Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 01, No. 038

Ethiopia’s Future Transport Outlook

Ethiopia plans to build five additional corridors in the coming ten years. Based on the ten years perspective plan, the transport sector has six strategies, 22 sub strategies goals and 98 interventions for the logistics sector.

For the implantation of the strategy, the Council of Ministers’ have formed a National Logistics Council that is chaired by MoT and includes Minister of Trade and Industry, Ministry of Revenue, Ministry of Agriculture, Ministry of Finance, National Bank of Ethiopia, Customs Commission, Investment Commission and representative of the private sector logistics actors.

The transport sector development in general is expected to consume 3.2 trillion birr or USD 75 billion in the coming decade, while the sector that is mostly preserved for public and domestic investors will expand its playground to foreign investors in different schemes.

From the 3.2 trillion birr, 69.55 billion birr will be covered by the money collected from the service provided by the sector and the rest will be financed by the government budget, which is about 2.2 trillion birr, loans of 582 billion birr and foreign aids of 164.5 billion birr. The intervention of the private sector including foreign investors has also been considered as a major source of investment in the sector.

Similarly, a further increase of the number of dry ports from 8 to 11 in 2030 is expected. Similar developments such as building cargo vehicles terminals to increase the number from 1 to 23 and 4 new one stop borders to increase the number are in the works.

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Foreign currency shortage backtracks’ ESLSE

Ethiopian Shipping and Logistics Services Enterprise (ESLSE) claims that it is unable to access its own foreign currency prompt from local banks. The state logistics giant that solely operates vessels in Ethiopia said that despite having huge amounts of foreign currency in banks it is unable to access it duly when it demands to settle service charges. The enterprise mainly working with ports in Djibouti said that it has accrued sums that are supposed to be paid for the port service.

“We have USD 92 million that is deposited in banks but we are unable to access it when we want,” said Roba Megersa, CEO of ESLSE. “We cannot access our own foreign currency from private banks that we deposited,” he said reminding why delays have occurred on payments that are due as a result the foreign currency shortage. According to the CEO, through whole this challenge there is no cargo delay at Djibouti ports because of service payment hold up from the Ethiopian side.

The flag carrier, ESLSE, is one of the oldest cross continent vessel operators in the world since it managed the first vessels in March 1964 and now the only in Africa.

Currently, it mainly manages 11 dry cargo ships. From the stated, two vessels are tankers and the nine are general cargo vessels called ‘Handysize’ with the capacity of 28, 000 DWT.

Ethiopia loads its cargos from 340 ports in the world and ESLSE has agents that have been working for several decades.

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Global logisticians called in to unlock trade routes

One of the leading global logistic solution providers gets to Ethiopia to develop the Ethiopian side of the road linking Ethiopia to Berbera into one of the major trade and logistics corridors of the Country’s international trade routes.

“Utilizing the Berbera corridor will surely have a potential to make Ethiopia a front runner in logistics operations since the industry is expected to play the leading catalytic role to the national growth,” said Dagmawit Moges Minister of Transport, adding that, “Ethiopia aims to diversify its port access facilities and services to improve its trade corridor access routes. Perhaps the development of this Corridor will not only meet with the growing demand of Ethiopian’s international trade, but it would also enhance our Nation’s capacity in utilizing our existing major corridor both in terms of volume of trade and efficiency.”

“The development of the port will create new jobs, attract new businesses and investment along the corridor, as well as diversify and strengthen the country’s access to international trade by having a direct, seamless and efficient link between Ethiopia and Berbera Port,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World.

The road infrastructure that will connect Berbera Port to Wajaale at the border with Ethiopia, funded by the Abu Dhabi Fund for Development and the UK’s Department for International Development, is expected to be completed by the end of 2021. The road will link the existing modern highway on the Ethiopian side and will further position Berbera as one of the key trade gateways in the region and will be one of the fastest and most efficient routes for Ethiopian transit cargo.

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Ethiopia’s Flag Carrier – ESLSE

The Chief Executive Officer of Ethiopian Shipping and Logistics Services Enterprise Ato Roba Megersa’s extended interview with the Ethiopian Reporter Newspaper on different important matters about the giant flag carrier of Ethiopia and other affairs of the Logistics sector.

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Ethiopia hopes to boost foreign trade with Chinese-built trackless station within industrial park

Ethiopia inaugurated its first trackless station in a bid to boost the country’s foreign trade efforts. The trackless station was inaugurated at a ceremony held in the Chinese-built Eastern Industrial Zone (EIZ) in Dukem city, 37 km southeast of Ethiopia’s capital Addis Ababa.

Trackless station refers to an office or agency of the railway, which operates in the area far away from the railway station to facilitate the transportation of goods. With the help of trackless station, factories or companies can directly transport the freight from industrial parks to railway station.

Yehulashet Jemere, State Minister of Ethiopia’s Ministry of Transport, said the inauguration of the first trackless station of the Chinese-built 752.7-km Ethiopia-Djibouti electrified rail line is an important milestone in the east African country’s quest to modernize its logistics sector.

The Eastern Industry Zone inaugurated a decade ago is Ethiopia’s first industry zone that inspired the Ethiopian government towards establishing more industry parks across the country towards becoming the manufacturing hub of the continent.

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Asian Ports Dominate Global Container Port Performance Index

Asian container ports are the most efficient in the world, dominating the Top 50 spots according to the new global Container Port Performance Index (CPPI) launched by the World Bank and IHS Markit. The report scored ports against different metrics, making the efficiency ranking comparable around the globe by assessing and standardizing for different ship sizes and container moves per call. The CPPI is intended to identify gaps and opportunities for improvement that will benefit stakeholders from shipping lines to national governments to consumers.

East Asian ports dominate the CPPI, led by Yokohama in Japan ahead of King Abdullah Port in Saudi Arabia and Qingdao in China. Algeciras in Spain is the highest ranked European port, in 10th place. Colombo in Sri Lanka is the top-ranked port in South Asia at 17th place and Mexico’s Lazaro Cardenas leads the Americas at 25th. Canada’s Halifax is the only other North American port in the Top 50. Djibouti, in 61st place, is the top-ranked African port.

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How is China Influencing Global Maritime Connectivity?

How is China Influencing Global Maritime Connectivity

Decades of economic growth and government prioritization have enabled China to position itself at the nexus of global maritime trade. Enhanced maritime connectivity has generated considerable economic benefits for China and offered Beijing greater influence over the flow of goods around the world. Chinese leaders are pushing to leverage the nation’s resources to further strengthen connectivity, with a key emphasis on enhancing port infrastructure.

China has developed some of the world’s largest and busiest ports. According to the Liner Shipping Connectivity Index (LSCI), which scores countries and their respective container ports based on their level of integration into established liner shipping routes, several of China’s container ports rank among the most connected in the world. As of the first quarter (Q1) of 2021, China possesses 10 of the top 100 ports in the LSCI. That figure rises to 11 ports when including Hong Kong. Only the United States, with nine ports in the top 100, comes close to matching China. However, China’s 11 ports boast an average connectivity score of 60.6, which is significantly higher than the average score of US ports (44.5).

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