Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 01, No. 047

Shipping Enterprise Gives Waiver to Importers

Shipping Enterprise Gives Waiver to Importers

Local importers have begun receiving waivers from the Ethiopian Shipping & Logistics Services Enterprise (ESLSE), allowing them to use other shipping companies to transport their goods from ports in China.

After months of uncertainty due to the global shortage of shipping containers, the move enables importers to bring their goods in from the Far East nation, the source of a fourth of Ethiopia’s imports.

Strict COVID-19 lockdowns in the global west and south meant that containers were not offloaded and loaded at the usual pace, creating disruptive shortages. Because of a directive making the Enterprise the only option for importers, they have had no choice but to wait months for their goods to be picked up while enduring staggering surges in transportation costs, a state of affairs that is creating fears of a critical shortage of imported goods in the months ahead.

The Enterprise only permitted importers to use other shipping companies in the rare case that their goods were moving from ports where its ships do not dock or where it has no agents present. Though it targeted to transport 170,000 containers last year, the Enterprise only managed to move 150,000, with more than 13,000 containers currently stranded in Chinese ports.

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Logistics Improvement Saved 1.5 billion Birr, Says Transport Minister

The measures taken to improve the logistics services during the concluded budget year have helped save 1.5 billion Birr, according to Ministry of Transport. It is believed that the transport and logistics service have a significant role in lifting the country out of poverty. Accordingly, a National Logistics Council was established early in the budget year to improve the challenges in the sector.

Transport Minister Dagmawit Moges told that, exports costed the country huge amount of foreign currency as they were sealed in containers at ports. She added that the unnecessary cost is now reduced because almost 90 percent sealing of goods has been made within the country. Furthermore, the minister pointed out that works have been underway to upgrade the Dikil-Dagur 100 km road, which is part of the Djibouti-Galafi road.

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ESLSE strategizes to lift containers from congested Chinese ports

The Ethiopian Shipping and Logistics Services Enterprise (ESLSE) announced that it is working to manage the containerized consignment challenges under short and midterm plans. Half a billion-birr worth of new containers have been procured.

The logistics giant that is in challenges on the global phenomenon of cargo boxes shortage stated that meanwhile the problem is still not easing on ESLSE, it has enabled to ship 150,000 containerized cargos in the 2020/21 budget year that ended on July 7.

ESLSE is currently looking to buy more boxes to solve the challenge that is expected tom be prolonged for more years on the midterm strategy.
“If we buy containers and at the same time transport cargos to our destination it would make us profitable. At the same time, we shall have additional containers,” Roba Megersa CEO of ESLSE says, adding, “when it is also compared with the current rates of leasing space on other companies; transporting cargos with our new containers would make us profitable, due to that we are working to buy more containers.”

Under the revised strategy, ESLSE has targeted to own 10,000 containers, “if our boxes are increased, we shall assign our vessels to lift cargos that would be congested in different ports.”

Weeks ago, the logistics giant has procured 1,000 twenty-foot equivalent units (TEUs) and 2,000 forty feet containers on swift approach following the failure of frequent attempt to buy the box for the past over a year on formal bidding processes.

Before the latest, adding ESLSE had about 2,940 containers with two common sizes of TEU or forty feet; of which 2,398 TEUs, 184 forty feet high cube (HCs) and 358 forty feet general purpose (GPs) containers.

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Ethiopian Transports More than 30 million Doses of Vaccine

Ethiopian Transports More than 30 million Doses of Vaccine

Ethiopian Cargo and Logistics Services has made all the necessary preparations with all required capabilities to transport COVID-19 vaccine across the globe.

So far, the airline transported more than 30 million doses of vaccine to more than 24 countries, according to the Ethiopian Airlines.

The airline transports the vaccines using its state-of-the-art Cargo terminal that has a cold storage facility of 54,000sqm with compartmentalized different temperature ranges and real-time temperature monitoring system.

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Commission to Give Importers Access to Duty Valuation Process

The Ethiopian Customs Commission (ECC) has decided to give importers access to its price valuation database, for long a source of dispute between its officers and the business community. This will be a departure from a long-held practice whereby importers are informed about the duty rate they pay without reviewing the valuation process.

The existing digital valuation system, which has been in use for the past eight years, was developed by an Indian state-owned software company, the Centre for Development of Advanced Computing (C-DAC). Many inside and outside the Commission fault it for a range of drawbacks, despite the Commission’s spending of 3.5 million Br. Its technical team could not give support service when the system gets down; it has flaws in service delivery and decision making.

Customs officers were expected to search for products in a database that contains information about millions of goods, with the system not being fully digital. It is not equipped with automated analytics, leaving customs officers the option of exporting data to excel documents and carry out manual computations, says Azezew Chane, deputy head of the Commission.

Officials of the Commission hope to see the new system address these issues, besides offering importers access to view the valuation process on goods they bring into the domestic market and observe how the valuation is computed. The system has incorporated an appeal mechanism when importers have complaints on the process, officials disclosed.

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Ethiopia’s use of alternative ports not only supports economy but also strengthens regional integration – Dagmawit Moges, Minister-Ministry of Transport

Ethiopias Use of Berbera Port and its Regional Implications

Ethiopia’s use of alternative ports not only supports economy but also strengthens regional integrationsaid W/ro Dagmawit Moges, Minister-Ministry of Transport. According to W/ro Dagmawit, Ethiopia is expanding its opportunities to use alternative ports. She said Ethiopia is also using the ports of Tadjoura, Berbera and Port Sudan in addition to the ports of Djibouti. Due to the growing transaction of import and export goods, there is a need to use an additional port to and conditions are being set for the use of Lamu port, said Dagmawit.

“More than 700,000 tons of coal and more than 200,000 tons of cargo were imported through the port of Tadjoura within this year, shortening the time spent on the port of Djibouti. This shows the country’s ability of using alternative ports will increase its economic benefits. It also will reduce the cost and facilitate the use of development,” said the Minister.

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Ethiopia’s Use of Berbera Port and its Regional Implications

Following Eritrea’s independence, Ethiopia has stopped using the ports of Massawa and Assab. It has been 30 years since Ethiopia, with a population of over 100 million, lost its seaport and could not breathe.

Landlocked Ethiopia has been importing more than 90 percent of its imports directly through Djibouti.

The government has stated that it is working to use additional ports to import Ethiopia’s exports from other ports in addition to the port of Djibouti. Accordingly, the government is making efforts to use additional ports, such as Berbera, Sudan, Lamu and other ports.

The port of Berbera, which is said to be equipped with modern cranes, is now in operation; Ethiopia has a 19 percent stake in this port; The first Ethiopian ship, Gibe, also arrived at the port of Berbera with a cargo. According to economists and politicians, the port is important for a country to be strong.

International Relations and Diplomacy Instructor said Ethiopia’s use of Berbera port will ensure its economic security. Ethiopia’s use of the port of Berbera will reduce the cost of goods, eliminate unnecessary bureaucracies and facilitate trade.” According to the instructor.

The port of Berbera will play an important role in the continuation of Ethiopia, Somaliland and the United Arab Emirates as a geospatial partner. Ethiopia’s use of Berbera port will speed up trade and reduce unnecessary costs

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AfCFTA Prosperity Requires More African Seafarers, Ships and Ports

AfCFTA Prosperity Requires More African Seafarers Ships and Ports

Trading under the African Continental Free Trade Area (AfCFTA) agreement started on 1 January 2021, a significant milestone for Africa’s political and economic aspirations. The deal created an enormous single market, uniting 1.2 billion people across 54 states with a combined GDP of US$3.4 trillion.

The standard expectation would be that AfCFTA trading – taking place on a continent of few islands and many landlocked states – would happen mostly by rail, road or plane. Africa’s maritime industries and actors will be vital in achieving this outcome, as sea transport offers the cheapest and fastest way of moving the largest quantity of goods across long distances. Even for Africa’s landlocked countries, trade depends primarily on maritime gateways.

Reaching an Africa-wide consensus on such a complicated matter is an essential first step. The World Bank estimates that AfCFTA could boost continental income by up to US$450 billion, and lift close to 30 million people out of extreme poverty. Yet the success and results of the initiative depend entirely on African states’ ability to increase the efficiency, capacity and safety of their maritime transport systems.

African decision makers must prioritize the expansion and improvement of the continent’s maritime transport infrastructure, which struggles to deal with the current level of import and export. The development of port infrastructure in most African countries lags behind the rest of the world – only three African ports are featured on the 2020 list of top 100 global container ports.

African states with better developed maritime trade capacity and infrastructure will benefit more from the free trade deal. The African Union recognized this in its 2050 Africa’s Integrated Maritime Strategy and the Revised African Maritime Transport Charter. Both require complementary implementation to support AfCFTA goals.

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