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The accumulation of Ethiopian containers at the Port of Djibouti is leading importers to pay a lot of money in fees for keeping the containers extra time.
“Some of the containers have been stuck at the port for more than two years now,” Djibouti’s Chamber of Commerce Chairman Youssouf Moussa Dawaleh told reporters on Wednesday December 10.
Ethiopia’s Ambassador to Djibouti, Suleiman Dedefo, agreed saying that containers were backed up due to “capacity limitations” on the part of Ethiopian importers. Suleiman noted that the port typically saw container congestion each year during the period from August to December.
“This is when we import fertilizers; the same happens when we import wheat or sugar”, he said.
The ambassador added “establishing good transport companies and upgrading infrastructure would help solve the problem.”
“Our importers need to coordinate things better and because they are not the country is paying unnecessarily high costs for storage at the warehouse and vessel demurrages,” he added. According to Ambassador Suleiman, logistics should be modernized as soon as possible.
The cost that we pay at the port contributes to price hikes in Ethiopia. “Public offices are especially paying a high amount at the port due to lack of attention to transporting the cargo needed for the country’s development,” he complained.
“For instance the housing development office is experiencing delays in transporting construction materials in to the country,” he explained.
The ambassador said that the country pays more for disposal than the value of the cargo at times.
“It is a huge expense for the country regardless of whether it is private or public cargo,” he added.
Every day container cargo volume is about 10,000 tons at the port, the country’s principal outlet for maritime trade with neighboring Ethiopia. This has to be transported to the country and about 200,000 tons of general cargo (non-containerized) is stored at the port daily. “The daily transport of cargo to the country and the amount of new cargo that comes through the port is unbalanced,” Ambassador Suleiman said.
The cargo imported at the port has a seven day grace period. The demurrage for cargo is increased every day if it is stored at the port for more than one week. The ambassador said that currently a large amount of cargo is being stored at the port for over six months. The additional costs are in turn passed on to consumers.
The ambassador expects the railway line from Ethiopia to Djibouti to resolve some of the extra demurrage cost by improving transportation.