Egyptian Logistics Boom

By Liesl Venter

Egypt’s project sectors are booming, with transformative developments in roads, rail, ports, water and energy creating unprecedented opportunities throughout the country. However, breakbulk movers must navigate complex economic and geopolitical challenges that threaten to impact progress.

From Issue 1, 2025 of Breakbulk Magazine.

(5-minute read)

Egypt’s project sectors are gaining momentum like never before. From road and rail to ports, water, and energy, the country is transforming. With a government committed to driving progress, infrastructure development is a priority and the project sector is not just promising – it’s flourishing, say project cargo experts.

“Egypt is part of our priority one region – a key focus area,” says Rafael Vicens, head of global projects and industry solutions, Middle East & Africa, at DB Schenker. “With significant foreign investment and major infrastructure projects like high-speed rail and renewable energy developments, the country is poised for growth in the coming years.

“The discovery of large natural gas fields, like Zohr, and the push for green hydrogen projects show Egypt’s potential as a future energy hub. These developments along with investments in wind farms and solar energy make the region vital for us.”

Echoing this sentiment, Ahmed El Dahshan, managing director of Khedivial Marine Logistics (KML), highlighted Egypt’s unique position as a logistics powerhouse. “Egypt’s strategic position as a gateway between the Red Sea and the Mediterranean, combined with ongoing investments in the Suez Canal and industrial zones, solidifies its role as a natural logistics hub for North Africa.

“The government is actively developing these areas to attract manufacturing and investment, creating long-term opportunities for the logistics sector.”

The outlook for Egypt’s infrastructure and project cargo sectors has been on an upward trajectory for some time. In 2016, the government announced its Vision 2030 strategy, setting the stage for change. The strategy has spawned several large-scale projects, including the new administrative capital – an estimated US$58 billion undertaking to create a new city from scratch. Built in the desert 45 kilometers east of Cairo, the development has been under construction for the past eight years.

The country has also embarked on a high-speed railway network set for completion in 2027. The Siemens mobility project spans 2,000 kilometers of railway and will be home to the second-fastest train in Africa.

According to Siemens, the first phase of the project’s construction is making significant progress. The Green Line, which spans 660 kilometers from Ain Sokhna to Marsa Matrouh via Cairo and Alexandria, has seen track laying, train stations and bridges being built by local contractors. Key milestones also include the installation of the first four transformers and constructing two substations for the electrified railway.

A second, 1,100-km line will run between Greater Cairo and Abu Simbel near the Sudan border, supporting urban development to the south. A third line will cover 225 kilometers, connecting the archaeological World Heritage sites in Luxor with Hurghada and Safaga harbor by the Red Sea, and easing freight transport to Egypt’s interior.

“We have been involved with this project from a general cargo perspective, and while there have been some delays, indications are that volumes will start picking up in 2025 as this project moves forward,” said Vicens.

“We have also assisted with 250 heavy-lifts, including eight gas turbines of 482 tons each for the Burullus Power Plant. We also moved 12 generators of 394 tons each and 12 transformers of 180 tons for this project. Other projects include the Toshka Electricity project and the Benban Solar Project.”

Key Project Drivers

Ahmed Nabil, project manager at Egytrans, says Egypt is making significant investments in energy, petrochemicals and mobility.

“We recently completed one of the largest wind farm projects in Egypt, transporting 77 wind turbine generators and managing all aspects of the logistics from the port to the project site,” he said. “Notably, the turbine blades for this project were the longest ever transported in Africa, measuring 84.5 meters. We are now preparing to handle a new project with turbine blades that are even longer.”

Simon Duke, CEO of Middle East & Asia-Pacific at Trans Global Projects (TGP), has also noticed an uptick in breakbulk and project cargo movements in Egypt.

“This has been largely driven by infrastructure development, including a notable US$6.6 billion commitment to developing the country’s maritime industry capacity. These efforts aim to diversify Egypt’s freight cargo split and strengthen its logistics sector,” he told Breakbulk.

Additionally, the Egyptian government allocated US$5.96 billion in 2021 to advance critical infrastructure projects, further fueling the demand for project cargo logistics.

Significant port projects include the Ain Sokhna Port Expansion on the Red Sea, which is set to add 720,000 square meters to the port and increase container terminal capacity to 1.61 million twenty-foot equivalent units (TEUs) annually. The project is progressing rapidly, with operations expected to commence within 18 months.

The Damietta Port Expansion is another major endeavor, backed by a US$455 million investment to develop a second container terminal. Once completed in 2025, this expansion will triple the port’s capacity, further enhancing Egypt’s maritime capabilities.

According to El Dahshan of KML, the El Dabaa Nuclear Power Plant, built by Russia’s Rosatom, is another project driving up project cargo volumes. The US$30 billion project, currently under construction, consists of four power units with a combined capacity of 4.8 gigawatts (GW).

Vicens at DB Schenker said developments in the oil and gas sector, particularly ENI’s Zohr Gas Field Development, were being watched closely with additional drilling to boost production planned for the first quarter of 2025. “The Egypt Green Hydrogen Project with Scatec as lead developer is also taking off with a green ammonia offtake agreement signed earlier this year,” he said.

Geopolitical Pressures Threaten Momentum

Despite the massive potential, it is, however, not all smooth sailing. “Egypt is going through a phase of hyperinflation – almost on the same level as Argentina, Pakistan and Ethiopia – and that is quite disturbing,” said El Dahshan.

“There’s a scarcity of hard currency and imports have declined sharply due to government restrictions on items like cars and mobile phones to stop the outflow of dollars and euros. Over the past ten years, the government has taken out international loans for some of the more grandiose projects such as the power plants, the capital city and the railway system – at high costs – and is now having a hard time paying the money back.”

Only a few years ago, one U.S. dollar was worth five Egyptian pounds; today it is almost 50 pounds. This has affected a number of projects, which are on hold with no indication of moving forward for the foreseeable future.

“Right now, the obvious challenge is FX currency,” said Vicens. “The local currency has devalued a lot. While funds coming in have helped for now, if the IMF doesn’t announce another package, or if the money doesn’t keep coming, Egypt will face serious trouble. The local currency will devalue again and projects will be delayed even more.”

From a geopolitical perspective, Egypt is also under pressure. The country is surrounded by instability. There is the civil war in Libya to the west, conflict in Sudan to the south and the ongoing war in Gaza to the east. This has led to the country having to deal with a refugee crisis, with millions of foreigners flocking to its shores, putting further strain on the economy. An ongoing dispute with Ethiopia over the equitable use of water out of the Nile has only added political and economic stress.

All of these challenges have been compounded by the ongoing crisis in the Red Sea, where continued attacks on vessels have forced many to reroute around the Cape of Good Hope rather than through the Suez Canal. The canal, responsible for approximately 60% of Egypt’s revenue, has been severely impacted by this disruption. Reports show that income from the Suez Canal dropped by as much as 64.3% to around US$337.8 million in May this year, compared to US$648 million recorded in May 2023.

According to Vicens, it underscores the fragility of the country’s primary economic arteries. “The Red Sea situation is concerning as the country is not getting much-needed revenue. This is affecting the economy significantly. Also, the geopolitical tensions and uncertainty complicate current project realization, while many other projects are on hold or even being cancelled.”

El Dahshan said the next few months would be critical. Developments in the Red Sea, particularly regarding security and stability, are expected to play a pivotal role in determining whether Suez Canal traffic can recover. “We all remain cautiously optimistic that increased maritime activity could bring more foreign exchange into Egypt’s economy, providing much-needed relief,” he said.

“Egypt’s growth potential is substantial,” added Nabil. “With the right policies and investment, it has the potential to become one of the leading emerging markets in the Middle East and Africa.”

As Egypt continues establishing itself as a critical global logistics hub, the project cargo sector is emerging as a key growth driver. This sector is expected to experience significant expansion in the coming years, with Egypt positioning itself to capitalize on its strategic location and infrastructure developments.

“We foresee a massive increase in the volume of project cargo during the next five to ten years,” said Nabil.

DB Schenker, KML and TGP are exhibitors at Breakbulk Europe. Siemens is a member of the Breakbulk Global Shipper Network.

PHOTO CREDIT: Egyptrans