An article by: Ahmed Moustafa

Egypt Experience
The fragmentation of the global economy necessitates the restructuring of transport chains and logistics routes to ensure the efficient movement of goods and services between countries and continents. This process is complex due to the increasing number of trade partners, ports, and logistics infrastructure, and the need for specialized services. To ensure a smooth and efficient flow of goods and services, companies must have an effective transport chain and logistics infrastructure in place. This involves carefully selecting transport providers, ports, and other logistics services, considering the cost of transportation, security of goods, and environmental impact. Specialized services such as customs clearance and warehousing are also necessary.
Establishing policies, procedures, and regulations is crucial for the safe and secure delivery of goods and services. This includes completing proper paperwork, following relevant laws and regulations, and training personnel in safety and security requirements. Additionally, companies must consider the environmental impact of the transport chain, ensuring environmentally responsible transportation and minimizing negative impacts. This includes ensuring efficient fuel sources, reduced emissions, and cost-effective transport chains. With careful planning and implementation, companies can ensure the efficient and successful movement of goods and services within a fragmented global economy.

Central Asia: relations between Egypt and Uzbekistan

In November 2023, the Eurasian Economic Forum was held in Samarkand, Uzbekistan, during which the current state and prospects of economic ties between Egypt and the Central Asian republics were analyzed. Since the restoration of diplomatic relations in 1994, Egypt and Uzbekistan have maintained friendly relations, focusing on social, cultural, and economic aspects. In 2016, Uzbekistan granted Egypt priority status in purchasing natural gas. The two countries have signed numerous agreements related to cultural cooperation, transportation, communications, economics, and trade. In 2018, they participated in a joint meeting of the Uzbek-Egyptian Business Council, highlighting their strong relations. In 2018, they agreed to double scholarship opportunities for citizens to study at higher education institutions in each other. The two countries exchange official visits at various levels of leadership to further develop bilateral relations. During his visit to Tashkent in September 2022, the Egyptian Assistant Foreign Minister signed a document granting Egypt the status of “dialogue partner” in the Shanghai Cooperation Organization. Last February 2023, the Uzbek President Mr. Shavkat Mirziyoev, visited Cairo to discuss improving the relations between the two countries. Despite their similarities, economic relations remain the weakest link, with the volume of trade between the two countries only exceeding $1.5 million.

This compares to the volume of reciprocal trade between Egypt and Italy amounting to $ 6.4 billion, as well as the volume of trade with Russia amounting to more than $ 5 billion.

Restructuring of transport chains and logistics routes in Egypt

Egypt’s recent political and economic changes have made transport chains and logistics routes crucial for the country’s growth and development. The Egyptian Logistics Association (ELA) was established to improve operational efficiency in the logistics sector and promote the growth of the logistics industry. The government has invested in infrastructure development, including the expansion of roads, bridges, ports, and airports, to facilitate the smooth movement of goods and services. Additionally, operational costs have been reduced through initiatives like a unified transport platform and a unified tariff system. To ensure safety and security, measures such as surveillance cameras, safety protocols, and a dedicated logistics police force have been implemented. The restructuring of transport chains and logistics routes in Egypt is essential for the country’s economic growth and development.

It is worth noting that the size of Egypt’s global share of logistics trade and global trade corridors is currently about 14 billion dollars and is expected to reach 18 billion by 2028K, according to the latest global statistics. It is expected that it will increase because Egypt has entered into new global alliances, which will allow better conditions for financing investments in these significant global services.

Expanding road networks and logistical in Egypt

Egypt has made significant progress in its transport infrastructure, investing heavily in the development of new roads, bridges, tunnels, and other transportation systems. This has improved the country’s connectivity to the world and led to the creation of several logistical zones, designed to provide efficient freight transport and supply chain solutions. The Suez Canal Logistics Zone, located near the Suez Canal, is the largest and most advanced zone, offering specialized services for containerized and bulk cargo. Other smaller logistical zones include Cairo, Port Said, and Ismailia, each providing a competitive advantage to businesses operating in Egypt. Overall, Egypt’s improved connectivity to the global economy is a testament to its significant progress in transport infrastructure.

Road networks and logistical zones will always prioritize Egypt’s role via BRICS+ and BRI

Egypt’s strategic location has made it a significant player in the global transportation network. The country’s role in global trade has been strengthened by the establishment of the BRICS Plus and the Belt and Road Initiative (BRI), a partnership between Egypt, Brazil, Russia, India, China, and South Africa. The Suez Canal Corridor, a major shipping lane connecting the East and West, is an important part of the BRI. Egypt has also been involved in the construction of the EastMed Pipeline, connecting Egypt, Cyprus, and Greece with Europe, bringing economic and geopolitical benefits to the region. Egypt’s involvement in the African Continental Free Trade Area (AfCFTA) is expected to create one of the world’s largest free trade areas, boosting trade and investment in the region. Egypt’s commitment to global trade and its strategic importance in the global transportation network ensures it will continue to prioritize its role in the region.

Bearing in mind that Egypt & Uzbekistan confirm their interest in supporting their trade relations; By establishing the trans-Afghanistan railway line “Tarmuz-Mazari-Sharif-Kabul-Peshawar” it will allow Central Asian countries to reach Egypt quickly and easily through the ports of Pakistan.

How can digital transformation and AI support Egypt in improving road networks and logistical zones

Egypt is leveraging digital transformation and artificial intelligence (AI) to streamline processes, reduce costs, and enhance safety. AI can analyze traffic patterns, identify weak points, and suggest improvements. It can also monitor and predict traffic patterns, enabling better road network planning. AI can also improve logistical zones, such as warehouses and distribution centers, by analyzing sensor data and suggesting ways to improve efficiency. For instance, adjusting shelf heights or optimizing inventory levels can improve logistical zone efficiency. Additionally, AI can optimize routes for a more efficient delivery process. By leveraging digital transformation and AI, Egypt can enhance its road networks and logistical zones, thereby enhancing the efficiency and cost-effectiveness of transportation of goods and services. Thus, Egypt’s digital transformation and AI can significantly enhance its transportation system.

How can Egypt get the benefit of AIIB and BRICS banks to develop its transport chains and logistics routes

Egypt’s access to the Asian Infrastructure Investment Bank (AIIB) and the BRICS bank offers significant benefits for its transport chains and logistics routes. These international organizations will provide substantial funding for projects such as road and rail infrastructure, motorway networks, ports, airports, logistics hubs, distribution warehouses, freight services, and logistics networks. This will facilitate reliable and efficient movement of freight and passengers. The AIIB and BRICS banks will also support the development of innovative transport solutions, such as smart technologies like satellite navigation systems and artificial intelligence, to reduce traffic congestion and improve freight and passenger movements. The increased funds will also lower costs for businesses, reducing dependence on expensive methods like air transport or long-distance roads. Investing in transport infrastructure and services will lead to increased economic growth and improved living standards, attracting foreign investors and further boosting growth. Overall, the AIIB and BRICS banks provide Egypt with a unique opportunity to receive funding for its transport chains and logistics routes.

To conclude, Egypt is working hard to restructure transportation chains and logistics roads, as the number of road networks and logistics areas that have been added to Egypt has increased recently, and road networks and logistics areas will always give priority to Egypt’s role through the BRICS Plus and the Belt and Road Initiative. Digital transformation and artificial intelligence can also support Egypt in improving road networks and logistics areas, and finally, Egypt can benefit from the Asian Infrastructure Investment Bank and the BRICS Bank in developing transport chains and logistical roads.

Director of the Center for Asia Studies

Ahmed Moustafa