Aug 8 , 2020
By MAYA MISIKIR ( FORTUNE STAFF WRITER )
The Ethiopian Customs Commission has frozen courier services of 16 companies citing the lack of an operator license.
The Commission sent out a notice informing the courier service providers, including FedEx and UPS, that it had suspended their services as of last Thursday, August 6, 2020. However, DHL, the German courier and express mail service, and EMS, the designated universal postal service provider of the Ethiopian Postal Service, have continued as they operate in their own designated warehouse.
The courier service providers had been operating out of an area managed under International Cargo & Aviation Services, which was renting out space to the 16 service providers at a location inside a terminal at Bole International Airport. However, a year ago, when the airport underwent renovation work, they were temporarily moved to an area at the cargo division of Ethiopian Airlines.
The courier companies have been operating there since then and paying a fee to the Ethiopian Airlines based on the type of cargo they were handling, amounting to 10 Br with value-added tax (VAT) a kilogram.
A few days before barring their services, the Commission had informed the courier providers they need to resolve the issue of warehousing for their items and that the current procedure was against customs laws. The Commission stated that this has caused difficulty in the storage and handling of shipments coming to and from the country.
It mentioned that the lack of a designated warehouse operator has also led to the loss of items and opened it up for theft without a registration and division process. The letter further stated the courier services will have to operate under the Ethiopian Airlines warehouse or another licensed operator to administer the incoming and outgoing goods and that the current service will not be allowed any further.
Warehouse renting needs a license that follows the legal procedure, according to Teferi Mekonnen, manager at the Addis Abeba Customs Branch Office.
"Both DHL and EMS have their warehouse operator license and are functioning accordingly," he said.
While the customs office does oversee the process, there needs to be someone in charge of the courier service providers at customs, according to the manager.
"Currently, what is happening is that all of these companies have access to one storage room and can take whatever they please," he said.
This brings in the issue of who will be held responsible for lost goods among themselves, as well as the fact that they are not operating within the legal parameters, making it difficult to supervise and take account, according to Teferi. "We've requested that they have one representative legal body that will be held accountable for what is happening in the warehouse."
"We've had multiple discussions on this issue with the couriers," said Teferi.
The courier providers, in a response letter signed by 14 companies, stated that they are open to discussion and resolution.
"We want to continue providing our services in the meantime," said Mulualem Geremew, managing director at Ahununu Express Service. "We have essential goods that are important and time-sensitive, from medicine to industrial inputs."
Five courier services had banded together to create a separate private entity and obtain a warehouse operator license last October following their relocation, according to Mulualem.
"However, the commission refused to give us a bonded warehouse license," he said. "Hence, we continued operating out of the space they had temporarily given us."
The bonded warehouse license, availed for dutiable goods, has now been green lighted by the customs authority on the grounds that the airlines allocate a space for the companies , according to him.
The courier providers are now in discussions with Fitsum Abady, managing director of Ethiopian Cargo & Logistics Services, to obtain a letter from Ethiopian Airlines regarding this.
Representatives of the courier companies have also visited a space around 200Sqm in the cargo area, according to Yonathan Beyene, owner of A to Z Express and vice-chair of the Ethiopian Courier Association, which is under formation.
"They want to give us a common shared space," said Yonathan, "as there isn't enough space to divide into 16 divisions and rent it out separately."
"Five of us are in the process of creating a company and obtaining a license as a separate entity," said Yonathan. "The remaining courier services will be paying a warehouse fee to the company to get their goods shipped."
The country has a significant warehousing problem in that there are not enough facilities, and those that are constructed are not up to standard, according to Girma Belete, a lecturer at the Addis Abeba University School of Commerce.
"Outside of the big players like Ethiopian Airlines and nonprofits like the World Food Programme, commercial warehousing still has a long way to go," he said. "The infrastructure is missing, and the cost is also very high."
Banding together of the courier services in this particular case can help strengthen their positions as well as give them the capacity, financial or otherwise, to get a warehouse and continue operations, according to the expert.
PUBLISHED ON Aug 08,2020 [ VOL 21 , NO 1058]
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