Kenya Lures Ethiopia into Using Lamu Port
Kenya Port Authority (KPA) wants to increase business at the new Lamu port by lowering port fees from the next month. Kenya wants Ethiopia to use its new Lamu port for import and export purposes. For years, Ethiopia has been relying solely on Djibouti’s ports for its imports and exports.
Ethiopian authorities are going to start using Lamu port for fertilizer import this month. This decision by the Ethiopian government came amid rising tensions between Yemeni Houthi fighters and Western/American forces in the Red Sea. This escalation pushed Ethiopia to consider the use of Lamu port for the import of fertilizers.
Lamu port has been gradually expanding. In 2022, Lamu port handled 6,539 metric tons of cargo whereas, last year, it handled 37,576 metric tons. Container traffic on Lamu port also increased. In 2022, it was 382 twenty-foot equivalent units (TEUs) and in 2023 it was 1,779 TEUs which is an increase of 1400 TEUs.
Kenya wants to enhance this growth by attracting Ethiopia and South Sudan. Both Ethiopia and South Sudan are landlocked. In 2016, Ethiopia, Kenya, and South Sudan agreed to build the LAPSSET (Lamu Port-South Sudan-Ethiopia-Transport) corridor.
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State Shipping Monopoly Awaits Gov’t Decision on ETB 1.7 Billion Owed by Former MetEC
Executives of the Ethiopian Shipping and Logistics Services Enterprise (ESLSE) await a government decision on 1.7 billion birr in outstanding receivables from the former Metals and Engineering Corporation (MetEC).
The sum was accumulated for goods and services provided by ESLSE to the military conglomerate between 2011 and 2018. MetEC was restructured into the Ethio Engineering Group (EBG) following the political transition in 2018.
However, heads of EBG say they are unable to settle the receivables inherited from MetEC and the Office of the Prime Minister has instructed the Ministry of Finance to clear the enterprise’s books.
Heads of ESLSE told the standing committee the enterprise is preparing to implement a new organizational structure approved by the Ethiopian Investment Holdings (EIH), the sovereign wealth fund that oversees the state shipping firm.
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Navigating Logistics Challenges and Opportunities
“In providing logistics services in Ethiopia, we encounter both challenges and opportunities unique to the region. One of the main challenges is navigating the country’s diverse and sometimes complex regulatory environment, which can impact customs clearance processes and transportation logistics. Additionally, infrastructure limitations, such as road conditions and Ethiopia being landlocked country and using neighbouring ports, pose logistical challenges that require innovative solutions to overcome. However, these challenges also present opportunities for us to leverage our expertise in supply chain management and develop tailored solutions to optimize operations and enhance efficiency. Moreover, Ethiopia’s growing economy and expanding market offer significant opportunities for us to expand our presence and capture market share. By investing in technology, developing our strategic partnership, and adapting our services to meet local demand, we can capitalize on these opportunities and contribute to Ethiopia’s continued economic growth.”
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Singapore Retains Maritime City Top Spot
Singapore came out top, followed by Rotterdam, London, Shanghai and Oslo.
The study benchmarks each maritime city on five pillars – Shipping Centres, Maritime Finance and Law, Maritime Technology, Ports and Logistics and Attractiveness and Competitiveness.
Singapore took the top spot in three out of five pillars – retaining its position as leader in Attractiveness and Competitiveness and overtaking Athens and Shanghai in Shipping Cenetrs and Ports and Logistics, respectively.
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Red Sea Crisis and Implications for Trade Facilitation in Africa
Security threats in the Red Sea have caused a significant redirection of ship arrivals and transits culminating in far-reaching global trade and transport repercussions. Ships across all shipping segments on the Asia-Europe and Asia-Atlantic trade lane have diverted their initial trajectory and started sailing around Africa’s Cape of Good Hope.
The Red Sea crisis has also impacted African ports and causing congestion as rerouting entails the need for more vessels to call at African ports including for bunkering services. Yet, these ports are not always fully prepared to service additional ship calls and cater to larger vessels.
The disruption in the Red Sea and increased shipping traffic around Africa underscore the need for African countries and ports to scale up ongoing efforts aimed at implementing trade facilitation measures, taking up digitalization and mainstreaming green processes to reduce port congestion and expedite the clearance of goods.
Can African countries leverage the current disruption and explore how, by improving their trade facilitation environment, they can take advantage of the business opportunities that may arise from the additional traffic passing through their ports?
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