Ethiopian Shipping and Logistics (ESL) has been granted exclusive rights to manage cargo from key international trade routes.
The Ethiopian Maritime Authority (EMA) has issued a long-anticipated notice to industry stakeholders, marking a significant milestone in the deregulation of Ethiopia’s multimodal transport industry.
This development comes one year after the government granted permits to new entrants, ending ESL’s nearly 15-year monopoly in the sector.
The notice, addressed to both domestic and international stakeholders, officially permits five licensed multimodal transport operators (MTOs) to enter the market. Gulf Ingot FZC, a Sharjah-based firm, has also been included as the sixth operator.
The initiative to liberalize the multimodal transport system began in 2020 as part of broader industry reforms aimed at increasing participation in the logistics sector. Previously, ESL was the sole operator under the MTO framework that had been in place for nearly 15 years.
The recent notification letter, sent to stakeholders such as the Djibouti Ports and Free Zones Authority (DPFZA), requests cooperation to ensure a smooth transition for the new operators.
“Your cooperation in this matter will be instrumental in ensuring a smooth and efficient transition,” stated Abdulber Shemsu, Director General of EMA, in the letter.
The letter also informed the Ethiopian Customs Commission about the compliance requirements for the newly selected MTOs, which include Panafric Global, Tikur Abay Transport, Cosmos MTO, Ethio-Djibouti Railway Standard Gauge Share Company, and Gulf Ingot FZC.
Gulf Ingot FZC, a UAE-registered company operating in the Jebel Ali Free Zone, Ethiopia, Djibouti, and other African countries, is a notable addition to the list of licensed operators.
Its inclusion has drawn interest from industry observers, as the government initially planned to permit only four additional operators alongside ESL.
Sector experts have raised concerns about the competitive landscape, particularly since ESL retains exclusive rights to handle cargo from major import destinations such as China and the UAE, which account for over 60% of Ethiopia’s imports.
Critics argue that this exclusive arrangement creates an uneven playing field. Yared Shiferaw, an international maritime lawyer and partner at Cosmos MTO, has previously expressed concerns about fair competition, suggesting that while ESL should continue as the national carrier, other operators should be allowed to compete on all trade routes.
“Even though ESL will continue as a leader in operations, it is important to allow us to compete on all destinations,” Yared told Capital last year.
Despite these concerns, EMA has clarified that ESL will retain exclusive rights on key trade routes, limiting opportunities for new operators. Additionally, significant import cargoes, such as fertilizers, are excluded from the multimodal scheme, further restricting prospects for the newly licensed companies.
Experts warn that this could hinder the sector’s growth and the competitiveness of new entrants.
During a recent CEO networking event organized by the European Chamber in Ethiopia, Brook Taye, CEO of Ethiopian Investment Holdings (EIH), which oversees ESL and other major public enterprises, emphasized the importance of fair competition.
Drawing parallels with the liberalization of Ethiopia’s telecom sector, Brook emphasized how increased competition has strengthened Ethio Telecom. “The full opening of the multimodal sector will enable the state-owned operator to become stronger and more competitive,” he stated.
Fraol Tafa, Deputy Director General of EMA, reiterated the authority’s commitment to supporting the growth of new entrants. “We have achieved our goal of expanding the multimodal transport sector to include more participants,” he told Capital last week.
He added that the licensed companies must complete their preparations, including strengthening relationships with Djibouti Port authorities and resolving banking issues, before commencing operations.
However, some companies have urged EMA to formally notify the National Bank of Ethiopia, financial institutions, and other relevant stakeholders, including the Ministry of Health and security agencies, about the new MTOs to ensure seamless operations.
The liberalization of the multimodal transport sector represents a significant shift in Ethiopia’s logistics industry. While the inclusion of new operators is a positive step toward diversification, concerns about fair competition and market restrictions persist.
