Tuesday, March 29, 2011

Freight Forwarders Up In Arms Over Multimodal Transport System

Government Instructions May Eliminate Private Companies
Shipping News Feature

ETHIOPIA – DJIBOUTI - In a bid to stem the flow of foreign currency from the country and to speed up essential import cargo the Ethiopian Government introduced a multimodal transport system last year by which importers could receive shipping containers through to the dry ports of Modjo and Semera. All thirty state agencies were instructed only to use the services of the approved contractor, Ethiopian Shipping Lines (ESL), another state monopoly. Many containers have traditionally been delayed upon import at the Port in neighbouring Djibouti and demurrage fees settled in the overseas currency.

Now it appears that the Government is pressing importers to use the services of ESL to the exclusion of the country’s independent logistic providers. In 2008 ESL had 20,000 containers dropped at Djibouti, virtually all were delayed, now, as the sole multimodal operator, imports are routed through immediately to the dry ports for customs clearance.

Some days ago a letter from the Ethiopian Revenues and Customs Authority (ERCA) was widely circulated urging that private companies should immediately begin to use the multimodal system, effectively cutting out freight forwarders as ESL is the only group to hold a licence for multimodal transport into Ethiopia approved by the Djibouti authorities. The Government have also started holding workshops to inform importers how to use the system and state the letter is merely informative advising importers they have the choice whether or not to use the system.

Ethiopian freight operators say firstly that the licence to operate the newly opened port of Modjo was granted, without a tendering process, to Dutch logistics group Steder B.V. Some apparently further assert that the head of the Ethiopian Freight Forwarders and Shipping Agency Association (EFFSAA), a fellow forwarder one Daniel Zemichael, should resign having allowed the situation to develop.

To confuse the situation further the Djibouti Customs Authority has shown reluctance for any in the private sector to make direct use of the multimodal facility. Djibouti port earns an estimated $600,000 from the sale of uncleared container freight annually and demurrage charges there are approximately 70% higher than those at the Ethiopian dry ports.