MUSCAT, Oman: October 30, 2018. The Oman Aviation Group (OAG) says the goal of its cargo strategy is to handle 780,000 tons of air cargo by 2030 and 1.5 million tons a decade later.
At an event in Muscat to mark the launch of its plan, OAG said it wants to transform Oman’s air cargo sector by retaining market share, enabling globalisation of the country’s national industries and establishing a logistics hub for global operators.
During the occasion attended by Oman’s minister for Transport and Communications Ahmed bin Mohammed Al Futaisi, Oman Aviation Services (OAS) signed an MoU with ground.net, a pan-European ground services alliance launched in 2013. The company unites local experts in a multi-station network to provide airlines with customised passenger, ramp and cargo services. OAS is the first non-European member and expects to benefit from access to new markets, best practices and training.
OAS also signed an MoU to join The International Air Cargo Association.
Since 2013, air cargo in Oman has grown 72 percent from 122,000 tons in 2013 to 210,000 tons last year and is currently forecast to top 220,000 tons by the end of 2018.
OAG says the increase is driven by globalization as air cargo traffic expands from electronics and consumer goods to perishables, foodstuff, healthcare and pharma - creating a growing need for just-in-time supply chains.
With a significant portion of Muscat’s import and export cargo made up of perishables and temperature-controlled goods including fish, fruits and vegetables, frozen meats and pharmaceutical products, the company says its new 22,500 sq.mt. air-conditioned terminal and cold room ensures cold chain integrity is maintained throughout the entire handling process.
Established in Muscat in February 2018, the state-owned Oman Aviation Group includes the business units Oman Air, Oman Airports and Oman Aviation Services.
GENEVA: October 24, 2018. IATA secretary-general and CEO Alexandre de Juniac has described as “ridiculous” the ban on discussing a post-Brexit air safety agreement between the European Aviation Safety Agency and the UK Civil Aviation Authority.
"This is aviation safety we are talking about – the number one priority for everyone connected with air transport and the top responsibility for governments. We understand the complexity of the political issues at stake. But safety and security should be non-negotiable," declared de Juniac.
IATA says the situation regarding goods is even more complex, with “almost no clarity” on Customs arrangements. The most likely scenario even under a transition period, it suggests, is for shipments to be delayed or disrupted as new Customs procedures become established.
"Interference with the movement of people and goods will have a major and immediate knock-on impact to economic activity in both the UK and the EU. Solutions to minimize disruption are of paramount importance. We must have clarity on future border and Customs arrangements now,” added the IATA head.
IATA is calling for urgent action by the UK and the European Union to put in place contingency planning for the continuation of air services in the event of a no-deal Brexit that ensures the uninterrupted continuation of air services, a framework for regulating safety and security, and policies and processes needed for efficient border management.
"These are the most critical areas because there are no fallback agreements such as the WTO framework available in a ‘no-deal’ Brexit scenario. Without any contingency planning being made transparent to the industry, the risks of not addressing these issues could mean chaos for travelers and interrupted supply chains,” continued de Juniac, “With less than six months to go, we have little more certainty than we did in June 2016.
"The EU and UK have a responsibility to millions of their citizens who depend on reliable air transportation. The goal should be a comprehensive air services agreement that does not step backwards from the connectivity existing today."
PARIS: October 22, 2018. A report from the OECD says the world’s consumption of raw materials will rise to 167 Gigatonnes by 2060 from 90 Gigatonnes today as the world’s population increases to 10 billion, placing twice the pressure on the environment.
Earlier this month the latest report from the Intergovernmental Panel on Climate Change (IPCC) warned a global warming of 1.5°C would lead to climate damage costs of US$54 trillion; a 2°C warming would be US$69 trillion; and an increase to 3.7°C would produce costs of US$551 trillion.
Without significant government intervention – including by the Trump administration - the world is on track to warm to 3.4°C by 2100.
Current global wealth is around US$100 trillion.
In the absence of new emissions-cutting policies, the OECD report says overall emissions from materials management will grow from 28 to 50 Gigatonnes of CO2-equivalent by 2060.
The increase comes despite a shift from manufacturing to service industries and continual improvements in manufacturing efficiency, which has lessened the amount of resources consumed for each unit of GDP. Without this, environmental pressures would be worse says the OECD.
The report, presented at the World Circular Economy Forum in Yokohama, Japan by OECD deputy secretary general Masamichi Kono, says the biggest rises in resource consumption will be in minerals, including construction materials and metals, particularly in fast-growing developing economies.
The recycling industry, currently a tenth the size of the mining sector in terms of GDP share, is likely to become more competitive and grow but will remain a much smaller industry than the mining of primary materials.
Meanwhile Denmark, Japan, the Netherlands and the UAE have announced they are joining over 50 government and business leaders who are part of the Platform for Accelerating the Circular Economy (PACE), which was launched at this year’s World Economic Forum Annual Meeting in Davos, Switzerland – not to be confused, it suggests, with “Davos in the Desert”, Saudi Arabia.
Japan recently launched its ‘4th Fundamental Plan for Establishing a Sound Material-Cycle Society’; the Netherlands government aims to achieve Circularity by 2050 and halve the use of primary resources by 2030; Denmark has launched its Circular Economy Strategy; and the UAE says it is committed to shaping strategic action to advance the circular economy.
PACE is also focused on waste from electronics. In 2016, 44.7 million tonnes of harmful e-waste was generated, equivalent to the weight of 4,500 Eiffel Towers. At the same time, the UN estimates that some €55 billion worth of secondary raw materials lays idle in e-waste.
Thani bin Ahmed Al Zeyoudi, UAE minister of Climate Change and Environment commented: “The circular economy is gaining momentum as a Sustainability paradigm. As the essence of this concept has always been at the heart of the UAE’s national agenda, we are proud to join PACE to scale up the transition to a robust circular economy.”
TIMOR-LESTE: September 25, 2018. Bolloré Ports has begun a three-year construction of a new Tibar Port in Timor-Leste, the country’s first public-private partnership under a 30-year concession at a total cost of US$490 million.
At the time of independence in May 2002, after decades of conflict, all public infrastructure including roads, ports and airports, water and sanitation systems, and government facilities were either non-existent, destroyed or severely dilapidated.
Since then the country has created the conditions for successful development, according to the Asia Development Bank, which suggests its prospects “hinge on prudent and effective use” of revenue from offshore petroleum production to finance investments needed to develop a sustainable non-oil economy.
The port project includes the construction of a 630-metre wharf and a 15-metre draught to handle containerships of 7,500 TEU, the creation of a 27 hectares yard, and the installation of two ship-to-shore cranes and five rubber-tired gantry cranes on start-up.
“Our group is very proud to have accompanied the country in this new step in its development. This new ultra-modern portal hub will promote maritime trade, particularly between China and Northern Australia, and thus instil a new economic dynamic in the region” said Bolloré Ports CEO Philippe Labonne.
The company operates 21 port concessions worldwide, including 16 in Africa.
(Pictured from left to right: Taur Matan Ruak, Timor-Leste prime minister; Arão Noé Amaral, president of the National Parliament; and Philippe Julien, Development director, Bolloré Ports.)
ADDIS ABABA: September 04, 2018. The Ethiopian Investment Commission (EIC) has lifted restrictions on foreign investment (FDI) in the country’s logistics industry.
In a statement, the EIC said it would allow FDI in bonded warehouses, consolidation and deconsolidation services as well as joint ventures of up to 49 percent by international logistics service providers in order to develop a thriving and productive cluster to serve as another pillar of economic growth.
Explaining the rationale behind the revision, it said there had been no “significant improvement in cost or speed to market by the logistics sector,” adding the “country’s low performance against its peers under international benchmarks is a key testament in this regard.”
The EIC pointed out that policy and regulatory barriers barring the participation of foreign logistics companies in Ethiopia had imposed serious strains on the export manufacturing sector due to the lack of capital and technology.
Last month Ethiopian Airlines Group CEO Tewolde Gebremariam pre-empted the EIC change of rules by announcing a joint venture between Ethiopian Airlines Cargo & Logistics and DHL to set up a new company owning 51 percent and 49 percent respectively.
At the time Gebremariam said DHL was already a major customer of the airline generating US$50 million a year and the new company would focus on serving manufacturers in new industrial parks and major export centres.
Noting Ethiopia has an inefficient and expensive logistics sector, Tewolde said industrialization without equivalent global standards in logistics would lead to failure. “We believe that the logistics sector is the dragging force. It is under developed. That is why we are going to enter the logistics service in Ethiopia.”
During its 2017/2018 fiscal year, Ethiopia attracted more than US$3.7 billion in FDI according to the EIC. Commissioner Belachew Mekuria said the country had managed to “lure the stated amount of FDI, despite the multi-faceted challenges the country has faced”.
Citing a lack of foreign currency and “unrest” in some parts of the country, Mekuria noted the EIC had issued licenses for 275 foreign projects worth US$5 billion with China, India and Turkey the leading investors. According to the Ethiopian ministry of Foreign Affairs, China has invested US$4.0 billion in 400 projects.
(Pictured: Ethiopian Cargo took delivery of its seventh B777-200 freighter on September 03.)
LONDON: September 25, 2018. According to a survey by KPMG, 62.9 percent of the British public believe they will face severe travel delays as a result of a no-deal Brexit, particularly at ports; 50.3 percent believe that flight delays and cancellations are likely to occur, and 52.9 percent believe that travel between the UK and EU will become difficult.
The survey coincides with the publication by the UK Department of Transportation (DoT) of six ‘No-Deal’ planning advisories including what happens to commercial road haulage as well as flights to and from the UK.
After March next year, the DoT says UK trucking companies will no longer be able to rely on automatic recognition by the EU of UK-issued Community Licences. “Hauliers may therefore no longer be able to access EU markets with their Community Licence alone. This would also end the ability of UK hauliers to perform cabotage.”
The DoT notes the existence of the European Conference of Ministers of Transport (ECMT) permit scheme that would allow truckers to access Europe but says “these are limited in number” and adds the understatement: “We expect demand for ECMT permits will significantly exceed supply.”
If a trucking company cannot obtain an ECMT permit, the government suggests “businesses should consider what contingency plans they need to have in place for the movement of goods if they do not receive the number of permits they applied for.”
A No-Deal Brexit will also mean UK and EU-licensed airlines will lose the automatic right to operate air services between the UK and the EU without seeking advance permission. EU-licensed airlines would lose the ability to operate wholly within the UK (for example from Heathrow to Edinburgh) and UK-licensed airlines would lose the ability to operate intra-EU air services (for example from Milan to Paris).
For airlines licensed outside the UK and the EU, their eligibility to continue UK operations would be determined by the air services agreement (ASA) between Britain and the country in which they are licensed. The UK government claims airlines from the 111 countries with a bilateral ASA, including China, India and Brazil, will not be affected.
KPMG UK head of Transport Ed Thomas observes: “If there is a No Deal outcome then the UK government needs to start planning and reassuring the British public that the transport system in the UK will operate as usual. The government also needs to analyse the impacts on business of any backlog of containers and lorries at UK ports and ensure that appropriate contingency planning is in place.”
As an obligatory preface to its advisories the DoT declares: “A scenario in which the UK leaves the EU without agreement remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome.”
WASHINGTON, DC: August 13, 2018. Confirmation by an international arbitration tribunal that the government of Djibouti has illegally seized the Doraleh Container Terminal (DCT) from DP World, coincides with the news the country has risen 44 places to No.90 on the World Bank’s latest biannual Logistics Performance Index (LPI).
With an annual capacity of 1.3 million TEU and reportedly the most advanced ocean container terminal on Africa’s east coast, DP World says its DCT remains the largest employer and biggest source of revenue in the country, has operated at a profit every year since it opened, and has been found to have been a “great success” for Djibouti under its management.
In addition to its original investment the company says it has contributed 12 percent to Djibouti’s economy, grown origin and destination cargo by 380 percent in the last 14 years, grew volumes over 70 percent in 2017, and was aiming for 80 percent this year.
“Logistics services are the backbone of international trade," commented Caroline Freund, director of the Macroeconomics, Trade & Investment (MTI) Global Practice at the World Bank Group. “Good logistics reduces trade costs, but supply chains are only as strong as their weakest link. For developing countries, getting logistics right means improving their infrastructure, Customs, skills and regulations.”
The significant jump in Djibouti’s LPI position in the two years since the World Bank’s last survey suggests DP World is making a difference to the country’s trade – despite the politics.
“With international trade becoming more dispersed through global value chains, good logistics are more important than ever. Small disruptions to a supply chain can spread rapidly to other countries and regions,” added Christina Wiederer, Economist with the World Bank Group’s Macroeconomics, Trade & Investment Global Practice and index co-author.
Published since 2007, the latest Connecting to Compete report says the performance of logistics in each economy depends on the public sector’s interventions and policies: “Public features include regulation; transportation infrastructure; the implementation of controls, especially for international goods (as in trade facilitation); and the quality of public–private partnership and dialogue.”
High-income countries that dominate global supply chains rank top in logistics performance. Not surprisingly, Germany has the highest aggregate score over the past four LPI editions followed by the Netherlands, Sweden, Belgium and Singapore. The UK, where DP World has a growing presence, is in sixth position ahead of Japan, Austria, Hong Kong and the US.
Countries that rank the lowest are described by the World Bank as low-income, isolated, fragile, or facing conflict or unrest: Somalia, Haiti, Afghanistan, Sierra Leone and Syria occupy the bottom five positions on the 167-place index.
The LPI analyzes countries through six indicators: The efficiency of Customs and border management clearance; the quality of trade- and transport-related infrastructure; the ease of arranging competitively priced international shipments; the competence and quality of logistics services; the ability to track and trace consignments; and the frequency with which shipments reach consignees within the scheduled or expected delivery time.
Noting the global turnover generated by logistics networks exceeds US$4.3 trillion; the World Bank suggests “a better understanding of their operation is no trivial issue”.
ZHENGZHOU, China: September 19, 2018. Speaking at the ICAO Air Cargo Development Forum earlier this month, the secretary general of the UN specialised agency Fang Liu said the 4.2 percent annual growth in air cargo to 2032 would only happen if current modernization continues to be “robustly and cooperatively pursued by governments and industry”.
“With current consumer expectations for same day or next day delivery driving a great deal of today’s growth in e-commerce and air freight, we cannot allow the speed and efficiency of commercial operations to be impeded due to network capacity shortfalls or other infrastructure-related risks,” Liu declared.
ICAO says it received funding and hosting support for the forum from Zhengzhou City and Henan Province governments as a reflection of the recent growth of air cargo and e-commerce activity in the region.
Another host was Silk Way West Airlines (SWW) that took the opportunity to announce an increase in service from its Baku hub to Zhengzhou from four to six flights a week: “With this we are entering into the new stage of our strategic cooperation with the government of Henan Province and Zhengzhou Airport. We are excited to further strengthen this cooperation by seeing further growth”, declared SWW president and CEO Wolfgang Meier.
“Within a short period of time we manage[d] to emerge as one of the leading cargo carriers in Zhengzhou and we are aiming to further increase tonnage and flights as [it] provides for us the perfect platform to grow in view of our core capabilities to serve the Silk Air Route in accordance to the One Belt – One Road strategy,” Meier added.
OTTAWA: July 27, 2018. Canada has agreed an immediate 68 percent increase in airline capacity with the UAE and, for the first time, the introduction of four all cargo services a week between the two countries.
Canada has also expanded its air transport agreement (ATA) with Egypt to allow designated airlines to increase weekly flights from four to seven from any city in either country.
"These expanded air transport agreements with Egypt and the United Arab Emirates are a positive development for air transport relations between our countries,” said Canada’s minister of Transport Marc Garneau. “[They] will continue to facilitate tourism, trade and investment between Canada and these countries and help our businesses grow and succeed."
Two-way merchandise trade between Canada and Egypt was valued at Can$1.3 billion in 2017 while equivalent trade with the UAE totalled Can$1.8 billion last year.
Canada minister of International Trade Diversification Jim Carr added: "Canada's commercial relationships with Egypt and the United Arab Emirates are strong and growing. These expanded agreements will help Canadian companies grow and diversify their markets by making the movement of goods and people faster and easier."
As a result, Emirates will increase service between Dubai and Toronto from three to five times a week with an A380 from August 18, and Etihad will operate a similar frequency from Abu Dhabi with a B777-300ER beginning October 28.
Canada implemented a so-called ‘Blue Sky’ policy to encourage trade and tourism in 2006 and has since concluded new or expanded ATAs with 103 countries covering 96 percent of the country’s overall international passenger traffic.
BERLIN: September 12, 2018. Corruption watchdog Transparency International (TI) says 33 countries, producing 52 percent of the world’s exports, conduct “limited, little or no enforcement” against foreign bribery by corporations.
In its twelfth and latest Exporting Corruption report, the organisation says only 11 out of 44 countries it surveyed conduct active or moderate enforcement against companies bribing abroad.
Of these only Germany, Israel, Italy, Norway, Switzerland, the UK and the US actively enforce the OECD Anti-Bribery Convention, while Australia, Brazil, Portugal and Sweden conduct “moderate enforcement”.
Together these countries are responsible for 30.8 percent of world exports.
Brazil and Israel have dramatically improved their behaviour, up from little or no enforcement in 2015 notes TI, while Austria, Canada, Finland and South Korea - accounting for 6.7 percent of world exports - have apparently gone in the opposite direction.
For the first time TI has evaluated China, India, Singapore and Hong Kong - each responsible for over two percent of global exports and parties to the UN Convention against Corruption - and places them in its “Little or No Enforcement” category.
“It is unacceptable that so much of world trade is susceptible to consequence-free corruption,” said TI chair Delia Ferreira Rubio. “Governments have promised to implement and enforce laws against bribing foreign officials under the OECD and UN conventions. Yet many are not even investigating major cases of grand corruption, which involve state-owned enterprises and senior politicians.”
The OECD Anti-Bribery Convention was adopted in 1997 to address the supply-side of international corruption. There are now 44 parties to the Convention, 36 of them members of the OECD, and collectively are responsible for more than 80 percent of world exports.
TI report author Gillian Dell added: “Authorities not only need a strong legal framework for going after businesses that pay bribes abroad, but proper resources for the agencies responsible. In many countries, the courts, as well as investigators and prosecutors of cross-border corruption crimes, have inadequate means to do their job.”
GENEVA: May 18, 2018. The Mediterranean Shipping Company (MSC) and Maersk Line are to stop serving Iran following Donald Trump’s withdrawal of America from the UN Security Council agreement in 2015 to lift some trade sanctions against the country, in exchange for limits to its nuclear program.
MSC is responding to the threat of punitive US sanctions on any company trading with Iran that uses the US Dollar, does business with the US or has American shareholders or subsidiaries.
Maersk said it would honour customer agreements entered into before May 08, but then wind them down by a November 04 deadline set by the Trump administration. As with other shipping lines, both box carriers can continue to carry food imports to Iran before November.
With the additional announcement that Maersk Tankers would cease trading with Iran, yesterday French oil giant Total said it would stop the development of an Iranian project to supply gas to the country’s domestic market as a result of the re-imposition of US sanctions by Trump.
The company said it would “unwind” all operations before November 04 unless it is granted a specific project waiver by the US with support from French and European authorities.
Total said the waiver would have to include protection from any secondary sanction against the loss of US financing for its worldwide operations (90 percent), the loss of US shareholders (30 percent of the company), or the inability to continue operating in the US where it has assets of over US$10 billion.
Speaking in Sofia, Bulgaria today European Commission president Jean-Claude Juncker announced the reintroduction this week of a 1996 EU Blocking Statute to combat what he described as the extraterritorial effects of US sanctions on the European Union.
“I have to be very clear once again, and I am repeating myself by saying it: we want an unlimited exemption from the proposed tariff measures [and if so] we are ready to engage in talks with our transatlantic partner.”
Juncker said that in such a climate, the EU wanted to expand energy cooperation with the US, particularly in the field of liquefied natural gas; focus on voluntary cooperation between regulators outside the framework of trade negotiations; work with the US on World Trade Organisation reform that includes lifting the current blockage of the WTO's Appellate Body nominations; and discuss how to improve reciprocal market access, notably for industrial products including cars.
“But let me repeat,” added Junker, “we will not negotiate with the Sword of Damocles hanging over our heads."
