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The number of containers leaving Mojo Dry Port has increased over the past week, but ever since the Ethiopian Shipping and Logistics Services Enterprise (ESLSE) published a list of 355 companies whose containers lie at the Mojo Dry Port, it is becoming more congested than ever before; as the number of containers that are entering the port surpass those that are leaving. Sources in the enterprise told Capital that Ethiopian authorities are contemplating the expansion of the dry port on 15 hectares of land adjacent to the existing port at a cost of 650 million birr.
“Though the number of containers leaving the dry port has increased, the dry port remains congested since the numbers of incoming containers surpass the outgoing ones. That has exacerbated the problems of the already congested dry port,” Ashebir Nota, senior public relations officer at the enterprise told Capital. “The expansion project is part of the government effort to facilitate the newly applied multimodal system following the merger of the three public enterprises,” he added.
The enterprise signed the construction agreement with Water Work Enterprise on October 6, 2012. The recent agreement is perceived as the second part of the enterprise expansion of the dry port which is 62 hectare wide. Only 8.7 hectare of the total area was developed in the first phase. The construction is planned to be completed within one year. There is also another dry port under construction in Gelan area of the Oromiya Special Zone.
According to the notice published by the enterprise in the state owned daily Amharic newspaper Addis Zemen, on Friday November 2, the newly amalgamated enterprise urged its clients to collect their goods from the Mojo Dry Port on time or face legal measures.
Local importers who have been complaining that their goods were stacked at the Port for more than eight months were not present to collect their goods, except few companies, after repeated notices were given, according to Ashebir Nota.
The problem has only been magnified since the government decided to put the multimodal scheme under the mandate of the state owned monopolies which formed ESLSE through the amalgamation of the Ethiopian Shipping Lines, Ethiopian Maritime Services Enterprise and Ethiopian Dry Ports Enterprise in the beginning of the last budget year.
Different actors in the economy had repeatedly complained about drawn out customs clearance procedures and complicated transportation and logistics services managed by the state owned ESLSE.
According to the Ethiopian Freight Forwarders and Shipping Association, the setbacks in the dry port resulted because services were being provided by different stakeholders under a single state owned business entity. The association also acknowledges the lack of vehicles, the import tariffs debate between importer and the enterprise at the dry port, the limited capacity of the dry ports and sometimes a lack of finance on the part of the importer as aggravating factors behind the problem.
Ethiopia used to make use of a ‘uni-modal’ freight forwarding and shipping system, where both the state and the private companies operate. However, the country switched to a multimodal system which mandates the state owned enterprise to handle all the operations associated with forwarding and shipment of goods that are imported into the country through Letters of Credit (LC).
“Solving the current setbacks at the dry port needs a change in the policy direction of the country. That is, letting private operators in the system. That will help to build additional capacity both in terms of human resource and facilities in the short term. Otherwise, it is difficult to handle the flow of incoming goods since the country is experiencing growth momentum. In the long run, the country needs to introduce bonded warehouse and private container certification systems to facilitate the movement of goods in a cost effective manner,” Mulugeta Assefa, President of the Ethiopian Freight Forwarders and Shipping Association told Capital on the phone.
“This does not mean that the multimodal system does not work. It is the best system for landlocked country like Ethiopia. Rather, it means it has to ensure private participation and should not be applied in a way that costs the economy generally,” he added.
Apart from the above setbacks in the application of the multimodal system, the lack of appropriate information about the whereabouts of the clients’ goods is another aggravating factor, according to Tilahun Mulugeta, Secretary General of the Association.
“A dry port is a platform to facilitate the movement of goods. It is not a warehouse. The problem is when clients do not obtain full information about the whereabouts of their shipment. Such an information asymmetry retards the functionality of the supply chain. Both the problem and the solution is currently in the hands of the enterprise,” the Secretary General told Capital.
The enterprise is obliged by law to inform its client by all means of communication including, letter, fax, telephone and email.
Previously if a containerised good stayed at the Port of Djibouti for more than six months, the Djiboutian government will confiscate it and auction it off. To avoid such a move the Ethiopian government agreed with the government of Djibouti to move the containers to Ethiopian Dry ports, before the due date. The Ethiopian government incurs all the costs associated with moving the containers from Djibouti Port to either Mojo or Semera Dry Ports.
Before the government set up dry ports, when owners were not present to collect containerised goods, that were brought to the hinterland by governmental bodies, within six months, the government auctioned them off through the Merchandise and Wholesale Trading Enterprise, following the decision of the Ministry of Finance and Economic Development. This was the practice before the merger of the three state enterprises. However, observers say it seems that a gap was created following the merger, and it played a part in the congestion of the port.
“There are containers which were moved in such a manner almost three months ago, but no one was present to collect them. We are speaking with the concerned governmental bodies on ways to get rid of such containers through legal means,” Ashebir added.
ESLSE claims that more than 5,600 containers which were brought to Mojo Dry Port are waiting for their owners to collect them. That has congested Mojo Dry Port and forced the enterprise to release a public notice. Most of the containers have been in the dry port zone from three months to a year period.
A high level government delegation has been deployed to Djibouti to diffuse cargo transportation bottleneck observed at the port of Djibouti three month ago. Since then reports indicate that the number of trucks moving goods from the port to Ethiopia has increased. More than 150 trucks have been transporting 300 containers per day.
The massive congestion at the port of Djibouti was blamed on the ESLSE’s new multimodal scheme to handle the imports and exports of the country. At the time, some 22,000 containers and several vehicles were reportedly stranded in Djibouti for over eight months.
Meanwhile, transportation of goods categorized as dangerous merchandise, goods for projects, factory raw materials, pharmaceuticals and perishable cargoes were given a waiver and their clearances from Djibouti port expedited.
The ESLSE has exclusive control not only of the state import and export activities but also of the private ones.