By Muluken Yewondwossen
Logistics operators in Ethiopia and Djibouti applaud the initiative currently being implemented by the Djibouti Ports and Free Zones Authority (DPFZA) in lessening the financial burden shouldered by shipping agencies.
DPFZA which is the main authority overseeing the country’s logistics industry had a month or so ago sent a circular indicating a cap on shipping agencies charges at 20 dollars as delivery order fee; to which stakeholders were notified this past week.
In addition to fee cap, the logistics authority has replaced cash deposits with bank guarantees for container and demurrage deposits. The authority has further fixed the exchange rate based on the amount applied by the Djiboutian central bank, which was welcomed as a noteworthy action.
According to the copy of the circular that Capital took a hold of, the shipping agencies were reminded that the delivery order tariff, inclusive of all costs, is set at USD 20 per delivery order and per bill of lading for all types of goods.
“This amount should not exceed the aforementioned limit,” the circular underlined.
As stated this is in accordance with the circular that was issued on August 26, 2018, in response to complaints from cargo owners.
Logistics participants stated that the fact that separate delivery order rates apply to Ethiopian and Djiboutian freight forwarders was of major discomfort.
Freight forwarders that Capital spoke to claim that shipping agencies have been charged service fees, such as those for clearing containers and port security, which can total up to USD 50.
However, DPFZA has capped these fees at USD 20, which makes it much easier financially for logistics agents in both countries which in turn lower costs associated with these kinds of expenses for the final consumers of goods.
It is also brought to the attention of shipping agencies that only bank guarantee letters must be requested for deposits of containers and demurrage until the return of the containers against documents named “Equipment Interchange Receipt” (EIR),” according to the circular signed by Aboubaker Omar Hadi, Chairman of DPFZA.
It further said that bills pertaining to damages to containers or detention fees must be sent to the bank together with the customer’s acknowledgement. It stated clearly, “Also as standard procedure, no container deposit is required for containers stuffed or unstuffed inside port limits.” Freight forwarders said that as a guarantee for containers, shipping agencies, particularly the more junior ones, are requesting cash despots of USD 7,000 and USD 3,500 for 40 and 20 feet containers, respectively.
According to information told by industry players to Capital, “Now that the authority has only mandated a bank guarantee as assurance for container returnee, it has significantly relieved us to manage our operation smoothly without financial burden.”
The shipping agencies are now required by DPFZA to utilize the official exchange rate instead of their own. This is another new rule. It is said that in order to convert Djibouti franc for delivered services, all shipping agencies must utilize the foreign currency rate set by the Djibouti Central Bank.
“The central bank exchange rate is floating from 174.5 to 175 Djibouti franc for a dollar, while shipping agencies are calculating a dollar from 178 to 179 Djibouti franc,” freight forwarding agents claim, adding, “The other thing we are suffering from is the exchange rate that shipping agencies asked higher amounts against the official exchange rate of the central bank in Djibouti.”
“Compared to the previous experience, we will now have some relief with the exchange rate,” they opined.
The authority’s circular dated October 29 mandates that shipping agencies adhere to these guidelines consistently. On Friday, December 1, experts informed Capital that they anticipate implementation to happen shortly.
