Tuesday, January 17, 2023
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BusinessShipping enterprise accuses public offices, traders of hoarding containers

Shipping enterprise accuses public offices, traders of hoarding containers

Executives of the Ethiopian Shipping and Logistics Services Enterprise (ESLSE) blamed public offices and private businesses for hoarding containers, a situation that has disrupted the timely transportation of shipments.

It is a problem caused by the global shortage of containers, which forced local businesses to get involved in hoarding activities, fearing they will not get a container when they ship items. Exporters, in particular, were unable to ship commodities because of a critical shortage of containers.

RobaMegersa, CEO of the Enterprise, says public offices also use containers as a storage facility, failing to understand how costly it would be to do so. “We pay a lot of forex for containers. So it is not right to use it as a storage facility and must be returned back to us for other shipments.”

The Enterprise tried to discourage hoarding and the use of containers as storage facilities by introducing disincentives. “We have raised the money needed to be deposited to get a container,” said Roba.

Container guarantee deposits saw an increase of as much as 66percent. The Enterprise also cut container return periods for importers by five days, shortening the grace period by three days. It was in response to what the Enterprise executives said was “importers’ reluctance to offload cargo and return leased containers on time.” The guarantee deposit for 20-foot containers has increased by 50 percent to 15,000 birr, while the guarantee deposit for 40-foot containers has increased by 75 percent to 25,000 birr.

The Enterprise, which made over 5.6 billion birr profit before tax in the preceding fiscal year, has been hampered by a shortage of cargo containers, even though it has procured thousands of new containers to expand its operation over the period.

Ethio Engineering Group, the former Metals and Engineering Corporation (METEC), is among public enterprises blamed for failing to return leased containers on time. As many of the containers stranded at METEC are leased on a depreciated value (DV) settlement, partner shipping lines are expecting payment from the state enterprise.  METEC took hundreds of containers stored at various sites such as the Yayu Fertilizer project and other areas.

In the fiscal year 2021/22, the enterprises transported more than 7.2 million tons of import and export cargoes, including soil fertilizer; achieving 102 percent of the target. It has also secured 51.4 billion birr during the same period.

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