AD Ports Group has signed a shareholder agreement with KMTF (Kazmortransflot), to launch an exclusive joint venture, 51 percent owned by AD Ports Group and 49 percent owned by KMTF, to provide offshore and shipping services for energy companies in the Caspian Sea.
Furthermore, the two parties have signed an agreement to pool tanker resources.
The joint venture, which will look at investments opportunistically will offer a broad range of services, including offshore support vessels, integrated offshore logistics and subsea solutions and, at a later stage, will offer container feedering, ro-ro and crude oil transportation in the Caspian Sea and the Black Sea. The enterprise will tender for a number of identified projects with estimated maritime contract values of more than USD780 million.
By combining AD Ports Group’s diverse portfolio of global maritime services and shallow water offshore expertise with the strong fleet, track record and local knowledge of KMTF, the joint venture will create an important new entrant in the highly valued Caspian Sea and the Black Sea region. The endeavour can expect to create opportunities around the region, particularly with the ongoing upgrades of fleets and facilities currently taking place, and some major offshore projects, such as the multi-billion-dollar expansion of the Kashagan field.
AD Ports Group and KMTF also signed a seven-year vessel pooling agreement, the joint venture includes the provision of several tankers for the transportation of crude oil internationally. Furthermore, the agreement will see KMTF’s fleet working alongside SAFEEN Group’s existing AFRAMAX tanker, with intent to acquire further vessels in the short-term. The objective is to jointly carry 8-10 million tonnes of crude annually in the medium-term.
The Caspian Sea region is one of the oldest oil-producing areas in the world and is an increasingly important source of global energy production.
Mirzagaliyev Magzum, Chairman, KazMunayGas, said, “This is an alliance of two world class companies who complement each other’s strengths and understanding of the market. As the world looks for reliable energy sources in challenging conditions, we will be able to provide a full portfolio of services supported by a modern fleet and teams of experts combining local knowledge and global experience. Companies operating in the Caspian Sea oil fields are looking for reliable partners and a broad range of value-added services. Working together, KMTF and AD Ports Group will provide the ideal solution.”
Caption: Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, AD Ports Group, and Mirzagaliyev Magzum, Chairman, KazMunayGas, witness the signing of the agreement between AD Ports Group and KMTF (Kazmortransflot), by Captain Ammar Mubarak Al Shaiba, Acting CEO of the Maritime Cluster and SAFEEN Group, AD Ports Group, and Aidar Orzhanov, General Director (Chairman of the Management Board), “Kazmortransflot”
FedEx to outsource more cargo flying in cost-cutting effort
In an aggressive cost-cutting effort to resize its delivery network FedEx will increasingly rely on outsourced air transport for growth. This is in line with deteriorating market conditions and a structural rebalance in e-commerce sales, executives said.
“An initial priority is to optimize the global air network where we expect to generate approximately $400 million in savings. This work includes deploying digital assets that allow us to efficiently balance our purple tile airplanes and third-party lift as we build the network of the future,” said CEO Raj Subramaniam on Tuesday’s briefing about the company’s fiscal year second-quarter earnings.
The cuts in airline operations are part of an additional $1 billion in savings FedEx identified to blunt profit pressures after demand weakened faster than expected. Foreshadowing weak second-quarter performance, FedEx in September said it planned to eliminate $2.7 billion in costs in the fiscal year ending May 31, 2023, by parking aircraft, closing offices, eliminating Sunday delivery and releasing drivers at its Freight division.
Since September, FedEx (NYSE: FDX) has reduced frequencies on eight international routes and 32 domestic routes. Five aircraft have been parked, and an additional 11 widebody freighters are expected to be removed from service through the end of the fiscal year. During the second quarter, international flight hours were 7% lower than the same period a year ago and domestic flight hours were 6% lower, said CFO Mike Lenz.
The international flight reductions increased since FedEx’s last update to investors in November.
FedEx operates the largest all-cargo air fleet in the world, with 714 aircraft, according to company figures. Of those, 286 are small turboprops that serve smaller communities and are flown by regional airlines on FedEx’s behalf.. The statements suggest FedEx Express will maintain a smaller internal fleet that bakes in recent aircraft reductions because of the sharply lower volumes. DHL Aviation, the in-house airline for DHL Express, mostly charters aircraft under term charters or has joint ventures with partners that provide aircraft and crews for aircraft of all sizes.
A goal of FedEx’s DRIVE program to eliminate $4 billion in annual costs by fiscal year 2025 is to restructure the Express network to allow for more flexibility as demand shifts. Using contract carriers to support the air network would help provide needed capacity without the risk of owning and operating more aircraft of its own. Purchasing transport services also fits with management’s expectation that more businesses will opt for deferred parcel and freight products for their goods.
FedEx Express revenue declined 6% year over year on a 12% fall in volumes as global industrial production slowed and e-commerce shipping returned to pre-pandemic rates after spiking in 2020 and 2021. Express operating income fell 64%. Companywide, adjusted profit fell nearly $500 million to $815 million from the previous year.