Expansion of SGTD boosts transit cargoes, enhances regional trade

By Muluken Yewondwossen

Ethiopian Shipping and Logistics (ESL), a state-owned logistics enterprise, commends the expansion of Doraleh Container Terminal Management Company (SGTD), a prominent port in the region. SGTD has announced that the recent expansion, which includes an increased transshipment capacity and additional gantry cranes, will significantly benefit transit cargoes in terms of time and cost.

The container terminal in Doraleh, located 12 km northwest of Djibouti’s capital, has inaugurated the expansion of its stake yard and the addition of four gantry cranes, at a cost of USD 70 million. During the launch of the flagship project on January 22, President Ismail Omar Guelleh emphasized Djibouti’s unwavering goal of maintaining its position as the leading port in the region. He stated that the installation of the new gantries is a crucial step towards achieving this aim.

The President highlighted that the gantry cranes demonstrate their commitment to enhancing the terminal’s activity with major shipping lines and expanding transshipment volumes. Furthermore, he emphasized that the gantries are part of their strategy to diversify the terminal’s customer base, allowing for a significant increase in regional and international transshipments. This, in turn, will lead to more trade, growth, and prosperity for the region.

Berisso Amallo, CEO of ESL, expressed satisfaction with the new expansion, believing that it will strengthen their extensive logistical operation. He noted the potential opportunities for ESL’s shipping business at the newly opened facilities. With the addition of the gantries, large vessels can now be accommodated, providing the opportunity for faster loading and unloading, thus accelerating port activity.

The project, which faced delays due to COVID-19, involved a USD 30 million extension of the yard and USD 40 million for the construction of Megamax ship-to-shore (STS) cranes, supplied by Liebherr Container Cranes, a leading industry provider based in Germany. In 2019, the terminal reached nearly 80 percent of its capacity, according to SGTD CEO Abdillahi Adaweh Sigad. The need for additional capacity, gantry cranes, and space arose from the growing demand from liners, particularly for the transit market with Ethiopia, as a result of the terminal’s improved productivity in recent years.

“We had eight gantries that were sufficient for operating vessels up to 15,000 twenty-foot equivalent units (TEUs) in size. However, with the increasing number of larger vessels like the Triple E (3E) Class and Malaccamax, which can carry between 15,000 and 23,000 TEUs, our capacity was insufficient. This prompted the expansion,” the CEO explained. “Currently, large vessels capable of carrying more than 15,000 TEUs dominate the transshipment market.”

“The expansion included the addition of cranes in addition to the yard,” he informed Capital.

The gantry crane arrived in December of the previous year, following the completion of the yard extension at the beginning of 2023.

“Even before we could commission the gantry crane, liners discovered its arrival and initiated transshipment operations,” he continued. “Although SGTD accounted for only 5 percent of transshipment in 2022, the presence of the gantry crane for the past six months has increased our transshipment to 20 percent of the total operation.”

Currently, SGTD aims to achieve 35 percent transshipment for the entire year of 2024, with a goal of 50 percent in 2025.

“This means that 50 percent of shipments will be transshipment, while the other 50 percent will be local and transit, serving customers in Ethiopia, Djibouti, and the international market,” the CEO stated.

Adaweh Sigad clarified that in addition to the lucrative transshipment business, the new development provides significant benefits for Ethiopian transit cargoes and Djibouti.

He emphasized that the increasing transshipment will directly benefit shipments to Ethiopia and Djibouti.

“When we bring a vessel with, let’s say, 1,000 TEUs, we cover all the vessel’s costs since we are Djibouti and Ethiopia. Shipping companies don’t concern themselves with the number of containers as long as they are paid. Whether the vessel remains at the port for twelve hours, two days, or three days, the shipping company is paid the full daily rate,” he explained.

“As the CEO, since taking over the management of the port facility in early 2018, if our transshipment grows to 4,000 and 1,000 TEUs for Djibouti and Ethiopia, transshipment will become the majority payer.”

He revealed that Ethiopia will benefit from transshipment in two key ways: price and speed. With more cargo, both local and transshipment, coming through the SGTD port, the price will be lower. Additionally, the speed of delivery will improve.

“If we have 5,000 containers tomorrow, they will arrive directly and be discharged here, rather than going through transshipment. This means that Ethiopian customers who used to wait two months or a month and a half for cargo from Shanghai will now only wait three weeks, as it will come directly,” he explained. “Therefore, we argue that transshipment saves both money and time during import or export transit.”

Adaweh Sigad, who has led several achievements in the port over the past five years, emphasized that transshipment will improve connectivity.

“When you have a direct call vessel with less time from the main supply chain point, from China to Djibouti, your connectivity rate increases,” he noted.

The new investment, with the addition of four important cranes and yard expansions boosting storage capacity by 20 percent, will double the capacity of the container terminal. The storage extension will solidify the Doraleh Terminal’s position as the dominant port in the area, increasing the accommodation capacity from 1.6 million TEUs to 2 million TEUs annually. In terms of the harbor, SGTD can accommodate any large vessel in the world.

According to the 2022 S&P Global Market Intelligence and World Bank container port performance index (CPPI), SGTD, which opened in 2009, is ranked as the most productive port in sub-Saharan Africa.

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