North Africa Gains Ground as Trade Flows Shift South

By Liesl Venter

Executives from DB Schenker, Maurilog and KML share insight on how shifting trade routes and rising investment are turning North Africa into a vital hub for breakbulk.

From Issue 4, 2025 of Breakbulk Magazine.

(5-mimute read)

From new ports and railways to freezones and road corridors reaching deep into the west of the continent, countries in North Africa are investing heavily to position themselves as a critical hub linking Europe, Sub-Saharan Africa and the Middle East.

Morocco, Egypt and Algeria are at the forefront of this shift, capturing volumes that once moved through Southern European ports. The result is a reconfiguration of traditional trade lanes and growing confidence among global investors and logistics operators in North Africa.

The momentum is promising, but not without obstacles. Geopolitical tensions in Libya and Sudan, the Red Sea crisis and inconsistent customs systems threaten to slow progress. And while initiatives like the African Continental Free Trade Area (AfCFTA), which aims to create a single market among its more than 50 signatories, signal long-term integration, the real impact will take time.

“It (AfCFTA) really is still in its inception phase and simply not mature enough yet to make a difference to trade barriers and other challenges faced by operators in Africa,” said Rafael Vicens, head of Global Projects & Industry Solutions MEA at DB Schenker Middle East.

But Ahmed El Dahshan, managing director at Khedivial Marine Logistics, said the agreement was already influencing investment trends across the continent. “Knowing that you can invest in a specific country and then export to another is an important aspect. It will facilitate infrastructure and logistics development.”

Region on the Rise

Few would deny the continent still has a long road ahead to realize the full potential of AfCFTA, which hopes to eliminate not only tariffs, but the many other barriers that hinder intracontinental trade. Yet, North Africa is already making significant strides, facing challenges head-on and laying the groundwork for long-term growth.

According to El Dahshan, North African countries are not only reshaping their trade corridors, but also driving major infrastructure development while attracting investment across key sectors such as energy, mining, industry and construction.

“The drivers of this transformation are Morocco in the west and Egypt in the east,” he said. “The projects taking place are extremely influential in terms of development and there is significant investment in key ports and other infrastructure.”

One of the biggest developments has been the upgrade and expansion of the Tanger Med Port, situated on the slope of the Strait of Gibraltar, about 40 kilometers from the city of Tangier, in Oued Rmel, northern Morocco.

Following large-scale investment, the port is considered one of Africa’s largest and most advanced, a critical hub linking Africa, Europe and the Americas. On the other side of the continent lies Port Said at the northern entrance of the Suez Canal.

“The Suez Canal is naturally a vital maritime choke point and its surrounding Economic Zone has become a major focus of development,” said El Dahshan. “Egypt has invested heavily in this area and successfully attracted foreign direct investment from Europe, China and even Russia.

“Investors are leveraging Egypt’s strategic location, along with its extensive network of free trade agreements across Africa, the Arab world, Europe, the United States and South America. This unique positioning makes Egypt an increasingly attractive hub for global trade and manufacturing.”

In Algeria, construction of the new deep-water Port of El Hamdania near Cherchell continues, creating yet another important regional hub development. “It is not just ports that are getting attention, but also road networks and railways,” said El Dahshan.

“The Trans-Maghreb highway and railway projects are just as significant and will connect Morocco, Algeria, Tunisia and Libya. Ongoing investment in dry ports and inland logistics hubs are also worth mentioning.”

Algeria is also investing in its road infrastructure and construction is underway on a new link to Mauritania. Stretching around 840 kilometers, the road will provide much-needed improved transport connections.

Trade Shifts

Mohamed Abdellahi Yaha, owner of Mauritanian logistics company Maurilog, said that countries like Morocco and Egypt were actively positioning themselves on the global stage.

“Each has its strengths and challenges but both are driving the continuous development of trade corridors as they work to establish themselves as gateways to both Sub-Saharan Africa and Europe. Just as important are the developments from a regional perspective.”

He pointed to the Global Trade African (GTA) corridor as another example. “Spanning 4,500 kilometers and linking the Economic Community of West African States (ECOWAS) countries to Europe, this is an extremely important project forecast to attract US$2 billion of investment by as early as 2027.”

For Vicens, the efforts are already paying off. “We are seeing North African ports more and more capture volumes and trade lanes traditionally handled by Southern European ports, particularly in Spain. Several Spanish ports are experiencing a decline in traffic as carriers and companies increasingly opt for North African alternatives, driven by competitive infrastructure and strategic location.”

The region, however, is not without its challenges. Conflict remains one of the biggest risks across the continent, and North Africa is no exception. Security concerns persist in Libya, which continues to grapple with instability. Meanwhile, the ongoing civil war in Sudan has caused major disruptions, with no ceasefire in sight, casting a shadow over regional stability and trade prospects.

The Trans-African Highway, arguably one of Africa’s most ambitious infrastructure projects, designed to connect nine key corridors, remains aspirational, with progress stalled in part due to persistent security risks in countries like Sudan.

Surrounded by Conflict

The Red Sea disruption is yet another example of how conflict continues to impact trade and logistics in the region. “The Suez Canal’s revenues have declined dramatically because of the Houthis and the broader Red Sea crisis,” said El Dahshan.

“When a country’s main source of income drops by 60% to 80%, it signals real economic trouble. And when you’re surrounded by conflict, whether it’s in Libya, Sudan or across the border in Israel and Gaza, all sectors inevitably take a hit. These may be external factors, but they significantly impede progress, especially in the project sector.”

Logistics experts maintain that, conflict aside, another major obstacle to efficient trade is the inconsistency and inefficiency of customs procedures across the continent. A key factor contributing to this is the lack of widespread digitalization.

While several countries, including Egypt, have made progress toward implementing online customs clearance systems, fully digital, end-to-end processes remain elusive. Many steps still require manual intervention, including physical inspections and approvals, resulting in delays, inefficiencies and sometimes corruption.

Compounding the issue is the lack of harmonization between countries. Customs systems vary significantly across borders, making regional coordination and integration under frameworks like the AfCFTA particularly challenging.

According to Yaha, while each country in North Africa faces its own set of domestic challenges, the region’s strength lies in its potential to collaborate.

He said public-private partnerships were increasing. “The private sector is focusing on the business and if we are honest, the opportunities in Africa are far more attractive than those in, say, Asia or Europe. Africa is the future, and North Africa’s value proposition is increasingly compelling.”

He said project activity was set to increase, as the region was on a trajectory to increase investment in infrastructure, intermodal transport and energy capacity to reach its ambitious goals.

Solar and wind projects have seen an increase in project cargo, noted El Dahshan. “We have seen an uptick in volumes and we have handled several renewable energy projects, be it wind, solar or biogas. Oil and gas remain part of the mix as well.”

Both Yaha and El Dahshan agree that governments will need to increase investment in railway and road infrastructure, particularly if growing intra-African trade remains a priority.

“North Africa has several factors in its favor, of which the most important is its strategic location linking it to Europe and Sub-Saharan Africa, as well as the Middle East,” concluded El Dahshan, also highlighting direct access to maritime routes such as the Suez Canal.

“North African countries are all investing in capacity to handle breakbulk and oversize cargo.”

Read more: High Risk, High Reward in West Africa

Top photo credit: Maurilog