Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 02, No. 069

Ethio-Djibouti Logistics Giants Ink Deals To Launch ‘Sea-Air’ Logistics

The four cemented their agreements on a ceremony in Djibouti to harness the multimodal operation, ‘sea-air’ logistics.

Djibouti Ports and Free Zones Authority (DPFZA) stated that the signing agreements will implement fully operational ‘sea-air’ logistics following various pilot operations. “This will include Djibouti as not only a business hub but also as a major actor in regional integration through an innovative multimodal transport system.”

During the ceremony International Djibouti Industrial Park Operation (IDIPO) which is the managing company of Djibouti International Free Trade Zone (DIFTZ), and SGTD signed on sea-air freight cooperation, while IDIPO, Ethiopian Airlines and Air Djibouti penned tripartite service level agreements. In addition, IDIPO and Ethiopian Airlines further inked on air freight service agreements.

Aboubaker Omar Hadi, Chairman of DPFZA, appreciated the four companies’ success during the trial period. He expressed that this achievement constitutes the ultimate step towards the implementation of a fully geared sea-air logistics model and should be noted as another milestone to bolster regional integration.

He added that sea-air logistics model is a game changer for the trade between Africa and the rest of the world in general, and Africa and Asia in particular. Djibouti’s geographical location gives her a key competitive advantage to become an efficient sea-air logistics center.

According to the Chairman, the advantage of the sea-air logistics is that it allows customers to manage their supply chains more cost-effectively and efficiently, offering a 50 percent faster service comparing to sea freight and 50 percent cheaper when compared to standard airfreight.

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Ethiopian Airlines Orders Five 777-8 Freighters

Ethiopian Airlines Orders Five 777-8 Freighters

Ethiopian Airlines has added another five 777 freighters to its existing nine strong fleet with an MoU signed with Boeing. The deal for the five 777-8 variants will enable Ethiopian to meet expanding global cargo demand from its hub in Addis Ababa and position the carrier for long-term sustainable growth, the OEM said.

This makes us join select group of launch customer airlines for the fleet,” said CEO Ethiopian group chief executive Tewolde Gebremariam. “In our vision 2035, we are planning to expand our cargo and logistics business to be one of the largest global multimodal logistics provider in all continents. To this effect we are increasing our dedicated freighter fleet with the latest technology, fuel efficient and environment-friendly airplanes of the 21st century.”
“The new 777-8 Freighters will be instrumental in this long journey of growth agenda. Today, our air cargo services cover more than 120 international destinations around the world with both belly-hold capacity and dedicated freighter services.”

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Maersk to Buy 730,000 Tonnes/Year Green Methanol from 6 Companies

Danish carrier A.P.Moller-Maersk (Maersk), to boost the global production capacity of green methanol, has signed strategic partnerships with six companies to source at least 730,000 tonnes/year by the end of 2025. The six companies are CIMC ENRIC, European Energy, Green Technology Bank, Orsted, Proman, and WasteFuel.

“To transition towards decarbonisation, we need a significant and timely acceleration in the production of green fuels,” says Henriette Hallberg Thygesen, CEO, Fleet & Strategic Brands, Maersk. “Green methanol is the only market-ready and scalable available solution today for shipping.

Production must be increased through collaboration across the ecosystem and around the world. That is why these partnerships mark an important milestone to get the transition to green energy underway.”

With this production capacity, by the end of 2025 at the latest, Maersk will reach well beyond the green methanol needed for the first 12 green container vessels currently on order, the statement added.

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CMA CGM Completes First Ship-To-Ship LNG Bunkering

French carrier CMA CGM and Shanghai International Port Group Company (SIPG) successfully completed liquified natural gas (LNG) bunkering of CMA CGM SYMI, a 15,000 TEU LNG-powered containership. “The vessel, deployed on the PRX line connecting China and the U.S., was refuelled with LNG at Yangshan Port. Haigang Weilai, a new 20,000 m3 LNG bunker barge deployed by SIPG, provided CMA CGM SYMI with LNG by means of a ship-to-ship transfer while the containership carried out cargo operations,” according to an official statement from CMA CGM.

SIPG will provide LNG bunkering service for CMA CGM’s vessels sailing from China to the U.S. for 10 years at Yangshan port, according to an agreement signed between CMA CGM and SIPG in January, the first of its kind in China. “With the completion of this joint project, our group is the first shipping line to bunker LNG in China, and the first to offer full LNG-fuelled container service between China and the U.S. West Coast,” says Rodolphe Saadé, Chairman and CEO, CMA CGM Group.

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Big Carriers Get Significant Tonnage Tax Advantage

Shipping companies have the opportunity to be taxed in accordance with tonnage tax regulations i.e. pay a fixed amount of tax per tonne deployed.

This means pre-tax income does not matter – even if you lose money, you have to pay tax. “However, if you are suddenly extremely profitable, like with the carriers in 2021, you get a competitive edge versus carriers that cannot avail of tonnage tax,” says Sea-Intelligence in its update.

Three large carriers (Maersk, Hapag-Lloyd, and CMA CGM) fall under the tonnage tax rules, and have a tax rate of 0.7-3.7 percent while ZIM and Matson do not and have a higher tax rate of 18-21 percent. “Looking at the three larger carriers against the average tax rate paid per TEU across these three carriers, we found that Maersk had a tax disadvantage of $10.3/TEU, CMA CGM was mainly neutral, and Hapag-Lloyd had a tax advantage of $10.7/TEU.

This translated into a tax disadvantage of $269 million for Maersk, a $10 million disadvantage for CMA CGM, and a $127 million advantage for Hapag-Lloyd.”

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