Addis Abeba — Ethiopia's logistics moment of truth has arrived with a clarity that can no longer be ignored by policymakers in Addis Abeba or the business community. The recent decision by the Djibouti Ports and Free Zones Authority (DPFZA) to prohibit newly licensed Ethiopian Multimodal Transport Operators from operating through the Port of Djibouti has exposed a profound and dangerous structural weakness in the nation's trade architecture. What began as a technical dispute over regulatory classifications has rapidly evolved into a strategic economic challenge, providing an urgent and undeniable impetus for trade diversification that moves beyond mere rhetoric. This friction is not just a localized administrative hiccup; it is a signal that Ethiopia's total reliance on a single maritime gateway has reached a strategic breaking point that threatens the very foundation of its economic reform agenda.
The roots of this crisis trace back to the ambitious liberalization efforts initiated by the Ethiopian Maritime Authority in 2024. In a historic move to dismantle the long-standing logistics monopoly of the Ethiopian Shipping and Logistics Services Enterprise, the government granted multimodal transport licenses to a first batch of private companies. This reform was designed to inject much-needed competition, lower prohibitive shipping costs, and increase operational efficiency in a sector that has been dominated for decades by a single state entity and a single, increasingly congested transit corridor. Rather than welcoming this liberalization as a means to foster broader regional growth, the Djibouti authorities moved to restrict these new entrants. They argued that Non-Vessel Operating Common Carriers cannot legally function as multimodal operators because the bills of lading they issue are not recognized under the current Djibouti regulatory framework.
While this technical objection may appear to be a matter of arcane administrative nuance, its practical effects are severe and far-reaching. By disallowing these licensed operators, Djibouti has effectively frozen Ethiopia's market liberalization in its tracks. Preparations by these private firms to commence operations--many of which had already invested millions in infrastructure, equipment, and human capital--were abruptly halted.
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Today, the logistics plans of these operators remain in limbo, leaving cargo owners, importers, and exporters facing renewed uncertainty in supply chains that are already under immense pressure from global inflationary trends and persistent foreign exchange shortages. The dispute has further revealed a concerning diplomatic impasse, signaling that Ethiopia's internal economic reforms now require the highest level of political engagement to survive external gatekeeping.
Port of Opportunity: How Berbera strengthens Ethiopia's trade resilience
When the sovereign economic policy of a nation can be stalled by the administrative discretion of a foreign port authority, it serves as a stark indication that the current level of logistics dependency is both strategically risky and economically unsustainable. It highlights the reality that true economic sovereignty is inextricably linked to the diversity of one's access to global markets.
In this moment of profound disruption, the Port of Berbera in Somaliland stands out as the most practical and credible alternative gateway for Ethiopian trade. Far from being a distant aspirational project, Berbera is a fully operational reality whose evolving infrastructure is uniquely positioned to serve Ethiopia's long-term trade needs and mitigate the risks of regional friction.
This friction is not just a localized administrative hiccup; it is a signal that Ethiopia's total reliance on a single maritime gateway has reached a strategic breaking point ...."
Under the stewardship of the global terminal operator DP World, Berbera has undergone a total transformation into a modern deep-water port with significant capacity and expanding technological capabilities. The container terminal at Berbera, which was inaugurated with substantial international investment, currently handles hundreds of thousands of containers annually, and there are clear plans to expand this capacity into the millions in the coming years. Beyond the docks, the port features specialized bulk and breakbulk facilities, livestock export infrastructure, and advanced logistics services.
Crucially, Berbera is integrated with the Berbera Economic Zone, a logistics and industrial hub that targets foreign direct investment in warehousing and light manufacturing. This holistic model mirrors successful global hubs where ports serve as anchors for broader economic ecosystems, offering Ethiopian firms a chance to deepen their supply chain participation rather than merely transiting goods through a foreign territory.
Recent developments in global shipping further reinforce the rising role of Berbera as a primary node in the Horn. In early 2025, DP World launched a direct shipping service linking Jebel Ali in the United Arab Emirates to Berbera, enhancing connectivity with major global trade networks and providing more predictable maritime timelines. For Ethiopia, these developments matter on multiple dimensions.
Geographically, Berbera is ideally positioned to serve the eastern and southeastern hinterlands more efficiently than the traditional Djibouti corridor. Shorter overland distances translate into tangible savings in cost and time, benefits that compound significantly for high-value or time-sensitive goods. Strategically, Berbera offers Ethiopia the immediate benefit of redundancy. In the world of logistics, redundancy is the bedrock of resilience. A supply chain that relies on only one artery is inherently vulnerable to disruption, whether that disruption stems from political decisions, infrastructure failures, or administrative impasses.
Ethiopia's logistics recalibration
The recent decision by Djibouti demonstrates the high costs of such dependency. By routing a meaningful portion of its trade through Berbera, Ethiopia can reduce its exposure and reclaim negotiating leverage--not through aggressive confrontation, but through the quiet and steady pursuit of structural diversification. It is essential to underscore that this shift should not be framed as an antagonistic abandonment of Djibouti.
Ethiopia and Djibouti share deep-seated trade, cultural, and historical ties that are vital to the stability of the Horn of Africa. The logic of diversification is fundamentally pragmatic and stabilizing. When multiple gateways compete on the basis of efficiency, reliability, and cost, the result is improved service for all users, including shippers, exporters, and the regional economies at large. A competitive landscape encourages all regional ports to modernize while allowing Berbera to flourish as a vital alternative.
At the same time, the Ethiopian government must continue to pursue rigorous reforms in the bilateral frameworks that govern port access and regional logistics cooperation. Many of the agreements negotiated under the paradigms of the early 2000s require urgent updating to reflect a modern, liberalized logistics market in which private operators and diverse modal networks play a central role. The formal recognition of specialized transport operators, the harmonization of customs and transport documentation, and the establishment of mutually agreed dispute resolution mechanisms are essential to prevent future impasses of the kind currently witnessed.
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Finally, Ethiopia's strategic recalibration toward Berbera must be paired with targeted domestic investments in corridor infrastructure. This includes the accelerated development of road and rail networks linking Berbera to major Ethiopian industrial hubs. Such investments signal more than just a reaction to a crisis; they represent a forward-looking logistics doctrine rooted in the principles of resilience and strategic autonomy.
The recent decision by Djibouti is a moment of reckoning that has revealed the structural challenges facing Ethiopia's trade system. However, it has also highlighted the immense opportunities inherent in diversification through Berbera. By embracing these opportunities, Ethiopia will strengthen not only its supply chains but also its economic sovereignty in a region increasingly defined by the competition for connectivity and the absolute necessity of resilience. AS
Editor's Note: Adam Daud Ahmed is a political and security analyst specializing in the Horn of Africa, with a focus on democracy, regional geopolitics, and counterterrorism. He can be reached at aadan7333@hotmail.com
