Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter Vol. 03 No. 108

Maritime Authority Sets Sail For Logistics Policy Changes.

Ethiopian Maritime Authority is launching a major overhaul of the logistics sector in a bid to streamline operations and attract foreign investment. A recent study conducted by a UK consulting firm exposed critical bottlenecks hindering the sector’s growth. Outdated regulations, a lack of transparency, and limited opportunities for foreign investors were identified as the main culprits.

One of the participants in the study, Yared Shiferaw, has operated in the sector for over 30 years. He observes that a restriction to foreign investors’ stake capped at 49pc is seen as unattractive for investment. He said outdated freight forwarding regulation has also resulted in firms operating without clear liabilities.

“Policymakers have to scrutinise the regulatory gaps,” he said.

Under the Authority, the Logistics Transformation Office hired Triple-Line and local consultants to conduct a six-month study. According to Temesgen Yihune, deputy director, the study is part of a national strategy to identify gaps and enhance the logistics sector’s performance. The recommendations have gone through public consultation and are being reviewed by the Authority before being approved by the National Logistics Council, led by Alemu Sime (PhD), minister of Transport & Logistics.

“Improving transit time, cost and infrastructure is vital,” said Temesgen.

Out of 330 freight forwarders in Ethiopia, only 95 are members of the Ethiopian Freight Forwarders Association (EFFSAA). The study suggests stricter regulations for market entry and adopting international standard trading conditions. According to Dawit Woubishet, president of the Association, the relaxed requirements to join the sector under the guise of ease of doing business have made proper monitoring difficult.

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China Calls for Gaza Cease-Fire to Resolve Red Sea Crisis

China’s ambassador to the United Nations on Thursday urged a lasting cease-fire in Gaza, emphasizing that the Red Sea crisis is a spillover of the Gaza conflict. He reiterated the need to address the Gaza violence to stabilize the region and ensure maritime safety.

“The current tension in the Red Sea is one of the manifestations of the spillover of the Gaza conflict. An immediate and lasting cease-fire in Gaza will help cool down the situation in Yemen and the Red Sea,” Geng Shuang, China’s deputy permanent representative to the United Nations, told a Security Council meeting on the Red Sea crisis.

China urges the Houthis to respect international navigation laws, listen to the voice of the international community and abide by the requirements of relevant Security Council resolutions. The Houthis also should stop harassing civilian ships and maintain the safety of waterways in the Red Sea, said Geng.

The Red Sea has played a crucial role in global trade, as it accounts for about 10 percent of seaborne trade globally. Since mid-November, the Houthis have launched a series of attacks against commercial and military ships in the region to pressure Israel to end the military action that it launched in the Gaza strip.

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Singapore Port Congestion Shows Global Impact of Red Sea Attacks

Congestion at Singapore’s container port is at its worst since the COVID-19 pandemic, a sign of how prolonged vessel re-routing to avoid Red Sea attacks has disrupted global ocean shipping—with bottlenecks also appearing in other Asian and European ports.

Retailers, manufacturers and other industries that rely on massive box ships are again battling surging rates, port backups and shortages of empty containers, even as many consumer-oriented firms look to build inventories heading into the peak year-end shopping season.

Singapore, the world’s second-largest container port, has seen particularly severe congestion in recent weeks. The average wait time to berth a container ship was two to three days, Singapore’s Maritime and Port Authority (MPA) said in end-May, while container trackers Linerlytica and PortCast said delays could last up to a week. Typically, berthing should take less than a day.

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Panama Canal Continues to Restore Capacity While Warning of Water Concerns

Panama Canal Continues to Restore Capacity While Warning of Water Concerns
Panama Canal Continues to Restore Capacity While Warning of Water Concerns

The Panama Canal Authority is accelerating its efforts to build back capacity at the canal while also providing for increased vessel draft as the region is now in the rainy season. While the canal is returning to normal levels the authorities however warn that the long-term impact of climate variability and the challenges of securing water remain.

The draft which had been a major concern for the larger containerships and gas carriers is returning to normal levels. As of the end of May, the Authority moved it back to 45 feet as the maximum authorized draft. Yesterday, they said effective immediately it was going to 47 feet from the prior 46-foot mark and further on July 11 they will increase it to 48 feet.

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