Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 02, No. 056

EFFSAA Commenced the 5th Evening Session of FIATA Diploma Training.

EFFSAA has started the 10th round and the 5th evening session of the internationally accredited FIATA Diploma training program on Tuesday 5th of October 2021. 30 professionals with different academic background are participating on this program.

Prior to the newly commenced program, EFFSAA began delivering the 9th round FIATA Diploma program on weekends basis. The ongoing program which started on June 25, 2021 has 25 trainees from various organizations. The 9th round and the 3rd weekend training program already finalized three training modules and, on the way, to begin the 4th one very soon.

The Association is currently delivering the programs by keeping all the COVID-19 prevention protocols set by FDRE Ministry of Health.
It is to be recalled that, EFFSAA has graduated more than 180 professionals by FIATA Diploma who trained in different rounds since the program was commenced in 2018.

Since it was first introduced in 1996, the FIATA diploma has become recognized throughout the world as recognition of the overall competence of the holder in all fields of freight forwarding.

EFFSAA is among the very few FIATA members found in Africa which is accredited to deliver the training program. The course material is timely and highly relevant. And also, content and delivery of the material is regularly validated by FIATA.

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Council Approves FoB Directive to Improve Logistics Sector’s Efficiency

The National Logistic Council has approved a new Free on Board (FoB) Directive in a bid to improve efficiency of Ethiopia’s Logistics sector.
The Council, established earlier this year to resolve challenges in the sector, held its meeting on Thursday to discuss the ongoing efforts to transform the sector.

“In a continued effort to transform Ethiopia’s logistics sector, our session of logistics council meeting highlighted on efforts carried out in breaking the monopoly of multimodal operators & allowing to have upto 5 operators thereby encouraging competition & improving efficiency,” said transport minister Dagmawit Moges after the meeting. The council also ratified the FoB Directive which will improve the logistics sector, Dagmawit said. The move would improve the sector’s efficiency “benefiting our country’s economy and enabling us to attain our improved Logistics Performance Index (LPI) target”, she added.

The LPI is an interactive benchmarking tool created by the World Bank to help countries identify the challenges and opportunities they face in their performance on trade logistics.

The index, which takes into account factors such as including logistics competence and skills, the quality of trade-related infrastructure, the price of international shipments, and the frequency with which shipments reach their destination on time, helps governments benchmark their progress over time and in comparison, to similar countries.

Germany is the most efficient and highest ranked LPI country while Ethiopia is ranked 131 out of 167 countries as per the aggregated LIP 2012-2018.

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Shipping Enterprise to Acquire New Vessel, Financing Remains Unsecured

The state-owned Ethiopian Shipping & Logistics Services Enterprise (ESLSE) is one step closer to acquire two cargo ships, though it is yet to secure financing to commission the ship-build.

The acquisition has coincided with a global logistics crisis precipitated by the COVID-19 pandemic, leading to a surge in shipping prices and the cost of containers. The decision to add vessels to its fleet was made when prices for cargo ships went through the roof.

The Enterprise wants to acquire two vessels with a load capacity of 65,000tn each.

Industry insiders are doubtful whether the new vessels will provide relief for the Enterprise. The ships to be commissioned for building will not be delivered for at least a year, as a shipyard can take up to 13 months to build large dry-cargo vessels.

Fitsum Mengesha, deputy manager of Samatra Logistics & Shipping Plc, a freight forwarder operating for nearly three decades, welcomed the decision to acquire the vessels but does not see it as a solution for the crisis haunting industry.

“It would take years to see the change that the acquisition could bring,” he said.

Fitsum Tilahun, an expert in logistics, sees no end in sight for the problems plaguing the industry unless private operators join the logistics sector. He argues the only dependable solution would be to allow the private sector to get involved, ending the state monopoly on shipping.

“Procurements alone won’t do much to ease the problems,” he said.

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Ministry Ends Age-Old Logistics Monopoly Partially

The state monopoly over the logistics sector will end soon, with federal authorities allowing up to five private operators to be involved in moving cargo shipments under the Free on Board (FoB) shipping terms.

Approved by the National Logistics Council, the decision will repeal the age-old provision in the logistics sector whereby importers were limited to using the state-owned Ethiopian Shipping & Logistics Services Enterprise (ESLSE) under Free on Board (FOB) shipping terms. However, experts see this move not as full liberalization but broadening the number of players from hegemony.

The Logistics Council, a 10-member body comprising officials from the central bank and Investment and Customs commissions, hopes the move will stimulate the country’s logistics industry and cut back on foreign currency expenditures for shipping.

“Allowing up to five operators will encourage competition and improve efficiency,” said Dagmawit Moges, minister of Transport & Logistics.
A maritime trade expert disagrees.

“They`ve simply expanded the multimodal operator from one to five, hardly a liberalization move,” he said. “And they want forwarders to do the business, contrary to the whole concept of multimodal.”

What Ethiopian authorities say is that “bring the cargo to Djibouti and one of the five companies we license will carry the containers up to Modjo”, which is not liberalization, the expert observes.

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We’re partnering with DP World to chart a stronger course for African trade around the world

DP World, a world leader in global supply chain solutions, and CDC Group, the UK’s development finance institution and impact investor, are entering into a long-term partnership to accelerate Africa’s long-term trade potential and transform the prospects of millions of people.

Africa has a sixth of the world’s population, but accounts for just 4 per cent of global containerized shipping volumes[i]. Ports are vital to the long-term prosperity and wellbeing of people. But many ports and logistics facilities in Africa remain constrained, lacking in capacity to meet the needs of local economies.

This partnership, which has been worked towards for four years, will help change that. It will help address the stark imbalance in global trade through supporting the modernization and expansion of ports and inland logistics across Africa, starting in the ports of Dakar (Senegal), Sokhna (Egypt) and Berbera (Somaliland). The platform covers a long-term investment period. DP World is contributing its stakes in the three existing ports initially and expects to invest a further $1 billion through the platform over the next several years. CDC is committing approximately $320 million initially and expects to invest up to a further $400 million over the next several years. The transaction is subject to certain final regulatory approvals.

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