Egypt’s logistics build-out is running into a coordination problem. The Madbouly government has spent years building out ports, logistics zones, and maritime infrastructure — but the bigger question now is why that build-out is not yet translating into smoother trade flows and a bigger FX payoff, according to a recent report from McKinsey. The firm sees transport and logistics as one of the sectors that could materially improve the country’s trade balance by 2035, but only if the next phase of investment is less on adding more assets and more on getting the system to move better.

Parts of the system are performing well

The transport and logistics market is expected to grow from USD 26.9 bn in 2023 to USD 36.9 bn by 2028, according to the report, and the country is hardly short on maritime assets. Egypt has 18 commercial ports, more than 40 river ports, and over 2k km of navigable waterways, and of course, the Suez Canal, handling some 12% of global trade. The SCZone should, on paper at least, make that footprint even more valuable — McKinsey notes that the zone sits “directly on the world’s main East-West trade route” and already has six operational ports and a growing tenant base.

Egypt ranks 57th on the World Bank’s Logistics Performance Index, behind Saudi Arabia’s 38th place and the UAE’s 7th place, as “despite significant investment in port improvements, Egypt’s ports are currently only using about 68 percent of their container capacity.” That makes this less a story about building more ports and more a story about why the existing ones are not pulling more trade, more value-added, and more FX through the system.

Five Egyptian ports ranked in the 2024 Container Port Performance Index, including Port Said, which came in third globally, McKinsey writes. So the report is not arguing that Egypt’s ports are broken. It argues that there are “several examples of best practice to draw on,” even as the broader system still needs “better governance and operational efficiencies to deliver faster, more reliable services.” That is a much more interesting place to start: Egypt already has ports that can compete — it just does not yet have a logistics system that consistently does.

The real bottleneck begins here

The country’s logistics and warehousing footprint is “geographically isolated,” McKinsey says, with facilities spread out in ways that create avoidable inefficiencies. The fix the firm suggests is to standardize layouts and operating procedures, connect facilities through shared IT infrastructure, and use a federated platform that lets operators see where capacity sits across the network. That is how goods get stored closer to demand centers — and how the system starts cutting delays and costs instead of simply adding more space.

Rail is another weak point. The report says Egypt can speed container movement through “reliable, dedicated rail links” between ports and inland dry ports, alongside shuttle services that move cargo on fixed schedules instead of leaving it to compete with passenger traffic. The key phrase in the report is “protected freight paths adhering to strict, fixed schedules” — because until rail becomes predictable, it is hard for time-sensitive operators to treat it as a serious logistics backbone rather than a nice-to-have.

That also explains why the next phase of logistics investment looks less like another mega project and more like coordination work. The firm argues that “immediate low-cost gains can be achieved” through standard operating procedures, data sharing, and slot-management scheduling that aligns shipping and rail timetables. In other words, Egypt’s logistics problem is not just about moving more cargo. It is about getting the system around the cargo to finally move in sync.

Cold-chain gaps are leaking value

The report flags cold-chain infrastructure as one of the clearer places where logistics weaknesses are bleeding directly into export performance. Egypt’s cold storage capacity, at roughly 3 mn cbm, is “undersized” against broader African benchmarks, while warehouse scale is often too small to meet the needs of modern supply chains. The firm also points to missing specialized capacity — including ultracold storage for products like vaccines — alongside the added risk from power instability. In a system like that, moving perishables efficiently stops being just a transport issue and becomes a reliability issue.

That matters because the country’s agribusiness upside is tied to reducing waste and preserving value deeper in the supply chain. The report cites studies showing significant value losses in fresh produce, attributing them to “high spoilage rates for perishables such as grapes and tomatoes along the supply chain,” and argues that some of the quickest gains could come from “modern packhouses, refrigerated storage, and stronger quality control systems.”

The logistics fix is fairly straightforward. The report calls for “grid-secured cold parks” near major producer belts and key airports and ports, alongside multitemperature reefer fleets and cross-dock facilities that can hold temperature through transfer and transport. That is not the kind of infrastructure that grabs headlines like a port expansion or a new logistics zone. But it may be closer to where the next chunk of FX gains actually sits: protecting higher-value exports from spoilage, delays, and power-related losses before they fall out of the system.

Whatever issues exist, Egypt does not need to start from scratch. The building blocks are already there, and in some places they are working well. What is missing is the connective tissue. “Shared infrastructure can change the slope of performance,” whether that means “one-stop shops” in the SCZone for sectors like FMCGs, pharma, and electronics, or a “federated digital platform linking logistics zones” so operators can finally match storage, transport, and demand across the network.

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