By Elias Gebreselassie
Addis Ababa, Ethiopia, November 26, 2011 – The Ethiopian Shipping Lines
Share Company (ESLSC) announced it is making the Multi Modal Transport
system service open to the private sector.
Transporting goods under a single contract but with at least two
different means of shipping such as rail and road is known as Multi
Modal. It makes the carrier liable for the entire trip even though it is
being carried through various means.
Often a Multi Transport Operator (MTO) will contract out to sub-carriers
even though they are legally liable to ensure the cargo arrives safe and
in good condition to its destination.
Yared Shiferaw, Law, Insurance and Commerce director at ESLSC said the
Multi Modal Transport system was implemented after Ethiopia and Djibouti
signed an agreement on November 18, 2006, with service being given
initially to government and aid organizations.
The two countries also signed an agreement between their customs
authorities known as the transit protocol agreement to harmonize their
procedures and formats used in transit operations. Following the
agreement, only one document is needed instead of numerous customs forms
The declaration is initiated in Djibouti instead of Ethiopia to minimize
the amount of time taken for transit permits.
ESLC has also sub-contracted forwarding agents at Djibouti port and
trucking companies for inland transport up to Modjo and Semera dry ports
that have comparatively smaller fees for storage and length of stay.
Dry Ports are ports without water bodies and vessels that perform
activities similar to seaports and are normally linked by different
transport modes with major water bodies. They can facilitate cargo
handling and movement with the aim of reducing cost, time and increasing
efficiency and can be established for landlocked countries as well as
nations that have sea ports but have problems with port congestion.
Yared said that a proclamation is being prepared to allow private MTOs
to participate in the service, increasing efficiency while reducing cost
and service time.
Kalayu Tessema Shipping and Logistics director at ESLSC said since
about 98 percent of Ethiopia’s exports and imports pass through Djibouti
port there are no plans to introduce the Multi Modal Transport System to
the other neighboring countries for now although that could be reviewed
if the trade volume increases.
For example, Somaliland’s ports could be part of this system if the road
infrastructure is upgraded, according to Yared.
Bruck Dagne, Logistics Manager at ESL also said the new system would
allow those in the private sector who use the uni-modal transport system
to avoid the large volume of paper work required for goods to be
imported to Ethiopia.
“The MTO will be liable for delays in delivery of goods at ports and
accidents in vehicles sub contracted by it to deliver the goods inland,
making it a more attractive option than the uni-modal system,” said
Bruck added that ESLC had previously sub contracted 34 land
transportation companies and is now registering new ones for this duty.
Yared, addressing concerns that it may not be able to cope with the
flood of private company customers, said, since the two dry ports are
expanding to accommodate even more goods there should be no cause for
concern. There are also agreements with companies like Comet Transport
and others to use their warehouses in case the dry ports are full.
ESLSC plans to promote the announcement through media and by meeting
directly with the business community.
ESL plans to import nine ships with credit from the Export-Import Bank
of China after an agreement signed on December 30, 2010. Yared said the
ships are expected to arrive within four years. Three of them are now in
the steel cutting process and the first batch is expected in the middle
of next year.
Kalayu added they plan to use the ships to replace old ones and to
create alternative potential markets and trade routes for Ethiopian
This fiscal year ESLSC hopes to obtain over five billion birr from
transporting goods and from cross trade carrying cargo belonging to
It is also in the planning stages of merger with the Dry Port Service
Enterprise and the Ethiopian Maritime and Transit Services to form one
government enterprise, although it’s expected to maintain its current
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