Ports and Logistics

SINCE ANCIENT TIMES, Egypt's location between the Mediterranean and Red Sea and the land masses of Asia, Europe and Africa has seen the country play a key role in in­ternational trade. Today, the maritime transportation sec­tor is one of the major contributors to the Egyptian econo­my, through not only cargo traffic and Suez Canal revenues, but also because of its role in facilitating the rapid growth of Egypt's exports.

Indeed, 90% of Egypt's foreign trade is shipped through ports, while the country's logistics capacity continues to ex­pand hand-in-hand with the volume of trade.

Beyond the country's location and the importance of the Suez Canal to global trade, Egypt's maritime transportation sector enjoys several advantages over regional competition as a result of the ongoing economic reform program. These in­clude the expansion of private sector involvement in the con­struction of ports under the Build Operate Transfer (BOT) and Build Own Operate Transfer (BOOT) concession schemes and increased private-sector opportunities in maritime and trans­port activities under Maritime Law 1 of 1998, including load­ing, supplying and ship repair.

These opportunities are showcased in the range and sophis­tication of logistics facilities at the EGP 3.4 billion, electron­ically managed Sokhna Port. Developed under a BOT con­tract, Sokhna Port is the first and largest privately operated port in Egypt, offering strategic warehousing capabilities and a state-of-the-art logistics center. Beyond business and invest­ment opportunities, economic reforms have also resulted in streamlined customs procedures, reduced tariffs and improved cargo-handling times across Egypt's maritime transportation operations.

The sector has also benefited from mega development proj­ects that have attracted significant attention from foreign in­vestors. Modern ports have been built to handle the newer generations of container ships and, even as they are reaching completion, are already being expanded to meet growing vol­umes of trade. Old ports are also being modernized, while spe­cialized ports have been upgraded to meet the needs of today's international trade.

Realizing the essential link between port facilities and the ex­port-driven economic reform programs, the Egyptian govern­ment has focused on developing and upgrading ports to accom­modate larger ships and to increase capacity and handling for a larger volume of trade.

In 2007, the number of containers handled through Egyptian ports increased dramatically to an average of 5.0 million 20-foot equivalent units (TEUs), up from 4.6 million TEUs in 2006 and a 117% increase over the 2.3 million TEUs handled in 2003.

In 2006, cargo exports at Egypt's ports reached 48.4 million tons, a 16% increase over 41.7 million tons headed for export in 2005. Cargo exports consisted of dry bulk (30%), transit (28%), general cargo (13%), containers (12%), special cargo (9%) and liquid bulk (8%).

On the flipside, cargo imports hit 58.2 million tons in 2006, up from 55.7 million tons the previous year, an increase of 4.5%. Cargo imports consisted of general cargo (22%), tran­sit (25%), dry bulk (30%), containers (13%), special cargo (8%) and liquid bulk (2%).

Egypt has 15 commercial and 30 specialized ports (six tour­ism, 14 petroleum, seven mining and three fishing). The four main ports include the multi-purpose Alexandria Port, the larg­est in Egypt — handling over 55% of the country's foreign trade. Damietta port is the leading Egyptian container handling port, with a handling capacity of 1.15 million TEUs, contribut­ing 40% of total containers handled in Egyptian ports.

The East Port Said Port, located at the crossroad of the world sea trade route between Asia and Europe near the northern entrance of the Suez Canal, is becom­ing increasingly important as a regional transshipment hub for container traffic. In 2006, shipping giants such as Maersk SeaLand, China Shipping Company and Zim Lines channeled some of their business investments to the 2.2 million TEU-capacity port. Equally important s the Suez Port, which also plays an im­portant role in both cargo handling and Suez Canal transit operations.

The Suez Canal: Unking the World

The 190-kilometer Suez Canal has played i critical role in international trade since It was opened in 1869. According to the Suez Canal Authority, 7.5% of world jade passes through the Canal annually. Following a project to deepen the Canal n 1994, the waterway now handles su­per-tankers and large vessels.

In 1999, the Suez Canal Container Terminal (SCCT) was incorporated, and commenced operations in 2004 under a concession to AP Moller-Maersk (APM) Terminals. In September 2007, Egypt started the second phase of the SCCT, which is expected to double the Terminal's capacity to 5.1 million TEUs by 2011.

The ongoing development efforts have peen reflected in the continued success pf the Canal. The number of vessels using the canal increased from 14,610 ves­sels during FY 2002/03 to 19,419 vessels n FY 2006/07. At the same time, net tonnage transiting the Canal grew rapidly. reaching 792.5 million tons in FY 2006/07 up from 499.9 million tons in FY 2002/03. Financial receipts have ex­perienced a similar upward trend, totaling US$ 4.2 billion during FY 2006/07 compared to US$ 2.2 billion during FY 2002/03. a growth of 86.5%.

The Future

As Egypt's export driven economic growth continues, the crucial role of the country's ports in linking the domestic economy with international markets  will only continue to grow. As a result pf increased public investment and pri­vate sector involvement in the industry. planned investment in the Egyptian maritime transport sector, is expected to increase from US$ 1.7 billion in 2008. to reach US$ 3.8 billion in 2010. And .With investments of around US$ 5 billion yet to be tendered, this figure may even be surpassed by then.