Clearing the Jam in Djibouti


From Djibouti to Ethiopia expeditiously

Somaliland sun- Bags of wheat speed down multiple conveyor belts to be heaved onto trucks lined up during the middle of a blistering June afternoon beside the busy docks of Djibouti Port. Once loaded, trucks set off westward toward Ethiopia carrying food aid to help with its worst drought for decades.

With crop failures ranging from 50% to 90% in parts of the country, Ethiopia, sub-Saharan Africa’s biggest wheat consumer, was forced to seek international tenders and drastically increase wheat purchases to tackle food shortages affecting at least 10m people. This meant extra ships coming to the already busy port city of Djibouti, and despite the hive of activity and efforts of multitudes of workers, the ships aren’t being unloaded fast enough. The result: a bottleneck with ships stuck out in the bay unable to berth to unload cargoes, both humanitarian and commercial.

“This is bad for the shipping line and for the customers of the shipping line when they are paying a lot of money for the waiting period,” says Ali Toubeh, a Djiboutian entrepreneur whose container company is based in Djibouti’s free trade zone. “Vessels that came in February were released in May.”

At the middle of July, 33 ships remained at anchorage including 12 waiting to unload about 476,750 tonnes of wheat – down from 16 ships similarly loaded at the end of June – according to information on the port’s website. At the same time, 15 ships had managed to dock including four ships carrying about 83,000 tonnes of wheat, barley and sorghum.

“We still have a lot of ships carrying humanitarian cargo waiting,” says Aboubaker Omar Hadi, chairman of Djibouti Ports and Free Zones Authority. “We received ships carrying aid cargo and carrying fertiliser at the same time, and deciding which to give priority to was a challenge. If you give priority to food aid, which is understandable, then you are going to face a problem with the next crop if you don’t get fertiliser to farmers on time.”

Hot hard work

Once ships have berthed, however, there remains the challenge of unloading them, a process that can take up to 40 days, according to aid agencies assisting with Ethiopia’s drought.

“I honestly don’t know how they do it,” port official Dawit Gebre-ab says of workers toiling away in temperatures around 38 degrees Celsius with humidity of 52 percent feel more like 43 degrees. “But the ports have to continue.”

The port’s 24-hour system of three 8-hour shifts mitigates some of the travails for those working outside, beyond the salvation of air conditioning – though not entirely.

“We feel pain everywhere, for sure,” Agaby says during the hottest afternoon shift, a brightly coloured vest bound around his forehead as a sweat rag, standing out of the sun between trucks being filled with bags of wheat from conveyor belts. “It is a struggle.”

To help get food aid away to where it is needed and relieve pressure on the port, a new 756km railway running between Djibouti and Ethiopia was brought into service early in November 2015 – it still isn’t actually commissioned – with a daily train that can carry about 2,000 tonnes, Aboubaker says.

Capacity will increase further once the railway is fully commissioned this September and becomes electrified, allowing five trains to run every day carrying about 3,500 tonnes each.

Djibouti also has three new ports scheduled to open in the second half of the year – allowing more ships to dock – while the new port at Tadjoura will have another railway line going westward to Bahir Dar in Ethiopia.

This, Aboubaker explains, should connect with the railway line currently under construction in Ethiopia running south to north to connect the cities of Awash and Mekele, further improving transport and distribution options in Ethiopia.

“Once the trains are running in September we hope to clear the backlog of vessels within three months,” Aboubaker says.

Djibouti lifeline

The jam at the port has highlighted for Ethiopia – not that it needs reminding – its dependency on Djibouti. Already about 90% of Ethiopia’s trade goes through Djibouti. In 2005 this amounted to 2m tonnes and now stands at 11m tonnes. During the next three years it is set to increase to 15m tonnes.

Hence Ethiopia has long been looking to diversify its options, strengthening bilateral relations with Somaliland through various memorandums of understanding during the past couple of years.

The most recent of these stipulated about 30% of Ethiopia’s imports shifting to Berbera Port, which this May saw Dubai-based DP World awarded the concession to manage and expand the underused and underdeveloped port for 30 years, a project valued at about $442m and which could transform Berbera into another major Horn of Africa trade hub.

But such is Ethiopia’s growth – both in terms of economy and population; its current population of around 100m is set to reach 130m by 2025, according to the United Nations – that some say it’s going to need all the ports it can get.

“Ethiopia’s rate of development means Djibouti can’t satisfy demand – even if Berbera is used, Ethiopia will also need [ports in] Mogadishu and Kismayo in the long run, and Port Sudan,” Ali says.

Trucking equation

“The bottleneck is not because of the port but the inland transportation – there aren’t enough trucks for the aid, the fertiliser and the usual commercial cargo,” Aboubaker says, explaining that even with other ports such as Berbera offering more docking options in the future, the problem of not enough trucks matching demand would lead to the same dilemma as now.

It’s estimated that 1,500 trucks a day leave Djibouti for Ethiopia and that there will be 8,000 a day by 2020 as Ethiopia tries to address the shortage. So many additional trucks – an inefficient and environmentally damaging means of transport – might not be needed, Aboubaker says, if customs procedures could be sped up on the Ethiopian side so it doesn’t take trucks 10 days to complete a 48-hour journey from Djibouti to Addis Ababa to make deliveries.

“There is too much bureaucracy,” Aboubaker says. “We are building and making efficient roads and railways: we are building bridges but there is what you call invisible barriers – this documentation. The Ethiopian government relies too much on customs revenue and so doesn’t want to risk interfering with procedures.”

Ethiopians are not famed for their alacrity when it comes to paperwork and related bureaucratic processes. Drought relief operations have been delayed by regular government assessments of who the neediest are, according to some aid agencies working in Ethiopia.

While the port’s food aid bottleneck has highlighted logistical frictions, Ethiopia and Djibouti look set to continue increasing ties and strengthening economic integration as they develop joint projects such as the new railway lines and an oil pipeline between the two countries.

Meanwhile as night descends on Djibouti City, arc lights dotted across the port are turned on, continuing to blaze away as offloading continues throughout the night and heavily laden trucks bound for Ethiopia set out into the hot darkness.

“Ethiopia has a population 100 times larger than Djibouti’s but it only imports and exports six times as much,” Aboubaker says. “Imagine the day that demand matches Ethiopia’s population size.”

Written by James Jeffrey

AfteAuthor Thumbnailr completing a master’s degree in journalism at the University of Texas at Austin in May 2012, James Jeffrey spent a year freelancing in US focusing primarily on business, including writing for the Austin, Houston, San Antonio and Dallas Business Journals. In October 2013 he moved to Addis Ababa, Ethiopia, to write about business-related features primarily, while endeavouring to cover other topics of interest in a remarkable country.

SOURCE:- Africanbusinessmagazine