Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 02, No. 072

Economic Operators to Get More Privileges

A new bill finalized by the Ethiopian Customs Commission bestows Authorized Economic Operators (AEOs) with a single window service aimed at revamping privileges provided to AEOs.

The bill allows AEOs to get a centralized service from a new department to be established under the Commission and dedicated only to facilitate service provision to the Operators. The Operators will get bank permits, customs services, security services, railway, and road transport documentations both from the Ethiopian and Djibouti side, at a one-stop window.

Other institutions that provide services for the Operators, including tax authorities, trade and investments, will also open their office at the single window service provision, to be launched under the auspices of the Ethiopian Customs Commission.

The Commission has sent the draft bill to the Ministry of Finance for a further review, with the regulation expected to be approved by the Council of Ministers soon.

AEOs are importers, exporters, industries and corporations, which are usually first-tier taxpayers and include big employers believed to have a significant impact on the national economy. AEOs have their own custom warehouses.

The Operators containers and cargos will have the privilege to drive through custom checkpoints without stopping. This would enable them avoid hectic procedures, leading to ease of doing business.

According to Azezew Chanie, deputy commissioner for operations with the Commission, the Commission is also working to improve the legal framework that will help streamline service provision.

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Ministry Permits Import of Basic Food Items On Franco-Valuta Basis

The Ministry of Finance has announced a decision that allows importers of basic food items such as oil, wheat, sugar, baby milk and rice to directly import the foodstuffs through the Customs Commission without waiting for foreign exchange permits.

In a statement, the Ministry said that the decision came at a time when Ethiopians in diaspora with foreign residency permits are calling on the government to expedite Franco Valuta’s licenses so that they can contribute their part in addressing current inflation.

The Ministry announced importers are allowed to use Franco-Valuta privileges while bringing in the basic foodstuffs listed in the statement.

Regarding taxes, activities will be carried out pursuant to the letter dated 22/3/2013 E.C by the Ministry of Finance No. 30/7/51 as concerned authorities will strictly monitor and control the implementation of the Franco-Valuta based import process, according to the Ministry.

It is to be recalled that last year in April Ethiopia had already allowed individuals with US$250,000 to use Franco-Valuta to import basic food items such as edible oil, wheat, rice, milk and flour by verifying the source of the foreign currency with the National Bank.

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Kenya Expresses Keenness to Work With Ethiopia in Blue Economy

Kenya is keen to work with Ethiopia to sustainably utilize the potential of blue economy to expedite the national development of the two countries, the Kenyan Blue Economy Sector coordinator Dr. Francis O. Owino said.

The blue economy is the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem, according to the World Bank.

According to information obtained from Transport and Logistics Ministry, activities are being carried out by Ethiopia to utilize the blue economic sector.

Even if Ethiopia is a landlocked country, it is taking advantage of the blue economy as a good opportunity in line with the country’s transport and logistics policy as well as other strategies.

Blue Economy is also among the main strategic focus areas of Ethiopia’s ten-year economic perspective plan.

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China’s Rules Leave Shipment Stranded

Undisclosed amounts of oilseeds that were transported to China change course for a voyage back to the country owing to the new law imposed by the most populous nation in the world and the major trading partner of Ethiopia.

Gebremeskel Chala, Minister of Trade and Regional Integration (MoTRI) explained that as per the declaration that China issued late last year, the agricultural products that enter the country through its borders from different countries ought to have the pass requirement that it introduced.

He said that the declaration of the fast growing economy country had designed agricultural commodities like oilseeds and pulses, which are Ethiopia’s major export commodities to China, to have certain requirements in which need to fulfill. The requirements highlighted that exporters should have their own processing facilities and required standards registration number to get a permit.

“We have a significant number of exporters, while those who meet the criteria are very few. Those who have their own processing facilities are not more than 40,” he explained.

“Without our knowledge of the new standard set by the Far East country, the sesame seeds started the voyage to China, but when the new declaration was received, the consignment was made to return to Ethiopia,” he explained how the scenario unfolded.

He said that in the sated period the government and other importers, who allowed supply by using the diaspora account or franco-valuta schemes, imported 481 million liters of edible oil, 8.37 million quintal of sugar, 4.98 million quintal of rice, and 687,500 quintal pasta and macaroni.

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ESLSE Makes Moves to Support Perishable Cargo

The Ethiopian Shipping and Logistics Services Enterprise (ESLSE) is gearing up to procure its own reefer containers for the first time with the aim of aligning with the growing interest in shorter shelf-life commodity consignment via vessels.
Ethiopian Horticulture Producer and Exporters Association (EHPEA) welcomes the move that would make its members more competitive in the global market.

The public logistics giant that is currently using leased reefer containers for commodities mostly that are at the trial stage, has floated an international bid for suppliers to purchase 31 40 feet MGSS reefer containers.

The consignment of reefer cargo is limited in Ethiopia to which experts said that Freighters International, one of the well-known private logistics companies in Ethiopia and has long-term agent partnership with the leading containerized cargo operator of Danish-based Maersk, is stated as operating in the sector.

The consignment of perishable cargos through vessels is highly recommended since it has a competitive advantage in the global market. The issue has been frequently raised by Ethiopian fresh producers and exporters like fruit and vegetable sector actors.

Experts said that using vessels means a less costly mode of transport besides enabling to manage the shipment of bigger size of cargo other than airfreight. They added that cool logistics investments, by drastically reducing transport costs and lead times, can unlock Ethiopia’s perishable industry.
Ethiopia is working to strengthen the cool logistics corridor that links farms with dry ports and railway network system up to sea port at Djibouti. The cool supply chain at Mojo is part of the new initiative.

ESLSE has also expanded its container ownership from about 3,000 to close to 14,000 different sizes of containers in a very short period.

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Container Ship Order Book Hits 6.5mn TEU, 1st Time Since 2008

Container ship orderbook is now 26 percent of the fleet size for the first time since 2014, and, combined with year-to-date (YTD) 2022 deliveries, 6.2 million TEU are now scheduled to be delivered during 2022-2024. “In addition to the newbuilding deliveries, we must expect that congestion problems around the world will eventually begin to ease,” says Niels Rasmussen, Chief Shipping Analyst, BIMCO. “This could release as much as 2 million TEU effective supply on top of newbuilding deliveries, and the total additional supply appears to be on target to exceed 8 million TEU between early 2022 and early 2025, representing 33 percent of the current fleet size in just three years.”

The container ship orderbook hit a post-financial crisis low just below 2 million TEU in October 2020. “In the eighteen months since then, liner operators have seen record profits and a large percentage of these have been poured into new building contracts. In just eighteen months, 6 million TEU of new building contracts have been added to the container ship orderbook,” says Rasmussen. “This has taken the orderbook past 6.5 million TEU for the first time since late 2008.”

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Maersk Air Cargo Launches

Maersk Air Cargo Launches

A.P. Moller-Maersk has decided to heap its aviation offerings into a new brand, Maersk Air Cargo, folding the Star Air branding in the process.

At the same time Maersk has choosen Denmark’s second largest airport, Billund, as its air freight hub for Maersk Air Cargo.

It will allow us to offer customers a truly unique combination of air freight integrated with other transport modes Maersk Air Cargo will progressively deploy and operate a controlled capacity of five aircraft – two new B777F and three leased B767-300 cargo aircraft. Three new B767-300 freighters will also be added to the US-China operation, which will be initially handled by a third-party operator. The new aircraft are expected to be operational from second half 2022 and onwards up to 2024.

Maersk’s ambition is to have approximately one third of its annual air tonnage carried within its own controlled freight network. This will be achieved through a combination of owned and leased aircraft, replicating the structure that the company has within its ocean fleet. The remaining capacity will be provided by strategic commercial carriers and charter flight operators.

Maersk Air Cargo is expected to be fully operational as of the second half of 2022 and comes at a time when other cash-rich liners, notably France’s CMA CGM, are also strengthening their air cargo offerings.

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