Private freight forwarders to be allowed into multimodal process

The Maritime Affairs Authority is going to introduce an alternative scheme for private freight forwarders and shipping agents to be part of the multimodal (land, sea, or road) transportation service.

The multi modal scheme has been solely operated by the state owned Ethiopian Shipping and Logistics Services Enterprise (ESLSE) for the past eight years.

The draft directive that will be tabled for discussion with stakeholders stated that the private freight forwarders will operate the system.

The draft directive that Capital obtained indicated that selected private movers will be assigned under the state owned logistic enterprise, which was established five years ago via the merger of Ethiopian Shipping Lines, Dry Port Services Enterprise, and Maritime and Transit Services to undertake combined service for the sector.

The preamble of the draft directive developed by ESLSE said that the goal is to accommodate the growing logistics activity mostly managed by the enterprise.

The preamble explained that the Ministry of Transport had ratified a directive allowing ESLSE to manage the fleet of containerized cargo, vehicles under three tons, dry bulk and steel under the multimodal scheme but it is only allowed to operate containerized cargo and vehicles under three tons. It added that the directive was created because of the inefficiency of dry ports related with the growing of import cargo and needed others (private actors) to be part of it to enable them to be independent multi modal actors, and the growing of industry parks, zones and bonded warehouses.

The draft directive has also targeted to expand the multimodal transport coverage on importing cargos and destinations and aims to reduce the uni-modal service significantly.

The private actors will be included in the multimodal operation that excludes the sea transport, which will be protected For ESLSE.

The directive also added that steel, project cargos and trucks and machines will be the new cargo that will be fully managed by multimodal scheme.

The directive has also put in place different criteria that will be included on the multimodal operation.  For instance the draft document indicated that the company should have 5,000 square meters of transit plot and a capital of 10 million birr.

“Meanwhile it allowed the private sector to be included in the multimodal scheme it will allow the private actors to operate under the state multimodal monopoly,” experts said.

It is a subcontracting setup for the private actors under ESLSE, according to one of the private freight forwarders. “It is an indication that the enterprise has become busier,” experts told Capital.

The private sector has complained since the commencement of the multimodal scheme.

The multimodal arrangement is a scheme whereby the transportation of goods is under a single contract but performed with two different means of transportation. The transporter is accountable for the entire journey, including the shipment’s delivery at the final destination. The transportation can be carried out by rail, sea, and road.

Currently bulk imports and exports are still allowed to operate under the old plan but most of the bulk items are government owned.