Djibouti Turns the Screw on Ethiopia's Freight Overhaul

Dec 20 , 2025. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

An unexpected change at Djibouti’s port has upended Ethiopia’s newly liberalised logistics industry. In recent weeks, Djibouti officials quietly barred operators without their own vessels from issuing bills of lading, leaving new private multimodal operators unable to move shipments. The decision, communicated informally, has caught companies off guard.

Djibouti’s unanticipated move to bar non-vessel-owning multimodal transporters from issuing bills of lading has sent tremors through the newly liberalised logistics industry, throwing into sharp relief the fragility of regional cooperation and the mismatch between policy ambition and geopolitical reality.

Implemented without formal notice, the new requirement has effectively suspended operations for a cohort of firms granted licenses to compete with the state-owned Ethiopian Shipping & Logistics Services Enterprise (ESLSE), a dominant actor in the sector for decades. The bill of lading, a foundation for maritime logistics, serves not only as a receipt for goods shipped but also as a legal document vital for customs, insurers, and international trade compliance. Without it, cargo movements grind to a halt.

The Ethiopian government’s decision last year to license private multimodal operators was heralded as a long-overdue step toward dismantling monopolistic control and injecting efficiency into a logistics sector plagued by high costs and chronic delays. Operators such as Ethio-Djibouti Railway S.C., Ethio-Railway Logistics Plc, and Gulf Ingot FZC Multimodal Operator represented a fresh competitive wave, soon joined by Pan-Afric Global, Tikur Abay Transport, and Cosmos Multimodal Operation.

Together, these companies signalled a shift toward a liberalised model in which vessel space could be chartered rather than owned, a method even ESLSE uses to complement its modest fleet. That model now lies in jeopardy. The Djibouti Port Authority, chaired by Aboubaker Omar Hadi, insisted that only vessel-owning operators may issue bills of lading, leaving private firms in Ethiopia stranded, literally and operationally.

“We followed ESLSE’s precedent and planned to charter space,” said Gashaw Hailu, CEO of Ethio Rail Logistics. “Now, despite paying guarantees and signing international shipping contracts, we're at a standstill.”

Gashaw argued that Djibouti’s move lacks legal standing under existing bilateral arrangements and international maritime norms, especially when such a crucial trade document is withheld from licensed operators without official notice.

Officials from the Djibouti Ports & Free Zones Authority were not reachable for comment by press time on Saturday.

For industry veterans like Dawit Woubishet of Gulf Ingot and president of the Ethiopian Freight Forwarders Association (EFFA), the issue cuts deeper than commercial logistics. He believes it exposes the vulnerabilities of conducting cross-border operations without a renewed and binding bilateral memorandum of understanding (MoU). The previous MoU governing Ethiopia-Djibouti port operations has expired, and renewal talks have been delayed, leaving a legal vacuum ripe for arbitrary enforcement.

According to Dawit, persistent regulatory uncertainty has made the corridor increasingly risky for private investors.

“We’ve committed significant capital, but without clarity on the rules, everything hangs in limbo,” he told Fortune. “We need a clear framework or alternatives that respect our investments.”

This uncertainty has paralysed business operations. Two companies now have cargo stranded at Djibouti’s port, their containers caught in a bureaucratic crossfire over the definition of what constitutes a legitimate multimodal operator.

Many in the logistics sector, such as Samuel Abebe, who has managed several major freight-forwarding companies, find Djibouti’s move "an overstep." He argued that port authorities should focus on charging "agreed fees," not on determining whether operators own ships.

“Vessel ownership should not be a regulatory test,” he said, referring to unimodal transport continuing to operate without constraints. "The same principle should apply to multimodal services."

In response to the growing tension, Ethiopian senior officials have launched a diplomatic push. A high-level delegation, including Prosperity Party Vice President Adem Farah, Foreign Affairs State Minister Berhanu Tsegaye, and Ethipian Railway Corporation (ERC) CEO Takele Uma, travelled to Djibouti last week to meet with President Ismael Omar Guelleh and other senior officials.

While the Ethiopian Maritime Authority claims to be “writing letters and holding discussions,” as Deputy Director Fraol Tafa stated, the pace of resolution appears glacial relative to the commercial urgency on the ground. The disruption arrives at a critical time.

“We're constantly writing letters and holding discussions to resolve these problems,” Fraol told Fortune.

Of the 25 million and 30 million tonnes handled annually across Djibouti’s ports, Ethiopian cargo accounts for as much as 70pc. In containers, more than 90pc of Djibouti’s roughly one million TEUs are tied to Ethiopian trade.

Each year, more than 20 million tonnes of imports and exports for Ethiopia move across the border into Djibouti. However, dry bulk, such as grains, clinker and construction inputs, accounted for about 15 million tonnes a year, while liquid bulk, mainly petroleum products, adds a further five million tonnes. Containerised cargo represented 10pc to 15pc of Ethiopia’s trade by volume, equivalent to roughly two million to three million tonnes, but a far larger share by value. Annual throughput linked to Ethiopia is estimated at between 800,000 and one million TEUs, growing at up to 10pc a year as manufacturing and agro-processing slowly gain traction.

In 2023/24, Ethiopia's exports amounted to roughly four million to five tonnes, primarily coffee, oilseeds and a modest flow of minerals. Containers increasingly carry processed coffee, sesame and other oilseeds, cut flowers and vegetables shipped in refrigerated boxes, and a small but rising volume of garments from industrial parks.

Gulf Ingot, with a registered capital of half a billion Birr, was preparing to scale its operations into vessel partnerships. Ethio Rail Logistics has invested 350 million Br and mobilised a fleet of 200 trucks. Ethio-Djibouti Railway has earmarked 300 million Br to expand into full multimodal services. These investments are now stalled, casting a shadow over future liberalisation efforts.

Unlike ESLSE, which benefits from its position as the legacy incumbent, most of these private entrants lack ships and plan to charter vessel space for bulk cargo. The new restriction makes this model unworkable for now. However, the appetite for investment remains strong.

However, the sudden restriction threatens to undo much of the momentum created by the recent liberalisation efforts. High shipping costs, operational inefficiencies, and chronic delays drove the government’s reform of the logistics sector. The country ranks 126th out of 160 countries in global logistics performance, uncovering the pressure to open the sector and improve competitiveness.

PUBLISHED ON Dec 20,2025 [ VOL 26 , NO 1338]