UAE’s DP World, Saudi Ports Authority unveil SR3 billion terminal in Jeddah

Expansion programme has increased South Container Terminal’s capacity to 4 million TEUs

Dubai: Dubai’s DP World and Saudi Ports Authority (Mawani) have unveiled a new state-of-the-art South Container Terminal at Jeddah Islamic Port.

The multinational logistics company said on Friday that this marks a significant milestone in DP World’s SR3 billion ($800 million) expansion and development programme to upgrade the terminal.

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The three-year project more than doubled the South Container Terminal’s capacity from 1.8 million twenty-foot equivalent units (TEUs) to 4 million TEUs. The companies said the expansion paves the way for a future capacity of 5 million TEUs, with additional ship-to-shore equipment to be deployed as demand grows.

Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, said, “Today marks a significant milestone in our long-term strategic investment in Jeddah Islamic Port. This expansion builds on our 25-year legacy in Jeddah and reinforces our commitment to driving regional trade growth.”

He added, “With this modernised terminal, we are enhancing efficiency, improving supply chain resilience and creating new trade opportunities for the Kingdom and beyond for decades to come.”

DP World’s Jeddah terminal, its first concession outside the UAE since 1999, has been vital to regional trade. Under a 30-year BOT agreement, its latest expansion strengthens Jeddah’s role as a key trade hub, aligning with Saudi Arabia’s Vision 2030 goals. 

Saudi Transport Minister Eng attended the opening ceremony with Saleh bin Nasser Al-Jasser, DP World Chairman Sultan Ahmed bin Sulayem, DP World GCC CEO Abdulla Bin Damithan, and senior officials from DP World, Mawani, and key stakeholders.

Egypt signs agreement for €7bn green hydrogen project that will produce one million tonnes of green ammonia a year

The facility, being developed by France’s EDF and UAE-based Zero Waste, will largely provide ammonia fuel for ships traversing the Suez Canal

The Egyptian government has signed a “co-operation agreement” with French utility EDF and UAE-based Zero Waste for a €7bn green hydrogen project near the Gulf of Suez that would produce more than one million tonnes of green ammonia annually, largely for use as a shipping fuel.

The consortium will build its own wind- and solar-power facilities across 420sq km hear Ras Shukeir, a small town with its own oil & gas facility and airport about 260km from the Suez Canal.

Shipping Giant MSC Set to Become World’s Largest Terminal Operator in $22.8B Hutchison Ports Deal

In a landmark deal announced on Tuesday, Hong Kong-based CK Hutchison will sell its 80% stake in Hutchison Ports Holding to a Blackrock-TiL consortium, positioning Mediterranean Shipping Company (MSC)—already the world’s largest ocean carrier by far—to become the global leader in container terminal operations, according to Drewry’s analysis of the deal.

The $22.8 billion transaction, the largest ever in the global container terminal sector, comes amid heightened political scrutiny over Chinese influence in critical maritime infrastructure. Notably, the deal also includes the sale of Hutchison Port Holdings’ 90% interest in Panama Ports Company, which operates the Balboa and Cristobal ports on opposite ends of the Panama Canal.

Since December, President Trump has repeatedly criticized alleged Chinese influence over Panama Canal operations and discriminatory practices against the U.S.—claims that the Panamanian government has firmly rejected.

“My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” Trump said in his address to a joint session of Congress this week. “Just today, a large American company (BlackRock) announced they are buying both ports around the Panama Canal and lots of other things having to do with the Panama Canal and a couple of other canals.”

Drewry’s global terminal operator (GTO) rankings show Hutchison Ports currently operates 43 maritime container terminals outside China and Hong Kong, spanning from Australia to the UAE, with a combined capacity exceeding 73 million TEU and throughput of nearly 47 million TEU as of 2023.

MSC’s existing portfolio, which includes a 70% stake in Terminal Investment Limited (TiL), full ownership of Africa Global Logistics, and various Italian terminals through Marinvest, handled over 70 million TEU in 2023, according to Drewry.

“The proposed deal will see MSC leapfrog other leading GTOs to secure the top spot in the global terminal operator rankings which Drewry produces each year, securing the Swiss-headquartered container carrier a truly global network of container terminals,” points out Eleanor Hadland, Drewry’s Lead Analyst for Ports and Terminals.

However, regulatory hurdles may complicate the acquisition. Drewry’s analysis reveals key areas of concern include Panama, where TiL already holds significant interests opposite Hutchison’s operations; Rotterdam, where the deal could affect competition across Northwest Europe; and Spain, where both companies maintain substantial terminal presence.

Drewry notes that the partnership leverages a longstanding relationship between MSC and Global Infrastructure Partners (GIP), now owned by Blackrock. GIP’s initial 35% stake in TiL, acquired in 2013 and currently at 20%, has proven crucial for TiL’s expansion.

“This deal appears to be a major win for MSC, which secures additional capacity in several key markets,” concludes Hadland. “We do however expect the regulatory processes to extend for at least a year, and foresee competition authorities taking a particular interest in the Northwest Europe, Spain and Panama markets.”

Tanzania Plans to Launch Its First Oil and Gas Bid Round in Over a Decade

Tanzania plans to launch in May its fifth oil and gas licensing round for 26 exploration blocks in what will be the East African country’s first such bidding round since 2014.

“We are proceeding with promotion activities because the blocks have already been identified and the data is in place,” Charles Sangweni, director general of Tanzania’s Petroleum Upstream Regulatory Authority (PURA), told Bloomberg in an interview published on Thursday.

Of the 26 exploration blocks on offer, three are in Lake Tanganyika and the rest are located in the Indian Ocean.

Tanzania aims to launch the new bid round at the Africa Energies Summit event in London in the middle of May, the official said.

Tanzania is believed to contain massive natural gas resources, which are estimated at 57 trillion cubic feet.

Tanzania also has a planned $42-billion LNG export project, but progress on this stalled early last year as supermajors Shell and Equinor were still expecting the signing of all agreements which would allow them to start developing the project.

The LNG project for connecting offshore natural gas discoveries offshore Tanzania with an export terminal on its coast has been nearly a decade in the making.

After buying BG Group in 2016, Shell became the operator of two offshore blocks in Tanzania, Block 1 and Block 4, together with its partners Medco Energi (Ophir Energy) and Pavilion Energy. A total of 16 trillion cubic feet (Tcf) of natural gas have been discovered in the blocks.

Equinor, for its part, started exploration drilling activities in Block 2 offshore Tanzania in 2011 and has made nine discoveries with estimated volumes of more than 20 Tcf of gas in place.

Last month, Energy Minister Doto Biteko said that Tanzania hopes the negotiations with the project developers on tax incentives would conclude by June this year.

How Tanzania can unlock $5.5 Billion unrealized export potential

  • A five-year export update and trade analysis has pinpointed the reasons behind Tanzania’s failure to supply various international markets with its agricultural produce, mineral products, and manufactured goods, while also suggesting potential solutions.

Tanzania has a $5.5 billion unutilized export potential for its products, according to the International Trade Centre (ITC) export potential map.

The center’s analysis shows there are several markets, such as South Asia and the Middle East, the European Union and West Europe, Eastern Africa, Southern Africa, Southeast Asia, North America, and Central Africa, which Tanzania can export more.

CMA CGM vessel in container stack collapse sails from South Africa

Photo: SAMSA

The 18,000 teu CMA CGM Benjamin Franklin that lost 44 containers in severe weather off South Africa on 9 July has now continued on its voyage to Europe.

The South Africa Maritime Safety Authority (SAMSA) confirmed on Thursday the container ship had departed Algoa Bay following works to strengthen the vessel’s hold.

The incident where the vessel occurred early morning on 9 July in the Indian Ocean and CMA CGM Benjamin Franklin reported a collapsed container stack. The vessel diverted to Algoa Bay where a damage assessment could be carried out in sheltered waters.

Related: CMA CGM ship loses 44 containers in South African storm

“The ultra-large container vessel, the CMA CGM Benjamin Franklin has left Algoa Bay. She sailed on the evening of Tuesday, 16 July 2024. She had been anchored in sheltered waters in Algoa Bay since last week, undergoing a comprehensive assessment while her cargo was being secured. The vessel had reported a collapsed container stack and the loss of 44 containers at sea,” SAMSA said in statement.

“The vessel was cleared to sail, after the South African Maritime Safety Authority (SAMSA) assessed a cargo securing plan that was received from the Owners, to secure the damaged cargo stacks. After the cargo stacks were secured in Algoa Bay, the Owners identified a suitable weather window to conduct the passage around the Cape of Good Hope.”

By Thursday morning the vessel was reported to be passing St Helena Bay heading to Europe.

Containerships that would normal transit the Suez Canal on voyages between Asia and Europe have been diverting via the Cape of Good Hope to avoid attacks by the Houthi on commercial shipping in the Red Sea.

Over three dozen containers lost overboard are believed to be on the seabed at depth of more than 500 metres outside of South African waters.

“A navigation warning to all vessels operating in the area remains active, advising them to navigate with caution. Vessels and the public are urged to report any sightings of the lost containers to the relevant authorities by contacting the Maritime Rescue Coordinating Centre (MRCC) on telephone number 021 938 3300 with the position, number, and colour of the containers if observed,” said SAMSA.

RED SEA CRISIS 

Attacks on Red Sea shipping bankrupt Israeli port

The economic effects of the Houthi strikes against Red Sea shipping became evident with the Port of Eilat’s request for financial assistance from the Israeli government following an 85% decline in volumes.

Nick Savvides | Jul 10, 2024

Eilat is situated on Israel’s southern coast on the Red Sea, linking the country to Asia and the Indian Ocean without the need to transit the Suez Canal, but its volumes had been in decline since a Q4 2022 spike saw the facility handle 124,000 tonnes, doubling its Q1 levels that year.

However, in a meeting with the Knesset’s Economic Affairs Committee on 7 July, CEO Gideon Golbert said there had been no activity at the port for eight months and no revenues coming in.

Related: Red Sea diversions hit Greece container volumes

The port mainly handles bulk cargoes, potash and car imports as well as some containers is considerably smaller than the country’s Mediterranean ports of Ashdod and Haifa, but the effects of the Houthi attacks have clearly affected the Israeli trade.

On a broader scale the Houthi actions have diverted hundreds of container vessels every week on a much longer journey, some 4,000 miles longer, around the African cape to Europe, increasing the fuel costs, and emissions, with the first increment of the EU ETS introduced in January this year.

Related: Suez Canal revenue drops by almost half due to Red Sea crisis

Conversely the Middle East conflict has given a significant boost to the secondhand container ship market, reports Alphaliner.

“Container sale and purchase deals surged again in the first half of 2024, as carriers and NOOs reacted to the red-hot charter and freight markets. After a slump in transactions in the second half of 2023, more than half a million teu of container tonnage changed hands in the first six months of 2024,” said the analyst.

As vessel operators “sought every available ship” in order to effectively meet the demand for the services travelling around the Cape of Good Hope and to maintain weekly schedules.

According to Alphaliner 141 ships of 572,600 teu were traded between January and June, an average of 23 units per month, compared to 15 sales per month H2 2023.

Carriers initially believed that the disruption to Red Sea shipping would be short lived and did not respond immediately to the surge in rates in late 2023.

“Despite the influx of a massive 1.6 million teu in newbuilding capacity in the first half of 2024, carriers sought even more tonnage in the second-hand market in order to plug schedule holes and capitalise on firm rates.”

Alphaliner also reported that virtually every available ship is now deployed in gainful employments with the idle fleet falling to 0.4% in May, and, while the idle container fleet increased minimally over the last six weeks, the number of unemployed ships remains below 1% of the total fleet.

Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.

Source: https://www.seatrade-maritime.com/ports/attacks-red-sea-shipping-bankrupt-israeli-port

Container shipping market outlook for H2 2024

Spot container freight rates have surged to unexpected highs in the first half of 2024 due the Red Sea crisis, what will happen in the remaining months of the year.

Marcus Hand | Jul 18, 2024

In a five-part series mid-year we take stock of shipping markets in the first six months of the year and look ahead to the remainder of the 2024 with experts Maritime Strategies International (MSI).

In this second part the Seatrade Maritime Podcast talked to Daniel Richards from MSI, about the developments in the container shipping market and the outlook for the remainder of the year.

In a five-part series mid-year we take stock of shipping markets in the first six months of the year and look ahead to the remainder of the 2024 with experts Maritime Strategies International (MSI).

In this second part the Seatrade Maritime Podcast talked to Daniel Richards from MSI, about the developments in the container shipping market and the outlook for the remainder of the year.

You can listen to the full interview as a podcast in the player above

Why have spot container rates risen much higher than expected?

“There’s no doubt that the scale, in particular, of the spot market increases, has been stronger than the consensus, and certainly we expected,” Richards explains.

The delayed and secondary impacts of Red Sea diversions via the Cape of Good Hope have been a lot greater than expected for which MSI sees a mix of drivers, and these include:

  • Trade data has been better than expected.
  • Demand growth at 6% in the first five months is not much better than MSI had been expecting but he notes, “there is some possibility that volumes have been brought forward as container shippers are trying to anticipate and avoid delays and supply chain problems”.
  • The need for additional vessels for African Cape diversions has prevented the addition of extra capacity on unaffected trades.
  • Port congestion initially in certain Mediterranean has seen containers piling up in storage yards and congestion spreading to Southeast Asian hubs such as Singapore and Port Klang.

So, it’s all combining to take effective supply out of the system. And I think this really points to the final driver, though, which is simply that freight markets now just seem to be far more volatile than they were in the period before the pandemic,” Richards says.

“It does seem that for a select number of shippers, they are willing to pay the premium rates to get their stuff loaded, and that’s leading to far more explosive responses in the market.”

Will freight rates hit the levels seen at the height of the pandemic?

Richards says much depends on how long the crisis lasts. “You need to see really sustained strength in the spot markets in order for that to filter through to the new contract negotiations when they come up, generally towards the end of the year and towards the end of Q1 and Q2 on certain trades.”

He explains, “So assuming that there is some normalisation, some softening in the spot markets in the second half of the year, as you move beyond peak season, as new capacity continues to come into the market, then we would expect that lines won’t be in quite as strong a position going into doing the next round of contract negotiations with shippers.

“But really in the very near term, certainly further increases are plausible, and for the moment, the market seems fairly unconstrained in terms of how high or how much shippers have seemed to be willing to spend.”

What happens if there is a ceasefire in Gaza and the Houthis stop attacking vessels in the Red Sea?

“We would expect the market to weaken, and generally speaking, the prevailing rate levels you’ve saw towards the end of 2023 are what we’d expect if you were to see the sailings to resume through the Red Sea, and for that to remain the case,” Richards says.

However, there are questions as to whether the Houthi would stop attacks if there were a ceasefire in Gaza and could be relied to do so on a ongoing basis. There is also a question as to how different lines would react and whether all would decide to return to the Red Sea immediately or adopt a wait and see approach. But a much weaker market would be expected.

Africa’s Critical Mineral Race Heats Up

Competing railway corridors pit the United States against China; Kenya faces a violent crackdown on tax protests.

The highlights this week: Protests in Kenya turn violent, Ghana reaches a debt deal, and Namibia decriminalizes homosexuality.

Can the Lobito Corridor Counter China in Africa?

The U.S. government is helping to revive a railway line linking critical mineral mines in Zambia and the Democratic Republic of the Congo to the port of Lobito in Angola. The corridor is a key to the Biden administration’s plan to counter China in Africa. (Chinese companies have made extensive infrastructure investments in all three countries.)

The end goal of the Lobito Corridor is to create an efficient route for exporting critical minerals to the European Union and the United States. Last week, Italy announced a $320 million investment in the project as part of Prime Minister Giorgia Meloni’s bid for African resource access, named the Mattei Plan for Africa. A consortium of European companies—Mota-Engil, Vecturis, and Singapore-based Swiss commodity trader Trafigura—have won a 30-year concession from the three African nations to operate the railway.

Freight Management Mistakes and How to Avoid Them

The United States has committed $250 million, mostly in concessionary loans to the Africa Finance Corp., which is spearheading the project, but that transaction has yet to receive final approval. Other major funders include the African Development Bank ($500 million). The Lobito project is ultimately expected to cost $2.3 billion.

Congo is the world’s largest producer of cobalt, accounting for about 70 percent of production globally. Congo and Zambia are Africa’s main copper producers; meanwhile, Angola has 36 of the 51 minerals that are critical to green energy technologies. Belgium and Portugal built the original rail line between 1902 and 1929, but it collapsed following a civil war and Angola’s 1975 independence from Portugal.

However, once the roughly 800-mile line is built, it could still be accessed by Beijing’s state mining companies for export. So far, only the Canadian firm Ivanhoe Mines has committed to using the railway.

Meanwhile, China has proposed rebuilding and running a rival railway, the Tazara line—which is 300 miles shorter than the Lobito Corridor—as a faster way to transport critical minerals from Congo and Zambia. Tazara, first built by Chinese leader Mao Zedong’s government in the 1970s, runs from Zambia to the Indian Ocean port of Dar es Salaam in Tanzania and is just one part of China’s infrastructure investments in Africa over the past four decades.

“The reality of the Lobito Corridor development is that it may be coming too late in the day … since most of the supply has already been locked in by China,” wrote Evans Wala Chabala, a policy consultant and former chief executive of the Securities and Exchange Commission of Zambia.

Congo, which sells most of its raw minerals to China for processing, hopes that the Lobito Corridor will also draw investments in a battery precursor plant that could cost just one-third of an equivalent plant in China or the United States.

However, Kinshasa is contending with ongoing violence in the eastern region of the country as well as a lack of specialized workers; the most likely candidates to risk such a project would be Chinese operators. Experts believe that Chinese mine operators would be able to use the corridor for export.

“With the EU and the US lagging in terms of EV [electric vehicle] technology, it is very likely that the DRC and Zambia will end up looking to the East for the capacity and capability building of EV battery value chains,” Wala Chabala noted.

“Just compare the number of essential EV players in China to that of the United States. Whereas only a handful of B-level companies meet Tesla’s dominance in the United States, China has powerhouses in BYD, Geely, XPeng, Nio, Chery, and others” Jorge Guajardo wrote in Foreign Policy.

Some analysts argue that the Lobito Corridor is little more than a minerals extraction project, and that the United States needs to look beyond that to outmaneuver China. “Washington’s attempt to borrow a page from Beijing’s book could prove to be a day late and a dollar short at a time when the nature of the relationship between Beijing and African capitals is changing,” wrote Chris O. Ògúnmọ́dẹdé, an analyst studying African politics.

Beijing is attempting to build local value-added chains. Zimbabwe, Namibia, and Nigeria, in which Chinese companies have a monopoly, have restricted the export of raw lithium in favor of processing it locally in Chinese built refineries. To be fair, Washington has also pledged along with China to help Zambia add value to raw minerals and create jobs in EV battery manufacturing.

Yet “one of Beijing’s considerable advantages over its rivals is its ability to get the private and public sectors to align with its geopolitical and strategic objectives,” wrote Christian Géraud Neema Byamungu, an expert on China-Africa relations.Success hinges on whether the U.S. government and EU leaders can convince private companies to compete against state-owned Chinese companies that face little regulation and accountability.

African air cargo tonnage up 8% in first half of 2024

https://www.logupdateafrica.com/air-cargo/african-air-cargo-tonnage-up-8-in-first-half-of-2024-1352559?infinitescroll=1

Tonnages from all the main world origin regions in Q2 this year were higher YoY, with Asia Pacific up 18%, Europe volumes up +7%, Africa origins up +6%. In comparison, there were +5% YoY increases from North America and Central & South America (CSA).

Global air cargo demand in the first half of 2024 (H1, 2024) was up, YoY, from all the main world origin regions, with Asia Pacific and MESA origins topping the growth list at +19% each, and there were single-digit percentage increases from Africa (+8%), Europe (+7%), CSA (+5%) and North America (+2%). Tonnages were up by +12% in the first half of 2024 compared with the equivalent period last year, according to preliminary figures and analysis from WorldACD Market Data, with +11% year-on-year (YoY) growth in the second quarter (Q2) following on from the +12% recorded in Q1. The preliminary figure for June of +9%, YoY, was slightly below the average YoY full-month tonnage growth figure so far this year, with strong YoY growth continuing from Asia Pacific origins but with demand from Middle East & South Asia (MESA) origins dropping back somewhat from the highly elevated tonnage growth levels experienced in the first quarter. Tonnages from MESA origins in Q2 were still significantly higher (+13%) than the equivalent period last year, but that growth figure was well below the +27% growth recorded in Q1, from a region particularly affected by the disruptions to container shipping caused by the attacks on vessels in the Red Sea.

Tonnages from Asia Pacific origins in Q2 were up by +18%, YoY, similar to the +20% YoY growth recorded in the first quarter of this year. Indeed, tonnages from all the main world origin regions in Q2 this year were higher than the equivalent period last year, with Europe volumes up +7%, Africa origins up +6%, while there were +5% YoY increases from North America and Central & South America (CSA). On the pricing side, average global air cargo rates of US$2.39 per kilo for the first half of 2024, based on a full-market average of spot rates and contract rates, were down by -8%, YoY. That decline was partly due to a tough comparison in the first quarter with the elevated average rates ($2.76/kg) still present in the market in Q1 last year. However, average rates of $2.46 per kilo in Q2 this year have risen back to +2% above their levels in the same period last year, thanks to significant YoY rises from Asia Pacific (+10%) and from MESA (+47%) origins, or at least on key lanes.

Whereas global average rates in the first four months of 2024 were down compared with last year, by May they had moved back into positive territory (+2%), with the gap widening to +9% in June, when they averaged $2.52 per kilo. Looking at the last full week (week 26, 24-30 June), average global rates dropped very slightly (by -$0.02) to $2.51 per kilo, WoW, according to the more than 450,000 weekly transactions covered by WorldACD’s data. But that figure was up, YoY, by +9%, and well above pre-Covid levels (+41% compared to June 2019). Meanwhile, total worldwide tonnages in week 26 rebounded by +3% after losing around -5%, in total, across the previous two weeks – mainly to and from countries with predominantly Muslim populations, linked to the Eid al-Adha annual festivals and holidays, which this year took place between 16 and 20 June.