It is known that the Egyptians used boats woven of papyrus, so it is plausible that surrounding nations used the same type of boats.
The sea
and the waters
mentioned probably refer to the Nile River, as the nations spoken of are inland nations. Even today, Arabs speak of the Nile River as the sea.
2 which sends ambassadors by the sea, in vessels of papyrus on the waters! Go, you swift messengers, to a nation tall and smooth, to a people feared near and far, a nation mighty and conquering, whose land the rivers divide.