Building Ethiopia’s Logistics Future: From Bottlenecks to Flow

On the outskirts of Modjo, roughly an hour away from Addis Ababa, rows of shipping containers fill a busy yard, stacked in orderly lines and waiting to be moved. Nearby, wide paved roads lead through newly built areas with open yards, warehouses, and truck lanes.

This is a logistics system that is changing.

The Modjo Dry Port has long served as the main entry point for goods coming into Ethiopia from the Port of Djibouti. However, as the country's trade volume has increased, the system has come under pressure, resulting in delays, congestion, and higher costs which frequently affect the businesses that depend on the port for the movement of their goods.

Elizabeth Getahun is the General Director of Panafric, a freight forwarding company in Addis Ababa. According to her, "Efficient logistics is about planning and coordination-getting goods to move at the right time and at the lowest possible cost."

When coordination is weak, delays occur.

Expanding capacity and improving flow

To address these challenges, the Government of Ethiopia, with support from the World Bank, has expanded the Modjo Dry Port.

New infrastructure is improving how efficiently goods move through the facility. Larger container yards, expanded warehouses, and dedicated entry and exit gates are helping reduce waiting times. Goods are cleared more quickly, and in some cases, processing times have fallen by 70%-from 60 days to just 15. Movement through the port is also becoming more predictable.

For importers, this means faster access to inputs and fewer disruptions. Goods are quickly transported from the port to factories and markets, helping businesses plan and operate more efficiently. Ultimately, a more efficient port leads to healthier businesses, which in turns translates into stronger job creation and growth at the local and national levels.

The role of the dry port is also evolving-from primarily supporting imports to enabling the government's export strategy, which focuses on expanding manufacturing, including textiles, leather, and agro-processing, and increasing agricultural exports. Containers are now being used for both imports and exports, with goods such as coffee, textiles, and agricultural products being loaded and shipped to international markets.

The way logistics services are delivered is also changing. Companies like Panafric are among several private firms now operating within the Modjo Dry Port, marking a gradual shift toward a multi-user system.

Expanded storage, improved container handling, and consolidation are making it easier for Ethiopian businesses, including small firms, to ship goods through the Modjo Dry Port. As more operators enter, capabilities such as cold chain management, cargo handling, and freight coordination are expanding, giving businesses more options and increasing overall capacity.

Digital systems are also being introduced to improve how information is shared across the port, allowing cargo to be tracked more easily and helping different actors coordinate and plan more effectively.

"Automation allows us to know what is happening and where," Elizabeth says. "When information is transparent, we can plan-how many trucks, how many containers, what resources are needed."

By adding these new services, the port itself is supporting local job creation across a broad range of skills.

The way forward

The dry port is part of a wider logistics system. Conditions along the Djibouti corridor, coordination between institutions, and the efficiency of port operations all affect overall performance.

As activity at Modjo increases, continued progress will depend on how these parts work together.

"Even if the port is open, if one part of the system is not working, everything stops," says Elizabeth, General Director of Panafric.

Modjo is developing into a more complete logistics hub. With continued improvements, the Modjo Dry Port can support trade more effectively and strengthen Ethiopia's connections to regional and global markets.