Delays in loading, unexplained fees and demurrage costs, and refusals to issue bills of lading are some of the problems that frustrated Ethiopian exporters and logistics operators brought up during interviews with The Reporter over the past couple of weeks.
The challenges arise from negligent and unfair practices on the port of Djiboutian authorities, as well as a lack of integration and coordination between international shipping companies, the Ethio-Djibouti Rail, and other actors in the logistics sphere.
A manager at one of the leading coffee exporters based in Addis Ababa told The Reporter that a shipment of several containers of coffee has been stranded in Djibouti for several days as a result of inconsistent procedures.
“It is still on the train because MSC [Mediterranean Shipping Company] and the authorities there refused to allow the cargo to pass through and be loaded onto the ship,” said the manager.
Meanwhile, Ethiopia-Djibouti Railway charges 42,000 birr a day for each wagon the manager has been unable to offload.
An executive at a logistics firm also based in Addis Ababa shared a similar experience.
“My cargo was held in Djibouti for longer than a week,” said the executive, whose firm was charged demurrage fees after the ship that was supposed to pick up its cargo faced delays.
“The ship was delayed, but the authorities and agents asked me to pay demurrage. The delay wasn’t my fault. Why should I be charged?” asked the executive.
Agents are exacerbating the problems, according to people in the industry.
“Agents are typically foreigners based in Djibouti and Addis Ababa. When something happens, for instance, a cargo delay, agents charge all parties demurrage fees. They take money from the shipping company, the exporter, and the inland logistics company,” said the executive.
Exporters and logistics operators are growing increasingly frustrated with the unpredictable and unfair bureaucratic hurdles they face on the country’s primary international trade route.
They say shipping companies impose exorbitant demurrage fees for cargo delays, while port management also demands payment for the extra time that cargo spends in their jurisdiction, no matter whose fault it is. The Ethio-Djibouti Railway also charges fees for failure to unload wagons on schedule, even if the delays are unavoidable.
Industry insiders say shipping companies and Djiboutian and Ethiopian authorities are to blame.
“They charge us 100 dollars for a bill of lading, which is nothing but three copies of a form printed in Addis Ababa. It isn’t security printing or some sort of expensive paper. The government intentionally took the bill of lading to Djibouti so it can charge us in dollars,” said the coffee exporter.
Despite the hassle, exporters and operators say Ethiopian officials are unwilling to understand or solve the problems.
“We’ve complained to the Ministry of Transport and Logistics, Customs Commission, and Freight Forwarders Association several times. But there is no solution,” said the logistics company manager.
Officials at the Ministry stated they are working with Djiboutian authorities to resolve the issues.
Despite Ethiopia facing these challenges, the key question remains: What prevents Ethiopia from rapidly and substantially increasing its use of Berbera Port in Somaliland?
