We have raised Ethiopian’s maritime sector to global standard - Ato Abraha

Ato Ambachew Abraha

Ato Ambachew Abraha, Managing Director of the Ethiopian Shipping Lines Share Company (ESLSC), may not help reminiscing about the company’s many years of uninterrupted shipping services, especially during some periods of instability in and outside the African region. Besides, the shipping company, which operates in a landlocked country, has been consistently run profitably across seasons for over four decades. In this special interview, Ato Abraha X-ray the facts and strategies behind ESLSC’s growing clout in the global maritime circles as well as how much its operations have impacted on the Ethiopian economy.

Excerpts:

What are the contribution of Ethiopian Shipping Lines Share Company (ESLSC) to the Ethiopian Economy so far?

Since its establishment and commencement of operation in 1966, the company has lifted 24.9 million tones up to June 2010. ESLSC lifting accounts for about 37.3 percent for the country’s dry cargo imports and 56.3 percent of the general cargo imports during July 2009 to June 2010. The company stabilises freight and provides promotinal freight rates as it offers relatively stable and long-lasting freight rates in view of the fact that it does not automatically transfer price changes due to surcharges, port congestion charges, fuel and currency adjustment charges, additional insurance charges, etc. It provides uninterrupted shipping service during instability in the neighboring countries or the red Sea area, enabling smooth movement of the country’s foreign trade cargo at all times. For instance, during the closure of the Suez Canal in 1967, the Ethio-Eritea war in 1998, the fear of piracy around the Somali coastal water in 2008, etc, ESLSC served the country continuously.
The company loads various types of cargo indiscriminately, including dangerous, outsized and special cargoes which are vital for the country’s economic development and security. ESLSC brings contemporary international maritime practices to the country and promotes the maritime sector. It helps the economy in saving foreign currency as well as provides consultation and follow-up on maritime issues, contributes to Government Treasury, develops human resources in the maritime sector, participates in developmental investments and strengthens international relations of the country.

With the global economy gradually improving, Africa is on the verge of stepping up its growth trend, and Ethiopia has the potential of becoming East Africa's economic hub. How is your company catching in on this opportunity?

Basically, ESLSC is pursuing development and sustainable strategies in the form of investment in ship acquisition, diversification in multi-modal transport services (door-to-door shipping and logistics services) and development of Maritime Training Institute in the and country. The company has entered in to US$293.5 million contracts with China Ship Building Yards for construction of nine vessels (i.e. two product tankers and seven multi-purpose dry cargo ships). The ships are expected to be delivered within the next two years and raise the loading capacity of our own vessels by 196,000 DWT (28,000*7) and 11,795 TEU (1,685TEU*7) in dry cargo and 83,000 DWT (41,500*2) in liquid cargo. This will enhance the current dry cargo loading capacity of the company to 337,742 DWT from 141,742 DWT and to 17,215 TEU from 5,420 TEU in addition to the aforementioned liquid cargo capacity and contract of affreightment (slot carriage shipments conducted in collaboration with mega carriers).
Moreover, construction has commenced for the development of Inland Container Terminal in Dukem area consisting of 209,253 m2 for Birr 151,672,916.88. The project is expected to be completed within the next two years. ESLSC has also constructed the Maritime Training Institute for Birr 7,824, 358.71 near Babugaya Lake in Bishiftu town, occupying an area of 7,000 m2 and a further expansion of 3,327 m2 shall be made. Recently, the Ethiopian Maritime Training Initiative (EMTI) was established through a partnership between ESLSC and the YCF Group, which has many years of experience in the maritime industry including managing the Liberian, Maritime Registry. This initiative aims to recruit, train, promote, staff and administer an ongoing supply of Ethiopian seafarers; lay down a platform in accessing high paying, stable and long-term career opportunities; raise the foreign exchange available to the country through seafarer wage remittances; boost the international presence and reputation of highly –trained and university-educated Ethiopians; and develop a skilled and professionally expericenced labour force capable of supporting Ethiopia’s domestic industries and global trade.

What makes your company unique?

The company is an indigenous shipping company and has served the country for the past 47 years with good earnings and profitability records. It is providing door-to-door, competitive, reputable, safe and customer-focused service, in spite of the country’s landlockedness. With in the COMESA countries, ESLSC is the strongest and leading indigenous shipping company. It is run by highly qualified national top management and shipping experts both at shore and on board vessels with few expatriates on its ships.

Do your service cut across all strata of the economy, and how are you able to sustain them?

Yes. ESLSC serves the agricultural, industrial, construction, service and other sectors of the economy by transporting dry bulk and general cargoes and is expected to resume service in liquid bulk transport in the coming years. As mentioned earlier, the shipping services of the company are uninterrupted during war and instability times. The company also renders competitive and sustainable services to the country’s transport demand to ensure sustainable economic development by transporting, among other things project, dangerous, out gauge cargoes at competitive freight rates.

What advice do you have for the government to enhance development in Ethiopia?

Considering the strategic significance of the sector, it is vital to enhance the capability of indigenous shipping companies to enable ESLSC to be more competitive and sustainable through continuous capacity development programmes and investments in the form of partnership as witnessed recently in the development of the Maritime Training Institute in such a way that it is possible to transfer knowledge and technology that will assist the country’s social and economic development endeavours.

What are the challenges you face in the market locally or globally?

The main local challenges that are prevalent are constraints in availing source of finance and the limitation of accessing foreign suppliers’ credit for expansion projects and vessel renovation as well as capacity development programmes of the company on continuous basis. Globally, the company is facing stringent international regulation and port state controls and the ships are subject to extensive vessel inspection and survey procedures. However, ESLSC’s strict follow-up and implementation of international rules and regulations have enabled Ethiopia to be among the very few “IMO White Listed Countries” for long.