A Study on The prospects of Facilitating Cargo Traffic Between Egypt and African Countries Using Maritime Transport

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Maritime Transport & Logistics Sector (MTS)The entity for which the Study was carried out
The Ministry of Transport, in coordination with the relevant Ministries; Ministry of Business Sector – Ministries of Trade and IndustryThe agency carrying out the Study
2020Year of Publication
Exploring the potentials of facilitating cargo traffic between Egypt and African countries by use of maritime transport via chartering (10) vessels of international shipping agencies.Purpose of the Study
Coordination took place between the Ministries of( Transport, Business Sector, Trade and Industry) , the Egyptian General Intelligence Service Agency, and the Suez Canal Authority to contemplate the formulation of a unified notion to facilitate cargo traffic between Egypt and African countries, and the results were as follows:

  • There are a number of commercial agreements with African countries whose ports are targeted (as Main \ Focal Ports), such as (the Common Market Agreement for Eastern and Southern Africa “COMESA”, the Tripartite Free Trade Agreement / the Continental Free Trade Agreement).
  • The Ministry of Business Sector has three affiliated companies working in the field of foreign trade, the most important and largest of which is Al-Nasr Company for Export and Import (which is being restructured after selecting a new board of directors and executive management mirroring the private sector management modality). During the year 2021, a merger between the company and two other companies: Misr Import and Export Co. and Misr Foreign Trade Co., is scheduled to take place.
  •  To facilitate cargo traffic between Egypt and African countries, an E-catalogue was devised for all Egyptian products and their inputs of raw materials required being imported.
  • As for logistical services, a comprehensive package of these services is provided, including land transport, customs clearance, assembly at the export port, shipping, warehousing, insurance, promotion, and mediation, in addition to financing through cooperation agreements with Egyptian banks.
  • To provide maritime transport service, coordination must be attained with international shipping lines to serve trade exchange between Egyptian ports and the targeted African ports until an increase in the volume of demand for maritime transport is achieved.
Recommendations
  1. Providing the required support to facilitate cargo traffic between Egypt and African countries within the framework of what the government undertakes so as to support exports with the aim of opening new markets for Egyptian products and importing industrially essential raw materials available in the targeted African countries. Hence, the State bearing a share of transportation costs via existing shipping lines, using the services of the Egyptian Maritime Transport Company “MARTRANS”, an Egyptian joint stock company established pursuant to Presidential Decree No. 415 of 1963.
  2. Developing existing shipping companies whose ships fly the Egyptian flag and working to strengthen the boards of directors of these companies in order to achieve the required economic feasibility as follows:
    ALKAHERA Company For Ferries and Maritime Transport “KCFMT” (Ministry of Transport
  3. The necessary measures are being taken to expand the size of the commercial fleet, deliberating the purchase of 2 new cargo vessels, and examining the possibility of chartering one of the vessels currently owned by the company (a passenger ship) and using the charter fees to charter a third cargo vessel.
  4. The company is also currently coordinating with major investors to participate in providing vessels for cargo transport. Thus, the company can operate shipping lines in the Red Sea basin to serve the transport of Egyptian exports to the Gulf countries and link with African ports.
  5. Arab Bridge Maritime Company (Ministry of Transport)
  6. Deliberations to increase its capabilities and aptitudes are currently underway in coordination with the rest of the partners (it is a joint company between Egypt – Iraq – Jordan) in terms of purchasing/chartering new vessels that satisfy the needs of intra-trade with Arab countries.
  7. National Navigation Company (Ministry of Business Sector)
  8. The company has developed an integrated plan for the replacement and renewal of its fleet; whereby a dry bulk vessel was purchased replacing one of the obsolete vessels, and work is underway to replace the rest of the obsolete fleet.
  9. When the promotion and marketing plans for the Egyptian product are successful, the volume of demand for maritime transport between Egypt and African countries increases, and on achieving the economic feasibility of vessels operated by Egyptian companies, suitable vessels can be purchased and shipping lines between Egyptian ports and African ports can be operated as per two stages:
  10. The first stage: A shipping line heading towards North Africa and then Northwestern Europe, operating (2) multi-purpose vessels (purchasing method) on the shipping line (Alexandria / Northwestern Europe).
  11. The second stage: Establishing a shipping line heading towards East Africa by operating (2) multi-purpose ships (semi-regular shipping line) between one of the Red Sea ports as a port of shipment and the ports of (Jeddah / Port Sudan) in the case of the presence of cargoes, then the East African ports of (Djibouti / Mombasa / Dar-es-Salaam) In this case, multi-purpose ships are purchased to serve Egypt’s foreign trade due to the ineffectiveness of purchasing RO-RO ships.
  12. New vessels are purchased (by contracting with shipyards to build vessels with the required specifications) and operated by State-Owned Companies. In the very short term, the decision to charter can be resorted to until these vessels are built. Thus, we recommend the following:
  13. Chartering state-of-the-art vessels compatible with international requirements, in accordance with the priorities of Egypt’s foreign trade needs.
  14. Providing the funds required to support State-Owned Maritime Transport Companies, which is demonstrated in the chartering value, or the difference between the cost of operating the ships and the actual income.
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