What are the challenges of logistics in Ethiopia?

What are the challenges of logistics in Ethiopia? Ethiopia is a landlocked country with a population of over 110 million people and a fast-growing economy. However, its logistics performance remains low compared to other African countries and the global average. According to the World Bank’s Logistics Performance Index (LPI), Ethiopia ranked 117th out of 160 countries in 2018, with a score of 2.42 out of 5. The LPI measures six dimensions of logistics: customs, infrastructure, international shipments, logistics quality and competence, tracking and tracing, and timeliness.

Some of the main challenges of logistics in Ethiopia are:

• Poor logistics management system and lack of coordination of goods transport. A study by Tadesse et al. (2018) found that Ethiopian logistics system is characterized by inefficient planning, monitoring and evaluation of logistics activities, lack of standardization and harmonization of procedures and documents, and weak collaboration among stakeholders.
• Low level of development of logistics infrastructure. Ethiopia suffers from inadequate and poor-quality roads, railways, airports, warehouses, and information and communication technology (ICT) facilities. These factors increase the cost and time of transporting goods within and across borders, and affect the reliability and security of supply chains.
• Inadequate fleets of freight vehicles in number and age. Ethiopia has a limited number of trucks and trailers that are suitable for transporting different types of cargo, such as containers, bulk, or refrigerated goods. Moreover, most of the vehicles are old and poorly maintained, resulting in frequent breakdowns, accidents, and emissions.
• Damage and quality deterioration of goods while handling, transporting and in storage. Due to poor packaging, handling, loading and unloading practices, as well as exposure to weather conditions and pests, many goods are damaged or spoiled during transit or storage. This leads to losses for traders and consumers, and affects the reputation and competitiveness of Ethiopian products.
• Trade barriers and regulatory bottlenecks. Ethiopia faces various trade barriers that hamper its access to regional and international markets, such as high tariffs, non-tariff measures, customs delays, corruption, and security issues. Additionally, Ethiopia has complex and cumbersome regulations and procedures for import and export activities, which increase the cost and time of doing business.

These challenges have significant implications for Ethiopia’s economic growth, social development, and environmental sustainability. They limit the potential of Ethiopia to diversify its exports, attract foreign investment, create jobs, reduce poverty, improve food security, and enhance its resilience to shocks.

Therefore, it is imperative for Ethiopia to address these challenges and improve its logistics performance.

Some of the potential solutions are:

• Developing a national logistics strategy and policy framework that aligns with the country’s development goals and priorities.
• Investing in upgrading and expanding the logistics infrastructure network, especially roads, railways, dry ports, warehouses, and ICT facilities .
• Promoting the modernization and professionalization of the logistics sector by enhancing the skills and competencies of logistics service providers (LSPs), improving the quality standards and certification systems for LSPs, encouraging innovation and digitalization in logistics processes, and fostering public-private partnerships for logistics development.
• Improving the trade facilitation environment by simplifying and harmonizing the customs procedures and documentation requirements for import and export activities, reducing the tariffs and non-tariff barriers for regional and international trade, strengthening the coordination and cooperation among relevant agencies for border management, enhancing the transparency and accountability in customs administration, and ensuring the security and safety of goods along the transport corridors.
• Implementing measures to reduce the damage and quality deterioration of goods while handling,
  transporting
  and in storage by adopting good practices for packaging, handling, loading and unloading,
  using appropriate vehicles and equipment
  for different types of cargo, providing adequate storage facilities and cold chains for perishable goods, and applying quality control and inspection systems for goods in transit or storage.

By addressing these challenges and implementing these solutions, Ethiopia can improve its logistics performance and leverage its strategic location and economic potential to become a regional hub and a global player in trade and logistics. Logistics Service In Ethiopia