Ex-Etihad Cargo boss Martin Drew has been appointed as Atlas Air Worldwide chief strategy and transformation officer.

Drew started in his new role this week and will lead the company’s corporate strategy, including its transformational growth initiatives.

As part of this role, he will drive strategic growth and diversification across Atlas’ services, geographic footprint, and partnerships.

Drew will report to Atlas Air Worldwide chief executive Michael Steen and will also serve on the company’s executive leadership team.

“We are thrilled that Martin is joining our leadership team at this exciting and pivotal moment for Atlas,” said Steen.

“Martin is a highly recognised leader in aviation and will be an incredible asset to our team as we leverage our diversified business model, unrivaled global network and best-in-class assets for long-term success.

“His vast experience in cargo and passenger operations, entrepreneurial leadership style and solutions-oriented approach will help guide the Company to new heights.”

Drew added: “I look forward to bringing my passion for driving change and strategic mindset to make a lasting impact on the Company’s continued growth and success. Atlas’ dedication to transformation and its visionary leadership have set the stage for an exciting journey ahead.”

Drew was most recently senior vice president global sales, marketing, brand and cargo at Etihad Airways where he oversaw all aspects of Etihad Cargo and was a member of the airline’s leadership team.

He first joined Etihad Airways in 2005 and during this time spent 18 months working with Jet Airways as vice president, cargo, in Mumbai, substantially growing the airline’s cargo business.

He also previously held the position of vice president Europe and Americas with responsibility for Etihad’s activities in Europe and the Americas, including passenger sales, marketing, and alliances. Prior to that, he held senior positions at Lufthansa and DAS Air Cargo.

Martin Drew to leave Etihad

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According to a recent market research report published by Extrapolate, the global freight market will reach USD 251.1 billion by 2030. Its growth is driven by increasing demand for integrated transport services and the development of international trade. The market is driven by the expansion of bilateral trade agreements between countries and the role of freight services as an integrated service provider to trade customers.

The introduction of digital solutions and technological developments are driving the growth of the freight market. Freight forwarders are using technology to streamline operations and provide more efficient and cost-effective services, including shipment tracking software, automated customs clearance and real-time updates to customers.

The freight market is also driven by the growth of e-commerce and online retailing. As consumers increasingly choose to shop online, the demand for timely and reliable delivery of goods is growing. Freight forwarders are ready to meet this demand by offering comprehensive logistics solutions for e-commerce businesses.

Ocean trade to account for the largest market share thanks to infrastructure modernisation

The Extrapolate study concludes that the ocean segment of the global freight forwarding market is experiencing rapid growth due to factors such as increasing internet penetration, rising consumer spending power and modernisation of port infrastructure, containers and ships. Various end-user industries are turning to ocean freight forwarding due to cost-effective transport solutions and growing strategic alliances. The growth of e-commerce companies is also positively impacting the market, especially in support of less-than-container-load shipments.

Documentation and favourable trade agreements are contributing to the growth of the freight market

Customs documentation and favourable trade agreements in the freight market have helped to improve the delivery of integrated services to customers. The increase in bilateral trade agreements is contributing to market expansion. There is a wealth of opportunities among industrialised countries, with increasing digitisation and efficiency of operations.

For example, the United States and Morocco, Brazil, and the European Union and Japan have concluded reciprocal trade agreements that are creating a boom in opportunities. Germany has also documented cars as the most traded commodity, with a market share of almost 19.3% of the USD 122.3 billion worth of cars exported.

Europe and North America experience exponential growth with global industrialisation and increasing trade activity

Europe is expected to lead the global seaborne freight market due to the presence of key players and technological advances in the region. The expansion of industrialisation and increasing development in different European countries are driving the growth of the sector. In addition, the growing popularity of e-commerce portals creates positive growth prospects for the region.

North America is also emerging as a fast growing market, driven by the increase in US exports and imports. The region is experiencing strong growth thanks to the world’s largest economy, the United States, which accounts for almost one fifth of world GDP. The region is also home to major market players, making the US a trading hub with many trading partners.

The global seaborne freight market is expected to reach USD 86.97 billion by 2028

According to a report published by Extrapolate, the global seaborne freight market is expected to reach USD 86.97 billion by 2028, driven by increasing cross-border e-commerce between trading countries, rising heavy cargo traffic and favourable government policies.

The ocean freight forwarding market is responsible for the transportation of goods via water and is a cost-effective option for trade activities. Strategic partnerships and the efficiency of water transport are also contributing to the growth of the sea freight market. According to the World Trade Organisation, sea freight is the backbone of global supply chains, accounting for more than 80% of total world trade.

Competition fosters industry development

The seaborne freight market has also experienced significant growth in recent years due to new entrants such as Kuehne + Nagel, Sinotrans, DHL and DB Schenker. Kuehne + Nagel International AG, a German company headquartered in Switzerland, is currently the leading player in the market, handling around 4.8 million twenty-foot equivalent container units.

Increasing trade volumes and demand for low-cost and efficient transport solutions have fuelled the growth of the ocean freight market, making it a highly attractive sector for new entrants.

Author: Rolands Petersons, logistics expert

President Vladimir Putin on Tuesday delivered Russia’s long-awaited response to a Western price cap, signing a decree that bans the supply of crude oil and oil products from Feb. 1 for five months to nations that abide by the cap.

The Group of Seven major powers, the European Union and Australia agreed this month to a $60-per-barrel price cap on Russian seaborne crude oil effective from Dec. 5 over Moscow’s “special military operation” in Ukraine.

The cap is close to the current price for Russian oil, but well beneath the windfall price Russia was able to sell for this year, and that helped offset the impact of financial sanctions on Moscow. Russia is the world’s second largest oil exporter after Saudi Arabia, and a major disruption to its sales would have far reaching consequences for global energy supplies.

The decree, published on a government portal and the Kremlin website, was presented as a direct response to “actions that are unfriendly and contradictory to international law by the United States and foreign states and international organizations joining them”.

“Deliveries of Russian oil and oil products to foreign entities and individuals are banned, on the condition that in the contracts for these supplies, the use of a maximum price fixing mechanism is directly or indirectly envisaged,” the decree stated, referring specifically to the United States and other foreign states that have imposed the price cap. “The established ban applies to all stages of supply up to the end buyer.”

The decree, which includes a clause that allows for Putin to overrule the ban in special cases, stated: “This…comes into force on Feb. 1, 2023, and applies until July 1, 2023.” Crude oil exports will be banned from Feb. 1, but the date for the oil products ban will be determined by the Russian government and could be after Feb. 1.

WIDER DEFICIT

The price cap, unseen even in the times of the Cold War between the West and the Soviet Union, is aimed at crippling Russian state coffers and Moscow’s military efforts in Ukraine. Some analysts have said that the cap will have little immediate impact on the oil revenues that Moscow is currently earning.

However, Finance Minister Anton Siluanov said on Tuesday that Russia’s budget deficit could be wider than the planned 2% of GDP in 2023, with the oil price cap squeezing export income, an extra fiscal hurdle for Moscow as it spends heavily on its military campaign in Ukraine. Russia has been promising to respond officially for weeks, and the eventual decree largely established what officials had already said publicly.

The G7 price cap allows non-EU countries to continue importing seaborne Russian crude oil, but it will prohibit shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is being sold for less than the price cap.

EU countries have separately implemented an embargo that prohibits them from purchasing seaborne Russian oil. Russian Urals oil traded above $56 per barrel on Tuesday, below the price cap level. Brent crude oil moved a little higher on the news and was up 1.4% at $85.1 by 1743 GMT.

The Port of New York and New Jersey has held onto the title as the United States’ busiest container port for a fourth consecutive month.

In recent months, U.S. East Coast ports have reported elevated container volumes as trade diverts from the U.S. West Coast where shippers have been hindered by labor disputes and logistics bottlenecks.

The Port of New York and New Jersey, which surpassed the Port Los Angeles as the nation’s busiest in August, said it moved 723,069 TEUs (twenty-foot equivalent units) in November 2022, an increase of 20.6% compared to November 2019.

However, compared to the 792,548 TEUs handled by the port in October, November 2022 cargo activity at the seaport fell by 8.6% as the seasonal peak of activity associated with incoming holiday merchandise ended, the port said.

Like much of the world, one word adequately describes the ship recycling market in 2022: turbulent.

According to GMS, prices reached decade long peaks above $700/LDT in the first quarter of the year before crashing back down by about $200/LDT, with certain trades seeing below the $500/LDT barrier and even into the high $400s/LDT on certain occasions.

On the West End, the situation was no different in Turkey, where levels too hit a record $500/Ton for a brief period, only to plummet about half in value (about $250/MT) in a rather short period, and has remained on the sidelines ever since.

Steel plate prices and especially the relevant currencies have all seen record lows against the U.S. Dollar, shattering records by the month during the summer period.

We have also seen decade lows in the supply of tonnage, with almost all freight sectors performing strongly this year, as we finally seen a much-anticipated rebound on tankers following a number of years in the doldrums.

Dry Bulk and Containers have also had outstanding years, with minimal scrapping seen in both sectors during the first half of the year. As such, moving into 2023, we do expect to see more vessels enter the market for recycling from each of these sectors, especially as freight rates have cooled off considerably towards the end of this year.

There are also a number of vessels trading right up to their limits (in terms of surveys) and due to older age profiles and reduced earnings, Owners are unlikely to pass further surveys and may well scrap with recycling rates still looking relatively firm $350/LDT being the historical average). A reduction in the fleet size amidst relatively low newbuilding deliveries for 2023 should help charter rates recover and for various earning cycles to start again.

Italy plans to boost its liquefied natural gas (LNG) import capacity to 27 billion cubic metres (bcm) from nearly 17 bcm currently as it seeks to completely replace Russian gas supplies following Moscow’s invasion of Ukraine.

In 2021, Moscow provided Rome with 29 bcm of gas via pipelines, equal to around 40% of Italy’s total imports but Russian supplies have fallen in recent months to around 10% of total imports.

Italy, which can now count on three LNG terminals, has mandated gas grid operator Snam SRG.MI to buy and set up two additional floating storage and regasification units (FSRU) near the cities of Piombino and Ravenna.

A timely start for the Piombino FSRU is crucial to allow Italy to fill gas storage facilities in time for winter 2023, Rome said.

An Italian administrative court said on Thursday it had ruled against a request for a precautionary halt on works at Piombino.

It could still decide to stop the project at a hearing it has scheduled on March 8 to assess longer-term safety issues relating to the floating terminal.

Below are details on the new and existing terminals:

NEW SITES

PIOMBINO/ITALY’S WEST COAST

Snam plans to moor a new FSRU dubbed ‘Golar Tundra’ in the port of Piombino for the next three years, before moving it offshore.

The FSRU will have an annual regasification capacity of 5 bcm.

OFFSHORE RAVENNA/ADRIATIC SEA 

Snam plans to place a FSRU dubbed ‘BW Singapore’ some 8 km off the coast of Ravenna in the Adriatic Sea.

The FSRU has a regasification capacity of 5 bcm per year and is expected to become operational at the end of 2024.

The new FSRU has secured all the green lights needed.

SITES ALREADY IN USE

ROVIGO/ADRIATIC SEA

Adriatic LNG is Italy’s main regasification terminal.

It is located in the northern Adriatic Sea, about 15 km off Porto Viro in the Veneto region, and is managed by Italy’s Terminale GNL Adriatico.

The facility has recently expanded its yearly regasification capacity to 9 bcm of gas.

The terminal, which started operations in September 2009, is 70.7% owned by ExxonMobil XOM.N, with Qatar Energy and Snam controlling 22% and 7.3% respectively.

LIVORNO/TYRRHENIAN SEA

The LNG terminal managed by OLT Offshore LNG Toscana is moored about 22 km off the Tuscan coast between Pisa and Livorno.

The infrastructure, which was converted from an LNG carrier to an FSRU, currently has an annual capacity of 3.75 bcm.

In October 2022 the Tuscany region approved an upgrade of the terminal’s maximum regasification capacity to 5 bcm a year.

Snam is the main investor in OLT Offshore LNG Toscana, with a 49.1% stake. Global asset manager Igneo Infrastructure Partners holds a 48.2% stake, and Golar LNG GLNG.O owns the remaining 2.7%.

PANIGAGLIA/LIGURIA

The Panigaglia terminal is an onshore facility located in Fezzano di Porto Venere in Italy’s northwestern Liguria region.

It has an annual regasification capacity of 3.5 bcm of gas.

Built in 1971, Panigaglia is the first regasification plant to be operational in Italy.

The plant is owned and managed by Snam unit GNL Italia.

The Baltic Exchange’s dry bulk sea freight index rose on Wednesday, as a jump in capesize segment to its highest since mid-July offsets a decline in rates for smaller vessel segments.

The overall index, which factors in rates for capesize, panamax and supramax shipping vessels carrying dry bulk commodities, gained 127 points, or about 8%, to 1,723, its highest since Oct. 25.

The capesize index climbed 432 points, or about 18.3%, to 2,797, its highest level since July 19.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and steel-making ingredient iron ore, increased $3,580 to $23,197.

Capesize Atlantic activity set the positive tone with an injection of fresh cargoes out from Brazil, West Africa, and North Atlantic that faced a shortage of prompt tonnage and led to significant week-on-week rises, shipbroker Intermodal said in its weekly note.

Chinese iron ore and steel futures rose on Wednesday, rebounding after two days of losses, with news that China Evergrande Group has resumed work on some property projects bringing relief to a market worried about demand prospects in China.

The panamax index fell 24 points, or about 1.5%, to 1,598, to mark its worst day in four weeks.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, decreased $217 to $14,378.

The supramax index shed 28 points at 1,103.

Finland-based marine engine and technology provider Wärtsilä will supply its hybrid propulsion system for four new heavy lift vessels being built at the Wuhu Shipyard in China.  The ships are set to be delivered in 2025, and they will mostly be used to help set up wind farms.

The vessels have been contracted by SAL Heavy Lift GmbH, a German heavy lift and project cargo specialist and part of the Harren Group, in cooperation with its joint-venture partner, Netherlands-based Jumbo Shipping. There is an option for an additional two vessels.

Wärtsilä’s hybrid system will feature a variable-speed Wärtsilä 32 main engine capable of operating with methanol fuel, a clean burning sulphur-free alternative to conventional fossil-based marine fuels.

According to Wärtsilä, the heavy lift vessels will be the first methanol-capable ships to employ a variable speed main engine.

The hybrid system also includes Energy Storage, a PTO/PTI generator and motor, a multidrive converter, and the Wärtsilä Energy Management System for controlling and optimizing the hybrid operations.

The Energy Storage system will be based on Lithium-Titanium-Oxide (LTO) batteries, which can handle higher amounts of deep cycles than normal Lithium-Ion based systems.

“The ESS will significantly reduce the fuel consumption and/or the necessary size of the port’s electric shore connection during crane operations while also providing fuel savings at sea by reducing Engine Load fluctuations in rough seas,” Wärtsilä said.

For each vessel, Wärtsilä will also supply the gearbox, the controllable pitch propeller (CPP), the bow and stern thrusters, air shaft seals, as well as the sterntube and bearings.

Ports have long been integral to Africa’s connectivity with the rest of the world. Yet over the last 15 years, a new stage in maritime infrastructure planning and development has begun. Between 2004 and 2019, over US$50 billion was spent on this infrastructure – roughly 13 times more than was spent between 1990 and 2004.

Ports reflect more than simple economic imperatives. They are crucial in creating and reinforcing social, political, and cultural systems. Infrastructure can be a useful lens to understand what particular groups in society value and how political elites aim to structure the social order. Indeed, port investment makes visible the linkages and disconnections between different agendas (those of leaders, global capital and civil society).

In a recently published paper, we explored two key questions about port investment and construction. What explains the massive increase? And what does this tell us about the nature of economic growth and political change across Africa?

We argue that the latest phase of port infrastructure development – the “ports race” – is shaped by (and simultaneously shapes) three Africa specific macro trends.

The second is an embrace of state-led development strategies that privilege large scale infrastructure.

Third is the repackaging of narratives that link economic growth and global connectivity. Elites do this to bolster their domestic power and legitimise processes that are often socially or environmentally destructive.

In essence, the ports race is the result of both new alliances between African political elites and global economic circumstances that favour large-scale infrastructure building. These may be drying up post-COVID-19, however.

Fashioning the ports race
African countries have long relied on primary commodity exports. This system, which began during the colonial period, largely continues today. The majority of African economies are still set up around two production systems: the export of oil and minerals, or the export of tropical agricultural products (there are a few exceptions, including Morocco).

The ports race is symptomatic of a new pattern in national development.

African politicians are aiming to use the export of unprocessed resources and commodities to develop pockets of domestic value-addition in certain strategic industries. This strategy has become ubiquitous under the umbrella of “resource-led development”. Yet it creates the conditions for the continued plunder of African resources and for hugely environmentally or socially damaging processes.

A good example is Ghana’s US$2 billion bauxite-for-infrastructure agreement with Sinohydro, a Chinese multinational. Bauxite will be processed domestically for export markets. But at least part of the Atewa forest reserve, where the bauxite is located, will be destroyed in the mining process.

The need for greater export capacity also drives port expansion projects across Africa. Increasingly, states are seeking to attract capital and bolster their legitimacy at home and abroad by creating “safe spaces” for investment.

For example, Djibouti has attracted over $4 billion for infrastructure development in the past 10 years alone. Yet, this has done little to reduce Djibouti’s poverty rates or improve employment levels. Instead, new infrastructure has served to gather international support for Ismail Omar Guelleh’s repressive regime, as corporate and state actors present the port of Djibouti as a secure regional pivot for transhipments.

The domestic stability needed to attract capital to Djibouti was realised through the erosion of press freedoms, harsh crackdowns on dissent and non-competitive elections. It is in the alliance between the interests of local political elites and foreign capital that the developmental effects of port projects are defined.

Due to rising levels of indebtedness and growing competition among African states to attract foreign investment, this is not a lasting solution.

The economic and political consequences of costly infrastructure projects falling short in delivering growth and development can be disastrous. For instance, loans might not be repaid, or funding could be directed away from projects with greater potential social impacts.

The ports race is a “risky business”. How, then, do African elites legitimise port development domestically?

They do it by associating infrastructure with modernity and connectivity. In essence, they create an idea of a future with high-tech port operations, smoothly paved roads and uninterrupted flows of goods.

Infrastructural visions are closely connected to extractivism and state-led development. They speak of “unlocking” the potential of specific African regions by connecting them with global trade and capital flows. And they portray domestic peripheries as “unproductive” and in need of infrastructure development.

Conclusion
Considering the number of large-scale maritime infrastructure projects currently under way in Africa, we view the ports race as an ongoing process. Major world events like COVID-19 and the Russian invasion of Ukraine could have an impact on it, though.

Not all port projects are harmful for growth and development. The developmental effects of ports and other maritime infrastructure are complex and varied. They depend on local factors and whether projects are tied to overarching plans.

For some countries, port construction or expansion may enhance the implementation of industrial policy frameworks by reducing transport costs and inefficiencies. Yet this is not a given. Moreover, construction of multiple ports in the same region attempting to gain the status of transhipment or gateway “hubs” means that some will certainly fall short. There will be severe political and economic consequences.

The Baltic Exchange’s dry bulk sea freight index rose on Friday and posted its biggest weekly percentage gain since late-September, buoyed by strong demand for capesize vessels.

The overall index, which factors in rates for capesize, panamax and supramax shipping vessels carrying dry bulk commodities, rose 32 points, or about 2.1%, at 1,560, its highest since Oct. 27.

The main index gained 12.6% for the week, its biggest weekly gain since Sept. 23.

The capesize index was up 113 points, or about 5.4%, to its highest in more than eight weeks at 2,208. It posted a weekly gain of 31.2%.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes of coal and steel-making ingredient iron ore, increased $938 to $18,312.

Dalian iron ore was bound for a third straight weekly rise on Friday on optimism over China’s economic recovery prospects in 2023, with traders largely brushing aside a wave of local COVID-19 infections.

The panamax index lost 6 points, or about 0.4%, at 1,652. It was down 0.4% for the week.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, decreased $55 to $14,869.

The supramax index shed 10 points at 1,157, although it gained 0.4% for the week.