By Muluken Yewondwossen
The Ethiopian logistics industry is poised for transformation as new participants enter the multimodal market, heralding an era of increased competition and innovation. The long-awaited liberalization of the multimodal sector has reached a pivotal juncture with the selection of three local operators, marking a significant departure from the previous monopolistic trend.
Initiated by the government in 2020 as part of broader efforts to liberalize the industry, the multimodal scheme sought to diversify participation beyond Ethiopian Shipping Logistics (ESL), which had held a monopoly for 13 years. However, earlier attempts to open up the sector were thwarted when bids from prospective operators were withdrawn.
In the latest round of bidding, seven businesses vied for the opportunity to participate in the multimodal operation, demonstrating a keen interest in the burgeoning logistics sector. The selection process was guided by stringent criteria outlined in regulations dating back two years, aimed at ensuring the qualifications and capabilities of prospective operators.
Among the prerequisites stipulated by the regulations include a minimum paid-up capital requirement, ownership or lease of suitable land and infrastructure, logistical equipment, and a workforce of competent employees. Additionally, selected firms are mandated to possess a fleet of owned and rental trucks, maintain overseas branches, and establish partnerships in the shipping and aviation sectors.
While local operators dominated the latest bidding process, a multinational logistics company also threw its hat into the ring, reflecting the growing interest from foreign entities in Ethiopia’s logistics market. However, the participation of foreign firms was limited, with only one reportedly involved in the latest round of bidding.
Following a rigorous evaluation process, the Ethiopian Maritime Authority (EMA) announced the selection of three operators to advance to the next phase of the multimodal operation. Panafric Global Plc, Tikur Abay Transport Plc, and Cosmos Multimodal Operation Plc emerged as the chosen entities, signaling a shift towards greater private sector involvement in multimodal transport.
Despite challenges and regulatory complexities, the liberalization of Ethiopia’s logistics sector signifies a significant step towards fostering competition and innovation. With the government’s commitment to promoting industrial competition and facilitating private sector participation, the stage is set for a dynamic and vibrant multimodal logistics landscape that caters to the diverse needs of the Ethiopian economy.
As the selected operators prepare to embark on their multimodal journey, stakeholders anticipate heightened efficiency, enhanced service delivery, and greater connectivity within Ethiopia’s logistics ecosystem. The advent of new participants heralds a new dawn for the industry, characterized by increased competition, innovation, and economic growth.
