Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 02, No. 055

Enterprise plans to transport over 10 million tons

The Ethiopian Shipping and Logistics Services Enterprise (ESLSE) plans to transport over 10 million tons of shipment and cargo this fiscal year.
The enterprise plans to raise the bulk of transported goods from 8.3 million tons last year to 10 million tons this fiscal year” said Roba Megersa, CEO of ESLSE

Speaking of this year’s plan, he said while the enterprise will use its vessels to transport six million tons of goods, the remaining four million tons will be solely transported by leased vessels from other service providers.

In addition, the purchase of freight vehicles is already under process. Roba stated that there are plans to procure 240 freight vehicles this year with order already submitted for 38 vehicles.

To improve services rendered by the ESLSE, the enterprise has deployed a fully automated IT system. Accordingly, Mojo has been fully equipped with an IT system and has CCTV cameras. Two warehouses have also been constructed to unload and store cargo quickly instead of storing it at the port.

According to Roba, the Dire Dawa dry port that spans 34 hectares of land is expected to become operational this fiscal year. The construction of the dry port is said to have cost over two billion Birr.

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Ethiopia Approves Tariff Schedule for Africa Free Trade

Ethiopian officials have approved a list of products and services subject to customs tariff reductions under the African Continental Free Trade Agreement (AfCFTA).

Seven percent of the duty items are free of tariff cuts within six to 13 years, while the remaining 190 (three percent) are not up for negotiations. But this exclusive list is up for amendment every five years. Nearly 90pc of the 6,328 products available will be up for a gradual tariff removal within a decade.

No tariff reduction or removal will be applied on goods and services on which the country has no competitive advantage, according to the officials. This includes the financial sector and the retail market, both identified as areas with little comparative advantage for Ethiopia.

The items are selected based on their prospects for job creation, revenues generation, and contributions towards the country’s food security, according to Mussie Mindaye, director of Multilateral, Regional & Bilateral Trade Negotiation at the Ministry of Trade & Industry.

Items with high customs revenues are not up for negotiations, says Mamo Mihretu, chief trade negotiator and policy advisor at the Prime Minister`s Office.

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IATA Urges Ethiopian Government to Maintain Support for Aviation Sector

The International Air Transport Association (IATA) called on the government of Ethiopia to continue its focus on maintaining efficient air connectivity amid the COVID-19 crisis. This will place Ethiopia in a strong position to weather the crisis and speed up the eventual industry and economic recovery.

“We congratulate Ethiopia for the positive steps it has taken to promote travel and air service connectivity throughout the pandemic. This includes accepting vaccinated travelers without restrictions, managing the cost of PCR testing to ensure it is affordable, and implementing a testing regime that accepts both PCR and rapid antigen tests. These measures should put Ethiopia on a faster track to recovery, not just for air transport but across the economy,” said Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East.

Ethiopia is performing above the African continent’s average demand for air transport services and has made progress in the recovery.

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Ethiopia’s Transport Ministry, WFP Sign MoU

Ethiopia’s Ministry of Transport and World Food Program (WFP) have signed a Memorandum of Understanding (MoU) aiming at improving the transportation logistics in Ethiopia.

The collaborative agreement will include supporting research and technical capacity building in the sector.
Signing the MoU, Transport Minister Dagmawit Moges and WFP Country Director Steven Were Omamo have noted that further collaborations will be made.

The agreement would strengthen the Ten-Year Development Plan of the country, it was indicated.

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Port stay duration increases 11% globally

Port stay duration increases 11% globally

The median time spent by container vessels in port began to grow sharply in the second half of 2020, continuing into the first half of 2021.
In Issue 532 of the Sunday Spotlight, analysts Sea-Intelligence used data published by United Nations Conference on Trade and Development (UNCTAD) on port stays to shed light on the current bottleneck issues faced by the container shipping industry.

Calculations showed that the median time spent in port in first half of 2021 was higher by 11% compared to the pre-pandemic average time spent in port in 2018 and 2019.

Comparing this to the global demand data published by Container Trade Statistics (CTS) – which was up 5.5% over the same period – shows that the efficiency of the port calls themselves declined in 2021.

Increased e-commerce demand, in addition to tight inland capacity, warehousing storage facilities, and labour availability have all been highlighted by experts as prime drivers behind the soaring numbers of vessels waiting to access ports.

China recorded a 12% increase in the first half of 2021 vs 2018-2019, which is in line with the global average increase in the first half 2021.

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Vietnam’s Ports Set New Records Amidst Container Surge

Vietnam's Ports Set New Records Amidst Container Surge

Despite disruption from lockdown measures over the summer, Vietnam’s seaports have handled in excess of 537 million tons of goods in the first nine months of the year – a three percent year-on-year rise, according to new data released by the Vietnam Maritime Administration.

The country’s containerized cargo is mostly handled through major ports in southern Vietnam, and it maintained a double-digit growth rate of 15 percent compared to the same period last year, reaching 18.6 million TEU. Exports were estimated at 6 million TEU, an increase of 13 percent; imports at 6.1 million TEU, up 18 percent; and domestic goods at 6.3 million TEU.

Major seaports were severely affected when the Vietnamese government put the country’s southern region into lockdown in July. Most of the terminals in Ho Chi Minh City reported massive congestion as ships waited for berth space to open up. Nonetheless, the volume of goods that went through Ho Chi Minh City expanded by more than seven percent during the period.

Although container shipping is experiencing upheavals from COVID-19, cargo is moving in larger amounts than ever before. To some observers, the ongoing disruption in the container shipping market may simply be a part of the new normal.

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ESL Shipping’s Subsidiary Orders 6 Highly Efficient 5,350 DWT Hybrid Vessels Worth €70 Million

AtoB@C Shipping AB builds a series of six new, highly energy-efficient electric hybrid vessels. These new 1A ice class vessels are market leaders in terms of cargo capacity, technology, and innovation. The total investment value of the six ships is approximately 70 million euros. AtoB@C Shipping has the option to expand the order with several ships.

The greenhouse gas emissions, including CO2, per cargo unit transported will decrease by almost 50% compared to the existing ships, making the vessels the most efficient in the world in their class. The vessels’ battery packs, shore-side electricity solution and electric hybrid use enable completely emission-free and noise-free port calls. Ships can also arrive and leave the port with electric power only.

The new vessels will be built at Chowgule and Company Private Limited shipyard in India and will be delivered starting from the third quarter of 2023.

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Governments must relieve supply chain turmoil, says shipping boss

Governments must relieve supply chain turmoil, says shipping boss

The head of one of Asia’s biggest ocean shipping companies has warned that governments may need to intervene to “restore order” to a global logistics market tormented by chronic delays, supply chain disruption and record container rates.

In the US, the Biden administration has exerted pressure on the ports of Los Angeles and Long Beach in California, the country’s main gateways for trade with China, to extend gate hours for trucks to pick up cargo in an attempt to alleviate vessel congestion.

Last week, the ports announced that following consultations with the US transport department, the port of Long Beach would trial 24-hour operations, while Los Angeles would extend night-time weekend hours.

Port closures caused by outbreaks of new Covid variants, supply bottlenecks and driver shortages have contributed to a tight operating environment. Container rates hit an all-time high of $11,109 in mid-September, after having fallen below $1,500 at the start of the pandemic, according to data provider Freightos.

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