Al-Fustat was built near the Babylon fortress. It was a center of foreign marine trade because of its location on the Nile between Lower and Upper Egypt. Al-Fustat had access to the northern ports of Egypt and the southern towns of Upper Egypt through the Nile. In the Fatimid era, this role was enhanced by its connection with Cairo, the headquarters of the Fatimid Caliphs. Al-Fustat became a port for the trade from China, India, Yemen, and Europe and became the main center of shipping. Al-Maqrizi described it as being distinguished with prices lower than those of Cairo. Commercial stores were established on Al-Fustat shores where goods were directly unloaded into the stores' doors. It was impossible to transport goods on animals due to the crowdedness of Al-Fustat City. The traveler Al-Maqdissi who visited Al-Fustat was astonished at the great numbers of ships and boats he saw in the city's port. The traveler Ibn Said who also visited Al-Fustat said, "I am truthful when I report that on Al-Fustat banks I saw what I have never seen on any other river bank".
When ships loaded with different types of grains arrived in Al-Fustat, porters carried such loads to their respective storage areas located in several parts of Cairo.
The commercial status of Al-Fustat was not greatly affected after the famine that took place during the reign of the Fatimid Caliph Al-Mustansir Billah.
Ahmad Ibn Tulun also built an arsenal on al-Roda close to Al-Fustat and when Mohammad Ibn Taghg al-Ikhshidi came into power, he transformed the site of the Fustat arsenal into a garden and built a new arsenal in 325 after Hijra (AD 937).
A shipyard for the construction of ships and boats was built. It is believed that this shipyard existed throughout the Fatimid, Ayyubid, and Mamluk eras. Historical sources also mention that this city was the production center for the fleets Salah Al-Din used in the Mediterranean to fight the Crusaders, and again in the time of King Al-Kamil Mohammad and his son King Al-Salih Najm Al-Din Ayyub. These ships were equipped with weapons and warriors then sent from Al-Fustat via the Nile to the northern ports of Alexandria, Rosetta, and Damietta. The arsenal also played a vital role in the construction of naval ships in the Mamluk period, as can be seen from Sultan Al-Zahir Baybars prohibition of disposing of the ship's wood and ordering the construction of 20 ships. Sultan Al-Ashraf Khalil Ibn Qala'un and his brother Sultan Al-Nasir Mohammad Ibn Qala'un were also great shipbuilders at Al-Fustat. Historians wrote the shipyard of Al-Fustat had stopped its activities during the reign of Al-Nasir Mohammad Ibn Qala'un.