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A new circular, distributed by the Port of Djibouti management to all transitors based in Djibouti forces the freight forwarders to settle mandatory fees before they transport their cargo from the port. This new scheme will force Ethiopian clients to pay their fees in advance.
Previously, transitors based in Djibouti who worked jointly with their Ethiopian partners based in Ethiopia used a credit system to pay fees to transport imported cargo from the port to Ethiopia, which meant that their Ethiopian clients had a fair amount of time to settle their charges.
Now a new circular written on November 20, 2013 and signed by Saad Omar Guelleh, general director of The Port of Djibouti, indicates that transitors have to pay the necessary charges in foreign currency before they receive and transport cargo for themselves or their clients.
The circular states that in addition to the usual documents, transitors must present documents containing the names of all transitors, names of importers or exporters, their identification number, a way bill (for export) (or name of the ship) and mode of payments.
“No merchandise can be withdrawn from The Port of Djibouti if any of the rules in this document are not followed,” the circular explained.
Even though the circular stated that the new rules would take effect December 7, 2013, reliable sources in Addis Ababa told Capital that the new scheme has not yet been implemented.
Sources said that the new scheme’s starting date has been postponed to January 15, 2014, after government officials from Ethiopia asked the Djibouti government to allow more time to prepare so that they would be in compliance with the new rules.
According to sources close to the issue, the new scheme will force the importers or their Ethiopian freight forwarding companies to settle the necessary payment before they transport their cargo to the country. “It is difficult for our clients to transport their products into the country on time primarily due to financial issues,” one of the biggest freight forwarders told Capital. ”The delay of any cargo at the port has other costs like storage fees (when transitors fail to unload ships on time) and price increases for commodities,” the freight forwarder said.
According to people involved in transportation, however, the previous system was more advantageous for Ethiopians, who are the major users of the Port of Djibouti. Now a lack of accessibility to sufficient hard currency will be a major challenge for Ethiopian importers.
Even though the new system is applicable all over world, it will affect the country’s economy in terms of the current availability of hard currency.
“Even if the financing is available on time, the banking system and the SWIFT system might cause a delay of days,” transportation officials told Capital. They recommended that the government modernize some of its systems at the port.
They suggested that now the government should consider private sector involvement in transportation, which up until now has been monopolized by the government.
“The private sector has to be involved in multi modal and container freight station (CFS) transportation sectors to accelerate the movement of cargo,” experts added.
The private sector has asked the government to liberalize the multimodal scheme controlled by the stated owned Ethiopian Shipping and Logistics Services Enterprise.
Currently, the uni-modal scheme is the only system that private shipping agents can use to transport cargo in and out of the country.