Good morning, ladies and gents. We have a bumper issue today with lots of updates to delve into, but first, the big story dominating headlines this morning…

THE BIG LOGISTICS STORY- Damascus airport suspends all flights: Damascus International Airport has suspended all flights following the collapse of the Syrian government, The National reports, citing a report broadcast on Syria’s Sham FM radio. “For now, there are no flights. We are awaiting further information from our company regarding the resumption of services,” a representative of Fly & More Travel, the Dubai travel agent for Cham Wings Airlines, told the news outlet yesterday.

What’s happening in Syria: Bashar Al Assad’s regime has been toppled following a rapid 10-day offensive by rebel forces, ending over five decades of autocratic rule in Syria by members of the Assad family after the rapid opposition offensive captured several key cities, including the capital Damascus yesterday. The power vacuum left by Assad’s departure has thrust Hayat Tahrir Al Sham and its leader Abu Mohammed Al Golani into the spotlight, with numerous outlets out with pieces trying to decipher the man and his motives. The group — once an al-Qaeda affiliate — and its leader now seek to portray themselves as a stabilizing force, issuing reassurances to Syria’s minorities and pledging to preserve state institutions after transition, but questions remain as to how much the group has changed and what role it will play in a post-Assad Syria. Read more on the developing situation in Syria: Wall Street Journal | Financial Times | Bloomberg | Reuters

HAPPENING THIS WEEK-

The Moroccan Rail Industry Summit will kick off on Tuesday and wrap on Wednesday in Casablanca. The summit will gather industry professionals and experts to discuss new market trends and future strategies presented by OEMs on infrastructure, rolling stock, embedded equipment and railway vehicle interiors.

The Middle East Business Aviation Show will start on Tuesday and run through to Thursday in Dubai. The event will showcase innovations across 130+ exhibitions with over 25 jets on display and over 50 speakers on various panels.

WATCH THIS SPACE-

#1- DP World wants to expand in India: UAE port operator DP World plans to boost its presence in India to remedy trade bottlenecks by expanding into more industrial parks and logistics projects in the country, CEO Sultan Ahmed Bin Sulayem told Bloomberg in an interview on Thursday. The move looks to alleviate congestion and ease the movement of cargo from ports to customers.

China is also an area of interest: The Chinese market is also ripe for growth as the country recovers from the chokehold of the pandemic and factories grapple with a backlog of cargo, Sulayem added.

DP has ties in India: The port operator launched operations at Cochin Economic Zone in the Vallarpadam terminal back in July. DP also operates in Mumbai’s Nhava Sheva Business Park and Chennai’s Integrated Chennai Business Park. The firm additionally operates five container terminals in India’s Mundra, Cochin and Chennai, as well as two in Mumbai. The terminals have a combined capacity of around 6 mn TEUs. The firm is also developing a mega-container terminal at Tuna-Tekra in India’s Kandla Port, which will take its combined capacity up to 8.19 mn TEUS.

#2- Bangladesh taps Aramco for LNG supply: Bangladesh tapped global giants Shell International Trading Middle East, BP Singapore Glencore Singapore, and KSA’s trading arm Aramco as suppliers of spot liquefied natural gas (LNG) in a bid to boost competition and reduce costs, a Bangladeshi energy official told Reuters on Thursday. The four companies are among the 22 new firms on Bangladesh’s list of 33 potential suppliers, which also includes Vitol Asia, Gunvor Singapore and Excelerate Energy, who previously dominated the country’s spot market.

What does Bangladesh’s market look like? Bangladesh — which made its first LNG import back in 2018 — acquired 5.2 mn metric tons in 2023, a 19% y-oy increase, which analysts expect to keep rising, the newswire writes. The country spends some 60 bn taka (c. USD 504 mn) a year on LNG imports, with more expected to come from government agreements with Qatar, Oman, and spot market contracts. It also imports some 100 LNG cargoes annually — with more expected to emerge from 50 direct contracts with Qatar and Oman.

#3- Spain to revive rail project connecting Morocco to Europe via Algeciras Port: Spain is looking to invest nearly EUR 500 mn to build a high-speed, international-gauge railway line which will link Morocco to Europe, Spanish media outlet El Faro Ceuta reported last week. The project, which was stalled for the last few years as some 61 tracks and 28 bridges would need to be adapted and built, aims to be operational by the end of 2H 2025.

Building bridges: Maersk established the Morocco Bridge Solution last year — a multimodal service that connects Morocco with Spain and the rest of Europe. The solution connects rail and truck transport across Morocco to a maritime shuttle from Tangier to Algeciras. The route aims to drive the growth in trade between Morocco and the EU by reducing congestion and carbon emissions without compromising time-efficiency.

#4- Iran wants more SCO railway cooperation: Iran is seeking increased cooperation on railways between the Shanghai Cooperation Organization (SCO) member states, calling for holding a trilateral meeting between Iran, Russia, and Azerbaijan to standardize tariffs, Tehran Times reported last week, citing comments by Head of Islamic Republic of Iran Railways (RAI) Jabbar-Ali Zakeri during an SCO meeting. Zakeri also recommended establishing an expert working group to work on border-related challenges, identify routes that are not connected to existing rail networks, and create a financial model to attract investment.

What’s next? Iran’s RAI is currently working on improving international rail links by increasing capacity and facilitating logistics to transport goods between China, Russia, Central Asia, India, Pakistan, and Europe, Zakeri said.

WORTH READING-

Morocco is rising as a possible export link to Western markets for Chinese EV manufacturers in response to protectionist US and EU policies and tariffs, according to a recent Chatham House report. Recent EU and US tariffs are pushing Chinese manufacturers to operate elsewhere to circumvent restrictions and continue exporting to global markets.

The case for Morocco: Morocco is a member of China’s Belt and Road Initiative and the African Continental Free Trade Area (AfCFTA), and Rabat has freetrade agreements with the US and the EU. The North African country’s geographical proximity to EU, African, and US markets would help companies cut shipping and ins. costs. Morocco also boasts advanced rail and road systems and advanced car industry infrastructure. Businesses from Canada, Australia, and South Korea have secured agreements with Chinese firms to build EV battery plants and produce chemicals for battery manufacturing in Morocco. The country also controls 72% of the world’s phosphate-rock reserves, which can position it as a global EV battery production hub as the world moves towards adopting cheaper and safer lithium iron phosphate (LFP) batteries.

An already established friendship: China Overseas Engineering Corporation (Covec) inked a MAD 1.34 bn (c. USD 133.9 mn) contract in November for the high-speed line (LGV) from Kenitra to Marrakech. Morocco and Guchen Hi-tech signed a USD 6.4 bn MoU in June 2023 to develop an EV battery gigafactory near Rabat, according to Chatham House. Morocco is also looking to secure China’s support for the e Nigeria-Morocco Gas Pipeline (NMGP) project.

But there are some complications: Morocco is being cautious about getting too close to China, adopting a bilateral, transactional approach and being reluctant to participate in multilateral initiatives led by China, like Brics.

MARKET WATCH-

#1- Oil prices rose in early morning trading in response to the ousting of former Syrian President Bashar al-Assad and his regime, Reuters reports. Brent crude futures climbed USD 0.36 to trade at USD 71.48 a barrel, while US West Texas Intermediate (WTI) rose USD 0.38 to USD 67.58 a barrel.

#2- Opec+ extends production cuts yet again: Opec+ pushed back the start date of production increases by three months to April 2025, with the overall production increases slated to be gradually implemented until the end of 2026, according to a statement. The decision came on the back of weak demand and rising non-Opec production levels. The story got ink in Reuters, Bloomberg, AP, and FT.

Remember- Opec+ had initially planned to start phasing out production cuts in October, but later pushed the plans back as oil prices fell.

The breakdown: The current cuts total 5.85 mn barrels per day (bbl / d), or 5.7% of global demand, divided into three tranches — 2 mn bbl / d by all members, 1.65 mn bbl / d in the first stage of voluntary cuts by eight members (including Saudi Arabia), and another 2.2 mn bbl / d in the second phase of the voluntary cuts. On Thursday, Opec+ extended the first two tranches by a year until the end of 2026 and prolonged the 2.2 mn bbl / d tranche until September 2026.

The rationale: Energy Minister Abdulaziz bin Salman told CNBC it would be unfeasible to add 2.5 mn bbl / d in one year, stressing Opec’s need to balance supply-demand fundamentals with market sentiment.

Oil price forecasts are a mixed bag for 2025: Morgan Stanley upgraded its Brent crude price forecast to USD 70 a barrel in 3Q and 4Q 2025, up from USD 68 and USD 66, respectively. ING penciled in USD 71 a barrel for the whole year, up from USD 69, Bloomberg reports. Meanwhile, HSBC maintained its forecast for the year at USD 70 a barrel, and Bank of America expects Brent to average USD 65 a barrel, according to Reuters.

#3- Baltic index breaks losing streak: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 0.6% to 1,167 points on Friday, buoyed by larger vessels. The capesize index grew 5 points to 1,535 points, while the panamax index increased 27 points to 1,067 points. The smaller supramax index shed 5 points to 974 points.

#4- The Drewry World Container Index increased 6% to USD 3,533 per 40-ft container on Thursday, according to the latest index readings. Spot rates for 40-ft containers are now 66% below the previous pandemic peak, but remain 149% above the pre-pandemic rate of USD 1.4k. The average composite index YTD is USD 3,958 per 40ft container, which is USD 1,104 higher than the 10-year average rate of USD 2,854..

DATA POINT-

Global trade is projected to reach USD 33 tn in 2024, a near USD 1 tn increase from 2023, driven by a strong 3.3% annual growth, according to a UNCTAD report (pdf). The record high is also driven by an annual 7% increase in trade services, while trade in goods is projected to grow nearly 2% in 2024 and remain below its 2022 peak, with both goods and services expected to contribute USD 500 bn each.

***YOU’RE READING EnterpriseAM Logistics, the essential MENA publication for senior execs who care about the industry that connects producers and retailers to global markets. We’re out Monday through Thursday by 9:15am in Cairo and Riyadh and 11:15am in the UAE.

EnterpriseAM Logistics is available without charge thanks to the generous support of our friends at Hassan Allam Utilities, Transmar, and AK-Ships.

Were you forwarded this email? Tap or click here to get your own copy of Enterprise Logistics.

Want to send us a story idea, request coverage, ask for a correction, or otherwise get in touch? Reach out to us on logistics@enterprisemea.com.

DID YOU KNOW that we also cover Egypt, Saudi Arabia, the UAE, and the MENA climate industry ?
***

Leave a comment

Your email address will not be published. Required fields are marked *