Maersk to Expand Egyptian Terminal as Competition Increases

Competition among the container carriers and their terminal operators will be heating up in Egypt in the coming years as the country works to become the home of one of the main transshipping operations in the Mediterranean. The Suez Canal Authority reports that Maersk will be investing $500 million for the expansion and modernization of its terminal operation while Hapag two months ago also announced plans for a new terminal operation in Egypt. In addition, there are reports that Egypt has also entered into a preliminary agreement with a partnership between France’s CMA CGM Group and Chinese companies COSCO and Hutchison Ports of Hong Kong.

Maersk operates Egypt's only container terminal located at the northern end of the Suez Canal. It opened in 2004 as a joint venture between APM Terminals, the Suez Canal Authority and other Egyptian companies, and COSCO. Located in East Port Said, the terminal already serves as a hub for distribution to the key markets in the Eastern Mediterranean. In 17 years of operations, SCCT reports it has handled more than 27,400 vessels with a total of 44 million TEUs. Currently, half of the total container traffic in Egypt used SCCT.

The Suez Canal Authority signed a new agreement with A.P. Moller-Maersk that calls for a new phase of expansion for the terminal operations. Maersk will reportedly invest $500 million, which will be used to add a new 3,200-foot container berth adjacent to the existing 1,600-foot berth. The current 18 cranes will be increased to 30 with the new ones being electric cranes to contribute to improving the environmental performance of the terminal. The goal is to completely transform the terminal into a green operation by 2030. Maersk will also work to develop the terminal into a smart operation using current technologies.

This next phase of expansion comes after APM completed the phase II expansion of SCCT. That saw a capacity increase to 5.4 million TEU annually. A dredging project was also underway deepening the terminal’s draft to over 57 feet. The terminal can handle the largest container vessels transiting the Suez Canal.

Three months ago, Hapag also announced that it would build a new terminal to be located near the Egyptian port of Damietta. Due to open in 2024, Hapag’s terminal will have a capacity of 3.3 million TEU. The company says it is also targeting transshipment into the Eastern Mediterranean.

Reuters also carried a report last week citing a briefing to the Egyptian cabinet on two additional initial agreements for further terminal development. According to the report, CMA CGM Group, COSCO, and Hutchison Ports will participate in a further port development program that could total up to $800 million in investments.

The development of the ports is in line with Egypt’s plans to become a commercial center for the region. They are exploring other projects including LNG terminals and the possible production of hydrogen as part of the effort to develop alternative fuel supplies. They are also expanding the Suez Canal which is already reporting record volumes.