Logistics practices in Ethiopia

Abstract: The ability to transport goods quickly, economically and reliably is vital to a nation’s prosperity and capacity to compete in global market. Ethiopia is a landlocked country in East Africa with a land area of about 1.13 million square kilometers and a population of about 82.8 million. 85 percent of the population is living in rural areas and the economy of the country is based mainly on agriculture accounting for 45 percent of GDP, 80 percent of exports and 80 percent of employment. Ethiopian logistics system is characterized by poor logistics management system and lack of coordination of goods transport, low level of development of logistics infrastructure and inadequate fleets of freight vehicles in number and age, damage and quality deterioration of goods while handling, transporting and in storage. This coupled with lack of sea port resulted in poor linkage of producers (farmers) to the consumers (market) and non-competitiveness of Ethiopian goods on global market, which compromised livelihood of the people and economy of the country. There is very high rate of traffic accident (first in the world) and congestion in cities and at city inlets/outlets to which freight vehicles contribute significantly. Efficient and effective logistics system needs to be put in place to solve these socio-economic problems. The objective of this work is to assess the current status of logistics practices in Ethiopia with the aim of identifying the gaps, potentials and constraints for development of effective and efficient logistics system. To meet this objective, qualitative assessment of the soft and hardware of logistics, freight logistics and transport companies, organizations dealing with documentation of import and export goods and case studies of specific supply chains of major goods in Ethiopia are made. Information from secondary sources is used to carry out the assessment. Presence of road of high density and quality makes efficient distribution of goods easy. Customer orientation, low level bureaucracy at customs and trade facilitations expedite goods flow. Availability of skilled manpower, conducive labor regulations and business Environment promotes economic activities. On most of these criteria, Ethiopian logistics system is found to be poor. There is urgent need for research on the problems, for which xcellence Center for Freight Transport and Logistics in Ethiopia (EthioLog) is established. Intermodal transport system is the best solution and commencement of construction of 10, 000 km rail line is an opportunity to use road-rail integrated intermodal transport system to solve the logistics problems of the country.