Egypt is emerging as a key gateway for trade flows

Egypt is positioning itself as a key gateway in global trade amid all the disruptions, with some of its ports witnessing a notable uptick in activity as more shipments get rerouted to avoid the now-closed Strait of Hormuz.

As things stand: The Red Sea ports of Hurghada and Safaga are experiencing significant pressure amid a surge in sea-to-land transit routes to Jeddah, three sources in the maritime and land transport sector told EnterpriseAM. Mounting pressure on those sites and the Saudi Port of Neom comes as land transport replaces sea freight thanks to the Hormuz closure. Egypt-Saudi passenger ferries are at 100% capacity as travelers ditch expensive flights for overland routes. Saudi’s Yanbu Port also reports a packed schedule.

Around 500 shipments are conveyed daily via the Neom-Safaga route, with additional cargo piling up pending ferry availability, a source said.

That’s not all: Sources have indicated a spike in trade volumes across the Neom-Safaga-Hurghada corridor, as well as at Sumed and Yanbu terminals. East Port Said Port is seeing increased activity as a strategic alternative, as it allows shippers to bypass Bab El Mandeb Strait and the Suez Canal entirely.

Safaga Port has emerged as a linchpin for Egyptian exports, providing a vital alternative for global shipping lines, the sources said. The port handled 4.2k shipments in the first half of March — a 75% y-o-y jump.

Safaga has played a “critical role” throughout the crisis, Egyptian International Freight Forwarding Association Chairman Medhat El Kady noted. The port is set to further bolster cargo handling, re-exports, and the resilience of global supply chains.

Meanwhile, the Egypt-Jordan land route has witnessed a doubling in activity, with 100 shipments transiting the corridor daily.

That said, there aren’t enough ferries: While the ports are mitigating the crisis, a shortage of vessels remains a hurdle, maritime transport expert and member of the general assembly of the Holding Company for Maritime and Land Transport Ahmed Al Shami tells EnterpriseAM. He noted that Safaga Port’s current fleet of just four ferries is insufficient to meet surging demand, necessitating private sector partnerships to expand capacity on these routes.

Transport costs are on the upswing: Rising operational costs have prompted a 10% increase in overland transport rates to the GCC, with broader land freight services climbing by 15-17% due to higher fuel prices and surging demand.

SPEAKING OF THE GCC- The Madbouly government has clarified that it has not suspended exports to Gulf countries, and denied reports claiming otherwise.