The Ethiopia-Djibouti Railway (EDR) has achieved a historic milestone today, obtaining a multimodal transport license. This achievement makes the company a major player not only in the regional but also in the global logistics sector. This step by EDR paves the way for the rapid modernization of Ethiopia’s logistics infrastructure and the strengthening of regional competitiveness.
Government Strategy: Increasing Competition
The Ethiopian Maritime Authority (EMA) has approved the granting of this license after a thorough review of EDR’s application. This will allow the company to establish itself not only in Djibouti but also in Ethiopia’s growing logistics market. The government’s strategy to expand multimodal transport aims to increase competition in the sector and stimulate annual growth. In this context, EDR will be among four new operators that will compete with ESL (another major logistics player between Ethiopia and Djibouti) every year.
EMA applies strict criteria for selecting companies in this process. Local and international companies compete intensely with each other to win licenses. Last year, EMA granted NVOCC (Non-Vessel Operating Common Carrier) licenses to major companies such as Panafric Global. These companies are accelerating their preparations to break ESL’s dominance in the market.
Success of EDR and Logistics Infrastructure
When the Ethiopia-Djibouti Railway began commercial operations in 2018, it managed to reduce freight transport times between Ethiopia and Djibouti to less than 20 hours. This significant improvement has increased efficiency in the regional transport sector. EDR manages containerized cargo, bulk cargo and passenger transport on a daily basis. In addition, Roll-on/Roll-off (RoRo) shipments are also successfully carried out, allowing the company to increase its regional capabilities day by day.
EDR is also strengthening its logistics framework in Djibouti, thanks to its 25% stake in the country. EDR has the potential to change the dynamics in the sector by competing with ESL, the existing major logistics player in Djibouti. Experts believe that this development will create a significant change in regional transportation.
Technical and Operational Strength of EDR
EDR’s success is not limited to the increase in operating capacity alone; it has also made significant progress in technical operations. Ethiopian engineers are successfully restoring locomotives and wagons that have been out of service for years, strengthening the fleet. “Our engineers have reached a historic milestone by independently repairing the fleet,” says Takele Uma, CEO of the company.
This technical achievement increases EDR’s capacity. The number of locomotives increased from 9 to 25 this year, while the number of wagons increased from 789 to 978, significantly increasing capacity. Previously, these restorations were managed by a Chinese company and local engineers were trained for the restoration process. However, now, Ethiopian engineers are successfully managing these operations with their own expertise. This brings the country closer to its goals of railway independence and makes Ethiopia’s technical competence more visible worldwide.
New Opportunities with Multimodal Transportation
EDR’s multimodal transport license will help not only Ethiopia but also Djibouti become more competitive in the transportation and logistics sector. The government had announced its intention to issue four new licenses, and EDR has taken a critical step in obtaining these licenses. With this license, the company will stand out as a major player in regional transportation and increase competition in Africa’s growing logistics market.
Infrastructure, technology and trade networks are key factors in EMA’s efforts to expand the multimodal transport sector. “We are successfully expanding the multimodal transport sector with more participants,” says Fraol Tafa, EMA’s Deputy Director, announcing the expansion. This statement reflects EMA’s commitment to nurturing and growing new participants in the sector.
The multimodal transport license obtained by the Ethiopia-Djibouti Railway is a major contribution to the modernization of Ethiopia’s logistics infrastructure. This development will have major impacts not only on regional transportation but also on the global logistics network. This success of the EDR will enable Ethiopia to gain independence in the logistics sector, increase regional competitiveness and become a globally recognized logistics powerhouse.
The success of EDR is not only a commercial success, but also a demonstration of Africa’s commitment and potential for rail transport. These developments are a major step for Ethiopia to become one of the major players in logistics and will continue to contribute to Africa’s transport infrastructure by increasing its influence in the sector in the coming years.
