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Clients in outrage over railway tariff

Clients who have a freight service contract with Ethio Djibouti Railway SC (EDR) are in outcry over the company’s imposition of a new tariff prior to the deadline they had signed for their consignment. On the flip side, the logistics firm has dismissed the claim.
On the notification letter via email, EDR disclosed that it has revised the consignment tariff as of August 1.
According to the contract amendment that EDR sent to its clients, the new tariff has an increment of over 16,000 birr per container and unlike the past the new rates are in USD.
An exporter that Capital spoke to explained that he has a contract rate with the firm with his set duration yet to be complete, and with the new rates kicking in, he expressed his worry, stating, “it will affect my export since I am running the business as per the existing logistics expense that I agreed with EDR.”
Another exporter who signed a six-month contract agreement with EDR and has so far used the first three months, explained that the rate he had agreed upon was 24,960 birr from Indode Terminal and 22, 512 birr from Mojo for a forty feet container, “I have an active contract that does not mention any price revision but they have revised the rate to USD 744 for a forty feet container that shall be loaded from Indode.”
Both exporters have similarly argued that the contract agreement they signed was not inclusive of any tariff revision.
They expressed that the service that EDR provides is seamlessly perfect and incomparable with truck operations, while such sudden rate revisions will erode and diminish the trust with the service provider, they opined.
They also reminded that the logistics sector is crucial for trade and competitiveness in the global market.
The revised contract that was sent by Teshome Eshete, Chief Operation Officer (COO) of EDR, said that the price of container transportation from Indode railway freight yard to SGTD container railway freight yard shall be USD744 per 40ft container and USD 753 per two TEU containers.
“If the client makes payment in Ethiopian Birr, the exchange rate from USD to ETB shall be the prevailing exchange rate of Commercial Bank of Ethiopia at the date of payment,” it added.
Teshome said that the railway company has neither revised the price nor increased it, “from the inception as per our operation the rate is stated on USD, but we have been giving a price at lower exchange rates that was converted years back, which is against the latest official exchange rate.”
“Issuing the daily rate is the mandate of the National Bank of Ethiopia, because of that the relevant government body ordered us to use the proper exchange rate rather than using our own rate,” he explained.
“Revising the rate is the responsibility of shareholders; we don’t have a right to put new price,” the COO told Capital.
He reminded that the rate that was mentioned on foreign currency was set in 2017 when the Ethio Djibouti Electric Railway system commenced service, “we are saying that the dollar rate was not properly exchanged that is now corrected.”
The COO added that the operation cost is growing due to different reasons including the price hike on petroleum that EDR is using for shunting, which is a process to transfer cargos at loading/unloading sites that are not connected with electricity.
“As far as my knowledge, only one person has complained regarding the latest payment change on foreign currency,” he added.
He argued that the railway consignment rate is still very fair compared with the road transport.
“The road transport for two TEUs is in minimum 120,000 birr that is about 80,000 birr at the railway transport. We have a minimum of 40 percent lower rate than road transports,” he elaborated.
He added that the rate is also lower compared with regional markets, “compared to Kenya, we have at least 15 percent lesser pricing.”
EDR has over 800 customers, who use the line to transport their cargos.
In the ended budget year, EDR said that even thought there is constrain on global cargo schemes it stated that it accomplished the budget year with the best performance in terms of lifting cargos on time and other operations.


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