The entity for which the study was devised

The entity devising the Study

Year of Publication

• Egyptian ports are characterized by several competitive advantages in comparison with the ports of the region, in terms of the geographical location that allowed the Egyptian ports to achieve top ranks in regard to the least deviation distance from the international shipping lines, especially East Port Said Port, whose deviation distance is ZERO nautical miles, while deviation distance of Damietta Port is (7) nautical miles. Such a merit gives Egyptian ports a higher competitive asset in attracting major shipping lines compared to other ports in the region.
• The logistic performance index of Egypt has greatly improved due to the positive impact of development in the customs operating system, in addition to the improvement of the infrastructure index and the easiness of transport index. The improvement in logistics services and the traceability index allowed the Egyptian ports to achieve distinctiveness with regard to the logistic performance index.
• Egypt was able to advance in the connectivity index to be considered one of the best comparative countries in the connectivity index; In fact, Egypt is one of the best countries worldwide in terms of communication with the container transport network. This is due to the unique location of Egypt and its ports, which is considered a very important attraction factor for shipping lines transporting containerized cargoes between Europe and Asia.
• One of the factors of excellence for the Egyptian ports is that they achieved high rates of container handling and were able to attract an increasing share of handled transit containers recently; which is considered the main activity of container handling ports in Egypt, as it constitutes approximately 60% of the total containers handled in Egyptian ports .
• The activity of container handling for transshipment fees is the dominant activity in Port Said and Damietta ports.
• East Port Said Port is recognized as the most important port in the region in terms of container handling, occupying advanced ranks worldwide with regard to container handling .
• In light of what Port Said Ports Authority is renowned of, in terms of its relative significance in container handling, it is subject to continuous enhancement and modernization processes in line with global developments, which qualifies it to achieve many successive rankings pertaining to worldwide port productivity, equivalent to Port of AMBARLI, Turkey, and Piraeus, Greece in the eastern Mediterranean region and the port of Jeddah in the Kingdom of Saudi Arabia in the Red Sea region .
• The Alexandria Port Authority is considered one of the major ports explored by this Study as a gateway to foreign trade, with more than 1.6 million TEUs handled, followed by the port of Mersin in Turkey, the port of Beirut in Lebanon, the port of Haifa and the port of Ashdod in Israel. It is anticipated that the development and modernization processes that the Alexandria Port Authority is undergoing will add a qualitative and quantitative transition to the port in the short term.
• The Egyptian port terminals are renowned by their long berths, especially East Port Said Port, whose berths are 2400 m long, 17.5 m deep, and it is planned to add about 4 km of new berth lengths in the near future.
• The port of Damietta is characterized by a berth length of 1050 m and a berth draft of 14.5 m .
• Container terminals are relatively large compared to other competing ports, and they are equipped with state-of-the-art machinery and cranes with high productivity, adequate to the design capacity of the terminals to sustain operations at the terminals, reduce congestion, reduce dwelling time of vessels in the port, and exalt their performance rates to international levels .
• Container terminals in Egyptian ports precipitate continuous modernization and keeping pace with the global maritime transport developments, as these terminals are equipped with state-of-the-art cranes with high productivity, especially of the SUPER-POS PANAMAX and PANAM POST models, where 18 Super Panamax cranes operate at the East Port Said container terminal. It is expected that The number of container cranes increases to 24, all of which are of the Super Post Panamax model, and 10 giant cranes, most of which are of the Super Post Panamax model, operating at the West Port Said container terminal .
• Egyptian ports have made great strides in the field of electronic management applications, with special attentiveness to developing navigational aid systems in ports and applying vessel monitoring schemes through LRIT-VTMS-AIS systems .
• The Greek port of Piraeus is one of the most significant emerging ports in the region in the field of transshipment container handling, as it recorded a growth rate of more than 60% recently, which is a vast leap in port handling compared to previous years, as a result of the development and modernization work that took place therein.

• Results related to Main Indicators of Egyptian Ports Performance: 
  • Dekheila port attained the highest rank with respect to achievement indicators among the ports under study, whether in tons or in TEUs, with the exception of “The Container Berth Achievement Indicator”, for which Damietta port attained the highest performance rate .
  • Damietta Port is the top port in terms of reduced dwelling time for container vessels, followed by Dekheila Port, while Dekheila Port is the top port in terms of reduced dwelling time for general cargo vessels .
  • The “Actual Utilization Rate Indicator”  for berths and container yards proportional to their production capacity showed that the problem appears largely with regard to the yards of the ports of Alexandria and Dekheila, where the percentage of exploitation of those yards reached 93% in Alexandria Port, 62% in Dekheila Port, which indicates a congestion, while the port of Damietta achieved minimal utilization rates, whether for berths or yards, as the percentage reached 38% for berths and 24% for yards, which indicates the presence of unexploited resources in the port .
  • The “Container Handling Cost Indicator” showed that the tariff of Damietta container handling terminal is higher than that of Alexandria and Dekheila terminals, whether for import, export or transit, whether the TEU is full or empty .
  • The Chinese container terminal, “Hutchison El Dekheila”, recorded the highest values for “The Cranes Productivity Index”, followed by the Alexandria Container Terminal (ACCHC ).
  • Alexandria Container Terminal “ACCHC” achieved the highest productivity indicators per square meter of the total area of the terminal, followed by Hutchison Dekheila Terminal, while Damietta terminal came in the last rank, which indicates an increase in the unexploited spaces in Damietta port compared to Dekheila and Alexandria .
  • The Chinese container terminal, “Hutchison El Dekheila”, achieved the highest rates of productivity per meter of longitudinal berths, followed by Dekheila ACCHC terminal .
  • All the Egyptian ports under study are well connected to the various land ports and railways. However, there are some problems related to the ports of Alexandria and Dekheila, which are currently being overcome through the construction of a number of upper bridges to transport cargoes to the desert and ring roads .
  • There are a number of investment opportunities in Egypt related to logistics and the integration of supply chain management services, especially container and vessel repair projects, value-added services in ports, infrastructure development projects for new river ports and new land road projects .
  • Most of the Egyptian commercial ports have been automated, with the exception of a small number of ports. This endeavor contributed to the attainment of many advantages, such as the establishment of a database for vessels frequenting Egyptian ports and cargoes traded through them, thus, allowing decision makers in the port to follow up the various operational processes, and to increase the awareness of port staffs and clienteles, as regards to the utilization of information technology to conclude official procedures, speed the processes of issuing and levying invoices at upgraded ports .
  • Providing certain electronic services to clients, such as exchanging specific EDI messages, inquiring via the Internet, and paying bills electronically .
  • Data centers available in the Red Sea Ports Authority, Alexandria Port Authority, and Damietta Port Authority are considered state-of-the-art centers with progressive capabilities and are highly expandable.

• Results with regard to the potential of Egyptian ports being transformed into logistical ports:
  • In the light of the substantial positive aspects and capabilities enjoyed by Egyptian ports and after studying and analyzing the logistic paradigms of ports and terminals worldwide, it was realized recognized  that the Egyptian ports do not fully benefit from their capabilities, as they focus on providing traditional services to vessels and cargoes and achieve a revenue that is not commensurate with the potentials of these ports, which imposes the need to augment the sources of income of Egyptian ports by transforming them into logistical ports in which they provide value-added activities.
  • In order for the Egyptian ports to be transformed into logistical ports, there are a number of requirements that abet such transformation. Indeed, distinguished location, availability of a strong infrastructure, connectivity with internal transportation networks, availability of a wide-ranging wired and wireless communications network, presence of areas that already provide logistical services, diversity of jobs, activities and services provided, quality of human resources, multiplicity of types of ownership and financing methods, administrative requirements, legislative requirements, stability and government commitment, attracting foreign companies and capital, devising procedures and systems for enticing foreign direct investment.
  • It turned out that many of these requirements are available in Egyptian ports, however, it requires enhancing the benefit from the site’s supremacies by striving to attract international shipping lines and increase their connection with the Egyptian ports through increasing the depths of the berths, developing operating systems with advanced equipment, developing information systems, and increasing the available yards with appropriate equipment and cranes. It also became clear that it is crucial to undertake the development of current access routes of a number of seaports, the most important of which are the ports of Alexandria, Dekheila, Port Said and Damietta, in an endeavor to achieve good connectivity with the geographical hinterland areas of those ports.
  • One of the most important requirements that must be met is a stable and appealing investment environment for direct foreign investments, which requires the improvement of laws pertinent to investment, tax and customs in line with the development of port activities and the establishment of logistical areas there.
  • Within the framework of the thorough contemplation of the importance of these requirements and considering the possibility of their realization in Egyptian ports in general and in the port of Damietta in particular, the following results had transpired:

• Results related to the proposal to convert the port of Damietta into a logistic hub
  • In the course of the study, the possibility of converting one of the Egyptian ports into a logistic port was analyzed, as it was ascertained that Damietta governorate possesses numerous economic and geographical components, which qualifies it to become a global logistical center for various major economic activities.
  • Moreover, Damietta Port has achieved satisfactory levels with respect to the availability of logistic port requirements, and given the growing trends of multinational companies towards establishing a center for logistics services that support worldwide trade traffic and industry, it has become clear that the port of Damietta has all the necessary ingredients to transform into a logistic port, in terms of being:
  • A distinguished seaport managed electronically.
  • The presence of the supporting infrastructure, which needs some development and modernization.
  • The availability of a network of roads, railways, river transport, and proximity to an international airport.
  • The presence of an effective and supportive telecommunications network for the business sector environment.
  • Allowing extensive use of information technology.
  • Availability of numerous services and enhancements for extensive logistics capabilities.
  • Availability of skilled and professional manpower.
• After Reviewing The Previous Results, The Study Concluded The Following Pivotal Conclusion:
  • The port of Damietta – as well as other Egyptian ports – and the surrounding area have the elements that qualify it to be transformed from a conventional commercial port to a logistical port provided that investments are devoted to certain sustaining activities such as improving and developing the already existing transport and communications network, and providing services and facilities to entice global investments establishing industries and activities within the port, in addition to the amendment of laws and regulations appropriate to the nature of logistical ports undertakings as well as achieving political and economic stability.

Results

• After reviewing the factors of transforming the Egyptian ports into logistical ports and applying them to the port of Damietta:
•  It was perceived that the port of Damietta and the surrounding area possesses the elements that qualify it to be one of the distinguished logistical hubs worldwide, provided that investments are devoted to certain sustainable activities.

• For  the purpose of transforming the Egyptian ports into logistical ports, we recommend :
• Taking positive steps towards implementing the plan to develop Egyptian ports and transform them into logistical ports, starting with the port of Damietta through developing the area currently available within the borders of the port (about 125 acres) and establishing a number of logistical centers, the most important of which are :
• Establishing an integrated logistics center to boost foreign trade. It is proposed to establish this logistic center on an area of 30 acres to carry out activities related to promoting exported or imported products and cargoes, through the implementation of a set of value-added activities on Egyptian exports, making them compatible with international requirements and increasing the competitive capabilities of those exports, as there are many requirements and conditions entailed by importing countries, especially European countries, in order to import various commodities, especially from developing countries. This center can also provide value-added services for imported cargoes such as vegetable oils, sugar or grain
• A proposal to establish a regional logistics center for advanced industries. It is proposed to establish this center on an area of (45 acres) of the logistics area designated for the port to establish a regional center for advanced industries that includes many cutting-edge industries in Europe, such as the automobile industry, where the center receives and imports parts of cars from factories located in European countries to the port of Damietta, and then works on assembling those cars in the logistics area designated for that purpose, and then the cars are re-exported as a finished product to their final destination in the eastern Mediterranean or Far Eastern countries. The regional logistic center could also include an integrated complex for electronic industries and electrical appliances, which would be an extension of the original international companies existing in European countries, as it became clear that the European countries’ exports of these industries represent a large percentage, and a large portion of these exports flows to the countries of the Far East in addition to the countries of the Mediterranean basin .
•  A proposal to establish a regional logistic center for the maintenance and repair of containers. This proposal comes in the light of what characterizes the port of Damietta pertaining to the numerous shipping lines frequenting the port connecting it with the majority of the ports of the region, and in this regard, a container maintenance and repair center can be established, where the containers of different shipping lines that require repairs are induced and provide all required services to rectify the container into the appropriate form for maritime shipping operations .

• Establishing a logistic center for petroleum services, This proposal comes in light of the developments taking place in the Egyptian territorial waters in the eastern Mediterranean, and the oil discoveries and natural gas fields, as there are many oil platforms and marine constructions in different regions, which require a lot of services and facilities such as spare parts and supplies for the operations carried out by those marine units.
• Recommendations on the proposed legal structure for converting Egyptian ports into logistical ports

The research team recommends that there be a legal delineation of the logistics ports, which requires:

• Issuing new laws related to everything related to logistic ports and providing alegislative framework that warrants investment, financing and management thereof, defining the rights and duties of investors and guaranteeing their rights, and investment incentives offered to them.
• Determine the parties and methods of settling disputes between different parties.
• Identify an incorporated body that supervises the implementation and development of logistic activities in Egypt .
• Developing several existing legislations, such as decrees regarding the institutional status of the Ministry of Transport and its affiliated agencies, and amending various provisions of existing laws.
• Issuance of ministerial decrees regulating the stipulations, restrictions and organization of agencies providing logistic services, and the stipulations and restrictions for practicing the profession of third party logistics .
• Exertion of due efforts to insure the availability of the legal framework that guarantees the credibility of electronic documents and the effectiveness of the enactment of procedures electronically.
• Take measures for Egypt’s accession to international agreements related to logistics management and international multimodal transport facilitation.
• Recommendations on attracting foreign and local investments:

It is recommended to work on examining and evaluating investment incentives while adopting a set of incentives for economic expansion and attracting industrial companies such as:

• Exempting leading companies from taxes for a period of five to ten years given to emerging companies and multinational companies that make large investments in the region .
• The government granting privileges for certain sectors to direct the flow of investments thereto, such as the transportation, logistics, financial services and information technology sectors, as they are considered the locomotives of development .
• Seeking to attract, establish and develop companies that provide global supply chain solutions, especially third-party companies to provide logistics services (PLS 3).
• The projects offer many attractive elements, such as choosing the strategic location for the logistical areas originating from the port site. Such logistical advantages range from good connection to the various means of transport, its connection to the main road network, the spaces available for performing required activities, infrastructure specification, points of contact for different means of transport, proximity to an international airport, extent of human resources, applicable laws and the facilities granted to the practitioner of various activities, targeted activities, environmental prohibitions, ……….etc.
• Provide a description of the constructions and their type in the proposed projects, with an account of the facilities, fire extinguishing stations, and other services ……….etc.
• Illumination of tariffs and prices for leasing and various services, options and alternatives offered by the project .
• Recommendations on pricing and contracting with investors
• Pricing must be competitive. One of the enticing marketing policies is that the Organization grants reductions in pricing for the initial years of contracting .
• The contract with the investor must include the principle of “First Refusal” when contracting, as the project administration guarantees to the contracting investor the right to have priority in contracting over areas adjacent to his project when offered by the management for rent if he wishes to expand his activity .
• Preparing a standard pamphlet to specify the terms of the contract, including the duration of the contract and the responsibilities of each party towards the other, to be reviewed by legal advisors .
• Working with the “One Stop Shop” (Single Window) System, which includes issuing the necessary permits to practice the activity within these areas, such as obtaining a license to benefit from various services, customs transactions, building permits, privileges or tax exemptions .
• Recommendations on the proposed marketing policy to attract various activities to the logistics center .
• Setting marketing policy according to a scientific approach and to be implemented by a specialized team with experience in the field of marketing and marketing policy .
• When addressing clients and specialists, the project charts comprising yards and warehouses and the approximate rent prices must be prepared and ready to be presented to clients .
• Preparing an advertising plan via all modes of media; audio, visual and printed media genres, in addition to the participation in specialized exhibitions that includes incentive factors such as declaring rental prices reductions .
• Extending the invitation to specialized companies to visit these areas or organizing external visits to promote our logistics centers services to relevant international companies .
• Coordinating with commercial attachés in foreign embassies to promote the project and attract new clients.
• Recommendations on improving the competitiveness of Egyptian ports as a whole
• Developing an Integrated Investment Plan for the entire country on which all investment opportunities in Egypt are listed, and preparing off-the-shelf investment projects that include all necessary licenses and approvals to start off projects within a short period .
• Developing information technology systems to introduce all project information on websites to facilitate investors’ access to information while facilitating procedures and overcoming investment obstacles .
• Sort out all problems with regard to laws regulating the work of logistical ports, without any form of inconsistency, by examining laws related to maritime transport parallel to the new investment law and the issued ministerial decrees and classifying the roles of the various authorities .
• Exert intensive efforts to maintain the prestigious status of the Egyptian ports in container handling in the eastern Mediterranean region, increase its competitive advantage and achieve its sustainability, with the need to take the necessary measures and procedures to achieve a pivotal presence in the Red Sea region, as the Egyptian ports lack an advanced position and a tangible presence in this region .
• Endeavor to improve and upgrade the transport and communication network already available in the Red Sea region, and provide incentives and facilities to induce global investments to establish industries and activities therein, which entails the need to set criteria for selecting industries to be established within these areas in order to enable the State to achieve maximum benefit from the distinguished geographical location.  Moreover, there is a need to work on providing, trained, specialized and technical manpower as an essential element influencing competitiveness. Such a necessity requires greater cooperation between industrial, and educational, rehabilitation and governmental institutions and the predisposition towards encouraging novelty and renovation at the same time, and finally the application of modern administrative systems and the absence of restraints on the employment of foreign labor for international companies with flexibility of labor employment.