Located in the confluence of Africa, the Middle East and Asia, the Djibouti port complex is a nest of constant activity. Ecosystems consisting of specialized ports such as Djibouti Port, Doraleh Multipurpose Port, and Tadjoura and Ghouubet support the country's role as a regional logistics hub and attract significant investment in infrastructure.
Robremohamed Barev, CEO of Oriental Africa Logistics and head of the Djiboutia freight carrier association (one of two industry associations of freight carriers), says it is run by 126 freight carriers in the country. “It's very competitive for such a small country,” he admitted. However, freight carriers are not struggling with their business. The vast majority of the outside trade in nearby Ethiopia is currently passing through Djibouti. “Ethiopia is a country that relies heavily on foreign currency exports.
Exports are very important to them, and 90% of their exports go through Djibouti,” explains Baahu. Ethiopia's transport import figures are not that far.
This arrangement works well for both parties. Ethiopia continues to rely on Djibouti despite the signal's intention to find other ports for shipping. The reason for this is that Djibouti is competitive and reliable, says Barreh. “Freight carriers understand their needs. And the ports are very efficient. Of course, there are some things that need to be improved, such as infrastructure, but we get there,” he says.
Some of these improvements have already been made. Over the past decade, the Djibouti government has made and promoted significant investments in ports as part of Vision 2035, which aims to transition the country to a middle-income economy by strengthening its role as a regional logistics and trade hub.
Seamless online operations
They are also investing in digitalization, which has been partially fueled by the pandemic. The Djibouti Port Community System (DPCS) portal was configured to digitize, streamline and simplify various processes linked to import and export via ports, airports, rail and road links. The Sydonia World System is a single window system that handles all customs-related issues.
Container throughput has skyrocketed
In the past, freight carriers have said they had to manually track containers within the port and physically move them to container terminals with pro-forma bills. “For us, it was a generational change. Today, the trucks are coming, loading, and the process is completely seamless.”
As a result, container throughput has skyrocketed from 600,000 to 700,000 units this year, effectively doubled within the last three to four years.
This growth is not due to a dramatic increase in Ethiopia's traffic. “It's primarily about gaining market share from other ports,” explains Barreh. “Although imports to Ethiopia have not increased significantly, they have attracted more cargo from ports that lack similar services or have chosen Djibouti due to their security benefits.”
These improvements have made Djibouti a compelling proposal for exporters and importers in the region. “The best place to assess customs efficiency is the border, and today the trucks only spend 25 minutes crossing between Ethiopia and Djibouti,” he says.
Fluid operation
“This highlights the liquidity of border operations where customs documents are well understood and integrated on both sides.” As Ethiopia and Djibouti move towards implementing a unified customs system, Barreh hopes that the procedures will be streamlined further.
Barreh believes that having a Djibouti port town community system office in Ethiopia is a plus.
“We know that customs authorities are investing in container tracking projects that allow us to track products to our final destination. This initiative will significantly increase transparency, primarily in Ethiopia, and build trust with our customers.”
One of the biggest headaches for customers is when the product starts to “dark” and it is not clear what action was taken by the freight carrier, port or customs when delays occur. The new tracking system eliminates this uncertainty.
Ultimately, according to Barreh, the more transparent the process is, the more efficient, fluid and competitive. Further improvements are expected.
“We want to have a “paperless” system where there are no more documents or QR codes are used to pass customs barriers or pass port barriers to the border. I hope we can maintain this pace. ”
Larger market share
Barreh says Djiboutian Transporters also wants a larger share of the freight market. Currently, Ethiopian airlines handle 97% of their cargo, with only 3% remaining for Djiboutian companies.
“The average customer in Addis Ababa or Ethiopia decides that. Some are large industries that invest in their trucks and transportation logistics to avoid delays,” he said, adding, “I want to accelerate, I want to invest, and I want more share in the market.”
One way this can happen is that market parties join forces and have more power and greater voice. Barreh expects there will be a consolidation of not only businesses but also trade institutions themselves.
“We met with the Port Chair and are considering merging the ATD with the other body, the RTA, to form a single association.
“We believe in the coming years, freight carriers will not only handle customs clearance and truck loading, but also evolve into full-scale logistics companies, not only providing door-to-door services.
“This includes transporting goods directly through Djibouti, being responsible for both the port of departure and final delivery of shipments, and potentially managing parts of the transport and freight chain.”
