190901+ +ethiopia+ +National+Logistics+Strategy+2018+ +2028

Federal Democratic Republic of Ethiopia
National Logistics Strategy

(2018 – 2028)
September 2019
Addis Ababa, Ethiopia
C o n tents
Acknowledgment i
Preface iii
Message from Her Excellency Minister, FDRE

v
Ministry of Transport
Mesage from Director General, Ethiopian

vii
Maritime Affairs Authority
Part one: Purpose and Bases of the Strategy 1
1.1 Purpose of the Strategy 1
1.1.1 Enable National Development 1
1.1.2 Control Avoidable Logistics Cost 2
1.1.3 Provide Systemic Logistics Solutions 3
1.1.4 Provide Direction and Leadership 3
1.2 Alignment of the Strategy with National

4
Policies & Strategies
1.2.1 Industrial Development Strategy 4
1.2.2 Rural and Agricultural Development Policy 6
1.2.3 Urban Development Policy and Strategy 6

1.2.4 Foreign Affairs and National Security
8
Policy and Strategy
1.2.5 Growth and Transformation Plan II

9
(GTP II) (2015/16-2019/20)
1.3 The Strategy Preparation 11
Part Two: Ethiopia’s Logistics Performance 13
2.1 Logistics Performance Based on Global

13
Institutions Reports
2.1.1 Logistics Performance Index –World

13
Bank Group
2.1.2 Logistics Performance Reports of

17
Landlocked Countries
2.1.3 World Economic Forum 17
2.1.4 Summary on Global Reports 18
2.2 Logistics Cost and Time in Ethiopia 18
2.2.1 Logistics Time 19
2.2.2 Import Cargo 19
2.2.3 Export Lead-time 24
2.3 Logistics Cost (Rates and Cost Indicators) 24
2.3.1 Import Cargo 25
2.3.2 Export Cargoes 28
2.4 Logistics Performance Assessment and Findings 30

2.4.1 Trade and Finance System 30
2.4.2 Excessive and Cumbersome Transit and

31
Customs Procedures
2.4.3 Poor Quality and Low Competence of

32
Logistics Service Providers
2.4.4 Monopolistic Practice in the Logistics

32
Service Sector
2.4.5 Logistics Infrastructure Deficit and

33
Management Problem
2.4.6 Logistics Service Providers & Regulators

33
gaps on Institutionalization & Capacity
Part Three: Vision, Mission and Strategic

35
Objectives and Targets
3.1 Objectives and Goals 36
3.1.1 General Objective 36
3.1.2 Specific Objectives 36
3.1.3 Strategic Goals 36
3.2 Logistics Sector Strategies 37
Strategy 1: Transform logistics service delivery and

38
capacity of operators
Strategy 2: Develop and strengthen logistics sector

50
policies and legal frameworks.
Strategy 3: Establish an efficient and reliable transit

55
and customs system
Strategy 4: Implement reliable trade and finance system
62
to enhance logistics facilitation role.
Strategy 5: Develop Logistics Infrastructure 67
Strategy 6: Strengthen regulators institutional capacity,

qualifications of human capital, and create 70
efficient governance
Part Four: Government Measures, Roles of

Stakeholders, Follow up and
77
Evaluation systems in Strategy
Implementation
4.1 Expected Measures from the Government 77
4.2 The role of stakeholders 78
4.3 Direction on follow up and evaluation of

82
strategy implementation
List of Tables
Table 1: Comparative position of Ethiopia in LPI

15
and its components
Table 2: Logistics performance in light manufacturing 16
Table 3: Global Competitiveness Report 2014–2015 17
Table 4: Logistics time for import cargo under

20
unimodal and multimodal
Table 5: Transit Time 21
Table 6: Lead time for export 24
Table 7: Logistics cost 25
Table 8: Comparison of cost of stevedoring (discharging)

26
service for import cargo
Table 9: Comparative cost of shore handling for

27
import containers
Table 10: Comparative cost of stevedoring (discharging

27
& shore handling) for export cargo
Table 11: Comparative cost of land transport in USD 28
Table 12: Logistics cost to export a container

29
under unimodal
Table 13: Logistics Sector Six Major Strategies

List of Figures
Figure 1: Import-Export process 12
Figure 2: Comparative position of Ethiopia in LPI 14

Acknowledgment
The National Logistics Strategy, upon its effective implementation,
is believed to transform fundamentally the country’s trade logistics
sector and produce a radical positive impact on the Country’s foreign
trade proceedings. Ethiopian Maritime Affairs Authority (EMAA)
has taken the lead and responsibility of preparing this strategy
document. Mr. Mekonnen Abera, Director General, EMAA deserves
special acknowledgement for taking the initiative, and for closely
monitoring as well as coordinating all activities in the course of the
development of the National Logistics Strategy.
EMAA would like to sincerely thank the following organizations

for their support during the preparation of the National Logistics
Strategy of Ethiopia.
• Ministry of Transport
• United Nations Development Program (UNDP)
• Ethiopian Shipping and Logistics Services Enterprise (ESLSE)
• Ministry of Revenue
• Djibouti Ports and Free Trade Zone Authority
• Importers, Exporters, Ship Agents, Transporters and Freight

Forwarders
• Public and Private Banks
Finally EMAA would like to thank all its staffs for data collection and
their all rounded efforts in the course of preparation of the strategy
document.
Preface
The Government of Ethiopia has pursued an economic development
policy that focused on massive public and foreign driven investment.
The country enrolled the implementation of the Growth and
Transformation Plan (GTP) since 2010, aiming at realizing the national
vision of becoming a middle-income country by 2025. Ethiopia has
been, thus, registering one of the fastest growing economies in the
world with an average gross domestic product (GDP) growth of rate
of about 10 percent per annum1.
The economic growth in recent years has brought about a rapid

increase in volume and type of the country’s import–export trade.
The country’s logistics systems, however, are still at the early stage
of development compared with the global best practices, and
have not adequately enabled the country’s international trade
competitiveness. The logistics performance indicators reported
by the World Bank have shown that Ethiopia has been one of the
least performing countries in the world. This has been, particularly,
characterized by high freight transit time, longer cargo dwell time as
well as ship’s turnaround time in ports. The acute capacity limitation
has hindered the accommodation of the increased trade cargo flows.
The Ethiopian Government has recognized the trade logistics service

as a major impediment, and has considered the improvement of this
enabling service as a core perspective of the country’s economic
development. A comprehensive National Logistics Strategy (NLS)
has, thus, been developed for implementation in order to address
the shortcomings, and transform the country’s trade logistics sector.
1
Shiferaw, A., 2017. Productive Capacity & Economic Growth in Ethiopia. UNDP CDP
Background Paper, 34, p.24.
iv FDRE National Logistics Strategy (2018 – 2028)
The NLS serves as a roadmap for structural reforms, effective

coordination, development of logistics infrastructures, and delivery
of quality services. These endeavors will facilitate to transform the
sector to a higher level and subsequently the achievement of the
national development goals.
The strategy document is organized under four sections. Section one

discusses background and importance of the NLS, the alignment of
national logistics strategy with other national policies and strategies
as well as the methods employed in preparing the strategy
document. Section Two presents the challenges and corresponding
root causes of the current logistics services along with basic logistics
performance indicators. Section Three provides the strategies; vision,
goals, and objectives along with the corresponding sub strategies
and interventions identified to transform the sector. The last section
identifies different stakeholders (i.e., government, private sector,
development partners /donors) that have roles in the course of
implementation of the strategy.
Message
from Her Excellency Minister, FDRE
Ministry of Transport
Mrs. Dagmawit Moges

FDRE Ministry of
Transport
Logistics is the backbone of creating connectivity of

economic, social and prevailing political realities of a
given country with the rest of the world through trading
transactions. The global trade volume has increased
from time to time over the last decades. The global
seaborne trade volume in 1968 stood at 2.6 billion
metric tons; after 50 years i.e.in 2018the seaborne trade
volume has climbed to 10.7 billion metric tons.
Transport in particular and logistics in general have

played key roles in moving such huge trade volume
from origins to destinations. Unless logistics is
managed through proper planning, with the utilization
of well- developed infrastructures, by employment of
transparent and comprehensible legal frameworks, and
by deployment of trained human resource as well as
vi FDRE National Logistics Strategy (2018 – 2028)
state-of-the art technology; it can be one of the dwindling factors

against the development of the economy.
Ethiopia’s foreign trade volume has also increased over the past
years, in line with growth trend of the global trade. In 1991, the
Country’s foreign trade was 1.3 Million tons and in 2018 it reached
12.5million tons. The development of the Country’s logistics
service has not, however, matched the demand of the trade. Poor
infrastructure, inadequate transport service, limitations in trade
financing, inefficient transit and corridor services, cumbersome
customs procedures and non-deployment of trained human resource
and very low ranking against world logistics performance indictors
depict that the country’s logistics sector is utterly underdeveloped.
It has, therefore, become imperative and a priority for the Government

to give a strategic leadership to the sector. I am confident that all
stakeholders in the government and partners in the private sector
as well as in international organizations will render their unwavering
support for the success of the implementation of the strategy. I take
this opportunity to assure that the Ministry of Transport will take the
lion’s share of responsibility and will do its utmost to follow up and
offer due support in the course of implementation of the strategy.
I thank you!
Let us all endeavor to implement the strategy holistically!

Message
from Director General, Ethiopian
Maritime Affairs Authority
Mr. Mkonnen Abera

FDRE Director General,
Ethiopian Maritime Affairs
Authority
The preparation of the national logistics strategy

document and its endorsement by the Government
are commendable measures and breakthroughs as the
strategy facilitates to lead the sector with clear vision,
objective and direction. I believe that it is a great leap
forward to come out of a vicious circle that had gripped
us to engage ourselves in lengthy deliberations and
analysis about logistics services and related challenges
and issues for over too long a time, and now that we are
moving forward to uphold the agenda of implementing
programs to transform the logistics sector.
It is noteworthy here that endorsement of the strategy

document by the Government is not an end in itself. This
does not give the guarantee to transform the country’s
logistics system. Transformation is the outcome of
viii FDRE National Logistics Strategy (2018 – 2028)
an action. The goal, therefore, should be to register outcomes by

eradicating ailments of the system by implementing solution bearing
programs. The implementation process reminds me of one proverb:
“The main thing is to make the main thing main”.
Accordingly, the implementation phase of the national strategy

requires a competent organizational set up to that can discharge its
responsibilities effectively.
In this regard, ministerial offices and institutions shall fulfill their due
share of the strategy implementation, and a high- level strategic
leadership will be set up to direct and coordinate the implementation
programs by re-instating commitment and discipline upon the
actors. On the other hand a logistics transformation office will be
set up with duties of conducting researches and studies on the
interventions in the strategy, and converting them into programs
and projects for implementation.
The Ethiopian Maritime Authority hereby commits itself to discharge

its responsibility of organizing the logistics transformation office
with skilled and competent professionals from the academia and the
industry.
I thank you!
Part one:
Purpose and Bases
of the Strategy
This Section presents the reasons for developing the NLS, its
significance and the need for alignment of the strategy with national
economic development policies and strategies.
1.1. Purpose of the Strategy

The National Logistics Strategy has considered four major issues as
bases for its development. These are addressed as here under:
1.1.1 Enable National Development

Ethiopia has registered an accelerated and consistent economic
growth in recent years. Logistics plays an important role in enabling
a rapid economic growth to ensure sustainable development. Yet,
the country has experienced poor logistics performance against
basic logistics performance indicators. This has become one of
the hindrances to attract investment and a bottleneck for trade
competitiveness of the country.
It has become imperative to transform the country’s logistics system

to a higher level to enable the logistics to play a significant role in
facilitating the smooth flow of the country’s international trade. In
this regard, reforms have become dire and urgent as ships carrying
Ethiopian import cargo are staying for months at anchorage of
destination ports thereby incurring huge logistics costs to the
country. This has become not only a bottleneck for international
2 FDRE National Logistics Strategy (2018 – 2028)
trade competitiveness but also a cause for misunderstanding with

development partners and operators, thereby negatively affecting
bilateral relations. Creating an enabling logistics sector for the
country’s economic development has, therefore, become one of the
driving factors for the development of this NLS.
1.1.2 Control Avoidable Logistics Cost

Following Ethiopia’s rapid economic growth in recent years, the
cargo flow has increased. At the same time, the country’s logistics
expenditure has also increased. The avoidable logistics cost due to
inefficiency constitutes a higher share of the national logistics total
cost.
For instance, the Ethiopian government imports on average 2.5 to

4 million tons of dry bulk cargo (grain, fertilizer, coal, and sugar)
annually. The Country spends about ETB 6 Billion on average for sea
transport, port service and haulage to inland destinations.
Moreover, suppliers impose USD 10 per day for ship demurrage for
staying at anchorage beyond the grace period. Suppliers and carriers
are aware of the poor scenarios in logistics at the destination ports
and their imposition of high demurrage rates arise from the poor
logistics performance. This indicates how the country is not able to
control such avoidable costs.
Generally costs for transport, port handling, transaction and

storage services as well as container demurrages and maintaining
inventories are on the high side. This implies that the country is
bearing unnecessary and avoidable logistics costs. Studies show that
the logistics costs of countries vary but they are estimated to be in
the range of 14-35% of the GDP of each respective country.
It is important to acknowledge that logistics cost is a major national

expenditure and it should be properly managed to eliminate
3
avoidable costs. Let alone at a national level, even corporates are

forced to control their expenditure by giving due attention and
dedicating resources to manage it. Control of the national logistics
expenditure is, thus, an important cause for the development of the
NLS.
1.1.3 Provide Systemic Logistics Solutions

Logistics is a chain of multiple nodes, entities, players, processes and
outcomes. The causes for inefficient logistics systems at operational
and strategic levels are many and scopes vary depending upon
how the chain is integrated and managed. Lack of proper set up
of frameworks for integration of players (including regulatory
bodies, logistics infrastructure developers, government and private
operators, importers/exporters, customs clearing agents, freight
forwarders, non-government organizations, and other logistics
service providers), cross-border issues such as customs, information
sharing, ICT infrastructure, etc. are some of the causes contributing
to logistics inefficiency which need to be addressed through in-
depth analysis. This strategy pursues an integrated problem-solving
approach to address the operational and strategic issues entrenched
in the current logistics system in order improve its performance
and ultimately transform it. This strategy document has, thus, been
prepared to serve as a comprehensive and systemic solution in the
transformation process.
1.1.4 Provide Direction and Leadership

Logistics management involves the seamless coordination of
the flow of goods and services, utilization of infrastructures and
superstructures as well as human resources and systems. This
implies that logistics management requires an effective coordination
of different stakeholders and systems. It also requires strong
commitment and follow up. In this regard, the national logistics
management falls short of applying sound analytical techniques

and lacks the proper understanding of its scope. Various actors
and stakeholders pursue their own respective approaches and
analysis towards the challenges facing the logistics sector. This
vividly demonstrates that a responsible and accountable body with
clear mandate and scope to manage the sector is not in place. Vital
services like sea port utilization are not managed with clear direction,
vision, polices and strategies.
Fore stated and other similar shortcomings have compounded the

challenges facing the logistics system of the country. Addressing
these shortcomings by developing this strategy makes it imperative.
1.2 Alignment of the Strategy with

National Policies & Strategies
The government of Ethiopia has been implementing a number of
development policies and strategies to sustain the country’s rapid
economic growth, bring about significant improvements in the
livelihood of its citizens, and build democratic system. Effective
implementation of different national development agendas requires
the creation of enabling environments from different relevant sectors
particularly from the logistics sector. The logistics sector will have a
key contribution in the realization of different national development
policies and strategies. It is appropriate to give due emphasis on
planning and implementing efficient logistics strategies with respect
to other national plans. The need to align the logistics strategy with
the other national development policies and strategies is presented
as here below.
1.2.1 Industrial Development Strategy

The Ethiopian Government has developed and implemented an
industrial development strategy since 2002 by adopting the following
principles: accepting the private sector as the engine of industrial
5
development, pursuance of agricultural led industrialization,

adherence to export oriented industrialization, focus on labor
intensive industrial development, coordination of national and
foreign investment, provision of strong government leadership
in industrial development, mobilizing the people to support the
industrial development and creating conducive environment for
industrial development and investors(fight rent seeking, create
conducive and stable macroeconomic milieu, create favorable
financial system).
The industrial development strategy emphasizes availing

adequate infrastructures and services related to road, railway, air,
telecommunication, electric power, and water supply as well as land
to investors.. The development strategy also emphasizes the availing
of direct rendering of support and management to investors. The
significance of the trade and transport logistics is also sighted. As
a result, the logistics strategy will have greater significance to the
success of private investors engaged in the industrial development.
Investors who are engaged in manufacturing goods within industrial
parks can find it difficult to be competitive unless they are provided
with improved logistics services particularly in terms of delivery of
raw materials from domestic and international markets at the right
time and at reasonable logistics costs. Further to this, there are a
number of giant industrial projects undertaken in the country such
as fertilizer and sugar factories, power supply projects and other
agricultural transformation programs. Logistics will play a significant
role in accomplishment of the industrial development projects
both by government and private investors within schedules and
allocated budgets. Thus, the Logistics Strategy is believed to pave
the way for facilitating the implementation of the country’s industrial
development strategic plan
1.2.2 Rural and Agricultural Development Policy

Rural and agricultural development policy of Ethiopia under
implementation is the key to the country’s rural development and
growth in agricultural productivity. This policy is of high importance
for the country’s development with focus on market-oriented
agricultural development, improved rural financial system, and
strong participation of the private sector. Logistics plays a critical
role by connecting rural areas and improving the accessibility
of agricultural inputs and products to markets. It is important
to ensure strong integration between industrial and agricultural
developments. In this regard, logistics connects agricultural areas
with industries by forging a transaction for delivery of agricultural
outputs as input for factories, and also delivery of industrial outputs
as input for agricultural developments at competitive prices and in
timely manners. Thus, preparing and implementing a comprehensive
logistics strategy will facilitate the implementation of agricultural
and industrial strategies in mutually interdependent and integrated
manners.
1.2.3 Urban Development Policy and Strategy

The Ministry of Urban Development and Housing has prepared a
number of urban development policies and the same were approved
by the Government. The policies focused on the improvement of the
quality of life urban citizens, making cities clean and green, and the
provision of adequate transport infrastructures and others. The most
relevant urban development policies having strong integration with
transport logistics are presented below.
1.2.3.1 Urban Housing Supply Strategy
The development of urban areas and development of new urban

centers or the expansion of rural areas into cities have made it difficult
for many of our cities to cope up with the wide range of problems.
7
Among several problems in urban areas, shortage of housing is one

and the most pressing.
Housing is one of the basic needs and rights of citizens, and

homelessness is considered as one of the manifestations of poverty.
Federal and regional governments and city administrations have
taken various steps to address the problems in urban areas. As a result,
an integrated housing development program has been implemented
since 1999 in Addis Ababa and since 1999/2000 in regional cities.
However, the construction of houses has not reached the desired
level; there is a wide gap between demand and supply. Although
there are many reasons for this gap, shortage of construction inputs
and the inadequate capacity of construction are among the main
challenges. To this end, inefficiency of the country’s logistics process
manifested by inadequate capacity to fulfill the transport demand
has also become barriers in the achievement of housing construction
objectives. As a result, Urban Housing Development Policy has set
out to expand a modern logistics system i.e., city logistics. City
Logistics is an engineering science which is a new development at
national as well as international level. Giving special attention to this
sector will significantly enhance the smooth flow of goods, traffic,
and increase mobility in urban areas. Thus, the logistics strategy will
play a major role in meeting such key national policies.
1.2.3.2 Urban Planning and Implementation Strategy
Next to the people who are living in cities, urban land is one of the
major and most powerful resources to accelerate development in
cities. Urban plan should be prepared with focus on proper utilization
of land in coordination with social-economic development plans of
the country, the regions, trading corridors, and other centers.
In urban planning, it is important to ensure that the plan gives

considerable emphasis on the urban economic status. While
properly utilizing an urban land, 30% can be used for green and
public services, 30% for roads, terminals and other infrastructures
developments, and 40% for building (residential, workplaces, etc.).
Among the problems related to the implementation of this strategy,
logistics centers are still major areas of requirements for urban to
urban integration in terms of trade, transport, industry and other
common and related issues. Thus, this Strategy will ensure proper
logistics infrastructure developments that will create effective urban
connectivity by taking in to consideration of the country’s urban
development plans.
1.1.4 Foreign Affairs and National Security Policy and Strategy

FDRE foreign affairs and national security policy give priority for
the attainment of peace, speedy economic development, and
democratization. One of the focus areas for the country’s economic
diplomacy is providing efficient and reliable transit and transport
corridors to our country’s import and export trade. While considering
Ethiopia’s relations with other countries, it is important to begin with
the country’s neighbors in the Horn of Africa, namely Sudan, Eritrea,
Djibouti, Somalia, South Sudan, and Kenya. These countries have
long-standing links with Ethiopia in such areas as language, culture,
history, natural resources, and so on. In this regard, the country’s
foreign affairs policy specifies formulation of an appropriate policy
towards forging strong ties with neighboring countries. The country’s
economic growth needs proper seaport services from its neighbors.
Therefore, port services shall be delivered in an effective manner,

given the economic shared interests. In a long-term, port services
demand may significantly increase as a result of neighboring transit
countries development growth. This leads to the formulation of a
policy for port services. Therefore, the Strategy includes a number of
9
interventions that need to be implemented in short and long terms

regarding the use of additional transit corridors or seaports.
1.1.5 Growth and Transformation Plan II

(GTP II) (2015/16-2019/20)
Ethiopia has set the goal of becoming a middle income country
by 2025. In line with this, the 2nd Growth and Transformation Plan
(2015/16-2019/20) states agriculture as the main driver of the rapid
and inclusive economic growth and development. It also focuses
on the expansion of irrigation-based agriculture, horticulture, fruits
and vegetables, livestock and fisheries. It also sets out to redress
macroeconomic imbalances. This imbalance has been created
mainly from two perspectives. These are investment-saving gaps
and deterioration of trade balance as import growth surpassed
export growth.
The Government of Ethiopia (GoE) has identified the logistics as one

of the key economic sectors for the realization of national poverty
reduction strategy, and for raising trade competitiveness. To this end,
various efforts have been exerted by GoE to improve the logistics
system, yet the logistics services in Ethiopia are still at the early stage
of development when viewed against the global best practices.
Accordingly, the 2nd GTP has set out the following direction in terms
of improving the logistics sector.
To ensure integrated transport and logistics service, special focus

has to be given to transport infrastructure developments. Significant
investment has been carried out in terms of road, aviation and air
transport, maritime transport and maritime services, and most
recently railway transport. The transport and logistics sector is
endeavoring to further demonstrate a fundamental change in the
future. With respect to the high level overall capacity required by
the sector, the logistics sector should be guided by a clear vision
and integrated logistics strategy or a master plan. As a result, the

logistics sector will play a major role in increasing logistics service
efficiency and adaptation of an integrated system that will reduce
the cost of transportation, as well as building private sector capacity.
In addition to increasing agricultural production, it is expected
that the expansion of rural economic bases will ensure supply of
industrial inputs. This requires ensuring effective linkage between
rural-urban areas. This strategy gives a special focus for increasing
access to rural areas and creating efficient linkage of rural Kebeles
and Koredas with major market centers.
In accordance with the 2nd GTP, the Strategy gives special focus and
directions on the following issues: ensure that domestic dry ports
provide quality and efficient services that will contribute positively
to the economy; improve the capacity and quality of transit corridors
and transport infrastructures which are utilized for import and
export trade; since road traffic safety is one of the main problems
in the country, it is essential to ascertain that road designs consider
road safety to bring fundamental changes to the locality, improve
the transport management system, ensure quality and efficient
cross-border trade facilitation, enhance rural and urban transport
service; ensure that the development of road, rail, sea and air
transport systems are carried in a coordinated manner; and reflect
several dimensions as well as cross-cutting issues on the expansion
of transport infrastructural developments and services.
The maritime transport and other related logistics services play

key roles in supporting the implementation of the country’s
manufacturing industrial transformation and export oriented growth
plans. It is important to build a modern information system in the
maritime sector. With this regard, the logistics strategy emphasizes the
need of ensuring modern information and communication systems
that will make the end to end operations visible to shippers, logistics
service providers, and cargo owners through sharing tracking and
11
tracing information in real-time about cargo location and logistics

operations such as that of shipping, port, and warehousing activities.
Therefore, the logistics strategy is prepared in line with the realization

of the 2nd GTP, particularly in relation to the establishment of
a reliable and cost-effective logistics system to support export-
oriented industries, to ensure the supply and delivery of agricultural
inputs and outputs to market centers in timely and cost competitive
manners, and eliminate rent-seeking problems in the sector. This
entails that logistics sector demands transformation so as to
contribute to the achievement of the GTP, which makes it critical to
have this logistics strategy in place.
1.3 The Strategy Preparation

This NLS was developed based on findings from NATHAN Associates
Inc., an International Consultant study financed by the United
Nations Development Program (UNDP). The NLS is a comprehensive
document developed by dedicated team of experts set up under the
Maritime Affairs Authority of Ethiopia.
In order to set up clear strategic direction that could pave the way
for the development of state-of-the-art freight logistics systems for
Ethiopia, a detailed analysis of the current freight logistics system, its
main characteristics and performances have been conducted with
the aim to identify issues/challenges in the system and highlight the
root causes.
The data about each of the main logistics processes or operations

were gathered from different stakeholders and sources including:
• members of the logistics sector such as regulators, logistics

service providersand companies andas well as customers.
• multiple institutional reports.

freight 12
logistics system,
FDRE itsLogistics
National main characteristics and performances have been conducted
Strategy (2018 – 2028)
with the aim to identify issues/challenges in the system and highlight the root causes.
• Relevant studies on logistics which were carried by

The data about each of the main logistics processes or operations were gathered from
international institutions and different government agencies.
different stakeholders and sources including:
 members of the logistics sector such as regulators, logistics service providersand
• International logistics benchmarks.
companies andas well as customers.
 multiple institutional reports.
 Relevant studies on logistics which were carried by international institutions and
different government
Accordingly, using theagencies.
data collected from different sources, detailed
 International logistics benchmarks.
analysis of the current freight logistics system in Ethiopia was carried
out with focus on five major segments of the import and export
Accordingly, using the data collected from different sources, detailed analysis of the
trade
current of end
freight to end
logistics supply
system chain, aswas
in Ethiopia presented in Figure
carried out 1. on five major
with focus
segments of the import and export trade of end to end supply chain, as presented in
Figure 1.
Figure 1: Import-Export process
Figure 1: Import-Export process
Customs/
Banking Shipping Sea port Land Transport
Dry port
Import
Land
Banking Customs Sea port Shipping
Transport
Export
Four consultation forums took place with stakeholders to review

Four consultation forums took place with stakeholders to review and validate the draft NLS
andimprovements
whereby validate theweredraftmade
NLSon whereby improvements
the strategy wereonmade
document based on and
the inputs
the strategy
feedbacks from the document baseddiscussions
forums. Different on the inputs andheld
were also feedbacks from with
on the strategy
the forums.
stakeholders Different
from different discussions
sectors were also
of the economy held on the
and development strategy
partners to enrich
the strategy. The strategy was also reviewed by Minister of Transport,
with stakeholders from different sectors of the economy and and finally approved
by the Council of Ministers of the Federal Democratic Republic of Ethiopian August 2018.
development partners to enrich the strategy. The strategy was
also reviewed by Minister of Transport, and finally approved by the
Council of Ministers of the Federal Democratic Republic of Ethiopian
August 2018. 22
Part Two:
Ethiopia’s Logistics
Performance
Assessment of the country’s logistics performance was based on two

inputs:
• Reports from international organizations and bodies about

the performance of the country’s logistics sector
• Analytical reports about the country’s logistics performance

in terms of time and cost competitiveness.
2.1 Logistics Performance Based on

Global Institutions Reports
International studies and reports covering various aspects of
the logistics performance of countries have been developed. In
this regard, the following three international reports have been
considered for having a clear understanding on the status of
Ethiopia’s logistics system and its performance.
2.1.1 Logistics Performance Index –World Bank Group

The World Bank (WB) measures the performances of international
trade logistics of various countries by applying its standards known
as the Logistics Performance Index (LPI) survey every two years. This
measurement has helped to initiate numerous policy reforms and
development of strategies by providing relevant information for
policymakers, private executives and any other stakeholders about
the abilities of countries to manage logistics operations in the global

business environment. According to this report, Ethiopia’s status in
LPI has been compared with the world’s top performer country i.e.,
Germany and landlocked countries with poor logistics performance,
as in figure 2 below.
Figure
Figure2: Comparative positionposition
2: Comparative of Ethiopia
ofinEthiopia
LPI in LPI
2
Source: Data from World Bank, 2010 – 2016 LPI
Source: Data from World Bank, 2010 – 2016 LPI2
The WB LPI produces a single weighted average index (overall index) and six components
as shown in Table 1.LPI uses a scale of 1 – 5 for each dimension. Ethiopia’s 2016 logistics
performance under the six LPI components is compared with selected countries (Table 1).
The WB LPI produces
Table a single
1: Comparative weighted
position average
of Ethiopia index
in LPI and (overall index)
its components
and six components as shown in Table 1.LPI uses a scale

LPI Six Components (2016) of 1 – 5 for
Overall score
Overall LPI
LPI (/160)
each dimension. Ethiopia’s 2016 logistics performance under the six

Internatio
Infrastruc
Timelines
shipment
quality &
compete
Tracking
Logistics
Customs
rank
tracing
LPI
ture
and
nce
nal
LPI components is compared with selected countries (Table 1).

s
Country
Germany 1 4.24 4.12 4.44 3.86 4.28 4.27 4.45
Luxembourg 2 4.22 3.90 4.24 4.24 4.01 4.12 4.80
Uganda 58 3.04 2.97 2.74 2.88 2.93 3.01 3.70
Kenya 42 3.33 3.17 3.21 3.24 3.24 3.42 3.70
Tanzania 61 2.99 2.78 2.81 2.98 2.92 2.98 3.44
Rwanda 62 2.98 2.93 2.62 3.05 2.87 3.04 3.35
Burkina Faso 81 2.73 2.55 2.67 2.73 2.78 2.49 3.13
Sudan 103 2.52 2.23 2.20 2.57 2.36 2.49 3.28
Burundi 107 2.50 2.02 1.98 2.42 2.46 2.68 3.45
2
Arvis,Zambia
J.F., Saslavsky 114
D., Ojala,
2.42 L., 2.25
Shepherd,
2.26 B.,
2.51 Busc, 2.42
C., Raj 2.36
A., Naula,
2.74 T.,
(2016).Ethiopia
Connecting to126 Compete2.3720162.60
Trade2.12
Logistics
2.56in the 2.37
Global Economy.
2.18 World
2.37
Bank.Source: World Bank, 2016 LPI
2
Arvis, J.F., Saslavsky D., Ojala, L., Shepherd, B., Busc, C., Raj A., Naula, T., (2016). Connecting to Compete 2016 Trade
Logistics in the Global Economy. World Bank.
24
Table 1: Comparative position of Ethiopia in LPI and its components
LPI Six Components (2016)
Country
LPI
Customs
ture
LPI (/160)
tracing
Overall score
Logistics
quality &
shipments
Timeliness
Infrastruc-
Overall LPI rank

competence
Tracking and
International
Germany 1 4.24 4.12 4.44 3.86 4.28 4.27 4.45
Luxembourg 2 4.22 3.90 4.24 4.24 4.01 4.12 4.80
Uganda 58 3.04 2.97 2.74 2.88 2.93 3.01 3.70
Kenya 42 3.33 3.17 3.21 3.24 3.24 3.42 3.70
Tanzania 61 2.99 2.78 2.81 2.98 2.92 2.98 3.44
Rwanda 62 2.98 2.93 2.62 3.05 2.87 3.04 3.35
Burkina Faso 81 2.73 2.55 2.67 2.73 2.78 2.49 3.13
Sudan 103 2.52 2.23 2.20 2.57 2.36 2.49 3.28
Burundi 107 2.50 2.02 1.98 2.42 2.46 2.6883 3.45
Zambia 114 2.42 2.25 2.26 2.51 2.42 2.36 2.74
Ethiopia 126 2.37 2.60 2.12 2.56 2.37 2.18 2.37
Source: World Bank, 2016 LPI
15
Ethiopia’s logistics performance in 2014 and 2016 (out of 160

countries)is also compared with five competitive countries in light of
manufacturing. The comparison is presented in Table 2.
Table 2: Logistics performance in light manufacturing
2016 2014
LPI Rank Overall LPI LPI Rank Overall LPI
Countries
(160) (out of 5)
(160) (out of 5)
China 27 3.66 28 3.53
Botswana 57 3.05 120 2.49
Vietnam 64 2.98 48 3.15
Cambodia 73 2.80 83 2.74
Bangladesh 87 2.66 108 2.56
Ethiopia 126 2.37 104 2.59
Source: World Bank, 2014 and 2016 LPI
The above results from the graph and tables show:
• Ethiopia is one of the lowest performing countries in trade

logistics i.e., 126th out of 160 countries in LPI rank
• While the logistics performance of many countries has shown

improvement, Ethiopia’s performance has deteriorated on
the contrast.
• Ethiopia’s logistics performance relative to competing and

peer group of countries in light manufacturing is not only
the lowest, but it is far behind.
• Ethiopia has not been included in the WB recent LPI survey

i.e., 2018 LPI. As a result, 2016 LPI has used as a recent report
for the analysis. However, based on 2012–2018 aggregated
LPI rank, Ethiopia’s position has declined from 126th to 131th.
17
2.1.2 Logistics Performance Reports of Landlocked Countries

There are 44 landlocked countries in the world and a new program has
been devised to support their transit transport services. At present
time, the UN-OHRLLS is implementing a 10 years program namely,
Vienna Program of Action (VPOA) for Landlocked Developing
Countries in2014–20243. The responsible body organized to over
seethe implementation of the VPOA has published an assessment
report on landlocked countries transit transport systems. According
to this report, progress has been observed on Ethiopia’s transit
transport system in terms of the development of road, logistics
facilities and other related infrastructures, and establishing bilateral
agreements with coastal neighbors on port utilization. While the
government made subsequent efforts, the evaluation report shows
that there is still a wide gap when compared with the expected
results.
2.1.3 World Economic Forum

Competitiveness is the ability of a nation to create and maintain an
environment that sustains more value creation for its enterprises
and more prosperity for its people. World Economic Forum
measures the competitiveness of global economies using the
global competitiveness index. According to this four- point index
measurement, Ethiopia has scored low performance under different
pillars. Table 3 indicates same.
Table 3: Global Competitiveness Report 2014–2015
Indicators Rank /144 Countries Value (1-7)

Institutions 96 3.5
Infrastructure 125 3.5
Technological readiness 133 2.5
Macroeconomic environment 95 4.4
Source: World Economic Forum, 20144
3
UN-OHRLLS, 2014. Vienna Programme of Action for Landlocked Developing
Countries for the Decade 2014–2024. Vienna.
4
Schwab, K. and Sala-i-Martin, X., 2014. World Economic Forum’s Global Competi-
tiveness Report, 2014-2015. Retrieved from.
2.1.4 Summary on Global Reports

Under global logistics performance indictors by utilizing LPI,
landlocked countries logistics performance indicators, and global
competitiveness index, Ethiopia has scored very low performance
in all respects.
2.2 Logistics Cost and Time in Ethiopia

Cost, time and service reliability are the three key indicators of the
logistics system. To analyze the country’s logistics system and to
have a complete understanding of its performance, import and
export trade activities have been classified under five main processes.
Then further analysis was undertaken to identify the problems and
corresponding causes. The following sections present different
findings that are derived from detailed data analysis.
Import and Export Cargo Flows
The country annual import cargos have reached 14 million tons. This
amount can be classified as;
• Containerized: 3.2 million metric tons, which is 23%

• Dry bulk: 4 million tons, 28%
• Petroleum products: 4.1 million tons, 29%
• Steel and other general cargoes: 2.9 million tons, which is
about 20%
Ethiopia’s export cargo has reached 2 million tons annually, with
an estimated annual export cargo of 65,000 containers or 1.3
million tons through the port of Djibouti. With regards to analyzing
import cargoes logistics time and cost, relatively broader analysis
for containerized cargo, and brief data analysis for other cargoes in
accordance with their operational characteristics have presented as
follows.
19
2.2.1 Logistics Time

There are several factors that determine logistics time including,
transport system, modes of transport, and origin and destination of
cargo. Logistics time is the average time required to perform multiple
functions in the transport process. Lead time to import cargo to
Ethiopia was analyzed by taking the time from issuing a purchase
order by importers to delivery of the goods to final destination.
Lead time for export cargo has been computed by considering
average time from export preparation to shipment of cargoes at
the destination seaport. This is the standard measure of logistics
time applied in several countries. The same practice was followed
to analyze Ethiopia’s import/export logistics time. The analysis is
presented as follows.
2.2.2 Import Cargo

Containerized Cargo
A. Lead-time forImport
Lead time to import refers to the time necessary to accomplish all

functions required to import goods. These include time taken to
obtain foreign currency bank permit, L/C opening and sending to
exporters, shipment preparation by the exporter, delivery of cargoes
onboard ships at the port of loading, maritime transport from the
port of loading to the port of discharge, cargo handling operations
at the destination port, inland transport, and customs clearance.
Though the lead time includes the time required by exporters
for shipment preparation and delivery to the port of loading, this
process has not been considered, because this process is similar for
all origins. Thus, the following assumptions were made to calculate
the lead time of the country.
• Normal cargo (non-dangerous)

• Containerized cargo (1 TEU)
• Port of loading: Shanghai, China
• Port of discharge: Djibouti
• Final destination: Addis Ababa
The time required to import the above TEU cargo has been computed
using multimodal and unimodal transport systems as shown in
Table 4.
Table 4: Logistics time for import cargo under unimodal and

multimodal
Unimodal Multimodal
Activities
Time Time
% %
(Days) (Days)
Submit Foreign Currency Permit and LC 45 37 45 40
opening
Waiting time for Ship at the port of 10 8 10 9
loading
Shipping at Sea 25 20 25 23
Waiting time for ship at the port of discharge 37 30 6 5
In-land transport 3 2 3 2
Dwell time at dry port 1 - - 19 17
Customs clearing and shipment delivery 3 3 4 4
Total 123 100 112 100
Source: Maritime Affairs Authority Internal Diagnosis Report, 2018
The above table shows that it takes on average four months to

import cargo into Ethiopia under the current logistics system. During
this period, foreign currency permit from a bank and port dwell time
makeup the largest share (65%). This is extremely higher than any
other international standard. Even, it is double than that of Eastern
Africa countries.
21
Moreover, it takes on average 78 days from shipment preparation

at the port of loading to shipment delivery to the port of discharge.
Following the discharging operation, it takes on average 42 days
to deliver cargo to the consignee. This transit time considers time
from the beginning of cargo clearing process at the destination port
(Djibouti) by the importer to shipment delivery to the consignee.
For unimodal transport, the transit time includes completion of
the seaport formalities, customs clearing, land transport, customs
clearing and shipment delivery. Under multimodal transport,
the transit time includes the time required to complete seaport
formalities, land transport to inland dry ports, customs and port
clearance by importers and shipment delivery to the consignee. The
data has been shown below in Table 5.
Table 5: Transit Time
Transit Time (Days)
Unimodal Multimodal
Activities
Bulk Cont. RoRo Cont. RoRo
Get transit permit from customs 2 2 2 --- ---
in Ethiopia
Customs clearance at Djibouti 2 2 2 1 1
Get delivery order from ship 1 1 3 1 3
agent at Djibouti
Receiving goods at port 1 1 1 1 1
Carrier assignment &getting 2 1 1 1 1
port gate pass
Loading and documentation for 1 1 3 1 2
land transport
Inland transport 3 3 3 3 3
Customs clearance at the 2 1 2 4 4
destination and shipment
delivery
Total 14 12 17 12 15

In terms of containerized general cargo, port dwell time at the port

of Djibouti is 37 days and 59 days at Modjo dry port.
Dry Bulk Cargo
Dry bulk cargo includes fertilizer, wheat, grain, coal, and sugar which
is about 4 million tons per year. This has a 28 percent share of the
country’s import trade.
Out of the country’s total dry bulk cargo import, over 80% is procured
by the government. However, the government procurement system
for dry bulk cargo is imposing a negative impact on the country’s
logistics system. Based on an overall assessment, the total cost
of this shipment has been estimated to be6 billion Ethiopian birr
per annum. Logistics cost is on average 103 USD per ton. The cost
category includes:
• Shipping at sea: $30/ton (29%)
• Port service: $21/ton (20%)
• Road Transport: $52/ton (51%)
Thus, the government annual logistics cost of dry bulk cargo is 257.5
million USD or 5.6 billion Ethiopian Birr. The cost does not include
cargo value and other logistics costs. The average duration of a ship
at anchorage was 15 days; occasionally the duration may extend to
over a 2–3 months. The lead-time for this cargo is not consistent;
sometimes it takes up to six months. It is also difficult to compare
the lead-time, shipping time and port dwell time with other similar
bulk cargo since the country’s logistics performance is at a very low
level. The main cause for this problem is lack of coordinated and
integrated planning and management of information, finance and
cargo at the national level.
23
Petroleum Products
Ethiopia’s import of petroleum products i.e., fuel import through the

port of Djibouti reached 4.1 million tons per year. The main problems
on the transit of this cargo include;
• Inadequate cargo handling capacityin Port of Djibouti
• Expensive port handling charges at the port of Djibouti
• Excessive ship demurrage and theft
Regarding the high value and unique nature of this cargo, it is

essential to provide facilities and a secured transportation system
that will solve the problems related to shipping at sea, port handling
capacity limitations and inefficient operations.
Steel and Other general cargo
The average dwell time for steel and other general cargo is above
30 days. This not only results in unnecessary additional costs, but it
also affects the quality of cargo, especially it has a negative effect on
steel quality. Some of the main causes for long dwell times include;
• Importers financial shortage
• Market searching after cargoes arrival at port
• Lack of follow-up
Truck millage per year
Increasing cargo trucks mileage per year will increase the likelihood
of speeding up freights shipments from ports. Since cargo trucks in
Ethiopia cover on average merely 60,000–80,000 KM per year, it is
difficult to pick up cargo on-time.
2.2.3 Export Lead-time

The lead-time to export from Ethiopia has shown in table 6 below.
The lead-time to export has prepared by considering:
• Types of cargo: coffee
• One TEU container
• Less than 20 tons load
• Container stuffing at the port of Djibouti
• Origin: Addis Ababa
• Destination: Hamburg/Germany
Table 6: Lead time for export
Time
Activities in exporting cargoes
(Days)
Obtain bank permit 2
Obtain customs export clearance and loading 1
Land transport to port of Djibouti 3
Finalize customs & port formalities and stuff at CFS 2
Waiting and loading on ship 5
Shipping to port of Hamburg (Germany) 23
Total 36
2.3 Logistics Cost (Rates and Cost Indicators)

The analysis of import and export cargo logistics cost has been
carried in relation to the logistics cost of other benchmark countries.
These countries are South Africa, South Korea, United States, and
Indonesia.
25
2.3.1 Import Cargo

Total Cost
The total cost of importing cargo from getting foreign currency

permit from banks or L/C opening to shipment delivery to the
consignee under unimodal/ multimodal transport is shown in Table
7. The following assumptions have been considered in calculating
the total logistics cost of import cargo; cargo purchased value 40,000
USD, one container cargo (TEU), less than 20 tons load, normal cargo
(non-dangerous good), and port of loading Shanghai (China).
Logistics Cost
The logistics cost includes the cost incurred in shipping and land
transportation, cargo handling operations at seaports and dry ports
until the shipment is delivered to the consignee. Table 7 below
presents the details of these costs.
Table 7: Logistics cost
Unimodal Multimodal
Cost list
Cost Cost
% %
(USD) (USD)
Shipping at Sea 725 28 725 30
Port Service at Djibouti 650 25 600 25
Land transportation to
1127 43 1000 41
Ethiopia
Inland dry port service 100 4 113 4
Total 2602 100 2438 100

The above logistics cost include port handling charges. Thus, logistics
cost refers to:
• Transport costs
• L / C payment
• Insurance payment
• Container storage and demurrage and other

administrative costs; having thesecosts the average cost of
one TEU contianer is 4,500 USD.
Port Service Cost
Port service charges are paid to the services provided by ports. These
charges vary from port to port. Port of Djibouti is well-known as one
of the most expensive ports. For comparison, the tariff information
of port of Djibouti and the surrounding ports are shown in tables8,
9 and 10 below.
Table 8: Comparison of cost of stevedoring (discharging) service

for import cargo
Port Stevedoring Charges in US Dollar

Dar es Salaam
Port Sudan
Mombasa
Average
Djibouti
Djibouti
Container
compared to
Type
average %
20feet 99 80 110 96 133 +39%

40feet 125 120 220 155 166 +7%

27
Table 9: Comparative cost of shore handling for import containers
Port Shore Handling Charges in US Dollar
Dar es Salaam
Port Sudan
Mombasa
Average
Djibouti
Container Djibouti
Type compared to
average %
20feet 85 70 40 65 272 +318%

40feet 85 95 80 87 544 +525%
Table 10: Comparative cost of stevedoring (discharging & shore

handling) for export cargo
Port Stevedoring and Shore Handling Charges

in USD
Dar es Salaam
Container
Port Sudan
Mombasa
Average
Djibouti
Type Djibouti
compared to
average %
20feet 184 230 110 175 249 +42%

40feet 273 330 220 274 398 +45%

Land Transport Cost
Land transport cost refers to the cost paid to transport cargoes from
port of Djibouti to inland destinations. The destination will be either
a named place of destination by the importer under unimodal or a
dry port in case of multimodal. The table below (Table 11) shows
transportation cost of 20 feet container with 30 tons load from port
of Djibouti to Addis Ababa under unimodal, compared with costs in
neighboring countries.
Table 11: Comparative cost of land transport in USD
Cost Cost
Cost Cost
Distance per per
Origin Destination per per
(KM) 1 ton/
TEU ton
KM KM
Nairobi 483 1045 2.16 34.83 0.072
Kampala 1137 3700 3.25 123.33 0.108
Mombasa
Kigali 1439 4800 3.34 160.00 0.111
Kampala 1571 4600 2.93 153.33 0.098
Kigali 1475 4300 2.92 143.33 0.097
Dar es Salaam
Djibouti Addis Ababa 925 2050 2.22 68.33 0.074
Source: Shippers Council of Eastern Africa (2014). East African Countries

Logistics Performance survey 2014.
2.3.2 Export Cargoes

The following analysis is carried out to calculate the total logistics
cost to export from Ethiopia by taking representative cargo. This
analysis assumes transportation of textile with a 40 feet container
from the port of Djibouti to Istanbul port (Turkey) and coffee with a
20 feet container from the port of Djibouti to Hamburg (Germany).
The analysis is presented in table 12.
29
Table 12: Logistics cost to export a container under unimodal
Cost List Cost per Percentage Cost per Percentage

20 feet of total cost 40 feet of total
container container cost
(USD) (USD)
Land transport cost 510 26 1020 32

(Addis Ababa - Djibouti)
Port handling charges at 450 23 660 21
Djibouti
Shipping cost 950 49 1400 44
Commission and other 40 2 80 3
expenses
Total 1950 100 3160 100
Logistics time and cost to export, especially in terms of export

products and manufacturing inputs, have shown that the country’s
logistics cost and time have been higher compared to those of
competitive countries. The following three major reasons have been
identified as major sources of this problem:
• Small volume and fragmented shipments (economies of

scale)
• Longer distance to sea
• Inefficient logistics performance
The above analysis has been carried out based on the current type
and amount of export cargo. Logistics infrastructures development
for livestock and perishable goods export is at the lower or below
the minimum level. The required time and cost to export such
products using the available infrastructures makes the country non-
competitive. In addition, the current performance rate of stuffing
export cargo into containers in Ethiopia is only 33 percent. This has
led the country to incur costs in foreign currency and also make the
system inefficient.
2.4 Logistics Performance Assessment and Findings

In the earlier parts of this study, data analysis has been carried
out on the national logistics performance of Ethiopia with specific
emphasis to logistics time and cost. This has been derived as an
excerpt from a detailed study on logistics problems (diagnosis
report). In the problem analysis of this strategy document, the time
and cost required for each process has been estimated. Further
comparative analysis has also been carried out in comparison with
logistics costs and time of East African countries and other countries
of the World. During each process, the problems, causes of problems
and effects were analyzed. The findings showed that the country’s
overall logistics performance indicators in terms of time and cost are
found at very low level compared to international standards. Relative
to average logistics performance of countries found in East Africa,
Ethiopia has scored more than twice higher in most performance
indicators.
The causes for the country’s lower logistics performance are

identified. Based on the analysis of these problems, the NLS need to
address the fundamental problems to bring about profound positive
effects and those which require special attention are identified, as
here under.
2.4.1 Trade and Finance System

As it has been shown on the analysis of transit time and the total
time and cost required to import, trade and finance system has 65%
share of the process of importing cargo into the country. Regarding
to port dwell time, the cargo dwell time is 10 times higher than the
average global standard (average 3 days). Though there are different
31
factors for cargo long dwell time, the key problem is the trade and
finance system.
For instance, the current practice of bulk cargo import is almost

equivalent to using vessels as a warehouse. The major causes of this
problem are difficulties of coordinating disparate importers with
fragmented operations and a shortage of supply of foreign currency.
Regarding cargo dwell time on seaports and dry ports, the practice
of using containers for storage is mainly related to the trading and
finance system more than transport logistics.
The country’s trading and finance system has been identified as one
of the key problems. The negative effect of the country’s trading and
finance system on logistics performance goes beyond the above
mentioned, it has made the import trading system extensive to incur
unnecessary additional operations. Thus, transforming the trade
and finance system has a significant role in creating an effective and
responsive logistics system.
2.4.2 Excessive and Cumbersome Transit and Customs

Procedures
There are several regulators and service providers participating
in the process of importing and exporting cargo from origin to
destination. These are freight forwarders, shipping companies, port
terminal operators, and customs authorities of both Ethiopia and
transit countries, border control and other related agencies. These
agencies perform under major challenges characterized by large
number of documents and payments; time-consuming processes;
lack of adequate facilities, equipment, and manpower at the required
level; and above all lack of coordination among the sector players.
The time required to deliver cargo at inland destinations include

procedures of releasing cargo at seaport, inland haulage and
clearance at inland customs appear minimal on paper, but the process
actually takes longer time due to complex customs procedures and

related systems.
2.4.3 Poor Quality and Low Competence of Logistics

Service Providers
One of the main challenges for different government organizations
engaged in regulating the logistics sector is lack of institutional
capacity to lead the sector based on knowledge and skills. In addition,
the private logistics service providing companies including port and
terminal operators have also challenges of shortage of appropriate
qualified professionals.
In this regard, integrated operations are required between customs

clearing agents, freight forwarders, ship agents, transitors and ship
agents in Djibouti. Though different institutions are providing training
and qualification programs, these programs are disintegrated
and incompatible with the required trade logistics performance
of the country. This has hindered the ability of various supervising
organizations from achieving the desired results at a satisfactory
level. The intermittent and inconsistent training provided for
customs clearing agents has been one of the main reasons for an
acute shortage of professionals. This has created opportunities for
fewer customs clearing agents to operate at higher service charges.
2.4.4 Monopolistic Practice in the Logistics Service Sector

There are several services provided by monopoly and exclusive
service providers in the logistics service sector. These companies
include container terminal management, bulk cargo operation
terminal and oil terminal at the port of Djibouti; the national shipping
company for import cargo (though not all import cargo), multimodal
operation and dry port services on Ethiopian side. These services
are not open to the private sector and also lack efficient procedures
for delivery of quality service. These have caused for inefficient
33
operations and a higher increase in service charges. Thus, lacks of

proper controlling on the logistics service areas and absence of a
competitive environment in the logistics service sector have become
significant problems in the logistics system.
2.4.5 Logistics Infrastructure Deficit and Management Problem

An effective and efficient logistics system requires development
adequate infrastructures. In this regard, earlier diagnosis reports
showed several gaps and shortcomings related to:
• Transport supply and management problem
• Road condition
• Status of logistics centers
• Port facilities, stuffing materials, port handling equipment
• The use of modern information technology and related

infrastructures
2.4.6 Logistics Service Providers & Regulators gaps on

Institutionalization & Capacity
Logistics service providers and various government organizations
engaged in regulation and controlling have institutional organization
and capacity shortcomings in leading the sector with the relevant
knowledge and skills. There is no also legal basis for horizontal
coordination and effective integration among logistics institutions.
The shortage of qualified logistics professionals in the private and
government sectors, and domestic and seaport logistics service
providers has been identified as one of the quagmires in the logistics
sector.
Part Three:
Vision, Mission and Strategic
Objectives and Targets
With the notion that all logistics stakeholders in the Ethiopian

import-export trade stand to gain from faster, easier and less costly
trade through improved competitiveness, internationally accepted
norms, standards and best practices, the following mission and
vision statements are here with set forth what the Ethiopian logistics
industry should strive to become in the future.
“Transform the country’s logistics system to be the

Vision:
leading enabler for trade and investment in Africa by

2028.”
The strategic objective, thus aims to achieve the national vision

stated above.
The mission of the logistics industry is
“Contribute to the efficient and effective flow of goods,

Mission:
services and information in a manner that supports

government development strategies, make the
country’s trade more competitive in the global market,
and achieve the end result of alleviation of poverty and
improve the quality of lives of citizens”.
As highlighted in the earlier sections of this strategy, issues in the

logistics sector need immediate attention despite major economic
achievements in Ethiopia. This entails that the logistics sector
demands transformation so as to contribute to the Ethiopian
economy which makes it critical to have specific strategies for the
sector’s development.
3.1 Objectives and Goals
3.1.1 General Objective

Transform Ethiopia’s logistics system in the coming ten years.
3.1.2 Specific Objectives

Ø Improve logistics services by refining the national trade
and finance system.
Ø Establish well integrated and interfaced transit and

customs System.
Ø Improve logistics service provider’s efficiency.
Ø Reduce the monopolistic practices in the logistics sector of

the country.
Ø Develop Logistics infrastructure
Ø Build up logistics sector institutional capacity
3.1.3 Strategic Goals

The NLS goals are designed by way of considering the Logistics
Performance Index, the current LPI status of the country and logistics
developmental projection in the coming ten years. And these goals
are stated as follows:
37
1. Trim down the import lead-time of foreign currency permit

to shipment delivery from 123 to 40 days.
2. Cut the import cargo transit time of port discharge to an

inland destination from 46 to 7 days.
3. Reduce export lead-time of inland bank permit to shipment

on board of a vessel from 36 to 7 days.
4. Transport all import bulk cargos from the port with zero
demurrage cost of vessels.
5. Decrease import cargo port dwell time from 40 to 3 days.
6. Increase export cargo containerization within Ethiopia from

the current 33% to 90%.
7. Reduce dry bulk vessel anchorage time from 35 to 2 days.
8. Cut break-bulk vessel anchorage time from 15 to 2 days.
9. Increase Ethiopian trucks annual mileage from 70,000Km to

120,000km.
3.2 Logistics Sector Strategies

The paramount challenges are identified based on detailed
studies and analysis in order toestablish the logistics sector
goalsobjectivesand strategies.Accordingly, six major strategies are
identified along with corresponding interventions that require to be
transformed into implementaion programs. The Six strategies are
presented in the table below.
Table 13: Logistics Sector Six Major Strategies
Strategy N.O Title
Transform logistics service delivery and operators

Strategy 1
efficiency
Develop and strength logistics sector policies

Strategy 2
and legal frameworks
Institutes an efficient and reliable transit and
Strategy 3
customs system
Implement reliable trade and finance system to enhance

Strategy 4
logistics facilitation role
Strategy 5 Develop logistics infrastructures

Strengthen regulators institutional capacity,
Strategy 6 qualifications of human capital and create
efficient government
Each of the above six major strategies are discussed as follows with
corresponding sub-strategies and interventions. Interventions are
actions used to translate strategies into implementation. As a result,
interventions will be translated into programs.
Strategy 1: Transform logistics service delivery and

capacity of operators
Description of the Strategy
Strategy one emphasizes on making the country’s logistics service

and processes effective, efficient and integrated. This is one of the
key issues in the process of transforming the country’s logistics
system to a higher level. This strategy aims at enabling logistics
service providers to deliver complete and well-integrated services
to exporters and importers. The sub strategies identified of this
strategy include:
39
Sub Strategy 1.1: Establish an efficient and effective logistics system

Sub Strategy 1.2: Transform ESLSE’s service delivery system and its
structure
Sub Strategy 1.3: Strengthen the capability of logistics service
providers
Sub Strategy 1.4: Enhance transport capacity.
The interventions proposed for each of the sub strategies along with
their brief explanations are provided below.
Sub Strategy 1.1: Establish an efficient and effective logistics system
Interventions
1. Establish an operational coordinating mechanism at national

level for import dry bulk shipments
It is imperative to lead all dry bulk cargo imports in a coordinated

and legally structured manner by the government and other
stakeholders. There shall be collaborative planning and
coordination on procurement, financing, sea transport, port service,
road/rail transport and local warehousing for dry bulk imports.
2. Develop logistics system for livestock Export
This intervention is focused on enhancing livestock export

competitiveness through building livestock spelling yards along the
main corridors of the country with sufficient facilities. Establishing
benefit packages for logistics service providers to have special
trucks for transportation of livestock from inland yards to seaports,
and providing livestock spelling yards around the seaports are vital
approaches to attain this intervention.
3. Strengthen the multimodal transport system and

increase its coverage
Nowadays, the volume of cargo handled by multimodal transport

system is very low compared with the national import/export volume.
To take it to a higher level of coverage, it’s imperative to strengthen
the capacity of the operators and to establish a research-based
system for inclusion of cargo which is not covered by prevailing
multimodal transport system.
4. Develop export cargo containerization in hinterland
In the existing global logistics system, there is an increasing trend

of containerization supported by modern operations. However, 67
percent of Ethiopia’s export cargois transported in break bulkto
the port of Djibouti, then the stuffing operation takes place there
for export to various destinations. Thus, it’s important to conduct
a study, prepare legal frameworks, and develop facilities for export
containerization within Ethiopia to avoid delays and excessive costs.
5. Enhance utilization of ports and transit corridors
Ethiopia’s import and export cargo are carried throughfew corridors

and the logistics service through these corridorsis found to be costly
and takes longer time because of cumbersomeprocedures and poor
road infrastructures. Hence it’s desirable to increase the utilization
rate of existing corridors and have alternateve/additional corridors
through well establishedagreements with neighboring countries.
6. Create full-fledged and Integrated system packages for export

logistics service
To make the country’s export trade more competitive in terms of

time and cost, and bring the tradebalance to an optimal level, it’s
imperative to examine the export logistics system. It is also critical
to institute benefit packages as well as create an end-to-end export
41
services to motivate exporters and logistics service providers.
7. Develop a system to control sea transport tariffs
Sea transport is highly controlledby international market forcesand

conventions in the existing global arena. However, the fact in
Ethiopia differs from this scenario because of the monopoly practice
the country is pursuing,and market forces are not determining the
freight rates. Therefore, a study shall be conducted with global
benchmarking and institute a system to control the sea transport
tariffs.
8. Create a system for transit transport of import cargo
Implement efficient and effective transit and transport systems

to lead import logistics by developing consistent standards fo all
logistics service providers and regulatory institutions.
9. Establishan integrated, efficient and effective transit transport

system with focus on industrial parks and cargo centers.
Establish a transit transport system to and from industrial parks by

removing all existing hurdles tothe industrial parks in the course of
import ofraw materials and forwarding of export products.
10. Establish Common use facilities for logistics service providers
Implement a system that will enable all logistics service providers to

use common facilities and infrastructuresthat are alreadydeveloped
or may bebuilt in the future by the government.
11. Developa system for storing and disposalof unclaimed cargo

in dry ports
Develop a system for cargo temporary storage and trans-shipment

as well as disposal for unclaimed cargoes handled at domestic dry
ports.
12. Install a consolidation system for providing an integrated sea,

air and land transport services.
To enhance the country’s import-export trade flow and promote

export competitiveness of perishable goods, an operating system
will be developed for an integrated land-air transport service by
preparing operational procedures and constructing consolidation
centers near to production areas.
Sub Strategy 1.2: Transform ESLSE’s service delivery system and structure
Interventions
This sub strategy focuses primarily on the Ethiopian Shipping

and Logistics Services Enterprise (ESLSE). The Enterprise could be
recognized as the backbone of the development agenda of the
country in terms of logistics services. Accordingly, ESLSE will have
two main roles in the implementation of the NLS. These are:
1) To become the leading logistics service provider in

implementing national logistics strategy of the country.
2) In partnership with other logistics service providers, the

Enterprise is expected to be an integral part in enhancing
the capacity of the country’s logistics service providers and
creating conducive environment for competition.
13. Develop a system to involve private logistics service providers

in multimodal transport system.
ESLSE operates all services ofthe multimodal transport system using

its capacity and it is a necessity to outsource multimodal transport
service to other companiesin order to increase freight coverage
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and enhance efficiency in the multimodal service delivery. As a

result, a system for outsourcing these services will be developed to
maximize ESLES’s capacity and include cargo that are not covered
by multimodal.
14. Establish effective presence at sea ports in line with the

country’s interests
It will facilitate improve functioning of the ports and corridors of

the country’s Import and export trade by opening offices at the
seaports as per the interests of the country and to play a leading
role for other service providers to enable them offer better services.
15. Provide quick service for cargo transported by multimodal

transport.
In order to make the multimodal transport system the choice of

Importers and exporters and to ensure its competitiveness in terms
of time and cost, the standard operating system will be implemented
to transport goods into inland dry ports within a few days after
discharge at the seaports.
16. Provide efficient service for cargo transported by unimodal

transport system
Implement standard operating system that will ensure shorter lead-

time and fast delivery of cargo transported by the unimodal transport
system from the time of receiving of customs clearing documents to
shipments delivery at destinations.
17. Create modern, efficient and effective service delivery

at dry ports
Currently dry port operations are not efficient due to unstructured

procedures, inadequate cargo securities and lack of standard best
practices and systems that can enable deliver smooth services. As a
result, modern dry port operation and service delivery system need
to be in placein all dry ports.
18. Implement shipping strategy
Well articulated shipping strategy has to be developed and

implemented considering the national, regional and international
maritime business environments to enhance sea transport service
using own and chartered vessels.
19. Create capacity to provide special cargo handling and

transport services for project cargo.
Due to the fact that our country is implementing many projects

and due to the unique nature of the project cargo, special logistics
arrangemetsare required. Therefore, a system will be established,
facilities will be provided, and capacity building measures will be
undertaken to accommodate the logistics services for the project
cargo.
20. Establish cross docking centers
Cross Docking Centers need to be established to address the problem

of supply of containers by addressingthe gaps in both import and
export.
21. Enable the Shipping and Logistics Services

Enterprise to be a full-fleged logistics company
ESLSE is expected to play a leading role to fill the gaps which were
identified in the course of this study and in the above mentioned
strategies and implement the strategies that are designed to
transform the country’s ailing logistics system. ESLSE has, therefore,
to equip itself with sound organizational set-up and institutional
capacity.
45
Sub Strategy 1.3: Strengthen the capability of logistics service providers
Interventions
The interventions for this sub strategy are listed below with
explanations.
22. Develop long- term contracts to create competent logistics

service providers in the sector
The services of the logistics sector play a significant role in supporting

the development of the country’s economy. If lots of hands, however,
are involved in a disorganized manner in the sector, this may then
result in higher costs and longer transit times. Therefore, it is
appropriate to create robust operators that can provide the services
from origin to destination efficiently. Accordingly, service providers’
ranks will be set by establishing a strong monitoring and support
system. Long-term contracting system will be implemented that can
enable operators to allocate sufficient capital for logistics facilities.
23. Transform transport operators to full-fledged logistics

service providers
A program will be implemented which help comparatively well-

established transport operators to transform them to be full-fledged
Logistics service providers.
24. Strengthen freight forwarding and shipping agency service

providers
Currently, with the exception of a few freight forwarders, there are

hardly any freight forwarding companies with adequate facilities
and qualified professionals. Some of them have poor performance
records and at times unable to settle payments to their partners,
and as a result clients have frequently aired out complaints. It is,
therefore necessary to establish a standard based on international
best practices to identify, enable and encourage the performers
in the sector to improve their services. Similarly, shipping agents

lack decision making capabilities as expected from competent ship
agents. Some agents are sub-agents of the agents at the port of
Djibouti, and their role in facilitating the logistics process is low.
Therefore, a system will be established which will enable these
agents to have strong decision making and play substantial role in
the country logistics through becoming direct and general agent for
shipping companies.
25. Establish a licensing system of Authorized Economic

Operators (AEO) status to logistics service providers
The AEOs’ license is given by the Ethiopian Ministry of Revenues

to exporters and importers engaged in manufacturing, agricultural
production and mining sectors. Therefore, a system will be established
to issue AEO licenses to logistics service providers which mainly
serve the above mentioned producers, exporters, and importers.
26. Improve the coordination among cross-border freight

forwarding service providers
Freight forwarders engaged in cargo handling operations in Ethiopia

have poor relations and coordination with their counter parts in
the port of Djibouti and other ports. The problems include the
lack of enforcement mechanisms to protect the rights of freight
forwarders when they face operational challenges at the seaports,
failure of foreign freight forwarders to deliver commitments under
their contracts with Ethiopian forwarders, and Ethiopian forwarders
failure to settle payments timely. The problem-solving procedure
which is now in place for solving the above problems has not
been effective. Therefore, review of these procedures and through
negotiations with transit countries, sustainable operating systems or
modalities will be established for freight forwarders.
47
27. Create an integrated training and licensing system
Freight forwarders and customs clearing agents are almost identical

and engaged in providing logistics service for similar cargo, yet the
training and qualification assurance system for both areas are not
integrated. Therefore, synchronized training and certification system
will set be up for freight forwarders and customs clearing agents.
28. Establish a system to monitor logistics service quality
Logistics service quality monitoring system will be established based

on international best practices.Assessment and measurement of
logistics service quality will be carried outand necessary corrective
actions will be taken to improve service delivery.
29. Capacity building for companies engaged in logistics service

provision
In the logistics sector, personnel’s skill, knowledge and experience are

not at the desired levels and do not meet the current requirements. In
addition, the system for human resource development has not been
in line with acceptable practices. Thus, it is important to examine the
human resources capacity building system in the logistics sector and
establish human resource a capacity building system that will meet
global standards and avail qualified professionals for the sector.
30. Apply an Incentive system for logistics srevices providers
An incentive system will be implemented to motivate operators

involved in the logistics service and to improve service deliveries
continuously.
Sub Strategy 1.4: Enhance transport capacity.

Interventions
The interventions for sub-strategy 1.4 are provided as follows.
31. Strengthen service delivery by integrating rail transport

with road transport and freight centers
Projects underway and future initiatives in the process forenhancing

the country’s rail transport, shall go beyond cargo transportation.
In addition, efficiency of logistics services rendered at terminals and
integration of rail transport with roadtransport and freight centers
need to be ensured.
32. Integrate the country’s import-export trade transit

and traffic flow
Based on the country’s current economic context, the flows of

import cargo exceeds the export cargo. This has a negative impact
on transport utilization. In solving this and other related problems,
an operating system for export cargo handling will be implemented
that will enable the effective utilization of facilities which are already
employed for handling import cargo.
33. Import trucks with heavy load (70 – 100 tones)
In Ethiopia most companies and truck associations use old trucks

with lesser loading capacity. Hence, legal framework and operating
procedures will be prepared to ensure effective utilization of trucks
with heavy loads in selected areas of the country. Besides, packages
will be put in place to enable companies to achieve this.
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34. Establish tractor head exchange systems
Tractor heads changing systems are important for efficient utilization

of vehicles as aresult fuel consumption reduces and road usage and
turnround time also reduces. Thus a system will be established that
will facilitate transport operations through switching truck heads.
35. Restructure the organization of trucking

associations in Ethiopia
There are many freight truck owners in Ethiopia where most of them
are single truck owners with less competitive power in the market.
As is known, transport associations are engaged in different efforts
to coordinate the fragmented and disorganized freight transport of
the country. Lack of authority by the association to give operational
directions for truckers and the presence of ethical problems in the
association has created complexity of the transport management.
Thus, an operational system will be implemented that will transform
the organization of transport associations into business organizations
(private share or large companies).
36. Implement fleet management system
Strengthen electronic cargo tracking system and fleet management

to mitigate a range of risks, improve service, regulate compliance,
and ensure proper asset utilization.
37. Improve major logistics routes
This intervention aims at improving international logistics routes

to speed up travel time of bigger trucks and utilization of road
infrastructures as well as facilities to withstand heavier truck loads.
Strategy 2: Develop and strengthen logistics sector

policies and legal frameworks.
Description of the strategy:
Ethiopia’s logistics performance indicatorsareat very low level

against globally accepted standards. This has made the country’s
foreign trade less competitive in the global market. The main
cause for this situation is a narrow competitive environment in the
sector due to monopoly practices. Out of services provided in the
logistics sector, some services are provided by a single government
owned operator, while some others are provided by local private
companies but not allowed for foreign companies. Therefore, the
main aim of this strategy is to open the logistics service to a broader
competition in a phase by phase approachby conductingappropriate
detailed studies and analyses. This will enablethe government and
private logistics service providers to provide reliable, effective and
effcient logistics services.
The sub strategies identified to accomplish this strategic objective

include:
Sub Strategy 2.1: Reform the policy on maritime transport service

Sub Strategy 2.2: Reform the multimodal Operators licensing
system
Sub Strategy 2.3: Reform the freight forwarding licensing system
Sub Strategy 2.4: Reform licensing system for dry port
development and operations
Sub Strategy 2.5: Reform policy on road transport service sector
The interventions proposed for each of the sub strategies along with
51
Sub Strategy 2.1: Reform policy on maritime transport service
Interventions
38. Open up the maritime transport and logistics services

gradually to the international market
Maritime services shall be opened up for competition in a phase by

phase approach as follows.
Phase One (1 year): Major cargo owners in Ethiopia will have shares
at ESLSE to improve its service quality and set a
mechanism to control the freight rates for services that
are provided by the monopoly. A revision will be made
on the 2001 FOB directive which has given exclusive
rights for Ethiopian vessels to transport all imports of
the country.
Phase Two (1 -2 Years): A system will be established for ESLSE to

work with international mega-carriers in partnership.
Phase Three (After 5 years): The shipping service sector will be

opened to the local and international shipping operators.
Sub Strategy 2.2: Reform the multimodal Operators

licensing system
Interventions
Interventions proposed for each of the sub strategies along with

39. Open up the multimodal transport service gradually to

international market
ESLSE is the sole provider of multimodal transport services in

Ethiopia. The Enterprise carried different reforms to cope up with
the service requirements. It is noted that the country’s cargovolume
had become beyond its handling capacity. Hence, it is essential
to address this problem by liberalizing the service to all capable
multimodal operators in three phases.
Phase one (1 –1½ year): The current sole multimodal operator, ESLSE
will establish and implement a system to use the capacity
of other logistics service providers to improve its
services.
Phase two (1 - 2½years): Introduce and implement a regulation to grant
licenses for domestic private logistics companies on
multimodal transport service.
Phase three (5 years later): Open the multimodal transport services
entirely to the global logistics market.
Sub Strategy 2.3: Reform freight forwarding licensing system

Interventions
The freight forwarding industry is open for private operators in the

country, but protected only for Ethiopian nationals. Besides, it is
highly fragmented, less regulated with inadequate organizational
set up and lack of service standard/code of conduct for proper
governance of individual clearing and forwarding companies.
Therefore, it requires phase by phase approach to transform this
industry, and the respective intervention proposed to attain this goal
along with its brief explanations is provided below.
53
40. Open up the freight forwarding service sector

gradually to the international market
During the first phase (1 year), domestic freight forwarding companies

will strengthen their capacity by partnering with
international companies in selected services.
In the second phase (1 ½year), a system will be set up for joint venture
arrangement to make partner foreign companies in all
logistics services with local freight forwarding companies.
For the third phase (after 2 years), the freight forwarding service sector
will be fully open to the international operators.
Sub Strategy 2.4: Reform policy on dry port development

and operations
Interventions
ESLSE owns, operates and manages dry ports at various inland

locations for the provision of multimodal transport services since
2009. Improving the efficiency of dry port operations and addressing
the inherent problems in dry port operations requires liberalizing
this sub sector. Thus, dry ports development and operations will be
opened in a phase by phase approach. The intervention to implement
this sub strategy is as following.
41. Open up the dry port services to both domestics and

international operators
In the first phase (1 - 2 years), a system will be established which

enables ESLSE to develop dry port infrastructures and
become the owner of common use facilities at dry ports.
Then, procedures will be prepared to involve private
logistics service providers and cargo owners to operate
in different services within dry ports.
In the second phase (after 2 years), the dry port service and the
consolidation centers, inland container depots (ICDs)
and Logistics centers will be opened up for both domestic
and foreign Logistics operators.
Sub Strategy 2.5: Reform policy on road transport service sector
Interventions
The inland freight transport is fragmented and disorganized with

a low level of service performance and management. Therefore, it
requires a phase by phase approach to transform the service. The
interventions to implement this sub strategy follows:
42. Open road transport services gradually to

the international market
In the first phase (1 year); improve capacity of local road transport

companies and enhance their service competitiveness.
A joint venture arrangement will be established
with transport companies from neighboring countries.
In the second phase (2 year), road transport services will be fully
opened to neighboring transport companies.
In the third phase (after 5 years): Road transport services will be
opened to international transport companies.
55
Strategy 3: Establish an efficient and reliable transit and

customs system
The main objective of this strategy is to make the flow of activities

of the regulatory institutions of the sector simple, integrated, and
efficient. The following sub-strategies are designed to achieve this
goal.
Strategy 3.1 Establish effective customs facilitation procedures
Strategy 3.2 Establish an effective transit port operation procedure
Strategy 3.3 Improve corridor utilization
Strategy 3.4 Improve port utilization

The interventions for each sub-strategy are presented as follows.
Sub-strategy 3.1 Establish effective customs

facilitation procedures
Interventions
43. Establish national single window service
There are several players involved in import and export cargo

transit procedures and general foreign trade activities. However,
these regulatory offices and service providers’ (banks, insurance,
shipping companies, freight forwarders) processes are carried in a
disorganized manner; this has resulted in extended processes, long
delays and accelerated costs. These fragmented business processes
should be organized and a national single window will be established
to facilitate the transfer of large number of documents through an
efficient and modern single center system supported by information
technology. To this effect, there is an ongoing project coordinated
by the Ministry of Revenues. The project implementation will be

expedited with due emphasis on the achievement of the goal of
transformation of the logistics system.
44. Establish regional single window service
As a landlocked country, Ethiopia utilizes seaports of neighboring

countries for its foreign trade. Therefore, it is a necessity to establish
a single window service for integrating regulatory bodies and
service providers who play essential roles in the logistics processes.
But, this by itself will not provide a complete solution. Rather, the
national single window system must be integrated with similar single
windows at seaports.
45. Customs procedures improvement program
Imported cargoes discharged from vessels at seaports and then

transported to destination points, and export cargoes moved from
inland origins to seaports for loading on vessels require longer
customs and transit processes. To provide a solution to this inherent
problem, designing and implementing an improved program on
customs procedures is one intervention.
46. Develop standard customs procedures for foreign

trade at entry/exit cross-border centers
There are several customs centers which are used to handle the
country’s import-export cargo flow. These are Galafi, Moyale,
Metema, Humera, Dewele, Bure, Zalambessa and Rama. However,
the customs procedures and services provided at these centers are
not standardized. These in turn hinders movements of shipments
and have a negative effect on trade movement. Therefore, it is vital
to establish standardized and effective procedures at all customs
centers.
57
47. Establish an integrated and efficient customs procedures at

Modjo dry port
Modjo dry port is the largest and busiest port in Ethiopia. A project
believed to bring transformation in the service delivery, scope and
capacity to a hub level is under implementation. In this set up, there
will be improved and efficient customs procedures which will serve
as a benchmark to other ports. There is a plan to make it a model for
other cargo centers.
48. Minimize transit check points and transit times
The increased numbers of checkpoints for import goods that

are transported from seaports to destination points and export
cargo from inland origin to seaports have led to extended transit
procedures. Hence, a program will be implemented which enable
will decrease the number of checkpoints and the time required for
inspection. This is expected to reduce the total logistics time for
import & export trade.
49. Establish a system for free container movement
Containers are part of a vessel. Most of the containers that carry

imported cargoes to the country are owned by shipping companies.
The container owners want these containers to be returned fast for
upcoming cargo loads. On the other hand, there is a need to use
the containers for stuffing export goods within the country. Thus,
easy and efficient system will be established with free container
movement into and out of the country.
50. Establish single customs service territory
The movement of cargo depends on documents/information and

financial flows. As the inflows and outflows of foreign trade cross
territories of other countries, the customs formalities and procedures

of different countries pose major obstacles. In order to coordinate
each country’s customs authorities; a collaborative program will be
implemented for the establishment of a single customs territory in
a long-term. The territory will facilitate the transit procedures for
ensuring efficient flows of cargo.
51. Reduce number of documents
One of the basic logistics performance metrics is the complexity

of service delivery. This is caused by a large number of documents
required to complete formalities of customs, and other regulatory
and service providers. This will lead to an extended transit process,
therefore; reducing the number of documents is one of the
interventions.
52. Enhance implementation of the Vienna Program of Action
UN agency that has a mandate to solve and facilitate transit and

transport challenges of landlocked countries has prepared a Vienna
Program of Action for implementation. Ethiopia being landlocked
with a big population, it has been committed for implementation of
this agenda. There is a need to strengthen this effort by developing
a plan, assignment of a focal point and follow-up procedures so as
to measure outcomes of the implementation program.
53. Develop partial cargo release system
There is an accumulation of cargo at dry ports. The dwell time of

cargo is also very long. One of the interventions to solve this problem
is to design a customs procedure for partial release of shipments
taking into consideration limitation of warehouses as well as market
and financial problems encountered by importers. This will allow the
release of partial cargo based on their capacity by completing the
59
required customs procedures.
Sub Strategy 3.2. Establish an effective transit-port

operation procedure
Interventions
The interventions for the above sub-strategy are presented as

follows.
54. Establish a system to control monopoly practice at seaports
If services such as stevedoring, shore handling and related terminal

services are provided by a sole service provider; this will have
a disadvantage on service quality, tariff rates, and other related
service indicators. Therefore, it is necessary to negotiate to have
research-based competition and an agreement with port authorities
to ensure the national advantages gained from the competition. In
addition, it is essential to establish regulatory framework for services
that are not open to competition.
55. Establish single window service at seaports
There are a number of regulatory and service providers including

customs office, port authority, ship agents, etc. that are involved in
maintaining customs and port formalities for transit cargo. These
services are provided in a disorganized manner which makes the
service time taking and expensive. Hence to address this problem,
it is necessary to establish Djibouti Port Community to provide
responsive and consistent single window service.
Sub Strategy 3.3. Improve corridor utilization
Interventions
The following are the interventions for this sub strategy
56. Develop seaport and transit corridor performance indicators

and establish a monitoring system
There are key performance indicators for seaports and transit

corridors. Accordingly, port and corridor performance monitoring
system will be established to measure performance and develop
problem solving programs in consistent manner.
57. Establish one stop border post
There are several inspection and custom check points along transit
corridors in the neighboring countries, as well as in Ethiopia. This
makes vehicles carrying cargo to be stranded at a number of points
and this in turn increases cargo transit time. These check points pose
hindrances to the transit transport services. To address this issue, it is
necessary to establish and implement a One Stop Border Post.
58. Harmonize common axle load rule
The Axle Load limitation rules between Ethiopia and transit countries
are not similar, in which Ethiopia’s axle load limits are lower than
those in the transit countries. This difference in the load limits does
not facilitate the free movement of trucks between the respective
countries. It is, therefore, necessary to establish mutually agreed
common axle load limits for all neighboring countries.
59. Establish transit corridor management authority
In order to scale up the cross border transit transport operation,

relevant stakeholders in Ethiopia and transit countries should work
in a coordinated and integrated manner. Collaborative planning and
61
implementation of monitoring measures should be taken to ensure

fast and efficient services at transit corridors. As a result, establishing
Transit Corridor Management Authority is vital to bolster these
efforts.
Sub strategy 3.4. Increase Improve port utilization

Interventions
The interventions proposed to implement this sub strategy include

the following.
60. Joint seaport development
There are multiple disadvantages if port development is monopolized

by a single seaport developer. In line with this strategy, Ethiopia will
have full participation on joint seaport development so as to ensure
the nation’s interest related to seaports utilization and bargaining
power in various negotiations such as port tariffs and other day to
day operational issues which arise in the course of port utilization.
61. Create regional seaport logistics center
One of the essential ways to reduce transport cost, especially sea

transport cost, is to have economies of scale of shipments. The
transport charges of vessels with large loading capacities are
relatively low. Using such vessels requires consolidation of shipments
and development of large ports with adequate handling capacity.
Hence, it is very important to build a “Regional seaport” for common
usage through joint ventures and cooperation with neighboring
countries.
62. Set up a procedure for disposal of abandoned and

unclaimed cargo at seaports
There are a large number of consignments laying at the Port of

Djibouti due to different reasons. Therefore, operational procedures
will be developed and institutions will be organized to manage such
cargo.
Strategy 4: Implement reliable trade and finance system to

enhance logistics facilitation role.
The main objective of this strategy is to improve the country’s trade

and finance system with respect to reducing logistics time and cost
and supporting the transformation of the logistics sector. To achieve
this objective the following interventions are introduced.
Sub strategy 4.1. Establish effective and efficient trade & finance
system
Sub strategy 4.2. Establish production network based logistics
service
Sub strategy 4.3. Establish modern import trade distribution
network
Sub strategy 4.1. Establish effective and efficient trade

and finance system
Interventions
The interventions for this sub-strategy are presented as follows:

63
63. Establish control procedures for bank transaction payments
It is well noted that importers are subjected to excessive charges

as a result of high bank fees paid to obtain bank permits and other
related services. Thus, to reduce/avoid the impact of such high
charges which ultimately cause increment on logistics costs, the
National Bank of Ethiopia will set up a mechanism to regulate the
rates for such service fees.
64. Improve foreign currency supply
The country’s import cargoes lead-time from placing an order to

delivery is very long. The main reason is long waiting time to obtain
foreign currency permits from banks. According to feedback from
many importers, the foreign currency shortage has also resulted
in unequal treatment among importers. Since, this practice has a
negative impact on the logistics system, this procedure should be
reformed.
65. Establish accountability procedures for importers who fail to

clear shipments on time from ports
The country’s port dwell time for import cargo is very long. In this
regard, importers should play a paramount role to reduce the dwell
time. Hence, it is important to devise accountability procedures for
importers who do not lift their cargo in time.
66. Promote trade transaction with neighboring countries
The share of Ethiopia’s logistics cost is very high in comparison with

the country’s GDP as well as the value of the commodity. One of
the factors contributing to this is the high shipping cost as a result
of the country’s trading transaction with the Far East countries.
Other countries have been able to reduce their logistics costs by
strengthening their trade transaction with surrounding countries.

The country’s trade transactions with surrounding countries should
be strengthened based on research in order to minimize national
logistics cost.
67. Establish a financial support system for importers and

exporters
Port dwell time for import cargo is very high. This is highly linked
with importers financial shortage. Different financial instruments
such as bank payment, tax and duties for customs and revenues, and
other payments are required to move shipments from port. Hence,
financial tools such as “Import Financing” will be established for
importers in order to ensure effective trade transactions.
68. Establish simple and effective payment system

for seaport service
Charges for sea port services are paid in foreign currency. The
current operation has created a major problem among Ethiopian
freight forwarders and Djibouti transit service providers. Sometimes
Djibouti transit service providers hold cargo in custody at seaport
for delayed payments. In general, a new payment system will be
established that will address existing bottlenecks.
69. Establish free trade zone
Considering the country’s foreign currency controlling systems

and finance related policies, free trade zones will be established in
selected areas to reduce the long lead time for import cargo. Free
trade zones will also help to solve problems of investors engaged
in manufacturing, facilitate trading processes, and reduce logistics
time and cost.
65
Sub strategy 4.2. Establish Production Network

based logistics service
Interventions
The interventions to attain this sub-strategy are presented as follows:
70. Prepare production and logistics supply master plan
It is believed that agro-processing and light manufacturing industries

have a major role in the country’s economic growth. Thus, availing
reliable logistics services is vital to support this economic sector
and enhance its global competitiveness in the world market. To this
end, a national master plan that considers the country’s production
centers and locations will be developed and implemented.
71. Establish consolidation systems
Consolidation system will be established based on the unique

characteristics of shipments or commodities.
72. Develop modern and effective logistics system

for perishable goods
Perishable cargo requires special forms of carriage and facilities in

accordance with the nature of shipments. Perishable cargo service
providers also need special experience, training and knowledge.
Hence, a logistics system will be established considering facilities
and cargo handling capacities for perishable cargo.
73. Establish modern laboratory service provision
The establishment of a reliable, efficient and modern laboratory

service provision is one component for providing smooth transit
service for foreign trade. Laboratory services provided for the
country’s import and export cargo take several days due to lack
of modern laboratory. These have a negative effect on logistics

process. Thus, a modern laboratory service provision system will be
established.
Sub strategy 4.3. Establish modern import trade

distribution network
Interventions
The interventions for this sub-strategy are presented as follows.
74. Develop master plan for modern import trade system
Modern trade distribution network is crucial to facilitate the country’s

import trade. Thus, modern distribution network master plan will be
prepared and implemented.
75. Develop urban logistics system
Development of urban logistics freight distribution centers,

development of transport network and increasing the number of
urban logistics service providers are crucial to address problems
which occur as a result of urban development and traffic congestion.
Hence, a well-functioning urban logistics system will be established
based on appropriate studies.
76. Establish green logistics system
Strong control and monitoring system will be developed and put in

place to ensure that the development of logistics centers and dry
ports within the country will be environment friendly to achieve the
country’s green development strategy.
67
Strategy 5: Develop Logistics Infrastructure
The main objective of this strategy is to improve the logistics

infrastructure planning, availability and management of the nation’s
logistics system through detailed study. The following sub-strategies
are developed to achieve this objective.
Sub Strategy 5.1. Develop logistics centers and facilities
Sub Strategy 5.2. Develop transport infrastructure
Sub Strategy 5.3. Development of IT to improve the logistics system
Sub strategies 5.1 Develop logistics centers and facilities

Interventions
The following are the interventions for this sub-strategy.
77. Develop a master plan for the country logistics freight centers
Logistics centers are important nodes in the logistics chain and

play important roles in delivering services to customers. Current
practice shows that importers are utilizing cargo trucks and vessels
as warehouse and keep their cargo for long time without unloading.
The main reason is the unavailability of adequate freight/logistics
centers, warehouses and terminals. Therefore, a national master
plan will be prepared to develop local logistics centers in line with
the countries import- export growth.
78. Transform Modjo Dry Port to green logistics hub
Modjo Dry Port is under process to be developed as a green logistics

hub to provide different value-added services like export processing,
packing, assembling and other logistics services in addition to
existing import cargo clearance services. Furthermore, Modjo Dry
Port will have a key role in the logistics sector by integrating railway
and road transport, providing complete services for import and
export cargo and will serve as a model for other dry ports.
79. Establish connectivity network between major production

centers and logistics centers
A network that links the production centers with logistics service

centers will be developed to ensure the distribution of agricultural
products, manufacturing and mining products in a timely manner
and at a reasonable cost throughout the country.
80. Develop cold storage and associated facilities

for perishable goods
It is known that, the country has the capacity of producing perishable

goods such as fruits, flowers, meat and other temperature based
products. Logistics plays a key role in the process of supplying these
productsto market. With this in mind, logistics centers that will be
built in the country will have completefacilities required for handling
perishable goods. In addition, considering the current situations,
variouslogistics facilities will be provided at the source to offer
services for perishable goods.
81. Develop an integrated air freight transport centers with other

transport modes and logistics centers
Ethiopian Airlines is the choice of many Africans and the airline is

a leading service provider in Africa. Thus by enhancing its capacity,
69
the airline shall develop local cargo logistics centers that will serve
as a center for Ethiopia and other countries. Therefore, air freight
logistics centers will be developed with an appropriate integration
with other transport and logistics centers.
Sub- strategy 5.2. Develop transport infrastructure

Interventions
The following are the interventions of this sub-strategy.
82. Develop master plan for transport infrastructure

development & management
A national transport infrastructure development and management

master plan will be developed and implemented to build and expand
infrastructures sustainably.
83. Conduct road expansion and upgrading, and avail necessary

facilities and equipment for transit corridors
This intervention shall be executed in the medium and long-term. In

the medium term, road used in transit corridors will be upgraded. In
the long term, road and transit corridor facilities development will be
carried out based on transport infrastructure development master
plan.
84. Develop and implement master plan for liquid

bulk cargo logistics
The country is known to import a large amount of petroleum which

is at an increasing rate year by year. As a result, construction of
liquid bulk logistics facilities will be carried out within the country
in accordance with the national master plan that will be prepared in
the future.
Sub-Strategy 5.3 Development of IT to improve

the logistics system
Interventions
The interventions to attain this sub-strategy are presented as follows:
85. Establish freight information exchange system
“Real Time Data” sharing system will be established that will enable
tracking the position of shipments imported into the country or
exported to foreign destinations.
86. Establish E-commerce system to minimize logistics

cost and time
The global commodity trading system is now heavily supported

by electronics systems which reduce the logistics process at a
significant level. Therefore, a system will be established to implement
E-Commerce.
87. Establish a modern terminal and corridor

management system
Domestic dry ports will use comprehensive and integrated terminal

operating systems. Thus, CCTV, GPS, Electronic Cargo Tracking,
and other advanced vehicle assignment and shipment controlling
technologies will be used in the dry ports and corridors.
Strategy 6: Strengthen regulators institutional capacity,

qualifications of human capital, and create
efficient governance
This strategy aims to enhance the skill and knowledge of personnel

71
in the sector including regulatory institutions with the principle of

continuous human resource development. Hence, the sector is led
and governed by knowledgeable and skillful leaders which results
in efficient logistics performance among other activities to be
implemented. The following sub-strategies are designed to achieve
this objective.
Sub Strategy 6.1 Strengthen regulatory offices institutional capacity
Sub Strategy 6.2 Develop human resource for the logistics sector
Sub Strategy 6.3 Create an effective structure to manage logistics in

a coordinated manner
Sub Strategy 6.1 Strengthen regulatory offices

institutional capacity
Interventions
The interventions for this sub-strategy are presented as follows.
88. Develop high leadership and effective coordination

mechanism for the logistics sector
It is essential to establish a structure for overseeing to ensure an

effective management and control of logistics services in the
country. Regulatory offices are responsible to coordinate and
monitor the logistics sector. Thus, vision and structure of regulatory
offices shall be revised and established in line with global logistics
best practices to ensure efficient logistics system leadership in the
country. Auditing of national logistics services will be developed and
implemented sustainably to enhance regulatory offices capability
towards ensuring the performance of the operators and the sector
at large.
89. Develop the institutional capacity for knowledge based

leadership in logistics sector
To lead the logistics sector based on knowledge, to identify gaps

through research and come up with solutions for the problems
in the sector, providing continuous training, appointing focal
offices and personnel for institutions having key roles for logistics
system in the country are critical measures to be taken to improve
the overall performance of the sector. The focal point operation
will be coordinated by National Logistics Council and Logistics
Transformation Office.
Sub-Strategy 6.2 Develop human resource for the logistics sec-

tor
Interventions
The following are the interventions for this sub strategy.
90. Establish logistics excellence center
Logistics excellence centers will be established to provide logistics

training, develop logistics professional’s qualification and this is
expected to be logistics knowledge bank.
91. Develop certification program and recognition plan
There are institutions with the responsibility of issuing qualification

certificates to professionals and companies engaged in the logistics
sector. These include Ministry of Revenues to custom clearing
agents, Maritime Affairs Authority to freight forwarders and ship
agents and Ministry of Trade and Industry to traders. However,
the certifications provided by these institutes are neither provided
continuously nor integrated. These training are not complete; in
addition, the opportunity for training is very narrow. As a result only
73
few professionals are certified. This has resulted in a shortage of

professionals, and created knowledge and skill gaps. This in turn
has a negative effect on the performance of the sector. Therefore,
training programs and procedures at national level will be designed
and implemented to develop the human resource for the logistics
sector.
92. Create logistics information hub
There are major issues in the logistics sector with respect to availing
information. Information may not be available in complete or non-
fragmented manners in the sector. This hinders from comprehending
the sector and its performance properly. Therefore, a national logistics
information hub will be established to gather and analyze logistics
information in a systematic manner, and to organize information for
future decisions related to policy and operations.
93. Develop benchmark or best practices for

logistics service provision
Global level system will be established and implemented to take

lessons on service provision practices for freight forwarders,
transport associations, and logistics service providers.
Sub strategy 6.3 Create effective organizational structure to

manage logistics in a coordinated manner
Interventions
Strategy statement
Logistics system is about planning, leading and controlling the three

flows i.e., cargo flow, financial flow and information flow from the point
of origin to destination in a coordinated and collaborative manner.
The logistics process is also a system that requires involvement of
several stakeholders and institutions. As a result, it is essential for
these bodies to work in a collaborative and integrated manner in all

aspects to achieve logistics objectives. Therefore, the main objective
of this strategy is to provide a holistic approach to address the
key problems of logistics integration in the country and to render
the sector a high level leadership. The following interventions are
presented to achieve the objective of this sub-strategy.
94. Establish national logistics council
In order to transform the country’s logistics system and to ensure its

international competitiveness with a certain degree of consistency
and reliability, it is indispensable to coordinate the activities of
institutions with key roles in the sector. For logistics related projects
and programs, it is crucial to render a high level leadership for
coordinated planning, joint leadership, and joint evaluation of
different committees organized at different levels. It also requires
discharging responsibilities by the respective stakeholders to ensure
transformation of the logistics sector. The high level leadership is
essential for passing timely decisions and enforcing of the same. The
establishment of a National Logistics Council (NLC) will be enacted
and the Council will comprise top officials from pertinent offices and
bodies. The council will serve as the highest pillar in transforming
the country’s logistics system.
95. Establish logistics transformation office
The logistics transformation office (LTO) is responsible to conduct

different studies, develop policy concepts, prepare reports and
devise programs and crucial proposals geared towards transforming
the logistics system. It is the responsibility of this office to support
the Council and the Government to make decisions with accurate
information and complete analysis concerning issues of the
logistics sector. The office will have the responsibility to ensure full
implementation of the strategy, through transforming the strategy
75
interventions into programs, prepare action plans and monitor their

implementation, and coordinate activities of regulatory institutions
and service providers in the sector. This office will be organized
with academicians from logistics and supply chain and experienced
professionals from the industry.
96. Establish logistics council at a regional administration level
Following the establishment of the national logistics council, councils

will be established at regional administrations levels in a similar
fashion to that of the national council. These councils will work in
tandem with the national council.
97. Establishing urban logistics council
Considering the development of cities like Addis Ababa, the traffic

congestion, air pollution and similar problems, urban logistics
councils will be set up based on the peculiar prevailing situations of
the city logistics.
98. Establishing logistics community
Active involvement of the private sector is vital to transform

the logistics sector. In line with this, logistics communities will
be established by bringing together representatives from the
cargo owners, regulatory bodies, logistics service providers and
academics from universities. The community will work closely with
logistics professionals association and in coordination with logistics
transformation office on identifying pressing issues that require the
attention of the national logistics council.
Part Four:
Government Measures, Roles
of Stakeholders, Follow up
and Evaluation systems in
Strategy Implementation
4.1 Expected Measures from the Government

It is believed that, the national logistics strategy will bring about a
dramatic change in the logistics sector by curing the ailments of the
country’s logistics system and this will again create an enabling milieu
for the national economy. Thus, following approval of the strategy,
appropriate structures for execution shall be created by allocating
necessary resources. Above all, the coordination of activities in the
logistics sector can bear a powerful and positive impact for the
sector; the task of coordination should be conducted by high-level
government leadership. The National Logistics Council (NLC) is to be
established by law and will be the authoritative body to oversee and
direct the implementation programs of the strategy.
The national logistics council is expected to comprise of top level

government officials. The National logistics council will have a
secretariat arm and to that effect a transformation office will be
established to plan and manage the day to day functioning of the
implementation programs. The transformation office will also be
dully responsible for converting the sub strategies and interventions
into implementable programs and monitor their effective executions.
4.2 The role of stakeholders

There are several stakeholders that should play active roles in the
implementation of this strategy, the major stakeholders and their
respective roles are presented as follows.
Ministry of Finance
The Ministry of Finance and economic development will allocate
adequate resources for planned projects and programs. The ministry
office will also be responsible for the follow up for the proper
expenditure of the resources and taking improvement measures as
required.
Ministry of Trade and Industry and Its affiliated institutes

Ministry of Trade and Industry will have an ownership role on
programs designed to issue trade license for the logistics service
providers and monitoring their service delivery. Accordingly, the
ministry will takes leading role for programs designed to to improve
the procurement and distribution system of the government bulk
cargo importing organizations, and to modernize the quality control
and laboratory procedures for import cargoes.
In addition, the ministry is responsible to implement programs and

projects to improve industrial parks export competitiveness through
improving export logistics in accordance with the national logistics
council directions.
Ministry of Revenues
The Ministry of Revenues will improve customs procedures,
modernize corridor/border services, improve technology utilization,
and implement customs related programs and projects which are
developed by the Logistics Transformation Office.
79
Sectors under the ministry of Transport

These sectors will be responsible to execute projects and
programs developed for infrastructure development, specially
road construction, terminal and port development, modernizing
cargo transport management, building air cargo logistics centers,
scrutinizing the logistics service providers qualifications, and
improving their structures.
Ethiopian Investment Commission (EIC)

The EIC executes programs and projects that are developed to
provide special logistics service for the national and foreign investors
involved in export manufacturing.
Ministry of Education
The Ministry of Education is expected to execute projects developed
to create sufficient logistics professionals by strengthening the
university-industry linkage thereby closing the knowledge and skill
gap in the logistics sector.
Public Enterprises Agency

The Agency is to execute programs and projects that are developed
to transform the manpower, structure and procedures of public
enterprises engaged in the logistics sector.
Ministry of Agriculture
The Ministry of Agriculture is to execute programs and projects
developed to enhance agricultural products for export, improve
livestock export logistics, and modernize the procurement and
logistics process of agricultural inputs.
Ministry of Foreign Affairs

The Ministry of Foreign Affairs will play a key role in executing
programs developed to obtain reliable seaport services and
negotiate with coastal countries and foreign companies for joint
corridor and port developments.
National Bank
The National Bank will execute activities with focus on resolving
challenges related to finance supply and foreign currency allocation
as well as improve the general operating procedures.
Ethiopian Shipping and Logistics Service Enterprise

The Enterprise shall execute pertinent programs to entirely transform
itself based on the directions from the council.
Development Partners
There are several countries and international organizations involved
in supporting developments in logistics. In accordance with their
relationship with Ethiopia, the following countries and organizations
are believed to support the implementation of this strategy
technically and financially.
• The World bank Group
• United Nations Development Program /UNDP
• United Nations Conference on Trade and Development/

UNCTAD
• The Government of Peoples Republic of China
• The Government of Russian Soviet Federative Socialist

Republic
81
• The Government of India
• The Government of Japan
• The Government of South Korea
• European Union
• African Capacity-Building Foundation/ACBF
• African Development Foundation/ADF
• Agence Francaise De Development/AFD
• Asian Development Bank/ADB
• Australian Agency for International Development/AusAId
• Canadian International Development Agency/CIDA
• Commission for Research Partnership with Developing

Countries/KFPE
• The Donor Committee for Enterprise Development/CDASED
• Department for International Development/DFID
• Deutsche Gesellshaft Fur Technische Zusammenarbeit /GTZ
• Deutscher Akademischer Austausch Dienst (DAAD)
• Environmental Development Action in The Third World/

ENDA
• Food and Agriculture Organization of the United Nations/

FAO
• United Nations World Food Program /WFP
• Inter-Academy Panel on International Issues /IAP
• International Centre for Agricultural Research in the Dry

Areas/ICARDA
• International Crops research institute for the semi-Arid

Tropics/ ICRISAT
• International Development Research center/IDRC
• International Foundation for Science/IFS
• International Fund for Agricultural Development /IFAD
• International Institute for Sustainable Development /IISD
• Islamic Development Bank/IDB
• Japan International Cooperation Agency/JICA
• Norwegian Agency for Development Cooperation/

NORAD
• OPEC Fund for International Development/OPEC FUND
• Organization for Economic Cooperation and

Development /OECD
• RAND Corporation/RAND
• Swedish International Development Cooperation

Agency/SIDA
• Swiss Agency for Development and Cooperation/SDC
• Trade Mark East Africa/TMEA
• Ford Foundation
• Rockefeller Foundation
• Commercial Logistics Providers (DHL, FEDEX, UPS, 2/3/4

PL Providers etc.)
The above mentioned are the major ones. It’s vital to plan and look
83
for organizations which are not mentioned above and seek for their
support.
4.3 Direction on follow up and evaluation of strategy

implementation
Implementation follow-up and evaluation reports will be prepared
and presented to concerned bodies at each implementation phase
in order to get the attention it deserves at a national level. In this
regard, the national logistics council as a high level formation will
give directions during its regular sessions. On the other hand, the
Logistics transformation office will direct organizations to prepare
annual implementation plans and performance reports. Stakeholders
are expected to take their parts and create their own structure
to follow the implementation of the strategy. It’s expected that a
system will be in place to audit the implementation of the strategy
in detail at certain time intervals by professionals and this will
provide feedback for decision making and improvement. Detailed
follow-up and evaluation policy and procedure will be prepared and
implemented.

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Federal Democratic Republic of Ethiopia

National Logistics Strategy

Message from Her Excellency Minister, FDRE

Mesage from Director General, Ethiopian

Part one: Purpose and Bases of the Strategy 1

1.1 Purpose of the Strategy 1

1.1.1 Enable National Development 1

1.1.2 Control Avoidable Logistics Cost 2

1.1.3 Provide Systemic Logistics Solutions 3

1.1.4 Provide Direction and Leadership 3

1.2 Alignment of the Strategy with National

1.2.1 Industrial Development Strategy 4

1.2.2 Rural and Agricultural Development Policy 6

1.2.3 Urban Development Policy and Strategy 6

1.2.5 Growth and Transformation Plan II

1.3 The Strategy Preparation 11

Part Two: Ethiopia’s Logistics Performance 13

2.1 Logistics Performance Based on Global

2.1.1 Logistics Performance Index –World

2.1.2 Logistics Performance Reports of

2.1.3 World Economic Forum 17

2.1.4 Summary on Global Reports 18

2.2 Logistics Cost and Time in Ethiopia 18

2.2.1 Logistics Time 19

2.2.2 Import Cargo 19

2.2.3 Export Lead-time 24

2.3 Logistics Cost (Rates and Cost Indicators) 24

2.3.1 Import Cargo 25

2.3.2 Export Cargoes 28

2.4 Logistics Performance Assessment and Findings 30

2.4.2 Excessive and Cumbersome Transit and

2.4.3 Poor Quality and Low Competence of

2.4.4 Monopolistic Practice in the Logistics

2.4.5 Logistics Infrastructure Deficit and

2.4.6 Logistics Service Providers & Regulators

Part Three: Vision, Mission and Strategic

3.1 Objectives and Goals 36

3.1.1 General Objective 36

3.1.2 Specific Objectives 36

3.1.3 Strategic Goals 36

3.2 Logistics Sector Strategies 37

Strategy 1: Transform logistics service delivery and

Strategy 2: Develop and strengthen logistics sector

Strategy 3: Establish an efficient and reliable transit

Strategy 5: Develop Logistics Infrastructure 67

Strategy 6: Strengthen regulators institutional capacity,

Part Four: Government Measures, Roles of

4.1 Expected Measures from the Government 77

4.2 The role of stakeholders 78

4.3 Direction on follow up and evaluation of

Table 1: Comparative position of Ethiopia in LPI

Table 2: Logistics performance in light manufacturing 16

Table 3: Global Competitiveness Report 2014–2015 17

Table 4: Logistics time for import cargo under

Table 5: Transit Time 21

Table 6: Lead time for export 24

Table 7: Logistics cost 25

Table 8: Comparison of cost of stevedoring (discharging)

Table 9: Comparative cost of shore handling for