Egypt Freight Transport Report Q4 2012

Through 2012 the key factor affecting the wider Egyptian economy, and the country''s freight transport sector, is political uncertainty. After the collapse of the Mubarak regime in early 2011 there are still many question marks over the future of the country. BMI believes Egypt is a country which combines strong medium- to long-term growth potential with significant short-term risks. Looking specifically at the freight transport sector, increasing militancy by dock workers has been an important issue. Some normalcy appears to be returning now, however, and while we project slow or sluggish growth across the different transport modes, we do expect an expansion. Investment in Egypt''s port facilities will help the country grow in the long term.
Headline Industry Data 􀂃 Air freight handled at Cairo International Airport is set to grow by 3.4% year-on-year in 2012 to reach 297,040 tonnes. Over the medium term to 2016 growth will average 3.5% per annum.
􀂃 Cargo carried by rail will remain sluggish, with expansion of just under 1% to 11.99mn tonnes. 􀂃 Total tonnage throughput at East Port Said is forecast to grow by 5.7% to 29.46mn tonnes in 2012, and to average 9.2% per annum to 2016.
􀂃 Real growth in total trade is forecast at 3.9% in 2012 and to average 6.6% in the medium term. Key Industry Trends Turkish Businessmen Seek Sinai Investment Turkish businessmen are seeking to invest in agricultural and logistics projects in Sinai and East and West of the Suez Canal, according to Adel al-Lamei, head of the Egypt-Turkey Businessmen Council. al-Lamei added that these projects would enhance the competitiveness of the Suez Canal, whose revenue would increase to nearly US$50bn annually.
DHL Renames Egyptian Brand To Strengthen Business Global express and logistics company DHL Express (DHL) has rebranded its Egyptian brand Nile Perishable Trans as DHL FoodServices Egypt. The renaming is aimed at highlighting the company''s association with German air freight company Deutsche Post, whose global network and expertise will assist DHL FoodServices Egypt to strengthen its current business and allow further access to international markets.
SCCT Expansion To Support Growth BMI believes that the completion of the expansion of the container terminal at Egypt''s East Port Said facility will offer upside risk to our medium-term growth forecasts for the port. Although we are not overly optimistic with regards to Egyptian demand for container shipping over the period, the port''s proximity to the Suez Canal ensures it receives considerable transhipment business, which East Port Said hopes to increase.
Key Risks To Outlook The main risks to our forecasts for Egypt remain to the downside. Although the country has its first democratically elected president in the form of Muhamed Morsi, the transition to democracy remains rocky, with potential conflict between the new government and the Supreme Council of the Armed Forces (SCAF), which retains significant powers. The uncertainty could hamper business growth, which would impact on the country''s freight transport sector.