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Boosts performance, increase capacity in shipping and logistical services
The Ethiopia Shipping and Logistics Services Enterprise (ESLSE), established in October 2011 with the amalgamation of three state enterprises, has posted almost 800 million birr in profit (799.1 mln) for the recently concluded fiscal year. The premier shipping and logistic company in the country is improving performance and expanding capacity, which will allow companies to import and export goods faster and cheaper. In pursuit of this goal, and while providing an improved service, the enterprise is exceeding its own revenue targets.
In its second year since its formation the enterprise earned 8.8 billion birr in revenues and its expenses were eight billion birr.
According to experts, the enterprise has had a relatively successful year compared to its first year.
Based on expenses, the total revenue of the enterprise is close to 800 million birr before taxation. The 2012/13 budget year revenue is 108 percent of the target. The original goal of the enterprise was to generate 740 million birr before tax, but actual revenues exceeded the target by 60 million birr.
“Our primary interest is to accelerate and improve logistical (import/export) services rather than focusing on profits,” Osman Ali, corporate communication service manager of ESLSE, told Capital.
He said that logistics is a bottleneck for third world countries, while it is key to expanding FDI and local investment. “Due to that, our priority is to support the country’s economy with effective logistics services,” he added.
Excluding the three new vessels that will arrive in the current budget year (one of the three vessels arrived on Friday) the enterprise has two oil tankers, six big and four medium general cargo vessels. With these vessels ESLSE has the capacity to transport 76,316 metric tons of oil and 197,957 tons of general cargo at once.
The enterprise statement indicated that ESLSE’s routes are north-west Europe, the Mediterranean and Africa, the Far East, the Middle East and the Indian sub continent and in these lines it has 47 international agents.
According to the annual performance of the enterprise, the multimodal scheme, in which ESLSE handles cargo from beginning to end, as opposed to cargo being handled by many different agents, has undergone many improvements since it was launched. With the amount of cargo being transported under the scheme gradually increasing and many of early problems with the scheme being fixed, it is improving performance and expanding its capacity to transport cargo.
During the last budget year, the enterprise was able to transport 43 percent of containers via the multimodal scheme and the total multimodal services provided during the past fiscal year, including both containers and general cargo, has reached 51 percent.
The enterprise’s annual report indicated that after the deal with Djibouti to accelerate the document clearance at the sea port, the number of days needed to clear cargo that comes via the multimodal scheme has been reduced to five days (it was 63 days in September 2012).
Priority has been given to companies that the Ethiopian Revenue and Customs Authority considers ‘Authorised Economic Operators’ to obtain containers and port facilities in different port destinations with a 25 percent discount.
ESLSE has provided sea transportation services for over 3.09 million tons of imports, exports and cross trading commodities. During the 2012/13 budget year the enterprise transported 67,389 containers via the multimodal scheme from the port of Djibouti to the central part of the country.
From the total number of containers the enterprise has provided service for 60,799 TEU containers at different parts of the dry ports.
At the port the enterprise has provided forwarding services for almost two million tons of imports and 221, 860 tons of exported items.
On the other hand, the enterprise has provided stevedoring services for 494,518 tons of imported items and shore handling services for 244,819 tons of items.
The enterprise now has branches in Djibouti, Dire Dawa, Kombolcha, Comet, Mekele, Semera, Mojo and Adama.
To speed up the multimodal service the enterprise is working on the formation of new branches and satellite offices, including Mojo, in order to handle 14,582 twenty-feet-equivalent (TEU) containers at the dry ports at once.
In the budget year the enterprise aimed to accomplish the expansion and terminal development in order to expand its capacity.
In addition, it is in the process of purchasing an additional 100 trucks to increase the number of land transport trucks to 160. According to the enterprise’s annual report , it is also procuring 30 forklifts.
A year after the establishment of the enterprise it underwent additional restructuring that divided the enterprise into different sub divisions.
A week ago the enterprise held a general assembly meeting at Adama (Nazareth). At the meeting the past year’s performance was evaluated. Ahmed Tusa, CEO of ESLSE, said that the enterprise has to expand its capacity for the current budget year.
After the launching of the multimodal service over the past two years various problems have occurred and the private sector has complained of delays in importing commodities, sometimes lasting many months. But since the middle of the previous budget year the situation has improved. In the upcoming budget year the shipping enterprise aims to expand the multimodal service to 80 percent of cargo, even though the original target was below the stated percentage for the 2013/14 budget year. The government wants to meet the 80 percent multimodal goal by the end of the five year plan, the Growth and Transformation Plan (GTP).
ESLSE is the sole agent that carries out multimodal services in the country, despite the private sector’s claims that they should be involved.
Currently, the enterprise has the capacity to handle 18 percent of the country’s cargo transportation, and the new vessels will handle an additional 35 percent of the cargo.
The enterprise plans to expand the country’s export market transportation options with the new vessels. Since November 2012, ESLSE has received six vessels out of nine and named them after the capital cities of regional administrations. Two of the nine vessels, Bahir Dar and Hawassa, are the country’s first oil tankers; both cities are adjacent to large lakes.
The enterprise received the seventh vessel, called ‘Jigjiga’ after the name of the capital of the Somali region, on Friday September 13 at the Port of Djibouti, the main gate for Ethiopian imports/exports, in the presence of government officials. The final two vessels, Mekele and Semera, named after the capitals of the Tigrai and Afar regions respectively, will arrive at the end of September and October.
In the middle of the previous budget year the enterprise announced that it has completed phase two of its restructuring, giving it the ability to import all containers without any delay from Djibouti Port in a year’s time.
The enterprise indicated that during the first restructuring phase ESLSE was restructured into four sub divisions led by four deputy CEOs. According to the restructuring the ‘shipping transport sector’, that handles the shipping service, is the first division. ‘Freight forwarding’ is the other sector that transports goods from sea port to dry port. ‘Port and terminal services sector’ focuses on the dry port activities including customs clearance. The ‘Supportive sector’, which supports the other sectors activities, is the fourth division that comes under the new restructure. More or less, the first three sectors were already active when they were independent enterprises or since the formation of the new enterprise, except for the supportive sector.
Ethiopian Shipping Lines (ESL), Ethiopian Maritime Transit Services (EMTS), and Dry Port Service Enterprise (DPSE) are the three state enterprises that formed ESLSE.