Concerns over experience requirement stall transport talks

The amount of experience freight forwarding companies need to take part in the multimodal transportation scheme has been a point of contention during attempts to complete a draft document outlining criteria to allow private companies to take part in the multimodal scheme under ESLSE.

Article five, sub article 1.2 of the directive states that freight forwarding companies interested in being part of the multimodal scheme need to have at least five years of experience.

During the December 19 discussion freight forwarders expressed concern that this rule would their companies who wanted to establish a conglomerate from being involved in the scheme in a large capacity.

The final draft of the document was expected to be finalized in January, two weeks after the initial discussions held on Thursday December 19, 2016. However, the committee, made up of four members from the Ethiopian Maritime Affairs Authority (EMAA), the regularity body under the Ministry of Transport, ESLSE, a sole multimodal operator and two from the Ethiopian Freight Forwarding and Shipping Agents Association (EFFSAA), was unable to reach a consensus, some sector actors said.

The issue was one of the topics discussed during the meeting of the association’s board of directors held last week, according to sources.

However, Yared Shiferaw, Legal Department head of ESLSE and chair of the committee, denied the private sector stakeholder’s claim. He told Capital that the committee finished the final draft.

“We have submitted it to the government for final approval,” he said.

He said the five year experience requirement can be discussed but that the other points were agreed to by the committee.

An expert at the government body said that the operation needs more trust so the operators need to be experienced.

“This is the reason to require the five years of experience, but it can be discussed since the private sector has more experience,” the expert at ESLSE told Capital.

The private sector argued that private freight forwarders could increase the capacity of the operation.

Experts said that the government is looking for capable individual companies to be involved in the business and does not want large companies because the nature of the business demands more individual trust.

The directive invited the private sector to be involved in the multimodal scheme, which is protected for the state owned ESLSE, on a subcontract level.

The private sectors expressed their interest in being allowed to get involved independently as opposed to being under ESLSE.

They claimed that the government invited them because it planned to partially privatize the enterprise.

In his latest press conference Prime Minister Hailemariam Desalegn disclosed that the government will sell the enterprise partly for an undisclosed company. Sources said that the Chinese logistics giant China Merchant Group is negotiating with the government to take shares of the enterprise.

The draft directive stated that forwarders who want to engage in multimodal (land, sea, or road) transportation service should have their own property or rent 5,000 square meters of land or have a warehouse for transit purposes.

According to the directive, the sea transport will be continued under the operation of ESLSE. The private sector has asked for plots of land for dry port, duty free incentive and access to finance to improve their capacity.

The logistics sector is one of the major challenges for Ethiopia, the biggest population in the world without access to the sea.

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.

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

The Ministry of Transport had ratified a directive exclusively allowing ESLSE to manage the fleet of containerized cargo and vehicles under three tons. The state logistic enterprise operated the system for the past eight years.

Capital’s effort to talk to Mekonnen Abera, head of EMAA, was unsuccessful.