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DP World Divests Stake to Indian Infrastructure Fund in $300 Million Investment

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Archives, Global Logistics, Global Trade Daily, News, Ocean Ports, Uncategorized

DP World Divests Stake to Indian Infrastructure Fund in $300 Million Investment

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India’s National Investment and Infrastructure Fund (NIIF) will invest a primary capital of INR 22.5 billion (close to $300 million) acquiring approximately 22.5 per cent of DP World’s subsidiary Hindustan Ports Private Limited (HPPL).

This transaction is subject to customary completion conditions and is expected to close by Q1 2023. This marks the Fund’s single largest investment.

NIIF’s total investment under this partnership will reach around $500 million according to DP World’s statement.

HPPL is one of India’s leading container terminal platforms, operating five container terminals with more than 5 million TEU of capacity and terminals in key locations – including Mumbai, Mundra, Chennai and Cochin.

The investment further extends the existing DP World and NIIF partnership formed in 2018 through the creation of Hindustan Infralog Private Limited (HIPL).

Since its inception, HIPL has made investments in rail logistics, multi-modal logistics parks, container freight stations, economic zones, cold chain infrastructure and contract logistics.

DP World noted that the primary capital raised through this transaction will aid new infrastructure development, drive supply chain efficiencies and support future growth initiatives of HPPL.

“The broadening of our partnership with NIIF to include our flagship India ports platform is a natural extension of our existing relationship and aligns both parties to focus on delivering end-to-end supply chain solutions,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World.

“Since the beginning of this partnership with NIIF, we have made significant progress in building an inland logistics infrastructure network of great scale that complements our container ports platform.

“Notably, the opportunity landscape in India remains significant and this transaction will allow us to accelerate investment across ports and logistics to drive returns for our respective stakeholders.”

DP World is expanding its landside reach in India, as it recently opened a new technology centre in Bangalore – the second office to be opened by the terminal operator this year.

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CMA CGM Launches New Early Container Return Incentive Program

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The CMA CGM Group has implemented its new Early Container Return Incentive Program at several of its terminals in the US to accelerate the return of empty containers and improve supply chain velocity.

The program started today [16 May] and will continue until 15 June at the Fenix Marine Services (FMS) terminal in the Port of Los Angeles and all CMA CGM return locations in Chicago, Dallas, Kansas City and Memphis.

CMA CGM has launched the new 60-day incentive program to counteract the ongoing congestion crisis throughout North America’s supply chain.

According to the group, the program will result in approximately 43,000 dry containers being put back into circulation within 4 days of pickup.

The incentives include a $300 credit per dry container returned to eligible locations during calendar days 1–4; calculation of incentive credits on a weekly basis with a credit memo issued every 14 days to each applicable importer of record; and utilization of EDI transaction data to assess credit, thus no additional documentation required from customers.

“CMA CGM is committed to doing everything we can to increase the fluidity and velocity of America’s supply chain,” said Ed Aldridge, President of CMA CGM and APL North America.

“Our new program will result in an incentive credit for our importers, improve equipment availability for our exporters and expedite the flow of goods into and out of America’s heartland. It’s truly a win-win for everyone.”

Throughout the crisis, CMA CGM has already frozen spot rates and implemented other programs to accelerate the flow of goods – resulting in a 73 per cent decrease of dwell of the group’s containers over nine days in South California.

Resulting from record demand and supply chain capacity challenges, CMA CGM is amongst the top performers of 2021.

Last year, the group saw its shipping revenue rise by 88.5 per cent compared to the previous year, reaching $45.3 billion.

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Private Equity Firm Takes Over $1.4 Billion Panama Canal Port Terminal Project

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Notarc Management Group (NMG) has announced its acquisition and finalisation of plans to complete the Panama Canal Container Port (PCCP).

The project was previously valued at $1.4 billion and is already 40 per cent complete. Construction is slated to resume by Q4 2022.

NMG is partnering with Terminal Investment Limited (TIL), an affiliate of Mediterranean Shipping Company (MSC), to manage and oversee operations of the new facility that is expected to handle 2.5 million TEU in its first few years and eventually to grow to a capacity of 5 million TEU.

“NMG’s core mission is to align with strategic capital partners, investors, and leading multinational firms in supporting and expanding innovation, technology, infrastructure, and sustainable initiatives across Latin America and the Caribbean,” said Leslie C. Bethel, CEO of NMG.

“This is our first major port initiative in Panama and sets the stage for other key investment opportunities we are pursuing across the region.”

Ammar Kannan, CEO of TIL, added: “We are delighted to be here for this special occasion and to commit to the partnership with Notarc, the Panamanian Government and, most importantly, the people of Panama. We are no strangers to Panama and our undertakings today cement our further belief that The Americas will continue to grow and prosper through the advent of trade and logistics.

“The pandemic has evidenced that our business is essential. Our Shareholders are committed to this industry for the long term. We are also grateful to Notarc for allowing us to bring our global operational expertise to this development as we continue to expand our footprint in the America.”

Dion L. Bowe, newly appointed CEO of PCCP, also commented: “Panama is an ideal gateway hub in the Americas and the World.

“This acquisition is a strategic opportunity for us to further develop and integrate a regional logistics platform while investing in assets which are synergistic to our investment model and where innovation and location offer an incomparable business footprint in the region.”

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Port of Antwerp-Bruges Prepares First Hydrogen-Powered Tugboat

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The Port of Antwerp-Bruges and CMB.TECH will soon welcome the first hydrogen-powered tugboat furthering the port’s transition towards sustainability.

The Hydrotug consists of two BeHydro V12 fuel medium speed engines that can run on both hydrogen and traditional fuel and it can store 415 kilograms of compressed hydrogen in six stillages installed on deck, eliminating the emission’s equivalent of 350 cars.

The first water launch of the Hydrotug at Armón Shipyards in Navia Spain took place on 16 May; sea trials will follow later this year upon completion of remaining construction works on the ship.

The tugboat is expected to become fully operational in the first quarter of 2023.

© Port of Antwerp-Bruges

“We are delighted that Port of Antwerp-Bruges will be the first user of Hydrotug, the world’s largest hydrogen-powered vessel,” said Roy Campe, CTO of CMB.TECH.

“The technology has been approved by Lloyd’s Register and we are ready to approach the global market of 10,000 tugs.”

“With this technology we can significantly improve the air quality in ports and bring hydrogen technology to every port worldwide.”

The acquisition is part of an integral greening programme for the Port of Antwerp-Bruges fleet and, according to the port authority, marks an important step in the transition to a sustainable, climate neutral port by 2050.

Last 22 April, the ports of Antwerp and Zeebrugge completed their long-awaited merger during an extraordinary general meeting.

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Port of Seattle to Establish World’s First Cruise-led Green Corridor

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The Port of Seattle, City and Borough of Juneau, and Vancouver Fraser Port Authority together with leading global cruise lines will cooperate to initiate the world’s first cruise-led green corridor.

The partnership is aimed at exploring the feasibility of a green corridor to accelerate the deployment of zero greenhouse gas emission ships and operations between Alaska, British Columbia, and Washington.

The First Mover Commitment was announced during the International Association of Ports and Harbors World Ports Conference in Vancouver, British Columbia.

© Port of Seattle

The partners have agreed to:

  • Work together to explore the feasibility of a green corridor in the Pacific Northwest of North America, including, but not limited to, further defining the scope and application of this concept;
  • Enhance and support the emission-reduction efforts already underway and use the green corridor as a testbed for low and zero greenhouse gas technologies and ships, as feasible; and
  • Work collaboratively to define the governance structures, terms, and frameworks needed to guide the regional effort.

“These first movers are coming together around the need to address the most pressing issue of our time — climate change,” said Port of Seattle Commissioner Fred Felleman.

“By exploring the development of a Green Corridor, we’re bringing resources and technological advancements to this region where commercially viable zero greenhouse gas emissions ships may sail that much sooner.

“We’re not naïve about the challenges ahead. But we recognise the urgency to act as we transition to an inclusive blue economy that works for the climate, commerce, and communities alike.”

The project supports the Clydebank Declaration signed by 24 countries in 2021 to support the establishment of at least six green corridors by 2025 and follows industry’s efforts to a net-zero transition.

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Cambodia Begins Construction of $1.5 Billion Seaport

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The Cambodian Ministry of Public Works and Transport has held a ground-breaking ceremony to mark the start of construction at the new International Multi-Purpose Logistics and Port Centre in the southwestern province of Kampot.

The project is estimated to cost $1.5 billion and will be built on a total area of 600 hectares, with a depth of 15 meters to accommodate vessels weighing up to 100,000 tons.

The Minister of Public Works and Transport, Sun Chanthol, spoke at the ceremony on 5 May to praise the contribution that the facility will bring to Cambodia’s development.

The International Multi-Purpose Logistics and Port Centre aims to improve efficiency for traders and investors in exporting agricultural, industrial, and fishing products in local and global markets – and boost Cambodia’s economic growth in the process.

“The investment project to develop the Kampot Logistics and Multipurpose Centre will be another large and deep-sea port in Cambodia and an international modern port in the Asean region,” said Chanthol.

“This mega-project includes a container terminal, a special economic zone, a free trade area, a logistics hub, an oil refinery, and a terminal for tourist vessels, among others.”

The project will be implemented in three phases, the first of which is set to begin operations in 2025.

The seaport will have a total handling capacity of 300,000 TEU in 2025 and up to 600,000 TEU by 2030.

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California Grants $2.5 Million to Push Port of Long Beach Electric Vehicle Project

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The Port of Long Beach has received a multimillion dollar California Energy Commission Grant to aid the second phase of the Port Community Electric Vehicle Blueprint – designed to accelerate a sustainable and zero-emission port ecosystem across the state.

The $2.5 million grant will help the towards its transition to zero-emissions operations by developing infrastructure plans to support electric vehicles.

Projects covered by the grant include developing a master plan for SSA Marine’s Pier J facility to achieve its decarbonization goals and similar planning to evaluate the infrastructure required to support a fully zero-emissions port-owned fleet of vehicles and vessels.

Other projects include installing chargers at the port’s Maintenance Facility as well as the infrastructure needed to power future chargers at the port’s Joint Command and Control Center.

Lastly, funds will be used to develop a report in partnership with Long Beach City College to identify workforce skills needed to maintain zero-emissions trucks and infrastructure.

“The Port of Long Beach has forged a new direction for the shipping industry and today, we are on the path to zero-emissions operations by 2030 for cargo-handling equipment and 2035 for trucks servicing the Port,” said Port of Long Beach Executive Director Mario Cordero.

Steven Neal, Long Beach Harbor Commission President, added: “The California Energy Commission is part of our collaborative model that has allowed us to reduce diesel pollution by 90 per cent compared to 2005.”

“The Electric Vehicle Blueprint identifies the path toward zero emissions and will provide an economical, demonstrated approach to EV planning that other California seaports can replicate.”

The Port of Long Beach will contribute $847,072 matching funds toward the total $3.4 million cost.

As the nation’s second-busiest seaport, the Port of Long Beach recently announced its busiest March on record, moving a total of 863,156 TEU.

The sum represented a 2.7 per cent increase over the port’s container volumes in March 2021.

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Maersk Finds Possible Buyers for Stake in Global Ports Investment

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A.P. Moller – Maersk (Maersk) is reportedly in talks with potential buyers for its stake in terminal operator Global Ports Investment.

The news comes as the Danish giant withdraws from Russia following a final cargo shipment this week, according to a recent report from Reuters.

Global Ports operates six container terminals in Russia and two in Finland. Russian state nuclear company Rosatom is also one of the major shareholders of the group.

The company initially announced its intention to divest its 30.75 per cent stake in Global Ports on 10 March, after the start of the Ukraine war.

Maersk has also recently stopped all vessel operations in Russia due to the ongoing conflict.

“We will not return until we think that Russia again plays a good and constructive role in the world,” Chief Executive Officer Søren Skou said in a press briefing.

The European Commission has recently implemented its fifth round of sanctions against the invading country. This included banning all Russian vessels from accessing EU ports.

The company also recently released its Q1 2022 financial results for its Ocean, Logistics, and Terminals businesses.

Maersk’s Ocean business generated $15.6 billion in revenue in the period of January to March 2022.

“The increased earnings are driven by freight rates and by contracts being signed at higher levels. While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges,” Skou said in a statement.

Freight rates have risen significantly due to the war, as well as China’s zero-tolerance policy to COVID-19.

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Maersk Maritime, Logistics Businesses Deliver Record Q1 2022 Results

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A.P. Moller – Maersk (Maersk) has released the Q1 2022 financial results of its Ocean, Logistics and Terminals businesses, posting significant upsurges in revenue.

The Danish giant previously reported whole company total revenues of $19.3 billion for Q1 2022 (period ending 31 March), a 55 per cent year-on-year increase.

EBIDTA more than doubled to $9.1 billion and free cash flow also rose to $6 billion.

These record figures were driven primarily by higher freight rates and strong long-term partnerships with customers seeking end-to-end supply chain support.

“In Q1 we delivered the best earnings quarter ever in Maersk with growth across Ocean, Logistics and Terminals,” said Søren Skou, CEO of Maersk.

“The increased earnings are driven by freight rates and by contracts being signed at higher levels. While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges.

“In Logistics, we enjoyed strong demand for products and solutions across our portfolio leading to the 5th quarter in a row with organic growth of more than 30 per cent while Terminals presented its best quarter ever.”

Maersk’s Ocean revenue for the period rose 64 per cent to $15.6 billion. As a result of retail slack season, global demand has fallen 1.2 per cent. Due to this, volumes declined by 7 per cent, however, this was offset by strong rates.

Income for the full year is expected to continue to be strong as the increase in freight rates on Maersk’s long-term contract portfolio will add approximately $10 billion to its revenue in 2021. Maersk noted this will offset the recent 21 per cent rise in costs due to higher fuel and inflationary pressure.

The company’s Logistics business also saw a large upturn in revenue, rising 41 per cent to $2.9 billion. Maersk continues to invest in acquisitions including the recent takeover of Pilot Freight Services which was finalized on 2 May.

In Terminals, revenue amounted to $1.1 billion in Q1 2022, up from $915 million in Q1 2021.

Looking forward, Maersk foresees global container demand to fluctuate slightly between -1-1 per cent, down from an earlier expectation of 2-4 per cent. This comes as trade flows and consumer confidence in Europe is negatively impacted by the Ukraine war.

As previously announced on 28 April, the whole company now expects its EBITDA for the year to come in at around $30 billion, underlying EBIT to amount to $24 billion, and free cash flow to be above $19 billion. Previously EBITDA was expected to total $24 billion in 2022.

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Port of Virginia Cargo Volumes Continue to Soar

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The Port of Virginia has handled more than 314,000 TEU in March 2022, registering an increase of more than 35,000 TEU (or 12.6 per cent) since March last year.

Nearly 47 per cent of the total volume was in loaded imports.

The volume figures for the month were also ahead of both January and February 2022, which were respectively 262,000 and 297,000 TEU.

“In terms of overall volume, this March ranks as the fourth most productive month in our history,” said Stephen A. Edwards, CEO and Executive Director of the Virginia Port Authority.

“We are processing heavy volumes and doing so with fluidity, which continues to draw interest from ocean carriers and cargo owners. This means we are keeping our focus on those operational issues that drive efficiency and meeting the needs of all port users.”

Edwards added that the port’s berth efficiency will further increase with the addition of two new ship-to-shore cranes that were delivered in late March to Norfolk International Terminals (NIT).

The new cranes will go into service in late May giving the port 30 ship-to-shore cranes capable of handling Ultra-Large Container Vessels (ULCVs).

“Combine this new equipment and the expansion of NIT’s Central Rail Yard and its North Berth with our effort to create the only port on the US East Coast with channels deep enough and wide enough to handle two-way movement ULCVs and we have the necessary foundational components to drive cargo growth here for decades to come,” commented Edwards.

“It also means that, in parallel, we’ll be able to provide an even higher level of efficiency, service, and care to all of our users.”

In 2021, the Port of Virginia posted its most productive year on record having processed more than 3.5 million TEU.