[dehai-news] allafrica.com: Ethiopia: Congestion at Djibouti Port Makes Transport Cost Hit the Roof

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From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Tue Mar 10 2009 - 06:56:12 EST

Ethiopia: Congestion at Djibouti Port Makes Transport Cost Hit the Roof

Tamrat G. Giorgis

10 March 2009


This is a season when a series of vessels loaded with tens of thousands of
tons of aid cargo and fertilizer arrive at the Port of Djibouti all at the
same time. This time around though, there are two additions to the cargo - a
huge amount of cement and tens of thousand of wheat government has imported
to stabilize domestic prices - contributing to what industry operators say
is an already congested the port.

There are close to 18 vessels under operation or anchored on the sea waiting
for the harbour master's instruction to start off loading, according to port
reports. The heaviest load has been brought in by a vessel named Mighty
Michalis, carrying 48,934tn of wheat; it has a daily discharge of 2,676tn.

This amount is part of the total 290,980tn discharged at the port last week:
The largest volume is cement (110,250tn) brought in by seven vessels, while
three vessels are carrying 107,548tn of wheat. There are also a further
three vessels loaded with 73,182tn of fertilizer.

The most affected are not only businesses. Aid cargo is not flowing as much
as it should, creating uncertainty about the distribution of relief inside
the country. Warehouses inside the Port of Djibouti and elsewhere in the
town used by the World Food Programme (WFP) are all full, observers there
disclosed. This was confirmed by WFP officials in Addis.

"A large quantity of WFP's food is at the port," Paulette Jones, WFP
spokeswoman in Addis Abeba, was quoted by IRIN last week. "These [food]
commodities are needed urgently to assist beneficiaries who are still
suffering from the impact of the drought, high food prices and [low] global
food stocks."

As a result, the transport cost per ton has risen to a record high of 70 Br,
disclosed operators.

There are conflicting opinions on what actually caused the congestion. Some
say it is due to insufficient number of trucks operating on the corridor.

"This is temporary and not as bad as last year," said a maritime expert from
Djibouti. "The shortage of trucks happens at this particular period and
things will ease in the subsequent months."

Others in the industry, however, blame lack of coordination among several
agencies operating in the maritime sector.

Officials of these agencies, however, say they are trying to ease the cargo
jam, moving as much cargo as possible by off setting the bureaucratic
bottleneck. Heads of the Revenues and Customs Authority (RCUA), the
Commercial Bank of Ethiopia (CBE), the Maritime and Transit Services (MTS)
and the Ethiopian Shipping Lines (ESL) are expected to sign an agreement
this week that would allow imports to enter mainland Ethiopia even though
import formalities have not been fully completed, sources disclosed.

The agreement requires CBE to provide copies of bills of landing for customs
officials to let cargo enter the country even though the importer has not
paid the balance on the letter of credit and duty has not been paid to the
authority. ESL would agree to surrender the cargo even when the consignee
has not fully paid the shipping cost and MTS would process the transit for
transporting cargo to the new dry port facility at the outskirts of Modjo
town, 73Km east of Addis Abeba, in the Oromia Regional State.

Consignees would be required to pay warehouse fees to the new management of
the dry port, and granted sufficient time to finalize all payments to the
various agencies before they move their imports from the facility, disclosed
industry sources.

The Modjo Dry Port facility lies on 61hct of plot and comprises two huge
warehouses, as well as offices for customs, banks, insurance and maritime
transit. Although the project was scheduled to be completed in July 2008,
the completion date had been postponed. Construction work was under way last
week, while one huge mobile container mover imported from Europe arrived at
the facility two weeks ago.

It would be the first time that the government allows cargo to enter the
country from Djibouti before customs duties are paid, and balances on
letters of credit fully settled to commercial banks by importers. It is an
attempt to spare the country from the cost in foreign currency paid to
Djibouti as warehouse fees, and the subsequent auctioning of imported goods
by the port's management every six months.


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