The Ethiopian Logistics Sector in Turmoil: DPFZA's Stance Leaves MTOs in Uncertainty
The Djibouti Ports and Free Zones Authority (DPFZA) has once again taken a firm stance, this time prohibiting licensed Ethiopian Multimodal Transport Operators (MTOs) from operating at its borders. This decision has left the industry stakeholders in a state of uncertainty, as it contradicts the operators' expectations to begin services by the deadline set by their regulator. The conflict originated from a decision made in March 2024 when the Ethiopian Maritime Authority (EMA) granted licenses to six new MTOs to disrupt the monopoly held by the state-owned Ethiopian Shipping and Logistics (ESL) in the logistics sector, which includes operations in Djibouti, Ethiopia's primary outlet.
The DPFZA's stance is based on the legal status of Non-Vessel Operating Common Carriers (NVOCCs), which are not permitted to function as MTOs within Djibouti. The Authority clarified that Bills of Lading (BL) issued by NVOCCs are not recognized in Djibouti's ports and trade corridors due to their legal status. The Authority expressed concerns that NVOCCs cannot ensure full payment for logistics services throughout the supply chain, which poses risks to security, cargo traceability, and financial accountability.
This decision faced criticism from industry experts, who argued that it conflicts with international maritime and trade laws. In response, senior Ethiopian government officials visited Djibouti, and in May of the previous year, the two nations agreed to establish a joint committee to address the issue amicably. The committee was charged with reviewing longstanding bilateral agreements, including the 'Ethio-Djibouti Utilization of Port of Djibouti and Services to Cargo in Transit Agreement' from 2002.
Despite these diplomatic efforts, the DPFZA's latest letter, dated November 10 and addressed to the Ethiopian Diplomatic Mission in Djibouti, firmly reiterates its original position. The letter requests the Ethiopian Embassy to communicate its clarification to the relevant authorities. It explicitly states: 'A NVOCC does not own nor operate vessels at sea. Accordingly, the DPFZA emphasizes that a BL issued by NVOCCs is not recognized within the Djibouti Ports and Corridors due to their legal status.'
The Authority maintains that only Bills of Lading issued by MTOs that are also vessel-operating shipping lines are considered legally valid for cargo transport within its jurisdiction. This development has become a top priority for logistics sector actors in Addis Ababa. Sources indicate that the newly licensed MTOs are now appealing to the Ethiopian government for a resolution. The urgency is heightened as the EMA set an October 2025 deadline for these operators to commence services. The six companies that received MTO operational licenses in March 2025 are Gulf Ingot, Panafric Global, Tikur Abay Transport, Cosmos MTO, Ethio-Djibouti Railway Standard Gauge Share Company (EDR), and Ethiopian Railway Corporation. Notably, EDR, a joint venture between the two countries, has been allowed to operate, leading other licensees to believe they would also be permitted to begin their operations. Some had even started preparatory work for their customers before the recent letter from Djibouti emerged.
