Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 01, No. 044

Berbera Port Container Terminal Officially Launched

The first phase expansion project of Berbera port was launched in the presence of Somaliland President Musa Bihi, a high-level Ethiopian delegation and Dubai Ports (DP) World Director Sultan Ahmed Bin Sulayem.

The new container terminal with a deep draft of 17m, a quay of 400m and three ships to shore (STS) gantry cranes, can handle the largest container vessels in operation today, and increases the port’s container capacity from current 150,000 twenty-foot equivalent units (TEUs) to 500,000 TEUs annually.

Noting that Ethiopia will benefit from the port of Berbera, especially the Somali Region State, the minister noted Ethiopia to build road from Berbera-Jijiga-Dire Dawa-Erer-Miesso that would enable to Jijiga and Dire Dawa towns to be the container destinations from Berbera to eastern Ethiopia.

The Berbera Terminal Corridor is jointly owned by DP World, Somaliland, and Ethiopia with 51, 30 and 19 percent shares respectively.

The first phase expansion project will enable it to keep 500,000 containers and handle one million containers in a year.

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Ethiopia hopes Somaliland port terminal reduces dependence on Djibouti


A new container terminal opened at Berbera port in the semi-autonomous Somaliland region is expected to be a major trade gateway for landlocked Ethiopia. It also is also expected to further enhance trade relations among East African and Gulf countries. The terminal was inaugurated after the completion of phase one of the port’s expansion project.

According to Somaliland and DP World officials, Berbera’s newly built terminal will increase the port’s container capacity to 500,000 twenty-foot equivalent units (TEUs) annually from the current 150,000 TEUs. Completion of the second phase expansion is expected to boost the port’s accommodation capacity to 2 million TEUs annually.

In addition to the expansion of new container terminal, Somaliland is building a Berbera free trade zone and corridor, and major road projects which intend to connect it mainly with Ethiopia. According to Ethiopian officials, the road project due for completion later this year will not only serve as an alternative corridor for Ethiopia but it will also provide efficient service as it will allow imports from the port of Somaliland to enter Ethiopia “directly, quickly and efficiently”.

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Extreme Freight Rates Begin to Change Shippers’ Calculations


The containerized shipping industry has been essential to global commerce for its low shipping costs. However, high freight rates are starting to have an impact on consumer goods. Already, consumers have started to feel the pinch of the surge on items such as furniture and coffee. Along the transpacific route, Alan Murphy, CEO of Sea-Intelligence recently estimated that freight rates for assembled furniture now account for a whopping 62 percent of the total retail value. It’s the same case for large appliances, for which up to 41 percent of the retail price is the shipping. As container rates continue to rise unabated, these commodities might be priced out: their thinner margins make it impossible to absorb rising costs.

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Erdogan Launches Istanbul Canal Project


On Saturday, Turkish President Recep Tayyip Erdogan held a groundbreaking ceremony for the Sazlidere Bridge, part of the Northern Marmara Highway project. Erdogan described it as the long-awaited launch of construction for the massive Kanal Istanbul project, which would cut a bypass route from the Black Sea to the Sea of Marmara, paralleling the Bosporus.

The canal project, announced in 2011, has been estimated by outside experts to cost in the range of $40 to $50 billion; recent government projections put the cost between $15 and $65 billion – well above the cost for the New Panama Canal ($5 billion) and the Suez Canal ($8 billion). It would be deep and wide enough to accommodate VLCCs.

Erdogan’s AK Party says that the canal would provide relief to vessel traffic on the Bosporus, shifting some of the 48,000 vessels per year that transit the strait onto a new route. Erdogan argues that the new canal is essential to improving maritime safety and reducing vessel wait times, as well as accommodating expected growth in shipping demand.

The project’s detractors say that it would harm the marine environment in the Sea of Marmara, destroy some of the area’s last forest reserves, threaten Istanbul’s fresh water supply and heighten the risk of damage in the event of a major earthquake.

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