Although the government has stressed its interest in logistical zones and their importance, it has not provided any clear vision about what those projects are or what defines these logistic zones, head of the Swiss-based Panalpina Abdel-Aal Ali said.
Ali, who is also vice president of Egyptian International Freight Forwarding Association (EIFFA), which is affiliated with Alexandria Chamber of Commerce, added that logistical zone projects must comply with Egyptian laws and regulations, whether in terms of the projects’ definition or methods of operation. This is so that ports may be used as intended: a genuine transit point for imported and exported goods, rather than a storage area, which is the case currently due to lack of adequate storage space.
Many bodies and private companies are considering the establishment of logistics zones. These suggested zones must be administered by a specialised operator company with experience in managing and operating logistics areas, he said.
Ali stressed the importance of the projects, which are encompassed in the larger Suez Canal Area Development Project, along with the new waterway, to attract ships to East Port Said port, transforming it into a major port. This is particularly crucial in light of the projected recovery of oil prices and the expectations for registering higher prices in the coming period, he said.
Ali said the Chamber of Commerce’s abolition of the tariff to store commodities outside the port – implemented under the pretext of violating the law for the protection against competition and prevention of monopolistic practices – has, in fact, opened the door for many shipping companies to exploit this abolition and impose their own high prices. This increased the cost of shipping services, thereby increasing costs for the consumer.
He pointed out that the high tariff on shipping services is temporary, as many of the factories and import companies realised that the charges paid for the unloading and storage of partial shipments and collected goods became higher than what is paid for full containers (20 feet). Therefore, there is a trend among importers to ship full containers.
The EIFFA monitors the performance of its company members, and would intervene in case of any monopolistic practices by any members of the division, which consists of about 500 members, in order to preserve the rights of the rest of the members in guaranteeing competition. The Egyptian Competition Authority began to communicate with the division to obtain members’ data, he said.
Panalpina is now adopting an integrated plan to develop the staff’s skills and train them on the most advanced technology. Additionally, in the current period the company is targeting to compete on large projects, especially in the oil, energy and electricity fields, according to Ali.
The company completed the procedures for acquiring Afifi Group for Transport after reaching a final agreement for its full acquisition, with the aim of expansion in the Egyptian market. The company also targets the pumping of more investments to add new equipment in order to specialise in the field of large projects and infrastructure, in addition to studying possible participation in the projects of the Suez Canal Area Development Project.
The shipping company is currently operating through six branches in the governorates of Alexandria, Port Said, Damietta, Ain Sokhna, Suez, and Cairo. While the company does not seek to increase its number of branches in the coming period, the new plan does aim to double the company’s size of business, according to Ali. He added that they work with about 20 international oil companies operating in Egypt, such as Halliburton.
Panalpina is one of the largest shipping companies in the world. It works in more than 70 countries around the world through 110 offices.