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Egypt Freight Transport Report Q2 2012

Business Monitor International's Egypt Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Egypt's freight transportation industry.

Through 2012 the key factor affecting the wider Egyptian economy, and the 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 Egypt; BMI believe the country combines strong medium- to long-term growth potential with significant short-term risks. Looking specifically at the ports and shipping sector, increasing militancy by dock workers has been an important issue. One bright spot for the Egyptian economy as a whole will come from the increase in revenues secured from the Suez Canal in 2011, and the expected further increase in 2012 as rates are due to be raised for the first time in three years. For the other modes of transport, namely air and rail freight, BMI expects fairly lacklustre growth over the mid 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 (compared to 2.1% growth in 2011).
- 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 8.9% to 30.35mn tonnes in 2012, and to average 12.1% per annum to 2016. ?? Real growth in total trade is forecast at 6.1% in 2012 and to average 8.8% in the medium term.

Key Industry Trends

EgyptAir Cargo Signs Pact For Transport Of Perishables
In December 2011, EgyptAir Cargo signed a cooperation agreement with the Export Development Fund and the Agricultural Export Council regarding the transport of agricultural produce from Egypt to foreign markets. The signing was witnessed by the Egyptian minister for industry and foreign trade, Mahmoud Eissa, and civil aviation minister, Hussein Masoud. The pact is aimed at boosting the competitiveness of Egyptian agricultural produce abroad.

Political Disagreement Results In Project Delay
The government of Egypt has still not decided whether to conduct a new feasibility study on a land-bridge project that would connect the country with Saudi Arabia via the Red Sea bridge, it was reported in December 2011. The failure by both governments to reach a political agreement is leading to delays, according to Abdullah Dahlan, chairman of the Saudi-Egyptian Business Council. A study on the project was conducted four years ago and its feasibility was proven, said Mahmoud Ezzeldin, chairman of Egypt's General Authority for Roads, Bridges and Land Transport. However, he added that a new study must be undertaken as several changes have taken place since.

Suez Canal Authority Announces Rise In Revenue, Benefiting From Bigger Is Better Trend
BMI believes that Egypt has been a direct beneficiary from the shipping industry's trend of building ever bigger ships, as despite a fall in the number of vessels traversing the waterway, the Suez Canal Authority (SCA)'s revenues rose by nearly 10% in 2011. With rates set to increase in March BMI believe this growth in revenues should be maintained despite the global headwinds facing East-West shipping. Given the current decline in Egypt's stock of foreign reserves this will come as some relief to the country.

Key Risks To Outlook
The main risks to their forecasts are primarily to the downside. Despite their relatively bearish outlook on the currency, that the unit has not experienced a more pronounced sell-off since the start of the year has been wholly due to ongoing intervention by the central bank. While BMIs core view sees Egypt receiving an influx in foreign aid over the coming months, which should support volumes passing through the country's ports, airports and on rail, there is certainly a risk that such external assistance does not materialise in the near term (negotiations with the IMF over a potential US$3bn Stand-By Arrangement in particular may well drag into 2012). Should the country be racked by another wave of political unrest, which remains distinctly possible at this stage, volumes in Egyptian freight transport could see a contraction like that experienced at the country's ports in 2011, or across the sector when the downturn hit in 2009.
Executive Summary

SWOT Analysis
Egypt Freight Transport Industry SWOT
Egypt Political SWOT
Egypt Economic SWOT
Egypt Business Environment SWOT

Industry Trends And Developments
Market Overview
Industry Forecast

Macroeconomic Outlook
Air Freight
Table: Air Freight - Cairo Airport And Egypt, 2009-2016
Maritime Freight
Table: Maritime Freight - Throughput, 2009-2016 ('000 tonnes and % change y-o-y)
Rail Freight
Table: Rail Freight, 2009-2016
Table: Trade Overview, 2009-2016
Table: Key Trade Indicators, 2009-2016 (US$mn and % change y-o-y)
Table: Egypt's Main Import Partners, 2002-2009 (US$mn)
Table: Egypt's Main Export Partners, 2002-2009 (US$mn)
Global Oil Products Price Outlook
Political Outlook

Macroeconomic Outlook
Table: Egypt – GDP By Expenditure – Current Prices Breakdown, 2008-2016 (EGPbn, unless otherwise stated)

Company Profiles
Egyptian Transport & Commercial Services SAE (Egytrans)
EgyptAir Cargo

Country Snapshot: Egypt Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2010
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012

BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
Companies Mentioned
- Egyptian Transport & Commercial Services SAE (Egytrans)
- EgyptAir Cargo
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