Saturday, April 13, 2024

Government urged to ensure equal competition in multimodal transport sector

By Muluken Yewondwossen


By Muluken Yewondwossen

The government is said that it should be taking a strong stance on equal competition in the recently liberalized multimodal scheme, according to experts in the logistics sector.

Despite the fact that the most recent selection procedure was unsuccessful, Capital has learned that the fifth multimodal operator is expected to receive a license as a non-vessel operating common carrier (NVOCC).

At a formal ceremony held on March 13 at the Sheraton Addis, the Ministry of Transport and Logistics (MoTL) awarded certificates to the three multimodal transport companies who were recently selected.

In addition to the existing state-owned VOCC, Ethiopian Shipping and Logistics (ESL), it has been stated that four other operators will be allowed access to the sector, under a plan that the government revealed almost four years ago.

According to the MoTL, ‘Multimodal Transport Operators Commercial Licensing and Competency Certification Directive no. 802/2021,’ prospective operators, including foreign businesses, have been invited to compete for the license, which will come into effect in approximately two weeks with the selection of Panafric Global, Tikur Abay Transport, and Cosmos Multimodal Operation.

The Amhara region oversees Tikur Abay, while Cosmos is a company founded by renowned logistics provider Tradepath International and Oromia region’s enterprise, Geda Transport.

One of the existing logistic firms, Panafric, has formed a partnership with a prominent businessman in the town.

According to industry analysts, the most recent action represents a significant turning point for the logistics sector.

However, they emphasized the need for the government to allow fair competition in the industry with the state-owned vessel operator. “We envision all actors having full access to the market and destinations,” they continued.

The international marine lawyer Yared Shiferaw commented on equal competition and said that ESL should keep holding the majority of the market share as multimodal operators as it is a national carrier.

Yared, a consultant and future partner of Cosmos, told Capital, “Even though ESL will continue as a leader in the operation, it is relevant to allow us to compete on all destinations.”

He said, “Given the government’s strategy of opening up the sector, we expected such direction from it.”

According to Yared, who worked on the feasibility study and other detailed papers for the firm, “ESL has been operating the multimodal scheme for the past 13 years; there were gaps that need to be filled by other operators.”

He continues, “We have ample experience and adequate and prominent global partners on sea and air freights so we shall handle the multimodal scheme as NVOCC.”

He claimed that in addition to Djibouti, Kenya, and Somaliland as a source for Ethiopian commodities, his company has branches throughout the Middle East, the Far East, and other destinations.

According to sources, the selection process for the fourth company will not end. They said that the state-owned Ethiopian Railway Corporation, which was excluded from the most recent selection process, would have a greater chance of being included in the scheme if certain prerequisites are met in accordance with the directive for 2021.

The government has chosen to liberalize the logistics sector to accelerate its growth trajectory, just as it has done with other important industries like banking and telecommunications.

Read more