In Egypt, the disruptions of the Arab Spring didn’t just disrupt traffic in the congested streets of its ancient cities. Some protests also directly affected international trade and logistics vital to the country’s economic growth.
Several Egyptian ports were hit by strikes that “created challenges for shipping operations during the first half of the year,” said Joseph Lee, managing director of APL Logistics for the Middle East and Africa. “We were able to minimize the impact of these strikes by staying close to our customers and working with them on making adjustments to their supply chains so they met their critical deadlines.”
Sporadic labor unrest has continued in Egypt months after Mubarak’s fall. In September, Dubai-based port operator DP World suspended operations at its Ain Sokhna port at the southern end of the Suez Canal because of strikes that cost it millions of dollars in lost revenue, according to the Red Sea port authority. A month later, DP World CEO Mohammed Sharaf said plans for expanding the port’s capacity to 1.1 million 20-foot equivalent container units by the end of 2011 are on track.
Another significant impact on the region during the first two quarters of this year, Lee said, involved the increased use of Jebel Ali Free Trade Zone and Dubai Logistics City in the United Arab Emirates as a distribution point for the Mideast region. Concerned that their goods could not be safely delivered to their customers in Egypt, “many customers held some of their products in the warehouses in Jebel Ali (Free Trade Zone), while waiting for things to settle down in the region,” he said.
Now that its logistics activity has recovered to nearly the same levels as 2010, APL Logistics is optimistic about the region, Lee said. APL recently established a warehouse in Al Obour, a suburb of Cairo.
“At APL Logistics, we believe this region has a tremendous amount of potential. We recently set up agencies in both Iraq and Kuwait, and we are looking at further expansion in the region.”
Lee is hopeful Egypt’s new government will chart a politically moderate course of reform that calls for significant expenditure to upgrade the country’s infrastructure. “The ports (such as Port Said) are fairly strong, and the road system has improved tremendously in the past 10 years. They are definitely going in the right direction,” even if there is room for improvement.
Contact Alan M. Field at email@example.com.