The 2023 Container Port Performance Index (CPPI) jointly issued by the World Bank and the US ratings agency Standard & Poor’s revealed the improved performance of three Egyptian ports among the 405 included in the index.

The port of East Port Said came in 16th on the CPPI, becoming Egypt’s highest ranked, followed by the port of Alexandria, which jumped from the 268th place in 2022 to 172nd in 2023. The port of Sokhna advanced to 122nd place, up from 269th in 2022.

The port of Dekheila dropped to 341st place on the CPPI from 172nd in 2022, and Damietta fell to 387th, down from 173rd. This marks the second consecutive year of decline for both ports, as Dekheila was ranked 133rd and Damietta 56th in the 2021 CPPI.

Amr Al-Samadoni, deputy chair of the Transport and Logistics Committee at the Federation of Chambers of Commerce, said the CPPI only includes five Egyptian ports while several other major Egyptian ports have undergone infrastructure improvements in recent years.

Among them is the Long Live Egypt Terminal in Alexandria, he said, which was implemented by the Ministry of Transport. Today, it handles cargo ships and containers comparable in size to those received by the port of Alexandria itself, he added.

Additionally, ongoing development at the port of Dekheila is expected to play an important role in Egypt’s transportation and logistics sectors.

Large-scale development efforts are underway across all Egyptian ports, focusing on upgrading infrastructure and services, such as deepening basins, expanding docks, and increasing warehouse capacity, Al-Samadoni noted. However, ports in more remote areas, like Nuweiba, have seen more modest development so far, pending the completion of larger-scale projects at the major ports, he said.

Hamdi Al-Barghouthi, an expert in maritime transport and logistics, believes that the CPPI rankings do not fully reflect the scope of work and development carried out in recent years at some of these ports. He argued that the 16th rank achieved by the East Port Said port does not imply that the port of Alexandria, ranked 172nd, is less developed.

The latter has been undergoing substantial enhancements, including the deepening of its basins, preparations to double the number of containers it can handle, and expanding its capacity to receive passenger ships, he explained.

The technical criteria upon which the CPPI is based favour East Port Said because they include six key factors: customs performance, infrastructure, the application of comprehensive quality standards, the facilitation of shipment handling procedures, the logistical services provided by the port, and the method of electronic tracking of shipments, Al-Barghouthi noted.

Ninety per cent of East Port Said’s operations are transit-based, with only 10 per cent related to goods entering the local market. This has led the port to be evaluated more favourably in terms of global trade activity, he explained.

Egypt’s ports have a good chance to double their revenues to $6 billion by focusing on the transit trade. This potential has been bolstered by recent expansions in port capacity, which create a better environment for coordinating trade agreements with 15 landlocked African countries seeking sea access.

However, Al-Barghouthi said that achieving this will require overhauling the domestic transport system, particularly by integrating sea, river, and rail transport. The current system relies on road transport via trucks for over 90 per cent of internal cargo transport.

Despite the decline in global trade activity due to ongoing global conflicts, port development remains an important step for Egypt, according to Al-Samadoni.

“Although Egyptian exports have not grown at the same pace as the development of Egyptian ports, expansion efforts are essential in the face of intense global and regional competition,” he said, adding that “the continuous development and expansion of the ports is crucial for maintaining their competitiveness, particularly amid the introduction of new transportation and logistics networks, such as the New Silk Roads.”

The Ministry of Transport has pursued a strategy aimed at expanding port services and enhancing their capacity to accommodate larger ships, containers, and storage volumes. This has come as Egypt seeks to become a regional hub for various goods.

“Such development efforts enhance the ports’ ability to compete for the transit trade. Egypt can attract more of this trade, especially after it has expanded the services its ports can offer,” Al-Samadoni said.

Mohamed Ali, a professor of transport economics and former advisor to the Minister of Transport, stressed the importance of transit operations. He said there are promising opportunities for Egyptian ports to secure a larger share of the transit trade in the Arab region and North Africa.

The competition is fierce, however, with even smaller ports like Oman’s Salalah port entering the regional and global competition. The port of Jeddah on the Red Sea, which has recently seen its largest volume of transit operations, is another example of the competitive landscape, Ali added.

“There are emerging opportunities through the expansion of port capacities to establish partnerships with European shipping companies for the management of recently expanded and developed terminals. These partnerships not only strengthen economic exchanges with EU countries, but also generate substantial returns by facilitating the movement of goods to the Egyptian ports,” he noted.

Global competition in the ports sector has become more fast-paced and fierce, Ali said. A new generation of ports is emerging equipped with advanced logistics capabilities such as new trains that can enter large vessels and trucks that can load directly onto them.

These integrated services provide multiple modes of transportation, saving time, efforts, and costs and enhancing the competitiveness of goods by ensuring quicker delivery and reduced shipping expenses.

More global shipping companies are emerging that offer multi-modal insurance covering the entire journey of goods from ships to trucks or trains and vice versa, he added.

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* A version of this article appears in print in the 26 September, 2024 edition of Al-Ahram Weekly