With a paid-up capital of half a billion Birr, Gulf Ingot is expanding its operations in the Horn of Africa market, having previously focused on unimodal dry-port transportation with a fleet of 160 vehicles. According to Yitbarek Zewde, board chairman of Gulf Ingot, the company’s plans are "extensive.” It intends to transition to full multimodal operations within six months, including investments in four ships and the pursuit of joint ventures with international shipping companies as well as partnership with Ethio-Djibouti Railway Corporation for railway transport.

For decades, the Ethiopian logistics market was dominated by ESLS, which managed roughly 90pc of the country’s cargo traffic. This monopoly had long been criticised for its inefficiencies and high costs. A recent study by the World Bank rated Ethiopia’s logistics performance at 2.94 out of five, citing major weaknesses in infrastructure (2.84), international shipment competitiveness (2.82), and time efficiency (2.89).

These deficiencies have been a source of concern for federal government officials and industry experts.

The Ethiopian Maritime Authority initiated the policy shift towards liberalisation, hoping to attract domestic and foreign investment to overhaul the sector. In recent years, the federal government has also issued licenses to companies such as Cosmos Multi-Modal, Tikur Abay, and Panafric Global, paving the way for broader participation in the logistics market.

Prime Minister Abiy Ahmed (PhD) has been vocal about reform. Citing the country’s poor logistics ranking — 126th out of 160 countries — he pointed out critical issues such as vessel inefficiency and exorbitant shipping costs.

The price for transporting a 20-foot container is 4,500 dollars, 429pc higher than in Vietnam.

The importance of these reforms is manifested by Ethiopia’s heavy reliance on Djibouti’s ports, which serve as the primary gateway for imports. Djibouti ports handle Ethiopia's imports, which were valued at 17.9 billion dollars in 2023. Import volumes were very large. In the 2023/24 fiscal year, the country imported on the order of 19 million metric tons of goods. Export volumes were much smaller, roughly 1.2 million tons during the same period.

However, the performance of these ports has come under scrutiny. The World Bank’s Container Port Performance Index shows a drastic decline in Djibouti’s ranking from 26th to 379th, although Djiboutian authorities ferociously contested this rating.

Critics of the previous monopoly model have long argued that it led to inflated prices and inefficiencies.

Logistics veteran Kassahun Abberu (PhD), from Akakas Logistics Plc, was one such critic. He recalled that the multimodal sector's monopoly created conditions that led to inefficiencies and increased export and import transportation costs.

“Nationalising the multimodal sector was a bad idea from the start,” he said. "While the current liberalisation is a step in the right direction, it should be fully implemented with relaxed financial criteria to allow more companies to enter the market and ultimately drive down costs and improve service."

The call for a competitive logistics environment is echoed by private-sector voices, including Elay Trading Plc, an importer of laboratory and agricultural equipment. Its General Manager, Israel Taye, reckoned his company's struggles with escalating shipping costs, noting that the price for a 40-ft container has risen to 6,800 dollars, forcing the company to pass on these costs to customers. He recalled delivery delays experienced under the incumbent system, with nearly half of the company’s orders arriving late, sometimes taking as long as two months instead of the expected 28 days.

“It'll be beneficial to have more choices,” he said.

He is optimistic that introducing new operators will help reduce shipping times and costs while enhancing overall operational efficiency.

PUBLISHED ON Mar 21,2025 [ VOL 25 , NO 1299]

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