Modjo Confiscates 223 Containers after Customs’ Green Light

Modjo Dry Port confiscated 223 containers stuck for more than six months after the last clearance call made by the Ethiopian Revenues & Customs Authority (ERCA) a month ago.

Electronics, leather products, textiles, foodstuff and steel were the major items taking up space at the port for six months.

Each importer is allowed a two-week grace period that enables importers to store goods at dry ports free of all charge. After that period the law imposes a charge of 12Br per container per day allowing containers to remain at the port for a maximum of two months.

The law allowing the ports to confiscate goods stored for more than two months has been in effect for the last two years, but it has not been enforced as the Authority extended the grace period with penalty payments for storage levied for each day after first two weeks considering poor awareness of the law on the part of importers.

Upon declaring the final day, it gave a four-days window for the removal of 600 containers out of the 823 that had overstayed their time at the port. These were cleared within the granted four days given as an ultimatum before confiscation.

It was Moges Balcha, ERCA’s deputy director for Customs Affairs who announced the confiscation before a number of importers who had containers stored for more than six months.

“Of the confiscated containers, the contents of 47 were found to be spoiled as their expiry dates had passed,” said Ayele Worku Mojjo, the Custom’s Office general manager.

Such goods as juices, therefore, could not be available for auction.

“We are processing all 176 containers for bid in which interested parties shall take part except the owners of these containers. We are also identifying items and assessing the market value of these goods to set the price,” he added

According to him, owners are not allowed to take part in the bid as they failed to take their goods by settling payments.

He said that 11.6 million Br had been secured from the sale of 15 containers sold at an auction held at the Modjo Dry Port last week. On June 11, 2016, an additional 50 containers estimated to value 27.8 million Br were floated for auction.

“Importers who can get a bank statement that guarantees their payment of Customs duties and demurrage costs if they had failed to do so in time are allowed to clear their goods. This way the importers are increasingly tending to clear containers sooner than [they did] before,” he said.

Unlike importers, freight forwarders and shipping agents are not affected.

“We do not lose, no matter how long the containers are stored at dry ports,” said Mulugeta Assefa, president of the Ethiopian Freight Forwarders & Shipping Agents Association.”We are operating in the uni-modal system where Customs service is done at Port Djibouti. And once we are paid to transport we will transport containers. If the containers stay for long at ports, it is the importer who is exposed to high demurrage and warehouse payments,” he added.

He added that firstly importers settle payments for forwarders and shipping agents for transportation of containers.

Of the seven dry ports in the country – Gelan, Modjo, Comet, Semera, Kombolcha, Meqelle and Dire Dawa, the congestion is the worst in Modjo dry port.

Congestion has to do with the country’s poor logistics performance, which makes the import and export of goods time-consuming and costly. Ethiopia has slipped to 104 in the world, falling 20 steps lower than the position occupied by neighbouring Kenya, according to a recent World Bank (WB) Doing Business in Ethiopia Report. Ethiopia’s logistics performance score is 2.5, 0.2 less than Kenya’s. Infrastructure development, international shipment capacity, logistics competence,traceability and tracking and timeliness are considered to be measures of the logistics performance index and score.

Document compliance – obtaining, preparing, and submitting documents during transportation, clearance and inspection take 126 hours and cost 175 dollars, while border compliance small Customs clearance and inspection at the border take 57 hours and costs 144 dollars.

Located in the eastern inlet of Addis Abeba, Modjo Dry Port, has a storage capacity of 14,000 containers. Official figures show that 12,000 containers reached the Port in March and April, making it the ever-congested dry port.

The Ethiopian Shipping Lines & Logistics Services Enterprise (ESLSE) wanted fast and efficient clearance of goods from dry ports so that it can have space for incoming containers. Close to 142,000 containers are cleared by Customs using a multi-modal freight transport system at all ports, a system in which Customs services are carried out at dry ports instead of at Port Djibouti, according to the Enterprise’s 10-month performance report.

In the first Growth and Transformation Plan (GTP I), the Enterprise planned to increase the share of imported commodities in the multi-modal system by 80pc and met only 23pc, a little over a quarter of the goal.


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