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Ethiopia: Djibouti Restricts NVOCCs as Multimodal Operators

Multimodal Djibouti

Djibouti threw a curveball at Ethiopia's plan to expand multimodal transport options. Djibouti banned non-vessel operators (NVOCCs) from acting as multimodal operators, despite Ethiopia approving three new companies for the role. Djibouti worries NVOCCs cannot guarantee logistics costs or ensure cargo safety. 

The crux of the issue lies with the legal recognition of bills of lading (BLs). DPFZA expressed concerns about NVOCCs' ability to guarantee full payment for logistics costs and ensure cargo security, traceability, and accountability. Consequently, BLs issued by NVOCCs hold no weight within Djibouti's ports and corridors.

Adding complexity, Ethiopia's state-owned shipper, ESL, also acts as an NVOCC. While primarily a vessel operator, ESL also functions as an NVOCC for a significant portion of its containerized cargo. The Ethiopian government has already initiated discussions with Djibouti through a technical committee to address this discrepancy.

It is to be recalled that the Ethiopian Minister of Transport granted multimodal transport service licenses to three Ethiopian companies - Panafric Global, Tikur Abay, and Cosmos Multi Modal Share Company, in March this year. These companies met the established competition criteria and were authorized to provide comprehensive transportation solutions.

Source: Capital Ethiopia

Additional source: 2Merkato Archives