Egypt's Third Party Logistics (3PL) Sector Soars to New Heights, Attracting Global Players and Driving Economic Growth

The Egypt Third Party Logistics Market is crucial for worldwide trade. Huge amount of money has been spent on infrastructure, with the logistics and transportation sectors receiving special attention. Egypt's third-party logistics business has risen steadily in recent years. The logistics sector has grown considerably since the political crisis. Due to improved economic conditions in the country and the recovery of trade volumes to pre-crisis levels, both local and international companies are fiercely competing in the market. Domestic companies have also begun offering international freight services.

The Third-Party Logistics (3PL) market in Egypt has witnessed substantial growth in 2022, with a notable increase of over USD 140 million. This growth can be attributed to various influential factors that have had a positive impact on the industry.

The logistics industry in Egypt is experiencing substantial growth, positioning the country as a key player in global trade and opening up numerous opportunities for logistics service providers. The World Bank's data indicates a noteworthy improvement in Egypt's logistics performance index (LPI), with the country now ranked 58th in the world in 2023, a significant rise from its previous position of 67th in the 2018 report. This impressive transformation in Egypt's logistics sector has attracted the attention of several companies, leading them to consider relocating or expanding their manufacturing operations within the country.

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► Egypt 3PL Market Segmentation
Egypt Third Party Logistics Market by services is divided into Freight Forwarding and Transportation, Warehousing and Value Added Services.

The majority of the services market is dominated by freight forwarding and transportation, which accounts for almost half of the industry's revenue, followed by warehousing.

► Notable Developments in Egypt Warehousing Sector
Warehouse management has grown in importance in the country as international trade has expanded. The government has also begun to build additional warehouses to reduce food waste. For example, since 2014, the state has built 35 new silos for storing wheat, increasing the total number of silos to 75 by 2023.

► Surge in E-commerce
The Egyptian e-commerce industry is witnessing a surge in growth, driven by companies like The Fashion Kingdom and Khazenly, which have recently secured funding of USD 2.6 million and USD 2.5 million respectively. Projections indicate that between 2023 and 2027, Egypt's e-commerce revenue is expected to experience a steady annual growth rate of 15%-18%. By the end of 2028, the e-commerce market is predicted to exceed USD 15 billion, with a user penetration rate of 70.0%. This rapid expansion of the Egyptian e-commerce sector will place additional strain on the existing logistics and fulfillment networks and businesses.

► Performance During COVID-19
There were notable gaps in volumes coming into Egypt's ports for a couple of weeks following China's lockdown. According to MS's Fahmy, these gaps continued into April. In the aftermath of the lockdown in Italy, Egypt's third biggest export market, sea freight was rerouted to Germany, Spain, Austria, and other European countries. During the first two weeks of April 2020, India (which uses Egyptian ports on its shipping routes to Europe and the U.S.) imposed a 28-day lockdown that lasted two weeks longer than originally planned, thereby aggravating the supply-side dynamics in Egypt's shipping sector. In addition to reducing Egypt's shipping market capacity, blank sailings also impact ocean carriers' revenues.

► Key Findings
■ Expansion of the Suez Canal Economic Zone: The Suez Canal is being widened by 40 meters and deepened by 6 feet. It is anticipated to be finished by July 2023, increasing capacity by 6 ships. This opens the door for larger logistics mobility. The canal's southernmost 30 km, where the Ever Given became stuck, is planned to be enlarged 40 meters eastward and deepened to 72 feet from 66 feet. This will enhance ship navigation by 28% at this tough section of the canal.

■ Infrastructure Development: Egypt will be transformed into one of the major global transport and logistics centers by 2024 as part of a vast 10-year plan to modernize its transport infrastructure. The 10-year plan was created to modernize the transport and communication sectors at an estimated cost of EGP 1.669 trillion (about USD 106.3 billion), which was implemented from 2014 to 2024. A total of EGP 474 billion will be spent on roads and bridges, EGP 225 billion on railroads, EGP 837 billion on tunnels and electric traction, EGP 115 billion on maritime transport, EGP 15 billion on dry ports and logistics, and EGP 3 billion on river transport as part of the six major areas covered by the plan.

■ Egypt Currency Crisis: Egypt's economy has been severely strained over the last year, with the Egyptian pound crashing, foreign cash running out, and inflation skyrocketing. Egypt's pound has fallen over 50% versus the dollar since March 2022. A severe dollar shortage has stifled imports and created a backlog of products at ports, affecting local industries.

■ Collaborations between Shippers and 3PL Companies: The importance of cooperative and productive partnerships between shippers and 3PL providers has increased in recent years. The effectiveness of interactions between 3PLs and their clients is increasing as both parties become more skilled at what they do. The cooperation between shippers, carriers, and end customers positively impacts the smooth operation of the supply chain.

Scope of the Study
The study titled "Egypt Third Party Logistics (3PL) Market Size and Forecast 2023-2028: Analysis by Mode of Transportation (Rail, Road, Air, Sea), Service Type (Freight Forwarding, Warehousing, Value-Added Services), and by Domestic and International Markets" conducted by Makreo Research provides a comprehensive analysis of the Third-Party Logistics (3PL) market in Egypt. The report examines the past, present, and future outlook of the industry, taking into account the impact of external factors such as the COVID-19 pandemic and macroeconomic conditions. The report further delves into the mode of transportation segment, examining both domestic and international transportation in Egypt. It evaluates different modes of transportation, such as rail, road, air, and sea, providing insights into their market shares and the regulatory framework governing each mode.

Additionally, it explores major trade routes, key ports, and the impact of trade agreements on international transportation services. The study also offers a future outlook for the Egypt 3PL market, providing forecasts of market growth and trends. It identifies emerging opportunities and potential challenges, while considering technological advancements and their impact on the industry. By assessing recent trends and conducting macroeconomic analysis, the report examines the influence of external factors on the industry's performance. The report includes a section on the competitive landscape, profiling major 3PL providers in Egypt.

Period of Study
2018-2022 : Past and Present Scenario
2023-2028 : Future Outlook of the industry

Market Assessment:
The report examines the Egypt 3PL Market Revenue on various parameters covering performance of the industry by Market (Freight Forwarding, Warehousing, Value Added Services), By Payment Method (COD and Online Payment), and By Freight Type (International Market and Domestic Market)

Country Assessed: Egypt

EPTD & Trade Performance
We have studied co-relation of major independent factors those have been covered under the sections:
• EPTD Analysis
• Pre-Covid Scenario
• Trade Performance

Companies Assessed:
Agility Logistics, Aramex International, DHL Supply Chain, DB Schenker, Nile Logistics, World Cargo Egypt, EGY Logistics, Khawass Logistics

For more information on the research report, refer to below link:
https://www.makreo.com/report/egypt-third-party-logistics-market-size-and-forecast-2023-2028

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Email Address
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Makreo is a market research and consulting firm working closely with business conglomerates worldwide to assist them in many aspects of driving their business growth and making wise decisions with the help of our qualitative and quantitative market insights.

This release was published on openPR.