IMPORTERS: New rule will affect price, growth | ERA: Necessary evil
Customers are unhappy with the introduction of a new scheme for containerized cargo shipments that limits the load of 20 TEU (Twenty Feet Equivalent Unit) containers not to exceed 20 tons, including the weight of the container. The new regulation decreases container loads from 24 to 20 tons in order to comply with regulations designed to lengthen life of roads and increase safety.
The circular signed by Mekonnen Abera, Director General of the Ethiopian Maritime Affairs Authority, states that from July 22, 2013 onwards all cargo imported in 20 TEU containers cannot weigh more than 20 tons. Stakeholders Capital talked to said that previously they could fit in some 24 tons of merchandise per container for imports, an internationally accepted weight. “The new regulation however, has forced them to use more containers, which affects shipments and demurrage costs more than usual,” they protested. This will ultimately drive prices up, as it represents additional costs, serving as an impediment to economic growth, they lamented.
Sources at the Ethiopian Shipping and Logistics Service Enterprise (ESLSE), the sole multimodal provider in the country, said that most clients that use the multimodal scheme have been squeezing in more goods in fixed-volume cargo containers than the maximum total weight authorized by the Maritime Authority. Still, they agree that it would be more profitable for clients, as well as for the enterprise, if more cargo were transported in a limited numbers of containers.
“The new scheme adds to the burden of the Enterprise by requiring it to handle additional containers for the same amount of cargo and also has a significant impact on clients,” the sources added.
According to these sources, the Authority was forced to impose the new ruling, because of the axle-load rule, designed to protect the durability of the country’s roads, as well as road safety issues.
The Ethiopian Roads Authority (ERA), also responsible for controlling truckloads transported on the federal road structures and for road safety, confirmed that the circular was implemented following the authority’s insistence that relevant government offices abide by the regulation and enforce it.
Samson Wondimu, Public Relations Head of ERA, told Capital that the only aim of the Authority is keeping the roads safe based on the regulation that was ratified several years ago. He said that roads, mainly the asphalt road that stretches from central Ethiopia to Djibouti, is exceedingly affected by overloaded trucks and is highly vulnerable; therefore, the regulation has to be strictly applied to extend the life and usage of roads and especially bridges that were constructed at extremely high costs. Ruining the roads will also result in high costs for repairs, which will affect the country’s growth, he explained.
According to the axle-load regulation, a truck is allowed to transport 8 tons on the first bed and 10 tons on its extension or semi truck. “But most trucks knowingly violate the regulation,” Samson said.
The Maritime Authority circular indicated that the new rule is being imposed temporarily.
“Even though containers loaded above capacity have contributed to the country’s economic growth, the capacity limits of goods loaded on containers have to meet international standards for road safety,” the circular stated.
The circular also stated that the Shipping Enterprise, shipping agents and the National Bank of Ethiopia are expected to work based on the new ruling. According to reliable sources, the state-owned shipping enterprise and the ERA are working together on a new study to develop a new axle-load policy to specify the amount of cargo that trucks can carry. The new rule is applicable to the 20 TEU containers only and does not yet include 40 TEU containers.
The circular did not indicate whether the new ruling is applicable to export cargo. Still, some coffee exporters Capital talked to said that the ruling does not really affect their exports as they do not exceed 18 tons per 20 TEU containers. But some exporters do load their containers over the limit, which does not allow the product to breath and affects the quality of the product upon delivery. Hence, the new directive application is actually a positive action.
Meanwhile, importers complain that the new rule has subjected them to additional costs, including sea freight, clearance, transport, port demurrage and dry port charges. They said that it may expose the public to additional expenses when purchasing goods.
Officials at the ESLSE and the Maritime Authority have acknowledged the concerns of importers, but said that the country’s regulations have to be implemented.
Officials at the ERA said that, based on the standard, one truck can load up to two 20 TEU containers with a maximum capacity of 400 quintals (40 tons),_while previously trucks used to load the same two 20 TEU containers carrying up to 500 quintals (50 tons), which was damaging roads and ruining the trucks themselves.