The Ethiopian Shipping & Logistics Services Enterprise (ESLSE) executives are finalising a deal to acquire nearly 200 heavy trucks for 15 million dollars. The Enterprise’s second attempt is to buy the cargo trucks with a loading capacity of 450qtl each.

A partnership between Sinotruk International and Yemkab General Import & Export Plc secured the deal last week. The companies have agreed to deliver the trucks in four months.

Executives hope the trucks will ease bottlenecks in the logistics corridor, besieged by a shortage of shipping containers and a surge in shipment costs.

“The trucks operating in the country can’t handle the Enterprise’s demand for freight transportation,” said Wondimu Denbu, deputy CEO for corporate services.

The executives had issued a tender last October to buy the trucks but were unsuccessful in striking a deal after many of the 35 companies that bought bid documents failed to place offers. Four were unable to pass the technical evaluation. In March this year, six suppliers submitted offers, and four did not make the technical evaluation.

Sinotruk International, a subsidiary of the Sinotruk Group, manufactures a wide range of heavy-duty trucks, buses, and special purpose vehicles. Established 15 years ago, Sinotruk International has teamed up with Yemkab ImEx, a local company importing construction machinery since 2008.

The latest fleet of trucks will be an addition to the 475 trucks the Enterprise currently operates. After it merged with Comet Transport S.C., the Enterprise acquired half of the fleet six years ago. Wondimu hopes to see the latest procurement speed up inward freight transportation services from Djibouti and reduce demurrage costs. The Enterprise pays 11 dollars for a 20ft container that stays at ports in Djibouti beyond the eight-day grace period. The demurrage cost doubles for 40ft containers.

Logistics jam hold brought on by a shortage of trucks spurred the federal government to commission the construction of the Ethio-Djibouti Railway with 4.2 billion dollars in credit secured from the Export-Import Bank of China. However, the railway transport operational since 2018 accounts for less than five percent of cargoes shipped to and from Djibouti.

Most import and export items are transported by close to 14,500 freight trucks, with a load capacity of more than 250qtl. Nearly 90pc operate under the Ethiopian Transport Employers’ Federation, representing 54 associations in the industry. More than half of these associations work with the Enterprise. They carry a significant volume of 13.6 million tonnes of import and export commodities to and from Djibouti to the seven dry ports. Established in 2009, Modjo Dry Port is the largest inland terminal that hosts 75pc of the 24,000 containers handled by the dry ports.

Due to the foreign currency crunch, few trucks have been imported recently. Last year, the National Logistics Council, a 10-member body, gave the green light to transport associations to import 2,500 trucks to ease logistics hurdles and avoid congestion at ports in Djibouti. Central bank authorities availed foreign currency for the procurement, while the state-owned Commercial Bank of Ethiopia (CBE) facilitated credit for businesses. However, less than 500 trucks were imported through the scheme.