Ethiopia’s Ministry of Transport requested that inland transport operators to reduce the rates with import export freight. The ministry also asked for a similar reduction in fuel consumption and time.
The Ethiopian government is set to reduce the transportation cost for the country’s foreign trade sector to enhance its competitiveness on the international market according to the document presented to transporters for discussion.
The final price of Ethiopian products on the international market owes a significant amount to trade logistic costs.
The price of transporting commodities through Port Djibouti, from Ethiopia, is notably higher at 6 US cents per ton/km as compared to 2.3 US cents in Pakistan and 4 US cents in Brazil according to the document.Transport vehicles in Ethiopia cover just 60,000 km annually as opposed to 180,000km annually in other countries noted the document. The excessive down time of vehicles offering freight transport services via Port Djibouti is part of the reason behind the high rates according to the study conducted by the transport authority.
Operators will also need to reduce their current fuel consumption of an estimated 1000 liters by 10%.
Transport services will not lose profits because of these measures because an increase in the number of round trips and the decrease of down time and fuel consumption will offset the 27% cut on their rates.
Problems associated with custom clearance will need to be dealt with before transport operators can increase the number of trips and reduce down time according to representatives of the sector in meeting with the ministry.
The authority expects to put the new changes into effect in the next fiscal year.
Source: The Reporter
