Capital Ethiopia Newspaper

Shipping Enterprise restructures

The newly formed Ethiopian Shipping & Logistics Enterprise (ESLE) is set to split in two big sectors, Shipping and Logistics sectors, and will be headed by two vice CEOs that are yet to be appointed by the board, sources say.  
The new restructuring is expected to be implemented shortly; however sources told Capital that the board has not yet decided on the restructuring though “the board’s inclination is towards the division of the enterprise in to two big sectors,” they said.
After the amalgamating the former Ethiopian Shipping Lines (ESL), Ethiopian Maritime Transit Services (EMTS), and Dry Port Service Enterprise (DPSE), ESLE has been restructured to have three sectors with three vice CEOs that incorporates the above three entities: ESL operating the shipping sector, EMTS operating the logistics sector and DPSE operating the port and terminal sector. Following further study, the enterprise has opted to have two sectors which have emerged to be viable. Ethiopian Maritime Transit Services (EMTS) and Dry Port Service Enterprise (DPSE) will be merged to create the logistics sector, while Ethiopian Shipping Lines (ESL) will continue to lead the shipping sector.  
The shipping sector will only deal with operations on the sea, maritime transport and maritime training, while the logistics sector will be involved in the stevedoring, shore handling, custom clearing, trucking, and multimodal transport.
The oldest of the three companies, ESL was formed in 1964 with a capital of 50,000 birr, while MTSE was established in 1968 at a capital of half a million birr.  DPSE was established in 2007 with a capital of half a billion birr.
The board, according to sources, is yet to receive nominations for the vice CEOs positions. Currently Ahmed Tusa is heading the enterprise now.
The newly amalgamated enterprise is the sole company involved in sea freight and multimodal transport operations (MTO). DPSE is in charge of dry ports in Modjo Town, 73km east of Addis Abeba and Semera, 550km northeast of the capital, while MTSE operates in clearing and forwarding. This was instigated by a directive signed by Kassu Ilala (PhD) when he was a deputy prime minister back in 2000, instructing all banks not to open letters of credit (LCs) for importers without bills of lading issued by the former ESL or waivers from the transporter.
The measure was introduced after the government bailed out the Enterprise from its unprecedented losses of close to 20 million birr. This action sheltered the then ESL from foreign competition, enabling the national flag carrier to register staggering profits over the past years.
During the last fiscal year alone, the former ESL made a profit of 661.5 million birr, exceeding its projection by nine percent.
The policy of forcing local importers to transport their goods only through the ESLE was implanted, despite strong criticism from importers who complained that the state enterprise’s interest is protected at the expense of local consumers.
Subsequent to this, it has also introduced payment in dollars since July 2010. It operates nine vessels with a combined carrier capacity of 150,000 tons, transporting 44 percent of the shipments of the county’s total imported and exported goods during the 2010/11 fiscal year.