Commissioned by APL and APL Logistics, the main businesses of global container shipping and logistics group, Neptune Orient Lines (NOL), a recently released 108-page report entitled “Connecting Egypt: challenges and opportunities in freight transportation and logistics” was authored by independent growth consultant Frost & Sullivan.

Freight infrastructure, it is pointed out, is the key to economic growth in Egypt, which is among the most developed economies in the Middle East and North Africa (Mena) region. In the three years prior to the global recession, the country averaged growth in gross domestic product (GDP) of around 7%.

The report recommends that Egypt examine the potential advantages of freight transport by rail – in preference to road – in terms of reliability, safety and profitability. Rail usage for freight is much lower than in developed markets such as the US and Europe and also developing countries such as China and India. The passenger segment however accounts for close to 90% of traffic. [ Some 62km of Egypt’s 5,085km of 1,435mm gauge track are electrified at 1,500kV DC, - editor]

To tackle the relatively poor contribution of rail to freight conveyance, the report suggests that new business models adopted successfully in other countries such as India should be reviewed. In this way, the operation of specific freight corridors and services could be privatised, with the government retaining overall ownership and receiving sizeable new revenues.

The report concedes that government is currently implementing plans to enhance rail transport, with some focus on freight. Foreign and private sector involvement is also increasing. For example, APL launched a coordinated container rail freight service between Sokhna and Alexandria in 2009 in partnership with ENR.

“Rail freight services of this kind provide importers and exporters with increased supply chain reliability and control. They will help international companies grow their business in Egypt, while helping take the country’s products to potentially lucrative international markets,” managing director of APL Egypt LLC Ted Muttiah says.

Geographically, Egypt is a gateway between the world’s major markets. It also controls the Suez Canal and “thousands of kilometres” of the River Nile.

[ According to the consultants’ report, the country’s rail network, government-owned and operated by Egyptian National Railways (ENR), “is the oldest in the world after Great Britain”. It isn’t, not by a long chalk. – editor

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