Djibouti Backs off from Proposed Operation Monopoly at Doraleh

The government of Djibouti backed off, last week, from its plans to grant exclusive rights to a private consortium, which would have undertaken the operation of container stuffing and unstuffing inside its own premises, sources disclosed to Fortune.

Spearheaded by a logistic firm, Maersk Djibouti Container Freight Station (MDCFS), these operations were given to this consortium, which opened a specially designated location known in Djibouti as PK 12. This is an area on the outskirts of Djibouti Town, a couple of kilometres from the Doraleh Port. This stirred an uproar in Djibouti and Ethiopia among forwarding companies and led to hundreds of trucks stranded inside the port.

Ethiopia has an average of 100,000 inbound containers a year. Close to half of them get unstuffed at the container terminal inside Doraleh, upon the request of the importers. Its outbound containers are estimated to reach between 30,000 and 40,000 units annually. Close to 90pc of this is stuffed in Djibouti.

The additional burden on Ethiopia’s economy as a result of the new procedure would have come close to 8.6 million dollars, according to industry experts.

Authorities in Djibouti reconsidered their decision last week, according to these sources. They have allowed containers bound for export from Ethiopia to continue being stuffed inside Doraleh, while all containers brought to the port by the state owned Ethiopian Shipping Lines (ESL) will continue being unstuffed there.

Managers of DPWorld Djibouti have already communicated this decision to their counterparts at the ESL, according to these sources.

However, a couple of trucks – operated by PACKTRA Plc -  loaded with containers and belonging to the Ethiopian Electric Power Corporation (EEPCo) remain stranded inside PK 12. Cargoes in these trucks, stranded for six days now, are processed by PACKTRA’s forwarding agent in Djibouti, Inchcape, one of the partners for Maersk. Although Inchcape processed the documentations, Ethiopian customs officers in Djibouti declined to issue a “forward way bill,” a document cargoes need to enter the country.

However, it is not clear whether this is a reversed decision or a temporary measure in order to address the issue of trucks held inside the port. But it is a political decision that came from the highest order of the government in Djibouti, due to the circumstances, officials involved in the process claimed.

The government has also proposed that forwarding companies in Djibouti receive their own designated plots near the port, and continue to undertake their respective operations of stuffing and unstuffing containers, sources disclosed.

Ethiopian authorities, in the meantime, met last week to respond to Djibouti’s unanticipated move, where they agreed that their long-term response should be to undertake all stuffing and unstuffing of containers at the dry port established in Modjo, Oromia Regional State, and Semera, Afar Regional State, reliable sources disclosed.

By Tamrat G. Giorgis
Fortune Staff Writer

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