The Ethiopian Maritime Authority (EMA) has officially launched the second phase of its Multimodal Transport Operators (MTO) induction program, signali
The Ethiopian Maritime Authority (EMA) has officially launched the second phase of its Multimodal Transport Operators (MTO) induction program, signaling a significant step in modernizing Ethiopia’s logistics sector.
The event, held in Addis Ababa, was attended by Ethiopia’s Minister of Transport and Logistics, Alemu Sime, EMA Director General Abdulber Shemsu, and other distinguished officials. This initiative aims to enhance the efficiency of the logistics industry by integrating various transport services, streamlining the movement of goods, and reducing costs.
Boost in import and export
Alemu Sime highlighted the government’s commitment to expanding Ethiopia’s logistics capacity by encouraging the participation of more transport operators. He emphasized that the multimodal transport system would improve the handling of import and export goods by creating a more integrated and coordinated framework. Sime also stressed the importance of competition among operators, stating that increased competition would lead to improved service quality and lower costs. He called on newly licensed operators to uphold high operational standards to ensure the system functions efficiently.
Abdulber Shemsu pointed out that logistical challenges such as port handling, warehouse storage, and customs clearance often result in delays and higher costs. He explained that the multimodal system is designed to address these issues by expediting transit processes, enhancing cargo security, and reducing foreign currency outflows. This, he noted, would make Ethiopia’s trade operations more competitive and cost-effective.
In a significant move toward market liberalization, EMA has granted licenses to five new multimodal transport operators. The newly approved operators include Panafric Global, Tikur Abay Transport, Cosmos MTO, Ethio-Djibouti Railway Standard Gauge Share Company, and Gulf Ingot FZC, a UAE-based firm. The decision to allow Gulf Ingot FZC into the market has drawn attention, as initial plans were to license only four new operators. This expansion follows the government’s decision to end the 15-year monopoly held by Ethiopian Shipping and Logistics (ESL), thereby opening the sector to increased competition.
However, challenges remain as ESL retains exclusive rights over key trade routes, particularly those with China and the UAE, which account for over 60% of Ethiopia’s imports. This has raised concerns about the potential for unequal competition. Legal experts, including Yared Shiferaw, have argued that all operators should have equal access to major trade routes. Similarly, Brook Taye, CEO of Ethiopian Investment Holdings (EIH), compared the changes in the logistics sector to Ethiopia’s telecom liberalization, suggesting that increased competition would ultimately strengthen state-owned enterprises.
Stakeholders have called on the government to address operational challenges, including improving access to banking services and establishing clear guidelines for market participation. While EMA views the licensing of new operators as a way to broaden market involvement, the success of these reforms will depend on effective implementation and regulatory oversight.