During an inauguration ceremony at Modjo Dry Port on 22 August 2020, the first ever refrigerated container carrying fruit was loaded at the train from Ethiopia to Djibouti. Ethiopian Minister of Transport H.E Dagmawit Moges launched the loading of the container at the train in the presence of stakeholders from different organizations.
“The development of a National Cool Logistics Network is a strategic project and vital for many economic activities in Ethiopia”, she said. The government of Ethiopia is committed to improve the logistics infrastructure and procedures in the country to promote and support its fruit and vegetable production and export sector.
This shipment is a milestone in the development of a cool logistics corridor for the export of fruit, vegetables and other perishables by sea freight via the Port of Djibouti. “This innovative cool supply chain Modjo-Djibouti-Europe for fruits, vegetables, flowers and other perishables will balance the trade and maximize the use of Ethio-Djibouti railway”, says Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Zones Authority. He is one of the members of the Cool Logistics Steering Committee, overseeing the cool logistics projects in Ethiopia and Djibouti. This steering committee is chaired by the Ethiopian Minister of Transport and the Dutch ambassador to Ethiopia and endorsed at Prime Minister’s level.
Collaboration between Ethiopia, Djibouti and the Netherlands
Members of the Steering Committee and the related Technical Committee come from Ethiopia, Djibouti and The Netherlands. This project is a cooperation between the governments of the three countries and is based on a signed Memorandum of Understanding.
“The partnership combines Ethiopia’s new logistics opportunities and agriculture potential with Djibouti’s maritime position and the Netherlands’ world-class experience in agro-logistics”, says Thijs Woudstra, Deputy Head of Mission of the Embassy of the Kingdom of The Netherlands in Addis Ababa.
Avocados from Ethiopia
The reefer container is stuffed with 24 tons of avocados from the Koga area south of Bahir Dar and, after a 750-km train journey, will be shipped from Djibouti to Europe in about 20 days. The avocados are sourced from dozens of local farmers by the company KogaVeg Agricultural Development PLC, owned by impact investor Durabilis from Belgium. Their business strategy is based on export by sea freight: “With reliable and competitive logistics solutions and lead times, we will be able to increase our export of fruit and vegetables rapidly in the coming years”, says Jan Michielsen, the General Manager of KogaVeg. Train transport is not only cost effective, but also environmentally friendly compared to truck transport and therefore compatible with green logistics policies of European countries.
Catalysing fruit and vegetable sector growth
This is one example of Ethiopia’s huge potential for fruit and vegetable production and export. The country has plenty of arable land available, a perfect climate for horticulture and is strategically located between Europe, the Middle East and Asia. That is also the opinion of Tewodros Zewdie, Executive Director of the Ethiopian Horticulture Producer Exporters Association: “The fruit and vegetable sector in Ethiopia has the potential to become the next flower sector” he says, referring to the fast growing export sector in the country. Cool logistics investments, by drastically reducing transport costs and lead times, can unlock Ethiopia’s perishable industry and allow it to fill a weekly train of reefer containers within 10 years and after that even five trains a week with perishable goods.
Positive impact on the country
Next to earning foreign currency for the country by exporting its produce, unlocking the horticulture sector in Ethiopia can create a positive impact on the country in many ways. Farmers producing avocados get a much higher revenue from their field than from traditional crops, like wheat, teff, sesame and even coffee. In the Koga region alone, about 10,000 smallholder families own a farm which is suitable for growing avocados. The harvested avocados are grown in an organic way, because they don’t consume pesticides and chemical fertilizers. Through an improved cool chain, high amounts of post-harvest food losses of fruit and vegetables are avoided. And more nutritious food will be available at the local and regional market for fair prices, both for the consumers and for the farmers.
National Cool Logistics Network
The shipping of the container is a pilot project for the National Cool Logistics Network. The development of Cool Port Addis, the first component of this network, has already started. Cool Port Addis is a cold storage facility integrated into a railway terminal near Addis Ababa. At this facility, produce from the hinterland is consolidated into reefer containers to be put on the train to Djibouti.
The warehouse will also be used for national and regional distribution. “Other components of the network are a dedicated railway solution for reefer containers from Ethiopia to Djibouti and a cross docking facility at the Port of Djibouti”, says Jeroen Bos, together with Marcel Biemond Program Director of Flying Swans.
Flying Swans consortium
Activities on the Dutch side of this project are conducted by the Flying Swans consortium. This is a Dutch cross-industry coalition that aims to increase perishable exports in emerging economies through the development of agro-logistical corridor projects. Consortium members are the Port of Rotterdam, Boskalis International and Mercator Novus, with the Dutch Fresh Produce Center as associated partner.
Development impact is at the core of all Flying Swans projects. Therefore, it is funded by the Dutch Ministry of Foreign Affairs through FMO, the Dutch entrepreneurial development bank.