Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 01, No. 034

Logistics actors mock impractical draft directive

Logistics sector actors mock the draft Multimodal Transport Operators Qualification and Licensing Directive which they claim is not properly crafted. However, the Logistics Office argued that it is under the draft stage and is more or less trying to accommodate the recommendation of the private sector.

On the discussion, the sector actors heard that the proposal never took account details of the implantation process. They said that the directive was supposed to consider the coordination of other public offices for the realization of the government strategy.

The directive seems impractical without the coordination of other offices like customs, central bank, investment commission and others.

According to participants, for instance the draft directive stated the insurance coverage, whereas the National Bank of Ethiopia (NBE) has suspended insurers to give such directive.

One of the major freight forwarders appreciated the initiative that the government is considering to comprise the private sector on this, multimodal, valuable scheme, but argued that NBE should be part as well and consider the access to foreign currency to handle the business, “Otherwise it would not be applicable,” he emphasized.

“We are trying to do our best to include the recommendation of the private sector,” Ewnetu Taye, Ethiopian Logistics Transformation Office Deputy Managing Director stated. He reminded that four deliberations had been conducted with the private sector besides receiving written comments, three times from them.

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Railway proposed to Berbera

Ethiopia is considering connecting Berbera Port into Ethio-Djibouti Railway network under the public private partnership (PPP) investment platform. The planned project was not part of the 5,000km railway project that Ethiopia had tabled to develop about a decade ago.

The proposed project that is called ‘port to port connection project’ is expected to be carried out under the 10-year development plan that was recently endorsed.

The project is expected to be developed under PPP arrangement with potential investors. On the recent transport investment summit, the project was introduced for interested investors. The project may have an estimated 310 km distance from Ayisha, which is connected with the Ethio Djibouti Standard Gauge Railway, to Berbera Port.

However, most of the project would be carried out inside the border of Somaliland, the administrator of Berbera Port. The document from the Ministry of Transport (MoT) that was disbursed at the summit indicated that only 60 km would be inside the Ethiopian border, while the remaining 250km will be developed in Somaliland.

The estimated cost of the project is USD 1.5 billion; however, it is noteworthy that it did not clearly explain whether the amount is the total cost between the two countries or only on the Ethiopian side. On similar lines, experts commented that the amount should include the project of Somaliland.

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Ethiopian Airlines builds success on A350 Preighters

Ethiopian Airlines builds success on A350 Preighters

Ethiopian Airlines has continued to fly and create new business since the outbreak of the Covid-19 pandemic and the A350-900 is part of it. Not surprisingly, Ethiopian used its entire A350-900 fleet for cargo operations. Seven out of its 16 extra-wide body aircraft have been converted to freighters by removing all economy seats. The other nine are used either for passengers or for cargo loaded on the economy seats.

In March 2020, the Addis Ababa-based carrier made the crucial decision to temporarily convert part of its fleet to carry cargo rather than passengers. Its preighters transported tonnes of masks and medical products, as well as industrial products and goods such as mobile phones, IT equipment, and clothing.

In a recent communication, the company indicated it had “operated 5,645 cargo flights on the cabin of passenger aircraft and transported more than 121,750 tonnes of cargo across its vast global network. The flights added an immense value to the total of 33,182 flights and 735,869 tonnes of cargo transported during the period from March 25, 2020 to March 25, 2021”.

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Ethiopia and Djibouti’s interest in strengthening cooperation in road, railway infrastructure and port services

Ethiopia, Djibouti expressed their interest to strengthen cooperation in road, railway infrastructure and port services.

Ethiopian Ambassador to Djibouti Berhanu Tsegaye holds talks with Djibouti Ports and Free Zone Authority Chairman Abubakar Omar Hadi. During the meeting, the officials praised the 80-kilometer road construction between Dickel and Dagoru, adding that close monitoring is needed to complete the project on time. They also stressed the need to speed up the delivery of essential commodities such as fuel.

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Ethiopian Airlines receives 737-800SF P2F from GA Telesis

Ethiopian Airlines receives 737-800SF P2F from GA Telesis

Ethiopian Airlines receives the delivery of 737-800SF passenger-to-freighter conversion by GA Telesis (GAT). The aircraft was delivered from Aeronautical Engineers (AEI) authorized Conversion Center, Commercial Jet in Miami. A second 737-800 contracted with AEI is currently undergoing the P2F conversion, with delivery expected in May 2021.

GA Telesis’ Leasing, Investment, Financing & Trading (LIFT) Group entered the air cargo sector with its first commitment with AEI signed in July 2020, followed by a second option taken in September. Given the remarkable growth of the main deck air cargo market, fueled by the pandemic, LIFT is negotiating additional 737SF slots, amongst slots for other aircraft models to add to their future portfolio.

“We are proud to launch our commitment to the freighter aircraft market with Ethiopian Airlines as a partner. Ethiopian has, throughout this crisis, cemented themselves as one of the world’s top carriers,” said LIFT president Marc Cho.

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How China is expanding its reach in the Indian Ocean

How China is expanding its reach in the Indian Ocean

This history of colonization is especially important in examining China’s approach to sea power. How do China’s choices compare to those of current and former global powers?

The British Empire once dominated the Indian Ocean – a key geopolitical asset – through its colonies in East Africa, Southern Africa and India. Exercising sea power in this region ensured that Britain would continue running its industries with inexpensive raw materials sourced from foreign nations. Any country that controls the Indian Ocean assumes the position of global super-power; after the Second World War, the U.S. Navy and the Indian Navy replaced British sea power in the Indian Ocean, becoming the principal providers of maritime security for merchant shipping in the region.

The Indian Ocean – which accounts for one fifth of the Earth’s seas – is one of the primary rings where global supremacy contests are settled. With China seeking to extend its reach, the Indian Ocean is an arena for its ambition to unseat American hegemony. If China succeeds, it will increase its control over access to key markets and to important shipping choke points at the Strait of Bab el Mandeb, the Strait of Hormuz and the Strait of Malacca.

The Eastern African coastline seems to be the easiest piece in the puzzle, with the successful development of China’s naval base in Djibouti cementing China’s presence near Bab el Mandeb.

Of all the global super powers with interests in Indian Ocean, only China has diplomatic missions in all of the six island nations in the region – Sri Lanka, the Maldives, Mauritius, Seychelles, Madagascar and Comoros. In comparison, the U.S. has only three embassies in Sri Lanka, Mauritius and Madagascar.

However, some may argue that China’s potential for influence in the Indian Ocean has been overstated.

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The rise of Chinese-African Logistics, a life line and an economic promise for Africa

The rise of Chinese-African Logistics, a life line and an economic promise for Africa

The national airline Ethiopian Airlines recently transported a batch of doses of vaccines against the new coronavirus between Beijing and Harare, the Capital of Zimbabwe.

To date, China has provided such vaccines to more than 30 African countries.

The fluidity of logistics links between China and Africa during the pandemic helped the countries of this continent to combat this scourge, facilitated trade in goods in both directions and ensured that Africa’s economic recovery was on the right track.

In addition to vaccines and other epidemic prevention equipment, the routes taken and the products transported in this Sino-African trade flow are diversifying. In 2020, the Guangzhou Port Group has opened two new African routes. The company, which is one of the largest full major ports and largest container ports in southern China, is committed to expanding into the African market, managing more than 20 African destination.

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