our exclusive networking breakfast from 8am.

Among the topics on the agenda, which you can view here:

• Welcome to the hot seat — top industry CEOs set the tone by addressing the biggest (and toughest) questions of the day.
• Looking from the outside in — what foreign investors and strategics think about Egypt right now.
• The only asset class in town — It’s real estate or nothing. We’ll get into the ins and outs of the industry, how it’s financing itself, which areas (and price points) are next, and more.
• Gazing into that crystal ball — The outlook for dealflow in 2025, from M&A and IPOs to securitization, FX and more.
• A once in a generation opportunity? — A deep dive into the promise and pitfalls of the emerging energy economy.
• Do we really love banking SMEs? — With NBFIs and fintech players staking their claims, banks are starting to take the SME market seriously.
• The NBFI panel — The resilience of the Egyptian consumer is the business story of the decade. How are banks and NBFS players building sustainable businesses? What are the opportunities — and credit worries — in the B2B space?

Haven’t requested an invitation yet? Do it today — space is limited. Tap or click here to let us know you’re interested.

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CIRCLE YOUR CALENDAR-

The UAE will host the World Freezones Organization’s Annual International Conference and Exhibition from Monday, 23 September to Wednesday, 25 September in Dubai. The event will discuss zones and the shifting dynamics of global economic structures to open up new avenues for investment.

The UAE will host the Freight Summit Global Conference from Monday, 23 September to Thursday, 26 September in Dubai. The conference is slated to bring together over 400 international freight forwarders to network and boost partnerships globally.

The UAE will host the Global Aerospace Summit from Wednesday, 25 September to Thursday, 26 Septemberin Abu Dhabi. The summit will gather key players in the global aerospace supply chain industry along with high level industry and government officials to discuss industry services, legal structure and resource sharing.

Bahrain to host the Routes World forum from Sunday, 6 October to Tuesday, 8 October. The event will bring together VPs and network planning heads from some 250 carriers to discuss global air route networks.

Saudi Arabia to host the Global Logistics Forum from Saturday, 12 October to Monday, 14 October in Riyadh. The forum will gather key industry players, government officials, and industry experts to discuss optimizing operations and driving growth in the logistics sector. The event will take a specific look at how the sector can adapt with regards to global climate change and incorporate sustainability into their supply-chain operations.

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