Shipping Company Consolidates Market Amid Dollar Targets Slip

Shipping Company Consolidates Market Amid Dollar Targets Slip

Feb 14 , 2026. By YITBAREK GETACHEW ( FORTUNE STAFF WRITER )

The state-owned shipping and logistics giant posted 74 billion Br in second-quarter revenue, a 59pc jump from the same period last year. The company reported that it has increased vessel transportation capacity by 92pc and now handles 40pc of the country’s imports end-to-end on its own ships. On land, eight dry ports, including Modjo, which processes about 78pc of imports, anchor a network that moved 3.9 million tonnes of cargo in the second quarter, though still 300,000tns short of the target.

The state-owned shipping company has become one of the standout enterprises, but its latest results lay bare a policy dilemma.

In the second quarter of the current fiscal year, the Ethiopian Shipping & Logistics Services Enterprise (ESLSE) posted 74 billion Br in revenue, a 59pc jump from the same period a year earlier. It has moved more cargo, collected more money in Birr and tightened its grip on the country’s import chain, handling 40pc of import transportation “end to end” on its own vessels. According to its senior executives, transportation capacity from its vessel services is up 92pc.

However, behind the reported boom in domestic earnings, the company is missing the target that matters most to the wider economy. The company's goal of 150 million dollars in foreign-exchange earnings for the first half of the year fell short by 16 million dollars. The executives attributed the fall to rising international shipping costs and a deliberate retreat from cross-trade operations abroad, which had allowed the company to earn from cargo beyond Ethiopia’s direct trade routes.

Abdulber Shemsu, CEO of the company, argued that abandoning cross-trade will help stabilise domestic prices and improve marketing, even as it cuts dollar income. In an economy starved of hard currency, the choice to prioritise lower freight costs for domestic customers over foreign-exchange inflows exposes a trade-off between short-term relief for importers and the longer-term need to rebuild reserves.

ESLSE owns and operates 10 ships and charters more than 60 vessels, giving it multiple shipping slots each day and access to hundreds of ports worldwide. On land, it runs eight dry ports, including the Modjo terminal in Oromia Regional State, built in 2009 on 150hct land and handling about 78pc of the country’s imports. The Enterprise transported 3.9 million tonnes of inbound and outbound cargoes in the second quarter, short of its target by 300,000tns.

For critics, the latest disclosure not only revealed operational consolidation but also the market power of an operator that faces little effective competition. They argue that where there are few alternatives, ESLSE can shape tariffs and terms in ways that entrench its dominance even as it presents itself as "a shield for consumers against high international freight rates."

Management changes have accompanied this growing influence. Abdulber was appointed chief executive officer (CEO) in October 2025 after serving as director general of the Ethiopian Maritime Authority, replacing Beriso Amalo (PhD), who had headed the company for more than two years. Abdulber, who studied civil engineering and specialised in construction management and leadership, has already reshuffled senior managers, promising to unclog operational bottlenecks and push a new strategic direction.

His tenure began amid criticism over the import of expired fertiliser last September, an episode that raised questions about oversight across the logistics chain the company increasingly controls. According to him, ESLSE is working to support Ethiopian logistics service seekers but has not yet fully delivered on its plans due to "various challenges." The company, he argued, was compelled to lower transportation costs on its own vessels so customers do not “have to pay so much.”

"This is to be achieved by avoiding cross-trade," he said.

A new five-year strategy is presented as the answer. Running through 2031, it seeks to lift annual revenue to 295 billion Br by its final year and generate 1.7 billion dollars in foreign-exchange earnings. The plan is anchored in fleet expansion, with the company intending to acquire 16 additional vessels to fortify its position in global logistics, with six expected this year. The company is in talks with the Commercial Bank of Ethiopia (CBE) to finance half the cost of the six vessels, with the balance to be covered from its own resources after earlier discussions with other financial institutions failed to produce a deal.

The acquisition list includes two new Ultramax ships, two Ultramax vessels in service and two container carriers. International market prices indicate that a new Ultramax with a capacity of 62,000tn can cost in the mid-30 million-dollar range, while a used vessel can approach 28 million dollars.

The strategy extends beyond adding tonnage. The shipping firm, long operating as a second-party logistics provider that owns and operates ships, vehicles, and other assets primarily to move goods, plans to transform itself within five years into a fully fledged third-party logistics provider. The company intends to offer integrated services, from freight brokering, shipping, warehousing, and inventory management to order fulfilment, returns handling, supply chain strategy, and access to logistics technology.

"This will expand ESLSE's competitive advantage while keeping shipping at its core," said Abdulber. “It helps us expand our competitive advantage. Shipping is our core focus, and we will continue to prioritise it.”

Some businesses, however, worry that moving up the logistics value chain will extend the company’s already strong grip on the market, making it harder for emerging firms to survive even as officials present the shift as "a step toward modern and end-to-end supply-chain management."

Beyond commercial expansion, the plan disclosed institutional reform, digital modernisation, customer-centred service and sustainability. According to the CEO, the company is pursuing digitalisation “from end to end” to prevent malpractice.

According to Abdulber, the strategy is formulated to align with Ethiopia’s 10-Year Development Plan and the gradual liberalisation of the logistics sector. It includes "stronger multimodal transport, expanded services for industrial parks, and green fleet initiatives."

ESLSE also wants to expand its presence into four countries by increasing its equity stakes in foreign ventures, although it has not disclosed which markets it is targeting. Domestically, it plans to gradually increase the share of rail transportation in its logistics mix. According to Abdulber, more fertiliser has been moved by train this year than last, and rail transport is more profitable than trucking.

For all the talk of diversification, however, the company’s fortunes remain tied to Djibouti Port and the Suez Canal.

Djibouti handled 95.1pc of Ethiopia’s imports in the first half of the year, reinforcing its role as the primary trade gateway. The Suez Canal carries about 30.6pc of global container traffic and channels goods worth more than a trillion dollars a year. Tensions around the Canal have spooked shippers. According to Abdulber, ESLSE has been able to capitalise on the situation rather than suffer losses.

"The Enterprise is prepared to use alternative ports if conditions change," he said.

Ethiopia’s import profile shows the scale of what is at stake. Imports from China reached 5.57 billion dollars in 2023, while imports from the United Arab Emirates (UAE) were 578 million dollars.

Experts say ESLSE’s difficulty so far in fully executing its plans and meeting foreign-exchange targets comes due to swings in international prices and a strategy that leans on revenue growth through market dominance. Multimodal service providers are still obtaining licences, and the ESLSE does not easily allow merchants to ship through other companies.

For Samuel Abebe, import-export marketing and sales operations manager at Mechatu Trading S.C., the result is a logistics arena still shaped by a single actor. While acquiring ships could in principle enable other operators to expand their activities, until new multimodal providers become fully operational, the national carrier is likely to continue dominating shipping and much of the wider logistics sector. According to him, international shipping prices have climbed even as ESLSE keeps its domestic prices relatively low and offers discounts to maintain bargaining power in a market where demand for shipping services has declined.

Samuel also pointed to falling exports in some areas and security problems at home and abroad. Sesame from Gonder, for instance, can be restricted by domestic instability, weakening export volumes. He believes that ESLSE's strategy, if combined with openness, could support free trade and help reduce shipping costs, but stated that logistics still requires money and transparency. As more operators obtain licences, engage in contract shipping and accumulate experience, they may begin to shape the market more forcefully.

PUBLISHED ON Feb 14,2026 [ VOL 26 , NO 1346]