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The Ethiopian Shipping and Logistic Services Enterprise (ESLSE), the amalgamation of three state-owned enterprises, has exempted its clients from paying storage and demurrage costs of their imported containers. The enterprise is also facilitating a loan scheme for clients to resolve the financial problems involved with the transportation of their cargoes.
The enterprise has also introduced several ways to accelerate multi-modal businesses and minimize congestion at dry ports.
According to the new scheme announced by ESLSE two weeks ago, the enterprise will cover demurrage and storage costs for containers that arrived via the multimodal scheme at the Port of Djibouti before July 1, 2012. Based on the new scheme, customers will be free from the stated costs.
ESLSE’s notice indicated that the reason for covering the demurrage and storage costs as well as facilitating a loan scheme for its clients was to alleviate the financial problem which is preventing them from transporting their containers from dry ports and the Port of Djibouti, creating congestions.
The announcement also added that customers who have five or above ‘twenty feet containers’ at the Mojo Dry Port and Comet Container Terminal shall be allowed to clear their goods in the containers using the new written guarantee scheme (Letter of Understanding) and return back the containers within 15 days.
Previously, the enterprise imposed money guarantee for the containers in which the goods are transported. Based on the new scheme, clients are also spared this cost as well to help expedite their cargo clearance. In addition, the enterprise has also provided another crucial offer for its clients allowing them to transport and import their product without pre-payment. Based on the new procedure, customers will conclude payment to ESLSE sea-and-land transportation, demurrage and services at the Port of Djibouti, after they collect their goods with assurance.
According to the announcement, the loan service will be reserved for cargoes transported via the multimodal scheme up until January 8, 2013 at the Mojo Dry Port, located 70km east of Addis Ababa and Comet container terminal situated 99km away in the same direction. The enterprise has also indicated that customers that will receive the new loan option have to conclude all formalities by March 9, 2013.
Capital sources at the enterprise said that ESLSE is also looking for ways to facilitate loan provisions from banks for its clients to accelerate the import-export activity, which has been beset with multiple problems since the beginning of the multimodal scheme.
At the end of last year, ESLSE announced that it has completed the first phase of its restructuring, and has already launched the second phase that aims to import all containers without delay from the Port of Djibouti in a year’s time.
The enterprise indicated that the first restructuring phase focused on the amalgamation of the three enterprises that were combined to form one enterprise to modify and compete efficiently in the maritime business.
ESLSE restructured into four sub divisions led by four deputy CEOs. Accordingly, the ‘shipping transport sector’ that handles the shipping services became the first division. ‘Freight forwarding’ is the other sector that transports goods from sea ports to dry ports. The ‘Port and terminal services sector’ focuses on dry port activities including customs clearance. The ‘Supportive sector’, which reinforces the other sectors’ activities, is the fourth division under the new restructure. Ahmed Tusa, CEO of ESLSE, said that the enterprise has been overseeing and taking the logistics transport service, however, delays remained a major problem since the implementation of the multimodal system.
Since the amalgamating of the three public enterprises in the past fiscal year, the government granted monopoly rights to the enterprise to embark on the multimodal service in the country.
The enterprise introduced the system on all imports and exports in the country. However, disagreement occurred between clients and the enterprise due to the delay of goods.
Private freight forwarders have also been complaining that either the government has to allow the private sector to be involved in the multimodal scheme or be allowed to undertake ‘unimodal’ service scheme.
Lately, the government temporarily allowed private freight forwarders and transitors to get involved in unimodal operations, following the grave conditions brought about by the congestion that occurred at the Port of Djibouti. Still, it did not allow private companies to get involved in the multimodal sector.
He acknowledged the problems related to the multimodal shipping system that created the congestion, especially since May 2012 at the Port of Djibouti. The CEO said that the major problem was the delay of the transportation of containers from the port.
“The first reason is lack of sufficient preparation to undertake the multimodal scheme; in addition we were in the process of restructuring the three enterprises into one entity,” he said, accepting the enterprise’s responsibility for the congestion. He said that the other reason for the problem was the inefficient implementation of the process of clearance services at the port.