Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter, Vol. 02, No. 076

EFFSAA Held Talks With KPA

EFFSAA & KPA
EFFSAA & KPA

Ethiopian Freight Forwarders and Shipping Agents Association (EFFSAA) held talks with Kenya Ports Authority (KPA).

EFFSAA was one of the Ethiopian logistics stakeholders who was chosen for a discussion with KPA’s delegation during their official visit to Ethiopia along with other stakeholders like Ethiopian Maritime Authority, Ethiopian Shipping and Logistics Services Enterprise, Ethiopian Railways Corporation, Ethiopian Chamber of Commerce and Sectoral Association, and Ethiopian Transporters Association.

The two entities had a vibrant discussion on various topics at the conference hall of the Association. The delegation of KPA mainly explained the expansion works at the Port of Lamu and offered the use of alternative ports to the Ethiopian counterpart. EFFSAA team on the other side briefed the activities of Ethiopia’s Logistics sector and its engagements in the country’s Logistics industry.

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YLP Award 2022 Participants Recognized.

Kidist Receiving her Award
Kidist Receiving her Award

Ethiopian Freight Forwarders and Shipping Agents Association (EFFSAA) presented Certificate of Participation and Memento to Kidst Abebe on behalf of FIATA and TT Club. The certificate and momento were sent by the award organizers in recognition of the 2022 Young Logistics Professionals Award participants.

The Young International Freight Forwarder of the Year Award was started in 1999 by FIATA and TT Club. In 2021, the TT Club and FIATA agreed to change the name of the “Young International Freight Forwarder of the Year Award” (YIFFYA) to the “Young Logistics Professionals Award” (YLP Award), to reflect the fact that all young talents of the industry are welcome to take part in the competition, regardless of their specialization.

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Ethio-Djibouti Railway Becomes a Game-Changer

Ethio-Djibouti Railway Becomes a Game-Changer
Ethio-Djibouti Railway Becomes a Game-Changer

Ethio-Djibouti Railway (EDR) embarks on an ecofriendly vehicle cargo transporting operation. In a single voyage the company which is jointly owned by Ethiopia and Djibouti has the capacity to move 240 vehicles to the centre.

In the past few months relevant offices and logistics companies of the two countries have been working to introduce vehicle freights through the cross country electrified railway system.

EDR has 20 wagons that can transport about 240 vehicles in a single fleet. According to the CEO, a single wagon can carry up to 14 vehicles and the number depends on the size of the vehicles.

Although dependent on the size of the cargo cars, the vehicles shipment capacity of EDR on average is about 24 folds of car carrier trucks on its single fleet.

In the ended budget year, the joint company registered a marvelous achievement despite constrains on the logistics sector.
For instance, according to the CEO Abdi Zenebe, from the total coffee consignment in the 2021/22 budget year, 98 percent have been stuffed and shipped through the EDR line.

“Containerizing the commodity locally has allowed the country to save USD 2.07 million in foreign currency besides job creation in the stuffing operation,” he explained.

If the commodities were to be stuffed outside the country, which is mostly done at the port area, it may cost USD 108 per container.

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Shipping Enterprise Accuses Public Offices, Traders of Hoarding Containers

Executives of the Ethiopian Shipping and Logistics Services Enterprise (ESLSE) blamed public offices and private businesses for hoarding containers, a situation that has disrupted the timely transportation of shipments.

It is a problem caused by the global shortage of containers, which forced local businesses to get involved in hoarding activities, fearing they will not get a container when they ship items. Exporters, in particular, were unable to ship commodities because of a critical shortage of containers.

The Enterprise tried to discourage hoarding and the use of containers as storage facilities by introducing disincentives.

Container guarantee deposits saw an increase of as much as 66percent. The Enterprise also cut container return periods for importers by five days, shortening the grace period by three days. It was in response to what the Enterprise executives said was “importers’ reluctance to offload cargo and return leased containers on time.” The guarantee deposit for 20-foot containers has increased by 50 percent to 15,000 birr, while the guarantee deposit for 40-foot containers has increased by 75 percent to 25,000 birr.

The Enterprise, which made over 5.6 billion birr profit before tax in the preceding fiscal year, has been hampered by a shortage of cargo containers, even though it has procured thousands of new containers to expand its operation over the period.

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MassDel Set To Transform Freight Transport

A modern freight platform called ‘MassDel Technology’ joins the market with an aim to bolster the transport sector.

“MassDel is a platform that facilitates bookings between shippers that need to transport goods, and carriers with available loads. Contrary to traditional freight brokers that still rely on manual processes such as telephone, email or personal contacts, MassDel utilizes software to automatically match shippers and carriers,” explained Tewabe Yilak, MassDel’s Digital Technology General Manager.

“We have started our operation in Addis Ababa and plan to serve other larger cities in Ethiopia and abroad,” he further said.

The system will cover areas where the existing vehicles have not been addressed via applying digital technology and offering more transparent, convenient and efficient services via breaking constraints created in due course of service delivery.

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Cross Trade Proves Vital as ESLSE Records Top Notch Results

Ethiopian vessels make a mark on cross trade services amplifying the performance of the Ethiopian Shipping and Logistics Services Enterprise (ESLSE), a sole flag carrier in Africa.

Despite some of the expected incoming cargos like rebar and coal showing reduction in the budget year as well as some of the import cargos sourced from Djibouti International Free Trade Zone, the state owned mammoth logistics service provider managed 7.2 million metric tons of import/export cargos in the 2021/22 budget year that closed on July 7.

In the budget year, the vessels that were operated by ESLSE were in good condition to carry out cabotage services for cargos in neighboring African ports.

Roba Megersa, CEO of ESLSE, said that through the cabotage operation package, the export cargos from Massawa, Eritrea, and containerized cargo from Djibouti itself have been transported by ESLSE vessels.

“Our vessels have regular service for bulk and containerized import cargos to Somaliland, at the same time we have started services at Mombasa to connect the Kenyan port to other destinations and similarly the service has expanded to other ports in Tanzania and South Africa and occasionally to western Africa,” the CEO explained.

Currently, ESLSE operates 11 vessels and nine of them, which included two tankers, were built about 12 years ago and financially backed by the Chinese EXIM bank having consumed USD 234 million.

The nine multipurpose vessels, ‘Handysize’, including the two relatively oldest one that Ethiopia operates, now have a capacity of about 28,000 dwt.

Recently, ESLSE’s board has approved the procurement of two more ‘supramax bulk carrier’ that will have a capacity of 63,000 dwt.

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Berbera Port Upgrade Raises Somaliland’s Hopes For Trade

Berbera Port Upgrade Raises Somaliland’s Hopes For Trade
Berbera Port Upgrade Raises Somaliland’s Hopes For Trade

Lined up alongside the quay are the latest crane models, which have become operational since June 2022. DP World employees practise operating the cranes every day. The hope is that the port will attract 500,000 TEU (unit of cargo capacity) per year, about one third of the capacity of neighbouring Doraleh port in Djibouti. This would allow Somaliland to become a logistical hub on the Gulf of Aden competing with other ports in the region such as Djibouti, Mogadishu and Mombasa.

The cranes are crucial for the speedy handling of cargo required in a modern port. The staff training, however, takes place in a port that is yet to get busy. So far, container ships arrive only infrequently.

We have been studying the Horn of Africa’s emerging port infrastructures. The boost that the revamped Berbera port needs is for Ethiopia to come to the party. Ethiopia has been landlocked since Eritrea gained independence in 1993, and relies on the port of Djibouti – 95% of its trade goes through the port.

In 2017, a concession agreement was signed between DP World, Ethiopia, and the government of Somaliland to rebuild and modernise the port of Berbera. The 30-year concession involves: a commercial port, a free zone, a corridor from Berbera to Ethiopia’s borders, and an airport in Berbera.

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