Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter Vol. 02 No. 104

Ethiopian CEO Hits Out at Price Gouging in Ailing Aviation Spare Parts Supply Chain

The CEO of the Ethiopian Airlines Group says a shortage of spare parts for aircraft maintenance and “unethical business practices” in the supply chain have forced the flag carrier to ground part of its fleet.

The CEO told local media last month that at least three Ethiopian Airlines jets are grounded while the carrier awaits the delivery of engine parts. The unavailability of parts, delays in delivery, and price gouging are among the problems facing the airline, according to Mesfin.

Ethiopian operates a fleet of close to 150 modern jets from Boeing, Airbus, and Bombardier Aviation. Last month, it struck a USD 11 billion deal that could see the carrier acquire nearly two dozen B777-9 aircraft from Boeing over the coming decade.

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ESL Sets Sail Toward Expansion With New Ultramax Vessels

ESL Sets Sail Toward Expansion With New Ultramax Vessels
ESL Sets Sail Toward Expansion With New Ultramax Vessels

The Ethiopian Shipping and Logistics (ESL) has renewed hopes for building two additional ships at the Chinese shipyard after the relevant authority approved the initial investment.

The procedure has taken longer, even though the National Bank of Ethiopia (NBE) approved the request to get foreign currency in order to purchase two enormous, brand-new vessels.

The company, which presently operates nine bulk carriers in addition to a recently acquired used ultramax, a midsize vessel, has been working on a proposal to purchase two vessels in order to increase the scope of its maritime freight business.

The state-owned logistics behemoth, ESL, has been expanding its fleet of ultramax ships.

In an effort to grow its maritime industry, which includes the profitable cross-trade service, a crucial market niche for producing hard currency, ESL has made the decision to add more ships to its fleet, which was previously mostly made up of handysize ships.

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Ethiopian Seafarers Contribute $50m Annually in Remittances

Ethiopian Maritime Authority disclosed 50 million dollars in annual remittances from seafarers deployed internationally. Abdulber Shemsu, the director general of the Authority, said Ethiopia’s membership in the International Maritime Organisation (IMO), establishes global standards and guidelines for safe, secure, and environmentally sustainable shipping practices. With 176 member countries and three associate member countries, including Ethiopia, the IMO provides a framework for ensuring that maritime activities adhere to international standards. Abdulber said this will enable them to secure employment opportunities abroad which in turn contributes to the economy. Abdulber said in the first eight months of the fiscal year, remittances exceeded 36 million dollars. Ethiopia has 7,500 legally recognised seafarers, with plans to increase this number to 40,000 within five years. Abdulber explained that seafarers receive training at schools located in Bishoftu and Bahir Dar cities with plans to expand opportunities for more trainees.


ESL Confronts Sugar Industry Group Over Unpaid Debts

The Ethiopian Shipping and Logistics (ESL) blasts the Ethiopian Sugar Industry Group (ESIG) for unpaid arrears that the latter failed to pay. The state-owned logistics enterprise’s efforts to address the audit findings are commended by the Office of the Federal Auditor General (OFAG).

During the Public Expenditure Administration and Control Affairs Standing Committee hearing, which aimed to assess the performance audit report covering the previous two years, the logistics giant declared that the majority of the arrears that were expected to be settled by private and public organizations have been paid.

With the exception of a relatively small number of public entities, the management of ESL indicated that it has received the money that was referenced in the audit findings.

The audit findings state that ESL owes the group USD 323,000 and 48 million birr in arrears.

According to the CEO, his organization has a significant stake in Ethio Engineering Group (EEG), formerly known as MetEC. He stated that ESL and MoF are now discussing a solution to the matter.

According to the findings, EEG, a state-owned firm, was intended to pay USD 19.6 million and 757.1 million birr to the logistic enterprise.

The National Disaster Risk Management Commission owes ESL 148.8 million birr and USD 25.6 million in arrears; according to ESL’s CEO, talks with the MoF are underway to resolve this debt.

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Kenya & Ethiopia Discuss Removal of Trade Barriers

Kenya and Ethiopia have launched a new effort to remove trade barriers. A Kenyan Association of Manufacturers (KAM) delegation has held meetings with Ethiopian business community in Addis Ababa this week.

Ethiopia is hoping to increase its exports to Kenya. Kenya-Ethiopia bilateral trade data shows that Ethiopia is importing more from Kenya. In 2022, Ethiopia exported $26.6M to Kenya. The main products exported from Ethiopia to Kenya were Dried Legumes ($6.26M), Dried Vegetables ($5.01M), and Corn ($2.68M). During the last 27 years the exports of Ethiopia to Kenya have increased at an annualized rate of 23.7%, from $85.8k in 1995 to $26.6M in 2022.

The main products which were from Kenya to Ethiopia were Palm Oil ($12.4M), Metal Stoppers ($7.95M), and Yeast ($6.92M). During the last 27 years the exports of Kenya to Ethiopia have increased at an annualized rate of 4%, from $33M in 1995 to $95.1M in 2022.

Kenya expects Ethiopia to shift part of its exports/imports from Djibouti ports to its Lamu and Mombassa ports. Ethiopia has shown interest in using Kenyan Lamu port. Senior Ethiopian official delegations inspected Lamu port and road infrastructure from the port to the Ethiopia border this year. Reportedly Kenya is offering lower port use tariffs to Ethiopia in comparison with Ethiopia paying at Djibouti ports.

The Kenya Association of Manufacturers (KAM), which held meetings in Addis Ababa this week, stressed the need to remove trade barriers to boost cross-border trade between Kenya and Ethiopia. It mentioned three key challenges which are hampering trade including currency preferences, axle load limits and visa requirements for drivers at the Moyale border with Ethiopia.

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Dubai Announces $35bn Construction of World’s Largest Airport Terminal

Dubai has started work on a $35bn airport terminal that is set to have the world’s largest capacity upon completion, the emirate’s ruler has said.

Dubai’s Prime Minister and Vice President Sheikh Mohammed bin Rashid Al Maktoum said on Sunday that the new terminal would be five times the size of the current Dubai International Airport and handle up to 260 million passengers annually.

All operations at Dubai International Airport will be transferred to the newer Al Maktoum International Airport over the coming years, Sheikh Mohammed said.

Once completed, Al Maktoum International Airport, which opened in 2010, will be the new home of flagship carrier Emirates and feature five parallel runways and 400 aircraft gates.

Paul Griffiths, the CEO of Dubai Airports, said the development would solidify Dubai’s position as a leading aviation hub.

“The growth of Dubai has always been hand in hand with the growth of its aviation infrastructure and today we see another bold step on that journey,” Griffiths said in a statement.

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Crewless Cargo? Autonomous Shipping Aims to Overcome Safety, Trust Concerns to Reach Mainstream

Crewless Cargo - Autonomous Shipping Aims to Overcome Safety Trust Concerns to Reach Mainstream
Crewless Cargo – Autonomous Shipping Aims to Overcome Safety Trust Concerns to Reach Mainstream

A cargo tanker off the coast of Norway completed a 13-hour journey last year — but it wasn’t a regular ship. The voyage was a test of an autonomous ship under AUTOSHIP, an EU-funded program to develop new technologies for navigating large vessels.

The consortium brought together entities from academia and industry, including Kongsberg Maritime, the Norwegian giant that has been conducting deep research and development (R&D) on autonomous shipping. The trip marked a pivotal advancement in developing autonomous technology for shipping, which still faces many hurdles before it is ready for primetime.

Markus Laurinen, growth and solutions director at Kongsberg Maritime, said that autonomous shipping as well as remote operating centers are possible, but there are external factors at play that will influence the acceptance of the tech, from gaining customer trust to securing regulatory clearance.

“We are doing this step wise. We have a road map where we are role by role moving the functions to the remote operating center. This enables all the stakeholders involved to also learn and adapt in this big change that is happening. This is concerning a big amount of stakeholders, the freight owners, the ship owners, operators, the regulatory bodies and even the technological development bodies.”

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Hapag-Lloyd Launches 1st Dry Container Tracking Product Live Position

  • Initial basic product “Live Position” provides full on-demand door-to-door visibility
  • Hapag-Lloyd is the world’s first shipping line to use IoT technology in logistics on a large scale
  • Smart container tool closes the “blind spots” of global logistics for the first time

Hapag-Lloyd is the world’s first shipping line to use IoT technology in logistics on a large scale

Smart container tool closes the “blind spots” of global logistics for the first time. Hapag-Lloyd is announcing the launch of “Live Position”, its first dry container tracking product. Customers can now enjoy full transparency on the location of their shipments – from the start of transportation until the arrival at the destination. By being the first container shipping line to introduce a fleet-wide dry container tracking product, Hapag-Lloyd is demonstrating its commitment to deploying pioneering IoT (Internet of Things) technology in logistics on a large scale. More than two thirds of the dry container fleets have already been equipped with tracking devices. Installations continue globally to catch the last boxes during the summer.

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