Gap Assessment of

Logistics Digitalization
in Ethiopia

Could Tech
 Gap Assessment of
Logistics Digitalization
in Ethiopia
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ii Gap Assessment of Logistics Digitalization in Ethiopia

 Contents

Abbreviations............................................................................................................................ v
Acknowledgments................................................................................................................... vi
Executive Summary................................................................................................................ vii
Objective vii
Methodologies...................................................................................................................................vii
What the study found........................................................................................................................ xi
What needs to change......................................................................................................................xii
What should be done.......................................................................................................................xiv
1. Introduction........................................................................................................................1
Objectives of the study.......................................................................................................................2
2. The Assignment.................................................................................................................4
The Ethiopian logistics sector.............................................................................................................4
Digital Ethiopia 2025...........................................................................................................................7
The levels and important components of digitalization........................................................................7
The main elements of the gap assessment framework ......................................................................8
Key technology trends for digitalization in the logistics sector.............................................................9
The main digital themes and bottlenecks in logistics.........................................................................15
3. Methodology....................................................................................................................16
Study setting and design..................................................................................................................16
Sampling techniques and sample size for the quantitative approach.................................................16
Sampling techniques and sample size for the qualitative approach...................................................18
Data collection tools.........................................................................................................................18
Data collection procedures...............................................................................................................20
4. Data Presentation and Analysis of the Logistics Digitalization Gap ............................21
The qualitative analysis.....................................................................................................................21
The quantitative analysis...................................................................................................................34
5. “As-Is” Analysis on Logistics Digitalization in Ethiopia.................................................40
The major findings............................................................................................................................42
6 “To-Be” Analysis of Logistics Digitalization in Ethiopia.................................................45
The Ethiopian Logistics Digitalization and Information Exchange as a proposed
high-level logistics digitalization architecture.....................................................................................46
Appendix A Survey Questionnaire...........................................................................................55
Appendix B Key Informant Interviews and Focus
Group Discussion Guide and Checklist.....................................................................................66

Gap Assessment of Logistics Digitalization in Ethiopia iii

Contents

Appendix C Selected Key Informants......................................................................................69

Appendix D Multiple Case Study Protocol ..............................................................................70
Appendix E Qualitative Analysis Based on Key Informant Interviews........................................72
Appendix F Survey Quantitative Analysis.................................................................................83
References ............................................................................................................................99

FIgures
Figure ES.1 Applied methodologies__________________________________________________________vii
Figure ES.2 Distribution of survey respondents_______________________________________________ viii
Figure ES.3 The multiple case study topics____________________________________________________ x
Figure ES.4 Recommended digital platforms_________________________________________________ xv
Figure ES.5 ELDIXA’s major components____________________________________________________ xvi
Figure ES.6 Integrating industry 4.0 into logistics services______________________________________ xvi
Figure 2.1 The digital transformation journey_________________________________________________ 9
Figure 6.1 ELDIXA high-level architecture __________________________________________________ 49
Figure 6.2 ELDIXA implementation action plan______________________________________________ 53
Figure 6.3 ELDIXA dashboard____________________________________________________________ 54

Tables
Table 2.1 Application of IoT technologies to logistics ________________________________________ 11
Table 2.2 Challenges and successes from the United Arab Emirates blockchain implementation____ 14
Table 3.1 Distribution of population and sample by type of business___________________________ 18
Table 6.1 ELDIXA implementation action plan______________________________________________ 50
Table A6.1 Questionnaire response rate____________________________________________________ 84
Table A6.2 Availability of digital strategy by the organization____________________________________ 84
Table A6.3 Use of digital platforms_________________________________________________________ 85
Table A6.4 Software usage_______________________________________________________________ 85
Table A6.5 Bottlenecks in digitalization of business process ___________________________________ 87
Table A6.6 Top management/board commitment and support for digitalization____________________ 88
Table A6.7 Prerequisite for digitalization in your organization___________________________________ 89
Table A6.8 Information exchange management among stakeholders____________________________ 89
Table A6.9 Method of information exchange system__________________________________________ 90
Table A6.10 Digital usage stage____________________________________________________________ 90
Table A6.11 Sector responsible for service delay______________________________________________ 91
Table A6.12. Technology use by logistics service providers_______________________________________ 91
Table A6.13 E-service assessment__________________________________________________________ 92
Table A6.14 Infrastructure and ICT utilization capability assessment______________________________ 93
Table A6.15 Organizations emerging technologies usage assessment____________________________ 94
Table A6.16 Digital technologies status and relevant assessment________________________________ 95
Table A6.17 Digital themes and initiatives assessment__________________________________________ 96
Table A6.18 Work environment and ICT capability and readiness assessment______________________ 97
Table A6.19 Overall logistics digitalization assessment_________________________________________ 98

iv Gap Assessment of Logistics Digitalization in Ethiopia

 Abbreviations

AfCFTA African Continental Free Trade LPI Logistics Performance Index

Agreement LSP Logistics service provider
AAU Addis Ababa University LTO Logistics Transformation Office
AI Artificial intelligence Mari-logMaritime logistics information
API Application programming inter- system
face MoT Ministry of Transport
AR Augmented reality MTPLIS Motor Third Party Liability Infor-
CCTV Closed circuit television mation System
e-CMS Electronic customs management NLC National Logistics Council
system NLS National Logistics Strategy
e-SW Electronic single window PaaS Platform as a service
ECC Ethiopian Customs Commission RESTful Representational State Transfer
ECTMS Electronic cargo tracking man- RFID Radio frequency identification
agement system SaaS Software as a service
ECX Ethiopian Commodity Exchange SMS Short Message Service
ELDIXA Ethiopian Logistics Digitalization SPSS Statistical Package for the Social
and Information Exchange Archi- Sciences
tecture UNICEF United Nations Children’s Fund
EMAA Ethiopian Maritime Affairs Au- WHO World Health Organization
thority WMS Warehouse management system
ERA Ethiopian Road Administration
ERP Enterprise resource planning
ESLSE Ethiopian Shipping and Logistics
Service Enterprise
FMS Fleet management system
GPS Global positioning system
IaaS Infrastructure as a service
ICT Information and communications
technology
IE Integration engine
IoT Internet of things
IT Information technology
LIMS Logistics information manage-
ment system

Gap Assessment of Logistics Digitalization in Ethiopia v

Acknowledgments

This report was prepared under the over- Gashaw Tenna, Frehiwot Gebrehiwot, Ti-
all guidance of Dagmawit Moges, Minister gist Hamid, and Eden Girma of the ministry
of Transport and Logistics of the Federal of Transport and logistics of Ethiopia con-
Democratic Republic of Ethiopia, and Vera tributed to the report. Mekonnen Abera,
Songwe, United Nations Under-Secre- former Director-General of EMAA, and
tary-General and Executive Secretary of staff of the EMAA Logistics Transformation
the Economic Commission for Africa (ECA). Office (LTO) provided support in validating
The report also benefited from the guid- the report.
ance of Yehualashet Jemere, Director-Gen-
eral of the Ethiopian Maritime Affairs Au- A special mention goes to Bruce Ross-Lar-
thority (EMAA) and former State Minister son and his team from Communications
of Transport of the Federal Democratic Re- Development Incorporated for profession-
public of Ethiopia. al editing for the report.

William Lugenwa, Robert Lisinge, Soteri

Gatera and Mactar Seck of ECA provided
oversight to the preparation of the report.
Matiwos Ensermu and Merid Nigussie pre-
pared the report under close guidance of
Yonas Bekele of ECA.

vi Gap Assessment of Logistics Digitalization in Ethiopia

 Executive Summary

An effective logistics sector is now recog- Objective

nized almost everywhere as a core enabler The objective of this study is to assess the
of development and a precondition for na- uses, gaps, bottlenecks and limitations of
tional competitiveness. Technology plays a existing logistics technology in Ethiopia.
critical role in logistics value differentiation With the information from this study poli-
and speeds up regional, continental and in- cy makers can make informed decisions on
ternational integration for the free move- designing Ethiopia’s logistics road map and
ment of goods and people. Despite Ethi- recommending remedial action for all key
opia’s strong, broad economic growth in logistics stakeholders.
recent years, its logistics systems are still in
the early stages of development compared
to global best practices, and the sector has Methodologies
not adequately enabled the country’s inter- The existing empirical and theoretical
national trade competitiveness. To ensure knowledge on policy, strategy and digitali-
competitiveness, Ethiopia is working to zation initiatives among key stakeholders in
overhaul the logistics sector by develop- the logistics sector was reviewed. This was
ing a national strategy, creating beneficial followed by a diagnostic analysis of the gaps
logistics and transport sector policy, and identified in the desk review, and the analy-
modernizing logistics services through digi- sis was supported by a survey, key informant
talization among key stakeholders. interviews, focus group discussions and live
case studies (Figure ES.1). Then a “To-Be”
analysis was done on how to digitalize and
transform logistics to make Ethiopian trade
regionally and internationally competitive.

Figure ES.1 Applied methodologies

Out of 418 survey of Twenty two (22) key Two (2) focus group Five (5) multiple live
345 response informants discussions were case on digital tech
analyzed interviewed made benchmarked

Gap Assessment of Logistics Digitalization in Ethiopia vii

Executive Summary

Academic papers, industry practices, pol- tion gap, logistics bottlenecks, obstacles to
icy documents and organizations’ annual digitalization, and stakeholder digital usage
reports were reviewed to analyse logistics and mode of information exchange. Of the
information and communications technolo- 418 distributed questionnaires, 345 were
gy (ICT) usage and logistics digital transfor- returned, giving an average response rate
mation initiatives. Topics—such as big data, of 82.5 per cent. Figure ES.2 shows the dis-
blockchain, logistics cloud, artificial intelli- tribution of survey respondents.
gence (AI) and others—were covered in the
analysis. The survey covered:

The success factors and key challenges • The status of the digital strategy.
of the 2016 United Arab Emirates’ Dubai
blockchain strategy and the 2018 Emir- • The use of digital platforms and soft-
ates federal blockchain strategy imple- ware in business operations.
mentation initiatives were benchmarked.
Using these benchmarks, this report of- • The obstacles and bottlenecks in digitiz-
fers insights for Ethiopian decision makers ing business processes.
into the challenges and successes of the
United Arab Emirates’ blockchain imple- • The commitment of top management to
mentation. digitization.

The survey assessed the perceptions of key • The support for digitalization within or-
stakeholders in the logistics sector in Ethio- ganizations.
pia. It included questions on the digitaliza-

Figure ES.2 Distribution of survey respondents

Importers/Exporter 184 (53.3%)

Logistics service providers 136 (39.4%)

Govt service providers 18 (5.2%)

Ware house service 7 (2%)

Total 345 (100%)

viii Gap Assessment of Logistics Digitalization in Ethiopia

 Executive Summary

• The mechanisms for exchanging infor- Focus group discussions were conduct-
mation amongst stakeholders. ed with officials from the Logistics Trans-
formation Office (LTO) and the Ethiopian
• The assessment of enterprise e-ser- Customs Commission (ECC). The first dis-
vices. cussion with ECC covered the available
technology used by the commission in cus-
• The maturity of infrastructure. toms processing. ECC used the Electronic
Customs Management System (e-CMS), a
• The utilization of ICT capability. single-window platform. But the system has
limitations in business processing require-
In the key informant interviews, respon- ments, such as multimodal services. And it
dents said logistics needed to be viewed has problems with interoperability, lacks
as a process where stakeholders were in- control of cargo after goods are released
volved, and the process should be centrally from customs and control of high-value
coordinated by the Ministry of Transport. imported items—which consume the lion’s
Participants said that no national-level lo- share of forex reserves. The second focus
gistics system was available as an inter- group discussion was with LTO officers
face for key stakeholders to use. But digital about cargo and inventory tracking and
technology had been adapted in-house for the central warehouse and the central data
the internal use of businesses, but these warehouse management systems. During
systems did not interface with other stake- the discussion, LTO officers supported
holders. Also, off-the-shelf systems were the ECC suggestion that high-value goods
not customisable to Ethiopian logistics re- and commodities need to be classified and
quirements. Most of these systems could tracked during import and export.
not deliver the required logistics service
efficiency needed to justify investing hard The consultants applied two selection cri-
currency in the technology. Many stake- teria to the case studies. The first was to
holders said systems were incompatible select a logistics actor who had introduced
and were not interoperable, did not meet digitalization initiatives. The second was to
business requirements and had function- focus on large firms that were global players
al limitations. They were then replaced by and whose initiatives could be scalable to
other digital platforms. Some systems need other logistics service providers. Selecting
non-integrated third-party components to case studies using these two criteria gave
be usable. The lack of digitalized systems this study real technology benchmarks on
interaction and the lack of infrastructure specific topics (figure ES.3).
reliability had a negative effect on logistics
service efficiency and led to bottlenecks.

Gap Assessment of Logistics Digitalization in Ethiopia ix

Executive Summary

Figure ES.3 The multiple case study topics

Findings from Multiple Live Cases

GPS Based Fleet Integrated Speed Electronic Customs Enterprise Bottleneck Analysis
Management System: Limiter with GPS in Management Resource Planning (Social Media
AAU Ethiopia System (ERP) Information Desk

• Adopted by AAU on 112 • A speed limiter is a • It is a fully-fledged • For digitization ESLSE • A case study on two
vehicles and the major system installed in a system that manages conducted a research, telegram groups with
functionalities of FMS vehicle that limits the the entire customs as a result with the embers (logistics
include real-time tracking speed at which it can process from notion of “world best community) of 2786
features, fuel monitoring, travel. pre-clearance to class product, world assessed to observe
and accident detection, and • The installations of post-clearance. best class the real information
interactive reporting. speed limiter • It processes all customs implementer” Oracle exchanging
• Enables real-time tracking integration with ICT documents and ERP was implemented. mechanism and real
and status monitoring of infrastructure has a procedures digitally, • Before Oracle, the local challenges.
vehicles from computer and capacity to improve thus introduced a implementer • The members uses the
cellphone. logistics and fleet paperless environment. attempted fragmented telegram as
management in solutions where as the unconsolidated
Ethiopia. implementation information desk to
capcity is challenged. share information
related to ECC
customer service and
operation
departments, customs,
clearing agents
requests, delay
coplaints, and others.

x Gap Assessment of Logistics Digitalization in Ethiopia

 Executive Summary

What the study found holders. The current Ethio Telecom revamp,
expansion, and upgrade to 4G and 5G will
There is a gap in the synchronized offer adequate support infrastructure to
working system between Ethiopia host the basic stages of digitalization.
and Djibouti
The assessment found a significant gap in A legal framework to implement and
the synchronized working environment use technology is needed
between logistics actors in Ethiopia and Businesses that lag behind in adopting dig-
Djibouti. Bold interventions are required ital processes do so because of a lack of
to digitalize logistics in Ethiopia so that pro- government enforcement and because of
cesses are synchronized from the beginning uncertainty over the future of technolog-
(applications to banks for letters of credit) ical development. Legal frameworks are
to the end (custom’s release of cargo). Pro- needed in multiple areas, such as in cash-
cesses also need to be synchronized so they less payment protocols, in securing systems
extended to distribution centres through at the institution level and in systems usage
warehouse management information and where data and documents are shared.
commodity tracking systems.
Information sharing and data
A strategy and ICT infrastructure are governance standards are needed
prerequisites for digitalization There is a need to make customs the centre
Nearly half (47.4 per cent) of the survey of gravity for logistics process efficiency by
respondents said a digital strategy and ICT sharing data from the central customs data
infrastructure are prerequisites for digi- warehouse, starting with the first trans-
talization in their organizations. So, having action and going through to distribution
a digital strategy at the organizational lev- to retail stores. Data needs to be shared
el—underpinned by ICT infrastructure and with all key logistics stakeholders—regu-
skilled experts to develop and run the tech- lators, financers, importers, exporters, lo-
nology—is a significant factor for logistics gistic service providers, distribution cen-
digitalization in Ethiopia. tres and retailers. There is also a need for
inventory information sharing from origin
Infrastructure readiness and removing to destination, not to control the market
bottlenecks are prerequisites for but to ensure accountability and to share
digitalization information about availability of invento-
Poor internet quality and frequent electric ry among supply chain members. Nearly
power interruptions are the main causes of a third respondents (31.4 per cent) use
service delay bottlenecks. So, implementing e-mail for external information exchange,
logistics digitalization in Ethiopia demands and nearly two-thirds (64.3 per cent) use
improvements to the existing infrastruc- both e-mail and faxes for internal informa-
ture. Reliable power and reliable internet tion exchange.
are base expectations for logistics stake-

Gap Assessment of Logistics Digitalization in Ethiopia xi

Executive Summary

Integration and interoperability have then been abandoned. In 2013–14,

standards are needed the software Mari-log was developed by
In the Ethiopia logistics sector there are the Ethiopian Maritime Affairs Authority
non-digitalized, partially digitalized and ful- (EMAA) to get freight forwarders to track
ly digitalized business processes. Where cargo. But the software was abandoned
systems are fully implemented there is still because of its limitations. The Ministry of
a systems’ communication or interopera- Transport developed a management system
bility gap. A requirement for transforming but it is no longer in use. Ethiopian Shipping
the logistics and supply chain sector is that and Logistics Service Enterprise built an
businesses need to be intergraded. To be in-house system, but this was replaced by
integrated, businesses need to be identifi- enterprise resource planning. These frag-
able so that processes can be coordinated mented initiatives indirectly affect perfor-
across regions. So, business processes need mance, as does the lack of a common gov-
to be reoriented and digitalized with digi- erning digitalization standard.
tal platforms appropriate to the context of
Ethiopian logistics. Further analysis suggests that a unified
platform should consider the following:

What needs to change • Logistics digitalization should be based

on the requirements dictated by the di-
Logistics information exchange rection of the transaction—an import or
needs to be coordinated and export transaction
Although exchanging information by email
among stakeholders is a key step in digita- • Systems should be customized based
lization, there is also a need to standardize on the unique nature of operating pro-
documents, procedures and platforms at all cedures.
stages of the process. At present there is
no coordination in order processing and re- The logistics sector needs to be
quests for services, and there is no central integrated and interoperable
information to accommodate stakeholder Stakeholders in the logistics sector face
needs. Also, real time traceability is limited, a standardization problem for operating
without logistics data and loading-to-desti- procedures that affects integration and
nation tracking. interoperability. The causes of the gaps in
digitization are the lack of data sharing gov-
A unified digital platform initiative is ernance, the absence of standards for dig-
needed italization and the lack of digital platform
The level of technology use by logistics planning and requirement identification.
stakeholders is at a very early stage. Stake- There is no legal framework that establish-
holders have initiated various digitalization es a mandated institution to standardize
processes in their businesses, but these system requirements and regulate stan-

xii Gap Assessment of Logistics Digitalization in Ethiopia

 Executive Summary

dards for information exchange and data lacked a cargo, commodity and truck track-
sharing among key logistics stakeholders. ing system, and they did not have a global
positioning system (GPS), radio frequency
Top management and boards of identification, remote sensing, or internet
directors need to support digitization of things technology to track and trace
For the successful implementation of the trucks and cargoes during transportation.
logistics digitalization agenda, it is vital that Logistics stakeholders in Ethiopia need to
top management are on board. As the coun- be made aware of the necessity for digital
try becomes more competitive, they will ul- logistics. There should be an actionable le-
timately reap the benefits of Ethiopia’s lo- gal framework that requires that import-
gistics transformation. But the assessment ing and exporting trucks and cargoes have
showed that support for digitalization by tracking and tracing technologies installed.
top management and boards of directors is
marginal—80.3 per cent were not support- Warehouse information management
ive or only slightly supportive. systems are needed
The mandate for customs to initiate con-
Skilled human capital is needed trol of goods at border entry and exit points
There is a lack of skilled people needed to limits the nature of the data captured at the
identify, plan, implement and operate the port of loading and port of dispatch. Be-
appropriate technology. Senior manage- cause of this there is no information on the
ment not only needs to commit to the tech- value and volume of goods disposed of in a
nology, but management also needs to com- year by legal action at the Djibouti port be-
mit to the institutionalized development of cause of the expiry of dwell time at the port.
human capital.
Customs’ mandate is limited once import-
Regulatory frameworks need to be ed goods are released. And, as there is no
enforced tracking when goods move to central or re-
The logistics sector faces serious issues be- gional warehouses, there is no information
cause of organized fraud by illegal brokers on the value and volume of inventory avail-
and because of theft from ports and during able. Without this information, the optimal
transportation. These crimes are under- allocation of foreign currency for reorders
mining productivity. To overcome the fraud, is difficult. Warehouses are also not built
crime needs to be contained beyond civil to standard, and they are not clustered to
lawsuits and criminal trails. A regulatory be accessible to logistics infrastructure. So,
framework should be in place that uses lo- there is a need to develop information man-
gistics digital technology to uncover fraud. agement systems to improve customs con-
trol after the release of goods.
Digital platforms are needed to track
cargo and trucks
Seventy per cent of respondents said they

Gap Assessment of Logistics Digitalization in Ethiopia xiii

Executive Summary

Customs hours and operations in • Set up a platform for research and de-
Ethiopia and Djibouti need to be velopment.
synchronized
Besides technology being unavailable, the • Have clear and inclusive identification
working hours between Ethiopia and Dji- as a requirement in livestock and agri-
bouti customs are not synchronized. Along culture logistics, for industrial parks and
with the use of old trucks and logistics fa- for all stakeholders in the sector.
cilities problems, this causes bottlenecks
and reduces efficiency. There are problems • Create awareness of the benefits of dig-
with non-consolidated control and moni- italization and of continuous evaluation.
toring, with the absence of an integrated
single-window service between the two • Institutionalize continuous professional
countries and with multiple inland check- capacity development on logistics tech-
points. Both governments need to enact nologies.
legal frameworks to avoid delays. And they
need to reduce bottlenecks, duplicated ef- • Create key logistics stakeholder aware-
forts and unnecessarily costs. ness and engagement platforms for
institutional readiness for sustainable
Available data need to be analyzed productivity.
Across the logistics service sector, differ-
ent providers generate and accumulate dif- • Create a Logistics Centre of Excellence
ferent types of data from various sources. for Research and Innovation that:
Even though this accumulated data can be
analyzed by trending technologies—such as ‚ Serves as Ethiopia’s logistics acade-
business intelligence, big data analytics and my that coordinates and organizes
machine learning—no bold data analytics the sector through continuous eval-
programs have been initiated. uation and improvement by creating
platforms for national and interna-
tional logistics expos, forums, con-
What should be done ferences and symposia.
To stay competitive in the disruptive glob-
al ecosystem, the Ethiopian logistics sec- ‚ Encourages logistics start-ups, prac-
tor needs to undergo a sustainable digital titioners and entrepreneurs to work
transformation. There are several ways to on and with emerging technologies.
achieve this:
‚ Creates awareness and engagement
• Institutionalize human capital develop- for institutional readiness among
ment. key logistics stakeholders.

xiv Gap Assessment of Logistics Digitalization in Ethiopia

 Executive Summary

‚ Empowers small- and medium-scale tion and interoperability as it decentraliz-

logistics enterprises. es information exchange. The architecture
will overcome the absence of an integrated
‚ Adopts and adapts new platforms framework in Ethiopia, allowing business
and technologies (figure ES.4). processes to interact by using trending
technology and open data governance for
To meet the challenges of a digital transfor- information exchange.
mation an inclusive, extendable, all-in-one
logistics framework—the Ethiopian Lo- The architecture’s action plan will serve as
gistics Digitalization and Information Ex- a vision paper for other sectors in Ethiopia,
change Architecture (ELDIXA) (figure ES.5) and it can serve as a blueprint for pan-Afri-
is designed. ELDIXA is a high-level architec- can logistics information exchange through
tural platform for all logistics stakeholders the African Continental Free Trade Agree-
and for the entire supply chain community ment (AfCFTA). (Figure ES.5 shows the
in Ethiopia. main components of ELDIXA.)

ELDIXA is a road map and critical step for-

ward for logistics visualization, optimiza-

Figure ES.4 Recommended digital platforms

Gap Assessment of Logistics Digitalization in Ethiopia xv

Executive Summary

Figure ES.5 ELDIXA’s major components

ELDIXA’s Major Components

Cloud and Data Trending

Source Technologies

Logistics
Actors Integration
Applications Engine (IE)

ELDIXA Value Logistics

Added Solution digitalization
enablers

With appropriate standards, the architec- how the architecture integrates industry
ture will integrate all stakeholders across 4.0 and data exchange among key logistics
the sector to share data and business pro- stakeholders.
cesses smoothly. Figure ES.6 illustrates

Figure ES.6 Integrating industry 4.0 into logistics services

xvi Gap Assessment of Logistics Digitalization in Ethiopia

 Executive Summary

Implementing the ELDIXA architecture time Affairs Authority, and advisers drawn
will involve teams—of analysts, consul- from regulatory agencies and from key
tants and software developers—putting stakeholders. The working action plan will
standard operating procedures into place. take about 32 months to deploy. (For the
Teams will be needed to design, implement, detailed ELDIXA architecture, implemen-
deploy, test and maintain the architecture. tation action plan and implementation gov-
Governance of the project can fall under ernance see Chapter 6.)
the Ministry of Transport, Ethiopian Mari-

Gap Assessment of Logistics Digitalization in Ethiopia xvii

 1
Introduction

An effective logistics sector is now recog- rum, digitization in logistics could grow to
nized almost everywhere as one of the core $1.5 trillion in value by 2025 (WEF, 2016).
enablers of development and a precondi- And The Future of Jobs Report identified
tion of national competitiveness. Despite the top 10 future jobs, and the top 20 jobs
Ethiopia’s strong, broad economic growth in with increasing demand, as jobs related to
recent years, its logistics systems are still in digitalization (WEF, 2020). Given the po-
the early stages of development compared tential for these jobs to create higher value
to global best practices, and the sector has for society, industry stakeholders should
not adequately enabled the country’s inter- take note of this and prioritize digital trans-
national trade competitiveness. formation initiatives. This analyses, howev-
er, shows that logistics companies in Ethio-
By using innovative solutions, the logistics pian are behind the digital technology curve
industry has evolved globally into an indus- compared to other sectors (WEF, 2020).
try offering value-added services. Technol-
ogy plays a critical role in logistics value dif- The Ethiopian government recently laid
ferentiation and speeds up the regional and out plans to maintain growth perfor-
continental integration of the free move- mance.1 But inefficiencies in trade logistics
ment of people, goods and services. With are a major difficulty to enhancing com-
the African Continental Free Trade Area petitiveness. Recent reports have drawn
(AfCFTA) entering into force, cross-border attention to Ethiopia’s logistics sector as
trade now requires regional logistics ser- being a critical constraint to trade. For ex-
vices and this trade invites more opportu- ample, the logistics costs for a 20-foot con-
nities and challenges to leaders and profes- tainer of garment exports from Ethiopia
sionals in the sector. Logistics digitalization to Germany are 247 per cent higher than
is one way to capitalize on the opportunities from Vietnam and 72 per cent higher than
the AfCFTA offers. from Bangladesh. When judging Ethiopia’s
performance using the Trading Across Bor-
Rarely before has a topic occupied the en- ders indicators, the country is ranked 167
tire logistics industry as much as digitaliza- of 190 (World Bank, 2018). On the Logis-
tion. According to the World Economic Fo- tics Performance Index (LPI), Ethiopia was

Gap Assessment of Logistics Digitalization in Ethiopia 1

1. Introduction

ranked 126 in 2018, a drop from 104 in So, insights into how to approach and inte-
2014. For technological readiness, Ethio- grate these interventions are important to
pia ranked 133 of 144 countries on an in- adapting logistics systems and revamping
dex measurement of the Global Competi- business models.
tiveness Report 2014–2015

Despite these rankings, Ethiopia is logisti- Objectives of the study

cally well-positioned on the Horn of Afri- This report assesses the logistics digitali-
ca to be competitive and to act as a hub to zation gap in Ethiopia. It identified and as-
Europe, the Far East and the Middle East sessed the gap between where Ethiopia is
and as a gateway to Africa. A good example now and where it aspires to be at the end of
of Ethiopia as a hub is when, in 2020, the its 10-year development plan. The study re-
World Food Program and the World Health viewed the existing empirical and theoret-
Organization used Ethiopian Airlines cargo ical knowledge on logistics sector reform
and logistics services terminal as a centre and digitalization. This was supported by
to distribute Covid-19 pandemic medical primary data collection done through a sur-
supplies to African countries. Another ex- vey, key informant interviews, focus group
ample is when, in 2021, Ethiopia partnered discussions and live case studies. The anal-
with the United Nations Children’s Fund to ysis was made on how to digitalize logistics
support COVAX in the global distribution in Ethiopia to enable a logistics transforma-
of vaccines. tion across the country and to capitalize on
regional and international trade competi-
Aware of these developments, the govern- tiveness for Ethiopia.
ment is working to overhaul the national
logistics sector. The Ministry of Transport The overall objective of this report is to as-
(MoT)—through the Ethiopian Maritime sess and analyse the digital transformation
Affairs Authority—acknowledges the chal- of the logistics sector in Ethiopia. It sheds
lenges it faces and is taking steps towards light on important issues such as gaps, ar-
improving the sector as a core economic eas of risk and concern, and emerging and
contributor. To achieve this, a comprehen- disruptive trends, challenges and predic-
sive National Logistics Strategy (NLS) was tions. The analysis outlines the remedial
developed in September 2019.2 The NLS measures needed to realize digitalization’s
document identified six major strategies full potential to create an efficient, reliable
and 98 interventions, with nearly half of and modern logistics system in Ethiopia.
the interventions needing information and
communications technology (ICT) for their Specific objectives of the assignment are to:
implementation. The strategy entails rev-
olutionizing logistics workflows through • Identify and discuss the digitalization
digitalization, thus increasing operational setting of Ethiopia’s logistics sector.
efficiency and improving customer service.

2 Gap Assessment of Logistics Digitalization in Ethiopia

 1. Introduction

• Identify bottlenecks in the sector. the context of the fourth industrial rev-
olution—Industry 4.0—and the Digital
• Identify possibilities for improving logis- Ethiopia 2025 strategy.
tics companies through the application
of ICT products and digital platforms. • Examine the transition approaches
needed in the Ethiopian context to set
• Assess the state of digitization and sum- up applications, digital platforms and
marize the strengths and weaknesses of business models for emerging technol-
institutional capacity to improve digital ogies in the logistics sector.
transformation.
• Recommend action plans to drive logis-
• Analyse the status of Ethiopia’s logistics tics service development, with a clear
sector and assess why logistics compa- strategy for increasing digitization lev-
nies are not fulfilling the expectations of els and transforming the sector. This
today’s connected consumers. requires that a consensus be reached
among the key agencies and actors
• Offer an analysis of the prerequisites, about next steps and sustainable inter-
barriers, opportunities and expected ventions.
impacts of the digital transformation in

Gap Assessment of Logistics Digitalization in Ethiopia 3

 2

The Assignment

A review was made of national logistics and mation technology infrastructure.

transport sector policy documents, the na-
tional logistics strategy and the Ministry • Lack of consistent, adequate and avail-
of Transport’s 10-year transport plan. The able information exchange supported
plan was aligned with Ethiopia’s 10-year by information technology.
prosperity development plan, Digital Ethi-
opia 2025, the World Economic Forum’s The plan also identified the technology re-
Future of Jobs Report 2020 and additional quirements needed by the sector and listed
documents from the Ethiopian Maritime the following systems.
Affairs Authority’s Logistics Transforma-
tion Office (LTO). The review was made in • Enterprise resource planning.
the context of the documents’ relevance to
digitalization in general and to digitaliza- • Maritime cargo canal database manage-
tion in the logistics sector in Ethiopia. The ment system.
review then informed the data collection.
Quantitative and qualitative data were then • Ethiopian road network information
collected through a survey, key informant system.
interviews, focus groups and cases studies.
The data were then analysed. • Management information system.

• Road management system.

The Ethiopian logistics sector
• Electronic toll collection/electronic
The 10-year Transport Sector Plan road pricing.
In its gap assessment of the sector, the
10-year Transport Sector Plan (2020/21– • Compulsory motor third party liability
2030/31) identified two issues in technol- information system.
ogy supply and usage:
• Aeronautical information management.
• Lack of national transport sector infor-

4 Gap Assessment of Logistics Digitalization in Ethiopia

 2. The Assignment

• Safety oversight management system. management information, e-warehouse

management and e-customer order pro-
• National transport management infor- cessing systems.
mation system.
National Logistics Strategy
• Tripartite Transport and Transit Facil- The National Logistics Strategy (2018–28),
itation Programme with the following was formulated by the Ethiopian Maritime
sub-components: Affairs Authority, under the Ministry of
Transport, and endorsed by Council of Min-
‚ National operator registration and isters in 2018.
fleet management system.
The document identified six logistics sector
‚ National traffic transgression sys- strategies that needed 98 strategic inter-
tem. ventions for implementation. The six logis-
tics strategies are:
‚ National vehicles registration and
management system. • Transform logistics service delivery and
capacity of operators.
‚ National drivers licensing and man-
agement system, and road traffic • Develop and strengthen logistics sector
accident data registration and man- policies and legal frameworks.
agement system.
• Establish an efficient and reliable transit
‚ Intelligent urban traffic manage- and customs system.
ment systems, intelligent transport
systems, integrated fare collection • Implement a reliable trade and finance
system, and central data warehouse. system to enhance the facilitation role
of logistics.
‚ The document analysed the features,
their applicability, the infrastructure • Develop logistics infrastructure,
and investment requirements, and strengthen regulators institutional ca-
the time of it would take to apply the pacity and develop human capital.
systems to the transport sector.
• Create efficient governance.
Besides enterprise resource planning,
which is mainly used for back-office pro- Logistics digitalization was not mentioned
cess optimization, the plan did not focus as a component of the mainstream nation-
on logistics digitalization, especially not on al logistics strategy. The logistics strategy
technologies related to cargo tracking and document also failed to mention the lack
tracing, blockchain, e-payment, e-logistics of a technology infrastructure as the main

Gap Assessment of Logistics Digitalization in Ethiopia 5

2. The Assignment

contributing factor for poor logistics per- lishing a system to implement a logistics
formance and for Ethiopia’s low ranking on strategy that will transform the logistics
the World Bank’s Logistics Performance sector of Ethiopia over a 10-year period.
Index. Instead, as a subcomponent, the doc- The document thus implies the need for a
ument listed monopolistic practices, trade modern technology system to transform
and finance systems, logistic infrastructure Ethiopian logistics.
deficits and management problems, exces-
sive and cumbersome transit and customs National Logistics Sector Policy
procedures, and poor quality and low com- The National Logistics Sector Policy was ap-
petence of logistics service providers as proved by the Council of Ministers in 2020
shortcomings related to the use of modern on three policy issues:
information technology and related infra-
structure. • The logistics governance system—A
National Logistics Council needs to be
The National Logistics Strategy document, established to serve as a high-level de-
however, emphasized the information tech- cision-making body on inter-organiza-
nology (IT) component under strategy 5, tional logistics challenges.
sub-strategy 5.3, and stated there was a
need for “development of IT to improve the • The Ethiopian Shipping and Logistics
logistics system.”3 Under this sub-strategy, Service Enterprise (ESLSE) needs to be
three interventions regarding logistics IT reformed from a monopoly of logistics
were mentioned. They are: services to a holding company, and pri-
vate logistics service providers should
• Establish a freight information exchange be allowed to engage in multimodal
system. transport and port use and develop-
ment at a common facility.
• Establish an e-commerce system to
minimize logistics costs and time. • The logistics service for the import of
goods should be through free-on-board
• Establish a modern terminal and corri- (FOB) directives. This implied flexibility
dor management system using the glob- on the waiver right of ESLSE, without
al positioning system (GPS), closed-cir- giving further detail.
cuit television (CCTV), electronic cargo
tracking, and other advanced vehicle Making the digitalization of logistics man-
assignment and shipment controlling datory, or even suggesting the use of IT to
technologies. modernize logistics service delivery for
efficiency and effectiveness, was not ad-
Although the document failed to put IT in- dressed in the three logistic sector policy
terventions under one main strategy, most issues.
of the stated interventions concern estab-

6 Gap Assessment of Logistics Digitalization in Ethiopia

 2. The Assignment

National Transport Policy Union’s Continental Digital Transformation

As with the National Logistics Sector Poli- Strategy. The strategy emphasizes four digi-
cy document, the National Transport Pol- tally-enabled pathways for inclusive nation-
icy document addresses the benefits of IT al prosperity. Pathway two targets adopting
infrastructure planning, construction and ICT in industrial parks and enhancing digi-
implementation as appropriate for the new- tally-enabled logistics management. The di-
ly enacted transport policy. The National agnostic and dialogue outcomes presented
Transport Policy also addresses improving in the strategy amplify the significance of
transport services on different modes and digitalization in various sectors.
intermodes and mentions research insti-
tutes, technical and vocational institutions,
and the Ministry of Innovation and Tech- The levels and important
nology as prominent technology partners components of digitalization
in developing transport infrastructure.
Beyond formulating these strategies, Ethi-
opia has taken steps towards digital trans-
Digital Ethiopia 2025 formation through proclamations on elec-
Digital Ethiopia 2025 was approved by the tronic signatures, electronic transactions,
Council of Ministers in 2020 as a national the NLS Implementation Plan and others.
strategy. The strategy aims to transform These are all progressive efforts to realize
the country’s national economy by focusing sustainable digital transformations across
on the priority sectors of mining, tourism, various sectors.
agriculture, manufacturing and IT-enabled
services. This is an umbrella digital strat- Steps for digital transformation
egy that other sectors can use to design It is important to differentiate the terms
and co-create more specific action-orient- digitization, digitalization, digital transfor-
ed strategies for their respective budgets, mation and digital strategy.
timelines and business processes.
Digital Ethiopia 2025 defined digitization
The strategy identifies the most relevant as the conversion of manual records, data
digital-enabled pathways for Ethiopia while or processes into a digital format, as well
considering the sectors that drive the econ- as the process of extracting data from dig-
omy, as well as the national objectives of itized files for automation. Digitalization
creating dignified jobs, increasing foreign is the transformation of business process
exchange earnings and ensuring inclusive operations, functions and business models
prosperity. It is also designed to closely align by using digital technologies and digitized
with national and international resolutions, data. Digital transformation is when digi-
such as Ethiopia’s 10–year Development talized processes are integrated to achieve
Plan, the Economic Reform Agenda, the Sus- countrywide automation that spans multi-
tainable Development Goals and the African ple functions. It also involves a comprehen-

Gap Assessment of Logistics Digitalization in Ethiopia 7

2. The Assignment

sive change of business and organizational public and private sector. The experi-
activities, and a reorientation of business ences of Estonia, Rwanda and Singapore
processes, working culture and business offer lessons on implementing e-gover-
models, mindsets and leadership. Digital nance for Ethiopia.
strategy—not just adopting technology—is
the key driver to realizing digital transfor- • The broader ecosystem is strength-
mation. The frameworks that lead to digital ened—as highlighted by Digital Ethiopia
transformation are digital strategies, busi- 2025—which requires policy, regulation
ness models, enablers and orchestration and skilled human resources.
and interaction (WEF, 2018). The steps
needed for digital transformation are de- Stages and levels of digitalization
veloping a digital strategy—including cov- Many public and private sectors digitalize
ering themes, challenges and opportuni- only to find that they are unable to deliver
ties—forming a conceptual framework and the intended transformational impact be-
executing an action plan. cause of low digital maturity levels within
organizations.4 Digital transformation re-
Digital transformations make progress quires a changing work culture, and mind-
when the challenges are removed and the sets need to change too. Increasingly dig-
following take place: itization happens further down the line.
Digital Ethiopia 2025 states that: “Tradi-
• Existing infrastructure is strength- tional development windows maybe clos-
ened—such as ensuring internet con- ing, but new, technology-driven pathways
nectivity and sustainable power—and are opening for countries that are proactive
the digital economy is unlocked. The and able to adapt to change.” Digitization is
Ethiopian digital strategy stresses that a journey rather than a destination and the
firms will soon be pressured by global journey must pass through several steps
businesses to adopt state-of-the-art (figure 2.1).5
communication software. When this
happens, reliable infrastructure needs
to be in place. The main elements of the gap
assessment framework
• Enabling systems are developed—such
as cybersecurity, digital transportation The gap assessment from the Digital Ethi-
and digital logistics—and the digital opia 2025 Strategy identified a four-part
economy is further enhanced. framework for the digital economy—infra-
structure, enabling systems, applications
• Digital interaction is facilitated— and the broader ecosystem. In this study
through e-government, e-commerce, the diagnostic and dialogue methods from
e-payment and e-banking—between Oxford University’s Pathways for Pros-
systems and among citizens and the perity digital economy tool kit are used to

8 Gap Assessment of Logistics Digitalization in Ethiopia

 2. The Assignment

Figure 2.1 The digital transformation journey

Low Digital Integrated

Penetration digital system

Analog Economy Strong Digital Digital Economy

Momentum but Analog
Source: Digital Ethiopia 2025

assess the frameworks, with the aim of sur- Key global technology trends
veying stakeholders and entering into dia- The global logistics sector is at the fore-
logue with representatives from targeted front of embracing innovation to improve
public and private organizations efficiency and transparency. In embracing
this innovation, the sector will apply many
emerging technologies—big data, block-
Key technology trends for chain, 3D printing, simulations, outsourc-
digitalization in the logistics ing, cyber security, cloud logistics, internet
of things (IoT), augmented reality (AR),
sector
self-driving vehicles, robotics and auto-
Unlike the media, telecom and banking sec- mation, artificial intelligence (AI) and ma-
tors, the logistics sector in Ethiopia has been chine learning, and others. This report
slow to adopt the latest digital technologies. looked beyond the literature review to get
The Digital Ethiopia 2025 Strategy points information from the survey participants,
out two priority areas where the Ethiopian focus group discussants and global and do-
government should pay greater attention mestic logistics actors to see what logistics
to digitalization. The areas are: technology practices were most likely to be
adopted. They are:
• E-commerce: More and more manu-
factured goods are being sold digitally • Internet of things.
rather than physically, making e-com-
merce a critical export channel. • Logistics information management sys-
tems.
• Computerized customs management:
Computerized customs manage- • Artificial intelligence.
ment systems cover nearly all foreign
trade-related procedures through a sin- • Big data analytics.
gle window.

Gap Assessment of Logistics Digitalization in Ethiopia 9

2. The Assignment

• Logistics cloud computing. nies insight into how drivers are performing
in terms of fraud, theft and delays (Hawk-
• Blockchain. ing, 2018). This information can then be
used for investigating and enforcing rules
Internet of things and laws, thus reducing fraud and associat-
The IoT connects physical devices to the ed crimes.
digital world. Digital Ethiopia 2025 empha-
sized that IoT-based innovation can pene- Logistics information management systems
trate the market because of two promising A logistics information management sys-
features: tem (LIMS) is an interconnected network
of high-powered computing systems and
• Devices are smaller and more afford- software, such as transport and warehouse
able. management systems and enterprise re-
source planning systems (ERP). LIMS uses
• Devices can be connected to the inter- the data from various sources to provide
net. decision making on monitoring and man-
aging logistics assets and processes. In the
The ability to transfer data over the internet context of IoT-enabled logistics systems,
using cheap nano- or micro-sized electro- LIMS is a smart system that can exploit IoT
mechanical systems is especially applicable data to cope with complex operations and
in the logistics industry. Because of these maximize efficiency.
features, there is an increased potential for
cost reduction and profit maximization, and Artificial intelligence
increased effectiveness and efficiency. In In AI technology trends, some applications
logistics, IoT is most widely used for gener- and concepts show a convergence that
ating tracking and tracing data, and service yields promising results. Technologies such
providers use data to anticipate potential as IoT, big data, blockchain and machine
bottlenecks or breakdowns and then apply learning supplement each other and enable
data-driven decisions. IoT is also used for organizations to use the synergy of each
electronic cargo tracking, electronic seal- technology while minimizing the risks and
ing, fleet management, inventory tracking limitations associated with them. Recently,
and warehousing. Small radio-frequency Ethiopia established the AI Research and
identification (RFID) tags and IoT sensors Development Centre to support future AI-
monitor cargo environments for tempera- based technologies in various sectors.
ture, humidity and moisture. And advanced
remote sensing devices can be used to alert Big data analytics
shippers to problems as they happen. New sources of data in the global logistics
industry—from ERP, smart phones, IoT
IoT-based real-time truck monitoring and devices, surveillance cameras and logis-
commodity tracking solutions give compa- tics planning and shipment systems—led

10 Gap Assessment of Logistics Digitalization in Ethiopia

 2. The Assignment

Table 2.1 Application of IoT technologies to logistics

IoT logistics IoT-based systems Description

applications
Real-time IoT-based systems Systems embedded in the transportation containers
commodity for smart container include sensing, controlling, communicating and
monitoring transportation computing
and tracking
Real-time monitoring and controlling of the status of
shipments inside the containers
Systems enable self-identifying containers, context
detection and autonomous decision making
Ensure cargo quality, reduce cargo loss and improve
efficiency
Shipping IoT-based systems Systems equip IoT-relevant technologies to vehicles and
and freight for real-time freight cloud computing systems for decision making
forwarding tracking and parking
Support efficient freight transportation
support
Efficient management of shipments; enable real-time
IoT-based systems for
tracking; support searching the parking spots through
freight management
communicating with intelligent transportation systems
Smart IoT-based systems for Systems include RFID systems, IoT platform to receive
warehousing inventory management data from RFID, and a web server to display the historical
inventory management
Real-time monitoring and management of inventory
Low-cost deployment of systems; Efficiency in searching
items
Source: Tran-Dang, Krommenacker, Charpentier and Kim, 2020.

to a colossal accumulation of structured, Since most of the leading freight forwarders

semi-structured and unstructured data. own many trucks, big data analysis would
Companies can apply big data analytics be an appropriate application for real-time
to deal with this accumulation. Big data vehicle tracking. In real-time vehicle track-
analytics uses targeted statistical, mathe- ing, large amounts of data about speed, dis-
matical, and econometrics techniques to tance, braking, vehicle location, engine con-
analyse this data and provide insights into dition and driver fatigue are collected using
business processes. This helps lower costs IoT sensors (Hawking, 2018). The vehicle’s
and mitigates bottlenecks, and allows for data is sent frequently over general packet
more effective management (Wang, Gu- radio services to cloud servers running big
nasekaran, Ngai and Papadopoulos, 2016). data analytics technologies. Big data ana-
Applying big data analytics can significantly lytics tools can then be used to reduce the
transform logistics operations, resulting in freight forwarding company’s costs and
more accurate predictions, improved ser- improve productivity. The analysis can be
vice quality and improved revenues. used to answer questions about fuel con-
sumption, driver risk, fraud and more. So,

Gap Assessment of Logistics Digitalization in Ethiopia 11

2. The Assignment

gig data analytics can improve efficiency by platform outsourcing can cover route plan-
making predictions, giving recommenda- ning, transport management, commodity
tions and detecting fraud. and electronic cargo tracking and automat-
ed warehouse management (Arnold, Ober-
Logistics cloud computing länder and Schwarzbach, 2013). There are
Cloud computing, defined it as a means of no ICT infrastructure and administration
storing and accessing a pool of resources costs for ESLSE after a cloud-based Oracle
and applications over the internet, is a key ERP was implemented
technology in Industry 4.0 (Lin and Zheng,
2013). Cloud computing services are clas- Logistics cloud computing allows users to
sified into three categories: infrastructure integrate, share and synchronize data. For
as a service (IaaS), platform as a service logistics businesses, synchronizing and
(PaaS), and software as a service (SaaS) (Lin sharing data through cloud data storage
and Zheng, 2013). For the logistics cloud, can be done using pay-per-use or pay-per-
SaaS is the more appropriate service as it rent business model. Synchronization is
supports integrated, interoperable and re- typically used for:
al-time logistics information exchange (Ni-
harikaa and Ritu, 2015). Not many logistics • Files or documents for mobile business
actors in Ethiopia use cloud-based services, units, such as trucks, vessels, inspectors,
but ESLSE uses IaaS and PaaS for Ora- customs teams and smart devices on
cle-based ERP, and a private data company, the IoT.
Redfox Solutions Group, is to build the first
private data centre in Ethiopia. • Interaction by logistics partners at
ports, customs, terminals or branch of-
It is possible to implement cross-border fices.
logistics cloud services where data, propri-
etary applications and cloud-based services • Business process data exchange among
from multiple actors are integrated. To do stakeholders, such as customs and ES-
this, several challenges must be addressed. LSE data exchange at ports.
Common data and governing standards
need to be agreed on, and proprietary sys- • File and document exchange with cli-
tems need to be integrated (Arnold, Ober- ents, partners, operators, regulators
länder and Schwarzbach, 2013). and authorities.

ICT and related services can be outsourced Cloud services can be economical if the chal-
using PaaS, IaaS and SaaS application pro- lenges are dealt with. As an alternative to the
viders. Small and medium size logistics ser- single-window and single-document initia-
vice providers would benefit from outsourc- tives, a semi-automated on-demand cloud-
ing, as cutting down on ICT infrastructure based service is recommended as an inter-
cuts company overhead costs. Logistics ICT mediate option for the sector’s digitalization.

12 Gap Assessment of Logistics Digitalization in Ethiopia

 2. The Assignment

Blockchain nologies (WEF, 2021) and inaugurated the

Blockchain is the result of technological Dubai Blockchain Strategy in 2016 and the
convergence and it is emerging as a tech- Emirates Federal Blockchain Strategy in
nology capable of storing and transmitting 2018. Since then, the government has im-
data in a secure, transparent and decentral- plemented several blockchain initiatives.
ized way (Issaoui, Khiat, Bahnasse, and Has- The United Arab Emirates and World Eco-
san, 2019). Information is chained together nomic Forum white paper offers real-world
and stored as blocks of fixed, unique, en- insights into the challenges and successes
crypted, digitally-signed and date-stamped of these initiatives (WEF, 2021). One ini-
data. Using data in this format increases tiative aims to transform United Arab Emir-
trust, transparency and traceability for all ates federal government transactions so
logistics documents and it provides reliable that 50 per cent of them are conducted by
information that ultimately increases effi- blockchain by 2021. This blockchain adop-
ciency (Koh, Dolgui and Sarkis, 2020). tion was projected to save $3 billion and
reduce work hours. United Arab Emirates
Blockchain can be applied to multiple areas stakeholders identified three challenges
in logistics services—transport, finances, and three successes in the blockchain’s im-
and information communication and stor- plementation (table 2.2).
age. Blockchain can improve single-ver-
sion-of-the-truth data warehousing by The United Arab Emirates blockchain im-
overcoming the inconsistent, unreliable plementation strategy spanned sectors,
and fragmented information flows of old- and the Digital Project (DP) World target-
er processes (Issaoui, Khiat, Bahnasse, ed blockchain solutions in the logistics in-
and Hassan, 2019; Koh, Dolgui and Sark- dustry using open application programming
is, 2020). Blockchain can store informa- interfaces and smart contracts.
tion on each asset as it passes through the
supply chain, and it can be applied to order DP World partnered with entities in the
tracking, payments and official documents United Arab Emirates to register custom-
(Koh, Dolgui and Sarkis, 2020). Integrating ers and to digitize port services.6 DP World
blockchain into transportation and logistics then created a blockchain for logistics ac-
can reduce fraud and bottlenecks, thus in- tors to promote data sharing and process
creasing sustainability. Blockchain can also integration. After logistics business pro-
be used for logistics financial services such cesses were digitized, the blockchain was
as e-payments, and this usage will simplify implemented in phases:
financial transactions by overcoming re-
mittance and hard currency constraints • In the first phase, a memorandum of un-
and transfer charges. derstanding was signed among stake-
holders, and a roadmap was set to on-
The United Arab Emirates is a leader in the board additional entities as the project
early implementation of emerging tech- progressed through the phases.

Gap Assessment of Logistics Digitalization in Ethiopia 13

2. The Assignment

Table 2.2 Challenges and successes from the United Arab Emirates blockchain implementation

Challenges Successes
Difficulty bringing together stakeholders Identifying the most valuable case

Stakeholders lack awareness and knowledge Well-defined roles, scope, expectations and
responsibilities of stakeholders

Lack of understanding of the most relevant Continuous alignment and communication

blockchain applications
Source: WEF, 2021.

• In the second phase, appropriate tech- There was a key deployment success:
nology was identified and developed
through iterative cycles. • The single-window service eliminated
duplicate processes across organiza-
• During both phases, workshops and tions. Stakeholders were now able to
awareness sessions were held on the interact through a single-window ap-
potential of blockchain technology to plication that was underpinned by the
address the challenges in logistics and blockchain platform.
trade among the stakeholders.
The United Arab Emirates blockchain im-
DP World also partnered with stakeholders plementation demonstrates the importance
in the logistics sector to ensure they pos- of having a strategy that unfolds in phases.
sessed the right foundations and prerequi- It also stresses the importance of having a
sites for full blockchain implementation. common roadmap for stakeholders based
on a formal memorandum of understand-
There were some key deployment chal- ing, of creating continuous stakeholder
lenges: awareness and engagement, of mitigating
challenges, of having organizational readi-
• Formalizing engagement among partic- ness, and for enacting governing legal man-
ipants on a co-owned platform that re- agement. It also stresses the importance of
quired funding, hosting, operating and understanding blockchain implementation
maintaining was a significant challenge. as an iterative process.

• As each entity had partial ownership of Industry 4.0 and logistics

the platform, adjustments on project The business sector is embracing the Indus-
management, workflows, timelines and trial Revolution 4.0. And it is applicable to
funding approval had to be customized. service providers, manufacturers, and to
businesses across multiple sectors. Indus-

14 Gap Assessment of Logistics Digitalization in Ethiopia

 2. The Assignment

try 4.0 is no longer an option for business- Logistics bottlenecks in Ethiopia

es as it promises to unlock future growth Ethiopia’s import–export trade has in-
through cutting-edge technologies. creased in type and volume in recent years.
And Ethiopia is positioned in a strategic geo-
Industry 4.0 relies on a spectrum of technol- location for humanitarian logistics services.
ogy for the digitization of business process- But bottlenecks are a disruption to trade
es. Even though there is dynamic innova- and services. Logistics bottlenecks slow
tion across these technologies, the current down business, impede lead time, worsen
global trends are to use AR, IoT, cloud logis- customer relation and have an impact on
tics, cybersecurity, big data analytics, and the flow of humanitarian aid. The National
AI and machine learning. Smart logistics Logistics Strategy (NLS) listed obtaining for-
is a fundamental pillar of Industry 4.0. For eign currency permits and letters of credit,
the logistics industry in Ethiopia, adopting and ship turnaround, high freight transit and
these global trends well lead logistics com- longer cargo dwell times as the main causes
panies to operate at lower costs and higher of bottlenecks. Concept of Operations, June
margins, and offer efficient quality services. 2020—Logistics Cluster Ethiopia found bot-
For the logistics services sector, the build- tlenecks in humanitarian aid were caused
ing blocks are data, digital platforms, phys- by a lack of logistics coordination and infor-
ical transportation and the application of mation sharing, lack of educated warehouse
new production methods (Little, 2021). personnel, and the lack of a competitive
freight forwarder market in Ethiopia.7

The main digital themes and Many of the factors aggravating backlogs
bottlenecks in logistics are directly or indirectly related to single
sourcing and poor data exchange and tech-
The World Economic Forum’s white pa- nology integration in the logistics sector.
per on the logistics industry identifies five To overcome bottlenecks, the government
themes that are central to transforming the has implemented several measures with
logistics industry: its partner to eliminate bottlenecks. The
Logistics Cluster Ethiopia report suggested
• Digitally enabled information services. coordinating regional and federal stake-
holders and logistics service providers,
• Digitally enabled logistics services. and using digital information management
tools and technologies. To further identify
• New delivery capabilities. the common causes of bottlenecks, human
error, regulations, overhead, miscommuni-
• Circular economy. cation and poor technology will be need to
be assessed.
• Shared logistics capabilities.

Gap Assessment of Logistics Digitalization in Ethiopia 15

 3
Methodology

Study setting and design will be required for logistics digitalization

A wide selection of Ethiopian transport in the next 10 years. And it assessed digital
and logistics services sector stakeholders bottlenecks.
was included in the desk review, primary
research and data collection. Both regional The study was conducted in Addis Ababa
and national actors were included, with the and Modjo Dry Port. Most of the key logis-
focus put on senior business and govern- tics stakeholders are regulators, infrastruc-
ment representatives. The business sector ture developers, cargo owners and logistics
surveys covered a broad range of enterpris- service providers and they are headquar-
es and actors in logistic services and includ- tered in Addis Ababa. Most of the clearing
ed cargo owners (importers and exporters), services stakeholders are from multimodal
freight forwarders and customs clearing transport services and they are based at
agents. The study employed a cross-sec- Modjo Dry Port.
tional, mixed methods design. Both quanti-
tative and qualitative data collection meth-
ods were employed to gather information Sampling techniques and sample
from key logistics stakeholders. An “As-Is” size for the quantitative approach
analysis was made on the status of digitali-
zation of logistics in Ethiopia, covering the Sampling methods and unit of
available technology infrastructure, its cov- analysis
erage and quality, and the existing enabling Data source validity requires identifying
systems, applications and ecosystems. A the right sources to participate in a study to
“To-Be” analysis followed. This identified ensure data accuracy. So, defining the popu-
and assessed the gap between where Ethi- lation to help identify the right representa-
opia is now and where it aspires to be at the tive sample in digital logistics in Ethiopia was
end of its 10-year development plan. The crucial. Logistics is about fulfilling customer
analysis included possible benchmarks and orders—order processing. Logistics is best
adaptations needed to meet global trends viewed as a process that begins with plac-
and best practices. The study also assessed ing an order and ends with the order being
what literacy, knowledge and competencies fulfilled. Throughout this process there are

16 Gap Assessment of Logistics Digitalization in Ethiopia

 3. Methodology

several types of participants—regulators, the representative sample of study targets.

logistics service providers, cargo owners, To construct a sample frame, a complete
financers and infrastructure developers. list of cargo owners was obtained from the
For the digitalization of logistics services in Ministry of Trade and Industry, and com-
Ethiopia, these participants can all be con- plete lists of freight forwarders, shipping
sidered units of analysis at the firm or orga- agents and customs clearing agents were
nization level. obtained from the respective associations.

Sample design and sampling The study used Sudman and Kish’s suggest
technique approach and determined the sample size
The sampling technique was designed to judgmentally and the sampling technique
construct representative samples of logis- randomly (table 3.1). A gap assessment of
tics service providers and cargo owners by logistics digitalization has to be explorato-
using a multistage sampling technique. The ry as much of the current status of logistics
first technique used was purposive sam- technology in Ethiopia—especially what
pling. This method was selected based on company owns what type of technolo-
the assumption that key logistics players— gy—remains unknown. So, the consultants
cargo owners and logistics service provid- used a theoretical minimum sample size
ers—would have digital logistics technol- for the perception survey using a Likert
ogy in their service provision and should, scale through Monte Carlo simulation and
therefore, participate in a study assessing found that the minimum sample size ac-
the status of digital logistics in Ethiopia. To cording to survey scales is n = 31.61 +2.33
ensure representativeness, a second stage (Louangraph, 2017). Sudman suggests that
was introduced that used stratified sam- a minimum of 100 respondents are need-
pling. In this stage the two main logistics ed for each major group or subgroup in the
actors—cargo owners and logistics service sample, and 20 to 50 respondents are nec-
providers—were stratified into their two essary for each minor subgroup (Sudman,
respective groups. At the third sampling 1976). Similarly, Kish says that 30 to 200
stage, logistics service providers were fur- respondents are sufficient when the at-
ther stratified into freight forwarders, ship- tribute is present 20 to 80 per cent of the
ping agents and customs clearing agents. time—that is, as the distribution approach-
And cargo owners were stratified into im- es normality (Kish, 1965).
porters and exporters. At the fourth and
final stage, random sampling from the sam- The consultants decided judgmentally on
ple frame for each stratum was applied to 100 from each group for a total sample size
select participants for the study. of 400 (n = 400). Each of the 100 partici-
pants from each group were selected ran-
Sampling frame domly, to rate their perception on the appli-
The purpose of a sample frame is to create a cation of digital logistics services provision
list that enables the research team to target in Ethiopia.

Gap Assessment of Logistics Digitalization in Ethiopia 17

3. Methodology

Table 3.1 Distribution of population and sample by type of business

Type of N1 n1 N2 n2 N3 n3 N4 n4 Total sample

business size (n)
Importers Exporters FFSA CCA
Cargo owner 13,287 150 1,384 100 250

Logistics 290 50 1,423 100 150

service provider
Total 13,287 150 1,384 100 290 50 1,423 100 400

Note: N is population size and n is sample size.

Sampling techniques and sample Data collection tools

size for the qualitative approach The data collection tools for the gap assess-
ment for logistics digitalization in Ethiopia
Qualitative data were collected from rep- included a document review, followed by a
resentatives of targeted working groups questionnaire survey, key informant inter-
and teams within the agencies through views and focus group discussions. All data
key informant interviews, focus group dis- collection tools were validated in consul-
cussions and live case studies. The study tation with the United Nations Economic
identified and interviewed key informants Commission for Africa (ECA)–Ministry of
from the government and from private in- Transport (MoT) team during the inception
stitutions. (See Appendix C for a list of in- report presentation. Each tool is briefly dis-
stitutions.) cussed here.

A total of 25 key informants were inter- Document review

viewed. And two focus group discussions A desk review examined the following
were conducted with logistics transforma- sources and topics related to logistics sec-
tion office team members at the Maritime tor digital transformations:
Affairs Authority and with the advisory
team on national transportation technol- • Phases of logistics digitalization.
ogies at the Ministry of Transport. These
were knowledgeable people who provided • Barriers and success factors for digital
information on current and future digital lo- transformation.
gistics prospects in Ethiopia. This informa-
tion was used to triangulate the information • Digital logistics ecosystems.
from the survey. Five live case studies were
done to benchmark digital logistics technol- • Levels and components of digitalization.
ogy practice, investment and management.
• Digital platform concepts, tools and
strategies.

18 Gap Assessment of Logistics Digitalization in Ethiopia

 3. Methodology

• New digital business models. Other relevant theoretical and empirical

literature related to logistics digitalization.
• Logistic information systems.
Structured questionnaire
• Modularity of intelligent and smart lo- The business survey questionnaire was de-
gistics solutions. veloped to gather information on the per-
ceptions of technology use from cargo own-
• Sustainability. ers and logistics service providers, both of
whom use different stages of information
• Best practice trends in comparator and communications technology to provide
countries. logistics services. Institutions selected to
participate in the survey were:
• Pathways, approaches and methods in
digital transformation. • Importers.

• Logistics industry 4.0 concepts. • Exporters.

• Emerging technologies—Internet of • Freight forwarders.

things (IoT), big data and others.
• Shipping agents.
• National logistics strategy.
• Customs clearing agents.
• Digital Ethiopia 2025 strategy.
The questionnaire was administered online
• PDP-10. and then, as the online response rate was
low, as a hardcopy to organization head-
• Future of Jobs Report. quarter addresses. Questionnaire items
measured the respondents’ perceptions
• Ethiopian Maritime Affairs National Lo- of current digital logistics applications at
gistics strategy intervention. their companies, and what future technolo-
gy adoptions and adaptations were needed
• 10-Year Transport Development Plan. to improve their institution’s performance.
(See Appendix A for the survey question-
• Transport sector policy naire.)

• Logistics sector policy. Key informant interviews

Key informant interview guidelines were
• National transportation technologies used to gather information on gaps in lo-
program. gistics digitalization in Ethiopia, challenges
and prospects, available policy frame works,

Gap Assessment of Logistics Digitalization in Ethiopia 19

3. Methodology

and the legal and technology infrastructure whether they had best practices that could
needed to adopt and adapt digital logistics be scalable to other logistics service pro-
in Ethiopia. Key informant interviews were viders in Ethiopia. A fourth case study was
done face-to-face. (See Appendix B for the done on an enterprise resource planning
guide and checklist and Appendix C for the program and a fifth on a social media plat-
participants.) A total of 25 key informants form.
were interviewed.

Focus group discussions Data collection procedures

A focus group discussion guide was devel- The overall field activities were guided by
oped and used to gather information relat- a standard data collection procedure that
ed to gaps in logistics digitalization in Ethi- involved close supervision and cooperation
opia. (See Appendix B for the guide.) Two with the consultants and the data enumera-
focus group discussions were conducted, tor. The study’s authors opted for an online
one with officials from the Logistics Trans- questionnaire survey based on the email
formation Office (LTO) and another with addresses obtained from the sample frame.
the Ethiopian Customs Commission (ECC). But, because of the low response rate—32
responses from an expected 400 respons-
Live cases studies es over a two-week timeframe—the study
Five live case studies were done to identify team opted for delivering physical copies
best practices and the use of digital logis- of the survey directly to the addresses of
tics technology. For the multiple case stud- respondents. A snowballing procedure was
ies, three Ethiopian organizations—reg- also used by distributing the questionnaire
ulator, technology solution provider, and through professional networks. A response
cargo owner or vehicle owner stakehold- rate of 82.5 per cent was obtained from
ers—were judgmentally selected based on participants using these methods.

20 Gap Assessment of Logistics Digitalization in Ethiopia

 4
Data Presentation and
Analysis of the Logistics
Digitalization Gap

To help the qualitative data analysis pro- with high-level managers from the Logistics
cess, the consultants organized the key Transformation Office (LTO) and with the
informant interview and focus group dis- ECC commissioner and four of the ECC’s
cussion responses into themes and then directors.
analysed the contents.
Five live case studies were selected using
purposeful selection criteria. The case stud-
The qualitative analysis ies were on topics such as the global posi-
Key informant interviews, focus group dis- tioning (GPS)-based fleet management sys-
cussions and multiple live cases studies tem (FMS) at AAU, the electronic customs
were completed for the qualitative section. management system (e-CMS) at ECC, the
enterprise resource planning (ERP) at ES-
Twenty-five key informant interviews were LSE and the integrated speed limiter with
done using various modes of communica- GPS in Ethiopia. And a bottleneck analysis
tion—phone, email and direct contact. Par- was done on a social media network—the
ticipants were drawn from the Ethiopian telegram group with 3,786 logistics com-
Customs Commission (ECC), Ethiopian munity members—that serves as an infor-
Shipping and Logistics Service Enterprise mation desk.
(ESLSE), Ethiopian Commodity Exchange
(ECX), Modjo Port, Ethio-Djibouti Railway, Key informant interviews
Ministry of Transport, Ethiopian Airlines, For the key informant interviews, guided
Ministry of Innovation and Technology, questions were asked about the current
Ethiopian Logistics Community of Prac- logistics bottlenecks, about the digitaliza-
tice, Ethio Telecom, Addis Ababa University tion gap in Ethiopia and about international
(AAU) School of Informatics and others. trade logistics. The interviews were looking
for insights into respondents’ exposure and
Two focus group discussions were done experience, and for respondents’ recom-

Gap Assessment of Logistics Digitalization in Ethiopia 21

4. Data Presentation and Analysis of the Logistics Digitalization Gap

mendations for improving Ethiopia’s com- not deliver the required logistics service
petitiveness. Appendix E presents the de- efficiency to justify investing hard currency.
tailed analysis. The consolidated analysis is The WMS implemented at ECX and Modjo
as follows: Port lacks customizable warehouse man-
agement features, and the ESLSE ERP can-
Participants said logistics services need not integrate internal and external systems.
to be seen as a supply chain process that At ECC, the e-CMS also lacks integration
stretches from origin to destination, and features with other systems.
as a process where all direct and indirect
stakeholders are involved. The interface of Interviewees said that sometimes the
the system needed to be streamlined from off-the-shelf systems needed manual or
beginning to end and it should be centrally non-integrated third-party components to
coordinated by the Ministry of Transport. integrate. For example, at ESLSE data for
The flow of logistics industry services mate- the cargo tracking system are extracted
rial and information should start at the ori- from ERP WMS and encoded to the official
gin, when cargo is loaded on to a vessel, and website. ESLSE uses email to exchange in-
follow through to the delivery of the cargo formation with branches (other ports) and
at the dry port. for external business partners. The lack of
digitization and digitalized systems interac-
Several key informants said the gap in digi- tion has an impact on logistics service effi-
talization is because no national-level logis- ciency and leads to bottlenecks.
tics system has been adopted or developed
and there is no interface among key logis- Key informants identify gaps
tics stakeholders. The few exceptions are The following gaps were identified through
the Ethiopian Customs’ e-CMS, in its infant debate and discussion with the participants:
stage and with limitations, and the ESLSE
ERP system, which does not interact with • A sustainable centralized logistics infor-
other systems. But multiple company-level mation hub that captures logistics data
or in-house developed systems have adopt- from source to end is lacking. Stake-
ed or adapted digital technology, such as the holders have initiated various systems
warehouse management system (WMS), in their business processes but these
transport and fleet management systems, have not succeeded. In 2013–14, Mari-
and internal business support systems (like log was developed by the Ethiopian
ERP for procurement, finance and human Maritime Affairs Authority (EMAA) and
resource). These systems, however, do not freight forwarders were required to use
interface with other systems. it for cargo tracking. But Mari-log had
limitations and was abandoned. A file
The problem with off-the-shelf systems is management system was attempted at
that they are not customizable to Ethiopi- the Ministry of Transportation but it is
an logistics requirements. Most of them do no longer in use. An in-house system

22 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

was built at ESLSE, but it was replaced ‚ Business process integration prob-
by ERP. This lack of logistics data and of lems.
material tracking from port of loading to
arrival at the customs warehouse limits ‚ Mismatched working hours between
the traceability of imported goods once Ethiopia and Djibouti customs.
they have cleared customs.
‚ Logistics facilities problems.
• There is no truck, cargo or commodity
tracking system as trucks do not have ‚ Warehouses location problems.
GPS, remote sensing, radio frequen-
cy identification (RFID), or internet of ‚ Old trucks.
things technologies. So, commodities
cannot be traced during transportation. The customs mandate is limited to just the
control of goods at border exit or entry, so
• Because to the lack of technology, the there is a lack of information on the location
logistics sector faces fraud and theft of goods at the regional and central level.
at ports and during the transport of This means there is no control on the value,
imports and exports from port premis- volume and availability of inventory in the
es. And this affects productivity. When country, thus making the allocation of for-
stakeholders tried to adopt technolo- eign currency for reorders difficult.
gies to combat this, fraudsters intro-
duce a counter approach to get around • Warehouses are not built to standard,
the introduced technologies. and those in service are not clustered
together based on accessibility to logis-
• When the Customs Commission mod- tics infrastructure.
ernized the customs management sys-
tem for transit, payment and warehouse • There is no legal framework to establish
management, the system concentrated a mandated institution for standardizing
on trade facilitation and control. This system requirements and for regulating
limited the type of logistics data cap- logistics information. There is also no
tured at customs stations during import mandated sharing of standard informa-
and export trade activities. tion among key logistics stakeholders so
that informed decisions can be made on
Bottlenecks lead to reduced efficiency and import and export trade logistics from
bottlenecks are caused by: the start (bank letter of credit) to the
end (importer/exporter warehouse) of
‚ Lack of a synchronized working sys- the process.
tem.
• An integrated single-window service is
‚ No available or adequate technology. not available.

Gap Assessment of Logistics Digitalization in Ethiopia 23

4. Data Presentation and Analysis of the Logistics Digitalization Gap

• Control and monitoring are not consol- to facilitate working together and to avoid
idated. bottlenecks and unnecessary costs. Key in-
formants pointed out that transforming the
• There are multiple inland checkpoints. logistics and supply chain sector requires
businesses identification, regional coordi-
The respondents saw opportunities for nation, human resource capacity, strong en-
Ethiopia’s digital transformation. There is forceable policy and businesses reoriented
a high level of commitment from officials in to digital platforms.
the prime minister’s office, in the Ministry
of Transport, and across the government Bold interventions are required to digitalize
hierarchy for transforming the logistics logistics in Ethiopia, based on understand-
sector, and for attracting foreign investors ing logistics as a process. And the transfor-
through joint ventures and public–private mation should be extended to distribution
partnerships. centres so that goods can be traced and
tracked through warehouse management
Several key informants recommended over- information and commodity tracking sys-
coming the sector’s challenges through tems.
proper planning, process integration, in-
frastructure development and by setting Further analysis suggests that:
information exchange standards. But digi-
talization needs to be done in a socially re- • Logistics digitalization should be based
sponsible way. Modern warehouses—that on the requirements dictated by the di-
are less expensive to run and with technol- rection of the transaction—an import or
ogy that performs efficiently—could bring and export transaction.
about unemployment that then leads to so-
cial unrest. The priority should be applying • Systems should be customized based
an enforceable regulatory framework, then on the unique nature of operating pro-
identifying the requirements for process cedures.
integration, and then digitalization should
be implemented through the contributions Focus group discussions
of all stakeholders. Attention should be Two focus groups were conducted with
given to the efficiency and effectiveness of high-level managers from the LTO and with
logistics freight forwarders as all logistics the commissioner and four directors of the
service providers are directly or indirectly ECC.
affected by freight services. The key infor-
mants underscored the significance of inte- Focus group discussions on logistics digitali-
gration for all stakeholders. zation with the ECC leadership
The focus group discussion was done on 8
The governments of Ethiopia and Djibou- March 2021 and lasted for over five hours.
ti must enact a synchronized framework Participating were the commissioner of the

24 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

Ethiopian Customs Commission, and four LSE have no interface. Without an inter-
directors from the customs office head- face, there is no information sharing on the
quarters. issuance of gate passes, cargo assessments
in the warehouses and at the ports of exit.
The discussion focused on assessing the So, for instance, there is no information on
logistics digitalization gap from a customs whether goods are staying or leaving port
point of view. Guided questions were asked after they have cleared customs. The sys-
about the gaps in logistics digitalization in tem does not allow cargo owners to track
Ethiopia, especially gaps related to trade lo- their cargoes’ arrival—they do not receive
gistics facilitation in import–export customs this information unless it is communicated
processing. The discussion focused on the by email or phone.
technology used by the Customs Commis-
sion in processing goods for release from The Ethiopian customs management sys-
customs, the available systems and their tem does not extend to tracking imported
interactions, and the potential scalability of goods to importers’ warehouses, distri-
these systems to other logistics stakehold- bution centres or retailers. When an elec-
ers. The group thought the adoption of dig- tronic cargo tracking system was installed
itized systems by key logistics stakeholders on 400 government-owned cargo trucks it
would ultimately enhance Ethiopia’s inter- failed because of limitations. High value im-
national trade competitiveness by making ported items like fuel oil, which consume the
logistics more efficient. lion’s share of forex reserves, do not have
an inventory tracking system from port of
The following is a summary: loading, to dispatch, to depot, to liquid car-
go carriers and to regional gas stations. This
The Ethiopian Customs Commission de- is problematic as a few border towns—like
ployed an e-customs management system Togochale and Moyale—have more gas sta-
known as e-CMS, a web-based system that tions than the number of town residents
interfaces with other systems and inte- warrants, indicating possible illegal activity
grates them at the regional and national lev- in the use of these fuel resources.
el. The system provides online services as
a single-window platform with three main The Ethiopian Customs Commission put
functions—e-payment, transit management in place the e-customs management sys-
and warehouse e-cargo tracking. tem (e-CMS), a web-based system that in-
tegrates other systems at the regional and
However, the system has limitations. No national level. The system provides online
manifest is available for multimodal trans- services as a single-window platform with
port for dispatched goods. This limits what four main functions—transit management
customs knows about the timing of the ar- information, e-payment, warehouse man-
rival of goods. Also, the customs warehouse agement and e-cargo tracking. Because
management information system and ES- the system was online it improved customs

Gap Assessment of Logistics Digitalization in Ethiopia 25

4. Data Presentation and Analysis of the Logistics Digitalization Gap

service by making the process more time from origin to destination, not to control
efficient. There were cost saving because the market but to ensure accountability
the requirement to physically submit doc- and to share information about invento-
uments was eliminated, and the quality of ry for supply chain members.
service in customs declaration, payment
and goods clearance improved through the • Logistics digitalization that enables
online services. backward integration so that import
substituted goods can be produced in
The focus group discussants recommended Ethiopia.
a holistic approach to addressing the logis-
tics digitalization gap in Ethiopia. They sug- • Digitalization in livestock logistics that
gested customs should be considered a big addresses livestock quarantine sta-
data centre where data could be generated tus and location at warehouses to help
and accessed by importers and exporters, avoid contraband exports.
carriers and shippers, port services, ware-
houses, distribution centres, banks and re- • Free trade zones and logistics hubs to
tail outlets. A logistics information system boost trade and focus on high-impact
should be adopted under the principle of and value-added trade activities. Do-
import–export trade facilitation and the mestic business owners should have ac-
system should require: cess to a digital free trade zone so they
can boost internet marketing and have
• Standardized procedures from source opportunities for cross-border e-com-
to end for all key logistics stakehold- merce to export their goods. Small and
ers—regulators, financers, importers, medium enterprises should be able to
exporters, logistics service providers, capitalize on e-commerce.
distribution centres and retailers.
• Adoption of emerging technologies
• Customs as the centre of gravity by al- with artificial intelligence features for
lowing data sharing for all key logistics improve efficiency and that allow for
stakeholders. stakeholders to make data driven deci-
sions.
• A legal framework for the interface
of multiple systems—and for securing Focus group discussion on logistics digi-
unique systems at the institution level— talization with officers from the Logistics
in the areas of payment protocols, and Transformation Office
data and document sharing. The focus group discussion was held 18
March 2021 with senior experts on the LTO
• Transparency in systems at the ware- staff at the EMAA. Discussants were briefed
house destinations of importers and ex- on background information and on the na-
porters so that inventory can be tracked tional logistics strategy, of which around a

26 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

third of the 98 interventions are being im- tem as an extension of the cargo tracking
plemented in budget year 2020/2021. The system. Not having a system to track inven-
policy, set to transform Ethiopia’s logistics tory location and warehouse capacity and
services and improve the country’s com- availability after dispatch from customs was
petitiveness, focuses on port development, identified as a major gap in Ethiopia’s lo-
the deregulation of some free on-board gistics services. So, the warehouse system
directives and allows private stakeholder should include an e-customs management
involvement in multimodal operations. The system to track goods after they clear cus-
logistics services sector will be transformed toms. It was noted that a GPS-based system
through the investment and development would track the whereabouts of goods when
in information systems working within the released from customs. Such a system would
available technology infrastructure. track the whereabouts of cargo in ware-
houses, but it would also help with informa-
The focus group discussed the sector’s tion about warehouse and distribution cen-
digital logistics gaps, available information tre capacities. This real-time information
systems that can be scaled up for use by all will help in optimizing warehouse capacity
logistics stakeholders, and how a digitalize and in making decisions about inventory
logistics sector could improve performance availability. The two systems—tracking and
and competitiveness in international trade. warehouse management—would need to be
integrated. The warehouse management in-
The first issue raised was the importance of formation system can be further developed
having a cargo tracking system as a compo- to cover regional and central warehouses as
nent of a logistics information system. Dis- well as retailer warehouses.
cussants agreed that a system that tracks
cargo from source to end is needed and The third discussion was on inventory
that there should be a legal framework that tracking systems (commodity tracking for
compels logistics stakeholders to share in- agricultural products) with RFID or bar-
formation. Stakeholders should be able to codes. The group discussed and agreed on
access information through a predefined the need to have an inventory tracking sys-
protocol to help them make decisions when tem from origin (supply source) to destina-
cargo arrives. The cargo tracking system tion (consumer) for both import and ex-
should be extended to cover warehouse port goods and commodities. The system
management information systems. Dis- should cover all key stakeholders—ship-
cussants agreed that the lack of real-time ping companies (to track vessels and in-
information exchange about cargo among ventories), port operators, customs, inland
stakeholders was a major gap in the logis- transport (by rail or truck), customs-bond-
tics information system in Ethiopia. ed warehouses, importer–exporter ware-
houses, regional warehouses and retail
The second issue discussed was having a outlets. Discussants also said there was
warehouse management information sys- a need to track high-value imported com-

Gap Assessment of Logistics Digitalization in Ethiopia 27

4. Data Presentation and Analysis of the Logistics Digitalization Gap

modities and goods—fuel oil, edible oil Using logistics technology for vehicles—
and vehicles. And some domestically-pro- Addis Ababa University’s GPS-based fleet
duced products and commodities need to management system
be tracked—teff, sugar, coffee, sesame and
cement. AAU adopted a GPS-based vehicle tracking
fleet management system (FMS) for 112 ve-
The final discussion was on the need for a hicles. FMS integrates hardware and soft-
central data warehouse where informa- ware to enable real-time tracking and sta-
tion can be accessed and shared by stake- tus monitoring of vehicles from a computer
holders. One discussant suggested that or cell phone. It involves a GPS tracker main
the Customs Commission serve as the unit, sensors, geographical information sys-
central data warehouse for all import–ex- tems map and communication technology.
port goods. The discussants suggested the Users can access the system’s features via a
EMAA serve as the central logistics hub web browser or through Android or iOS ap-
by accommodating additional information plications. The major features used at AAU
systems in the supply chain—production are real-time tracking, history tracking, driv-
centres (suppliers and manufacturers such er identification and ignition authorization,
as farmers and industrial parks), logis- fuel monitoring, driving behaviour monitor-
tics service providers (shippers, customs ing and accident detection, geofence man-
agents, port operators, freight forwarders, agement, and interactive reporting using
transport service providers, warehouse filtering criteria.
operators and retail outlets).
Implementing the FMS was justified be-
The discussants recommended EMAA de- cause the using the system:
velop a central logistics information hub
that has information from the e-CMS, as • Enhanced fuel efficiency.
well as develop inventory, warehouse man-
agement, manufactured products and agri- • Avoided time theft.
cultural commodity information systems.
• Reduced downtime and increased vehi-
Multiple live case analysis cle productivity.
For the case analysis the consultants decid-
ed to select large logistics firms that oper- • Restricted unauthorized use of vehicles
ated globally and that had introduced dig- and employee fraud.
italization initiatives that could be scalable
to other service providers. Selected cases • Restricted bad driving.
need to provide insight into the challenges
of digitalization and how to best manage • Enhanced the chances of recovering
the process. stolen vehicles.

28 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

• Reduced paperwork and the need for much attention is given to the energy effi-
logbooks. ciency issues. Energy is vital to economic
development. Life would be considerably
• Enabled work performance monitoring. less comfortable without fuel to power cars,
trains, and planes, and without electricity
• Made maintenance proactive. for light and heating (World Bank, 2000).
But Ethiopia imported close to Birr 81.8
• Minimized engine idle time. billion (around $2.82 billion) of fuel during
the 2019 fiscal year, a significant outlay of
• Controlled fuel filling. forex. So, the fuel efficiency of vehicles is a
significant concern.
The system was implemented with config-
urable alerts and notifications, such as on- A speed limiter is a system installed in a vehi-
line popups, email alerts, mobile application cle that limits the speed at which it can travel.
push notifications and audible alerts to driv- This can be achieved in several ways, such as
ers for events and incidents. An important through accelerator control, direct fuel con-
feature of the system is that it can interface trol or electronic control. The main purpose
with third party systems. The latest version of a speed limiter is to reduce accidents and
has offline data storage for when there is no save lives. A speed limiter system allows for:
cellular network coverage.
• Managing vehicle fuel consumption
GPS-based FMS allows owners to have ve- based on daily, monthly and annual re-
hicle performance information at their fin- ports provided for a particular vehicle
gertips. GPS-based technology is also used or a group of vehicles.
for commodity tracking and tracing in the
logistics sector. FMS uses a sophisticated • Efficient management of the vehicle
database that has numerous applications fleet and increasing supervision capa-
that can improve efficiencies and drive down bilities.
costs. In-use vehicles can generate large
amounts of data. Trawling through this in- • Promoting system efficiency and reduc-
formation can be problematic and there is ing control and monitoring costs.
a risk that important information is missed.
But trending technologies—such as big data • Receiving exact performance and oper-
analytics and machine learning—can make ation information from vehicles.
sense of this information, paving the way for
adopting intelligent transport systems. • Increasing fleet management system ef-
ficiency.
Using the integrated speed limiter with GPS
in Ethiopia • Reducing driving violations during
In the global transport and logistics sector in-service periods.

Gap Assessment of Logistics Digitalization in Ethiopia 29

4. Data Presentation and Analysis of the Logistics Digitalization Gap

• Increasing customer satisfaction and find useful information, and pay required
staff transparency. taxes and fees electronically. The second
is a crossborder regulatory agency (CBRA)
• Evaluating the performance of affiliated portal that provides a single point of con-
organizations. tact for all government authorities involved
in verifying, inspecting and approving the
The speed limiter case study revealed that documents received through the trader
installing speed limiters and integrating portal. The third is a messaging gateway
them with ICT infrastructure and GPS can that handles electronic document exchange
improve logistics and fleet management in between the trader and CBRA portals. The
Ethiopia. gateway gives customs declaration and
tariff information, bank and electronic pay-
Managing customs digitally—Ethiopian ment history, and links the internal and ex-
Customs Commission’s e-CMS ternal data with CBRA.
The Ethiopian Custom Commission imple-
mented the Electronic Customs Manage- A report on e-SW revealed the following
ment System (e-CMS) to make the customs about its January 2020 to January 2021
processes paperless. The system manages performance:
the entire process—from pre-clearance to
post-clearance—as a one-stop paperless • 51 key logistics stakeholders use the sys-
single-window service. All steps are com- tem—Ethiopian Customs Commission,
pleted virtually and no physical presence is Ministry of Trade and Industry, Ethio-
required. pian Investment Commission, Ministry
of Finance, Ethiopian Standard Agency,
The ECC also inaugurated the Electronic Ethiopian Ministry of Agriculture, and all
Single-Window Service (e-SW) on 4 January banks and insurance companies.
2020 to enhance the cost effectiveness and
efficiency of trade logistics in Ethiopia. The • 19,058 total users—14,592 importers
system is expected to cut the time needed and exporters and 4,466 logistics ser-
to process imports and exports from 44 vice providers.
days to 15. Over time, this should be re-
duced further to only three days. The sys- • 116,914 licenses given online.
tem is currently managed by the e-SW proj-
ect office at the Ministry of Revenue, and • 115,085 approvals made by regulatory
ECC is the main user. bodies.

The e-SW system has three main sections. During the period under view the e-SW digi-
The first is a portal through which traders talization program saved Birr 1.3 billion and
can submit customs and border clearance increased customs efficiency. It processes
documents, view processing procedures, all customs documents and procedures dig-

30 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

itally, thus introducing a paperless environ- as are features for complaint manage-
ment (Ethiopian Electronic Single-Window ment, reimbursement, and offence and
Annual Report, 2021). fraud-tracking management The sys-
tem supports frequent file uploads and
The implemented platform, coupled with unlimited access and sharing among
customs reforms, helped Ethiopia comply the stakeholders. However, the system
with international best practices The plat- lacks a file compression feature.
form contains two main modules:
• Transits can be tracked online. Autho-
• Trade Portal Manager (TPM)—This mod- rized users can search all possible car-
ule provides trade-related open infor- go lists, and the user can view detailed
mation access to all logistics stakehold- information on a single cargo. The sys-
ers. User credentials are not required. tem provides the declarant status and
The services offered are a tax simulator, a tracker map to view the location of
tariff searching, T1 search, a trader’s in- the transit. If there is a delay, the cargo
teractive guide and assistance on codifi- owner can communicate with freight
cation, and exchange rate information. forwarders by email or phone to get
an update on the status of the cargo.
• Trade World Manager (TWM)—This But there is no integrated IoT-based
module manages the business process- automatic notification system. The on-
es for customs and stakeholders and line cargo tracking is limited to custom
only authorized users can access the terminals points. There is no real-time
system. Users can access online submis- tracking, as there is no interaction with
sions, do online tracking, search tariffs, truck GPS systems.
conduct transactions, get quick links
and download resources. • Declaration status can be tracked.
Agents can set search criteria and list
Users can do the following on the system: the status and detailed declaration in-
formation. Agents can get tracking no-
• Supplementary documents can be reg- tifications, such as assessment notices,
istered and uploaded by exporters, im- support information and notes from
porters, custom clearing agents and assessors and others. The system pro-
port officials. Customs clearing agents vides two-way communications.
can fill in forms, attach scanned docu-
ments, submit declaration data, send • Information can be exchange between
assessment requests and communicate custom officers and customs clearing
with branch managers. The system pro- agent. Custom officers can also commu-
vides business process validation from nicate through Trade World Manager
various perspectives. Both online and (TWM) e-mail with the port officials to
manual payment options are available, rearrange the cargo in a warehouse.

Gap Assessment of Logistics Digitalization in Ethiopia 31

4. Data Presentation and Analysis of the Logistics Digitalization Gap

• Transit, payment, declaration, staff op- house, human capital, finance, project and
eration, cargo manifest, risk manage- enterprise performance management sys-
ment and importer–exporter reports tems. These modules brought promising
can be generating as pdfs or in xlsx file improvements that include:
formats.
• Accessible and integrated online ser-
The e-CMS system has many functions, but vices.
it lacks instant notification. And, because
the system cannot link to IoT devices or • Cost effective services. ERP is hosted
RFID, it has no real-time tracking. There is on a cloud service infrastructure. The
also no significant interaction with other data centre is not managed by ESLSE
platforms and no integration with emerging thus relieving the company of procure-
technologies. ment and administrative costs.

Planning enterprise resources digitally—the • Simplified workflow and information ex-

Ethiopian Shipping and Logistics Service change. Work orders and information
Enterprise ERP system exchange are communicated immedi-
ESLSE was formed in August 2016 (under ately between departments, branches
regulation No. 255/2011) as a merger of and headquarters.
four enterprises— Dry Port Enterprise,
Comet Transport S.C, Ethiopian Shipping Although ERP contributes to better busi-
Lines S.C. and Ethiopian Maritime and Tran- ness outcomes in the logistics sector, there
sit Service Enterprise. The consolidated are limitations. There is no feature in ERP
company provides customs and port clear- that allows for online shipping requests
ing, shipping, warehousing, multimodal and for consignees, there is no integrated help
unimodal delivery and agency. ESLSE runs desk and no truck tracking system. There
9 business units—6 in Ethiopia and 3 in Dji- is also no integration between internal
bouti—and operates 11 vessels globally in systems (such as the ESLSE website) and
304 ports. external systems (such as ECC’s e-CMS).
Because of integration problems with car-
Before the consolidation, the four enter- go tracking, ESLSE has to extract data from
prises used in-house systems based on old ERP and then encode and upload the cargo
technologies. After an assessment, Oracle information to the ESLSE website so that
ERP was proposed to resolve the problems clients can trace the status of their cargo.
with the existing systems. Fragmented solu- Other challenges include unpredictable
tions had been implemented before Oracle, connectivity at branch offices (dry ports)
but the implementor had limited experience and a human skills gap in coping with some
in the logistics business. The implemented ERP features.
ERP modules include order, inventory, pro-
curement, supply chain, transport, ware-

32 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

Using social media as an information (such as paid but not amended), clear-
desk—a bottleneck analysis ance/dispatch/penalty appeals, risk
Globalization has imposed numerous instalment requests, corrections to
changes on people’s lives and brought new amendments, and supporting letters
business models to corporate working cul- from the customs.
ture. One change is the widespread use of
social media, now used in both private and • Complaints about delays. Customs
public sectors for digital marketing, cus- clearance agents can submit complains
tomer service and communication. Because about customs side delays. These mes-
of the widespread use of social media, a sages, for example, were taken from the
case study was done on two telegram chat customer thread:
groups—“Port and customs information”
with 2,413 members, and “Mojo customs Dear All, please do the following for us.” 1/
information desk” with 1,373 members. Clear 4-873/21 BC 4-33118/20 MG; 2/
The groups included customs clearing The Modjo Branch complain Review office,
agents, cargo owners and customs commis- please respond to our appeal for declara-
sion officers. The case study assessed prob- tion 4-1068/21. It has been more than a
lems, challenges, information exchanges month since we submitted our appeal but
and causes of bottlenecks in real time. no response so far.

The most frequent communications were: The above thread demonstrates the bot-
tlenecks on the customs side. But there
• Notices from the ECC customer ser- are business process, system-related com-
vice and operation sector department. plains too:
This department monitors notices to
enforce proclamation No. 1160/2011, “For HS code 39206900, when import-
31(1), notices that inform cargo own- ed by packaging industries, the tax rate is
ers of the need to clear within 15 days. 5 per cent, but the system only shows 10
Officers post notices for assessed doc- per cent. Can you suggest how to proceed?
uments when cargo owners fail to pay With thanks!”
the regulation 153/2011 enforcement.
Even though the notices are relevant, or
no cross-checking mechanisms are in
place on the customs side to ensure the “We were told to pay 20 per cent penalty
correct client is notified. but the delay was because of a bank prob-
lem and we couldn’t get the documents in
• Requests from customs clearing agents. time. We have attached a supporting letter
These include cargo release requests, from the bank so please inform them to re-
unanswered “add note” requests on vise the decision and lift the penalty.”
e-CMS, delayed response requests

Gap Assessment of Logistics Digitalization in Ethiopia 33

4. Data Presentation and Analysis of the Logistics Digitalization Gap

And there are customs officers related The consultants then changed course and
complaints: distributed questionnaires through their
own networks. They also hired an enumera-
“Dear information desk please inform tor to distribute and collect questionnaires.
BC unit to tell us the deposit amount of Using this method, the consultants distrib-
4-4045/21.” uted 418 questionnaires (See Appendix F,
table A6.1.)
There is no platform for clients to submit
requests, to assign tasks to the right de- Of the 418 questionnaires distributed by
partment or officer, to send reminder noti- the enumerator and the consultants, 70
fications or alerts, or to track the progress questionnaires were nonresponses or were
and status of requests. not returned within the requested time.
There were 348 completed surveys. The
Problems can be summarized as: collected data from the survey were audit-
ed, transcribed, translated, cleaned, trans-
• Unorganized communication and infor- ferred and analysed by the consultants
mation exchange and the absence of an using SPSS software. The data were then
instant notification and alert system. summarized to ease classification and to
facilitate tabulation and interpretation. De-
• Unorganized request management, scriptive statistics were used to interpret
task assignment and tracking. averages for each variable of the digital lo-
gistics gap assessment.
• Absence of a consolidated help desk, no
frequently asked question database and In an analysis such as this it is important to
no document sharing. consider the criteria of representativeness
and the response rate. Representativeness
• There is no organized digital platform to refers to how well the sample for the ques-
submit requests online or to track the tionnaire compares with the population of
status of requests. interest. This issue was addressed in the
survey design when service providers and
cargo owners were identified as key logis-
The quantitative analysis tics stakeholders in the digital transfor-
Key logistics stakeholders—exporters, im- mation of logistics technology. The second
porters, freight forwarders, and shipping and issue is the response rate to the survey
customs clearing agents—were surveyed for questionnaire. A response rate of about
their perceptions. There were two approach- 60 per cent should be the goal for most
es to the data collection. Between 25 Febru- research. Of the 418 distributed question-
ary 2021 and 12 March 2021, an online sur- naires, 345 questionnaires were returned
vey was sent to more than 600 stakeholder with an average response rate of 82.5 per
email addresses. But only 32 responded. cent with ratio of originally proposed pop-

34 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

ulation size 400. On the other hand, re- to persuade and encourage them to adopt
sponse rate varies for each variable, with a digitalization strategies.
minimum response rate of 73.4 per cent (n
= 307). Hence, the minimum response rate Digital platforms are little used
for all variables (79) found to be eligible for Respondents were asked if they used digital
analysis. platforms and most (70 per cent) do not (see
Appendix F, table A6.3). This implies a huge
Among the 345 respondents who filled in gap in the use of technology in the logistics
and returned questionnaires, a significant service sector by key logistics stakeholders.
number were cargo owners (importers and The finding suggests that full digitalization
exporters)—184 respondents (53.3 per of the logistics sector in Ethiopia has a long
cent). This was followed by two key logis- way to go. Awareness needs to be created
tics service providers (freight forwarders as to the need for digital logistics among all
and shipping agents, and customs clearing stakeholders in Ethiopia.
agents) with 136 respondents (39.4 per
cent). Eighteen respondents were gov- Most organizations do not use
ernment service provider respondents software for business operations
and they are senior officers at Ethiopian Most respondents (216 or 65.5 per cent) said
Shipping and Logistics Service Enterprise, their organization did not use software to run
a state-owned enterprise. Seven respon- the business (See Appendix F, table A6.4). The
dents (2 per cent) were warehouse service finding from the perception survey indicates
providers. Based on the first logistics digita- the existence of a huge gap in the use of rel-
lization gap assessment, these key logistics evant software to provide efficient logistics
stakeholders adequately represented the services in Ethiopia. This can be attributed to
population and hence it is safe to use the the lack of investment in business software,
findings of the perception survey as an ac- the lack of awareness of the benefits of using
curate representation of the logistics sec- technology or the lack of enforcement from
tor in Ethiopia. regulatory bodies to have businesses use the
software necessary to enhance Ethiopia’s lo-
Most organizations do not have a gistics competitiveness.
digital strategy
Respondents were asked whether their Bottlenecks to digitizing business
organization had a digital strategy (See Ap- processes
pendix F, table A6.2.) The majority—218 Respondents were asked about what was
(66.3 per cent)—said no, their organization holding their organization back from opti-
did not have a digital strategy. These re- mizing the digitalization of business pro-
sponses demonstrate that the rate of digiti- cesses. Most of the respondents mentioned
zation of logistics services at the firm or or- more than one factor (see Appendix F, table
ganization level is low. So, there is a need to 6.5). The top factors were:
educate stakeholders in the logistics sector

Gap Assessment of Logistics Digitalization in Ethiopia 35

4. Data Presentation and Analysis of the Logistics Digitalization Gap

• Lack of information technology (IT) ex- experts are lacking, there is no government
perts to run, control and support digitali- enforcement policy and there is a lack of
zation—271 respondents (9.7 per cent). awareness about digitalization. Bringing the
right skills to logistics digitalization in Ethi-
• Lack of enforcing government poli- opia by developing human capital requires
cy—264 respondents (9.4 per cent). a regulatory framework and investment in
technology by Ethiopian stakeholders.
• Uncertainty about future technological
development—262 respondents (9.4 Support for digitalization by top
per cent). management and board of directors
is marginal
• Belief that digitalization will not bene- Top management and board of directors’
fit the organization—255 respondents support for digitalization of their organi-
(9.1 per cent). zation was marginal —199 respondents
(54.7 per cent) were marginally support-
• Lack of availability of technologies to ive. Besides, 93 respondents (25.6 per
purchase—250 respondents (9 per cent) did not support or resisted digitali-
cent). zation in their organization (see Appendix
F, table 6.6). This low level of support is
• The least reported factors (bottlenecks) reflected in the response rate of 17.9 per
for business process digitalization were: cent. The success of new initiatives, espe-
cially initiatives that include a transforma-
• No need to replace legacy systems—53 tion agenda, is preconditioned by having
respondents (1.9 per cent). the commitment of top management. So,
for the transformation and successful im-
• High investment and operating plementation of Ethiopia’s logistics sector,
costs—63 respondents (2.3 per cent) the key logistics stakeholders from top
management need to be brought on board
• Staff resistance to change—79 respon- the agenda.
dents (2.8 per cent)
Infrastructure and a digital strategy
• Data security and data protection—131 are organizational prerequisites for
respondents (4.7 per cent) digitalization
Respondents were asked about what the
• Lack of budget or suitable funding op- prerequisites would be for digitalization
tions for digitalization—134 respon- in their organizations. Nearly half—(291
dents (4.8 per cent) or 47.4 per cent—said ICT infrastructure
and the need for a digital strategy were
These responses confirm that there is a de- prerequisites for digitalization in their or-
mand for digitalization but that skilled IT ganization. Digital leadership and senior

36 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

management involvement were seen as E-mail and faxes are used as

prerequisites by 122 respondents (19.6 methods of information exchange
per cent). Digital skill training for employ- Very few respondents—18 or 1.6 per cent—
ees was seen as a prerequisite by 220 mentioned their use of ERP. But many re-
respondents (8.6 per cent), and organi- spondents (64.3 per cent) use both e-mail
zation-wide information initiatives were and fax to exchange information. This was
mentioned as prerequisites by 170 re- followed by Excel files—193 respondents
spondents—a response rate of 14.4 per (16.6 per cent)—and isolated digital sys-
cent (see Appendix F, table 6.7). Based on tems—145 respondents or 12.5 per cent
these responses, having a digital strategy (see Appendix F, table 6.9). These results
at the organizational level, underpinned suggest that there is little use of full-fledged
by ICT infrastructure, is a significant fac- logistics systems, and that a grand initiative
tor for digitizing logistics in Ethiopia. This is needed for the sector to move away from
is followed by leadership commitment and partial solutions to fully digitalized systems
involvement. using a phased approach.

Information is exchanged among Many respondents have not yet

stakeholders by e-mail, phone or in started digitalizing their businesses
person Respondents were also asked to rate their
A significant number of respondents use level of digital usage in their organization.
e-mail to exchange information—303 re- A significant number of respondents—152
spondents (31.4 per cent), followed by a (39.9 per cent)—replied that they have not
similar number of respondents (284), who started to digitalize their business pro-
stated that they use the phone, a letter or cesses. This suggests a gap in technology
in-person communication. Social media as adaptation by organizations. Only 83 (21.8
a form of communication exists, but it is per cent) of respondents said they have al-
not significant (58 respondents or 6.0 per ready run a digital business. Ninety-three
cent) (see Appendix F, table 6.8). Although respondents (24.4 per cent) were at a
using email to communicate among stake- higher stage of adoption, having integrated
holders is a key step in the process of lo- their use of digital technology with other
gistics digitalization in Ethiopia, there is systems. Thirty-one respondents (8.1 per
a need to standardize documents, proce- cent) are at an early stage of adoption (see
dures, and platforms to adapt to emerging Appendix F, table 6.10). These findings are
technologies like blockchain and artificial consistent with similar by logistics stake-
intelligence. Besides standardization, this holders in Ethiopia.
also requires identifying system require-
ments and having a legal framework for The availability of forex and poor
data sharing and management among internet connections are the primary
stakeholders. reasons for service delays
Respondents were asked to identify the

Gap Assessment of Logistics Digitalization in Ethiopia 37

4. Data Presentation and Analysis of the Logistics Digitalization Gap

primary reasons for service delays in the warehouse owners (mean = 3.36), export-
movement of goods from source to desti- ers/importers, and the least tech users
nation. Forex availability was mentioned per the respondents; perception are com-
as a primary reason for service delays by panies engaged on logistics activities of
282 respondents (27.9 per cent) followed inventory, packing, and material handling
by internet connectivity—273 respon- (see Appendix F, table A6.12). Based on the
dents (27.1 per cent—and power inter- above response, logistics service providers
ruption—258 respondents (25.6 per cent). are more pro tech than cargo owners, and
Nearly all the respondents (80.6 per cent) high-end logistics especially in the delivery
believe the logistics process was behind services of warehousing, inventory man-
service delays.. The remaining 187 respon- agement, packaging and tracking systems
dents (18.5 per cent) think that customs in the distribution/warehouse centres are
clearance is the reason for service delays perceived to be the logistics digitalization
(see Appendix F, table A6.11). Logistics gaps as reflected in their low score of the
trade financing, especially the availability likelihood on the use of logistics technolo-
and timing of the foreign currency need- gies by these actors.
ed for international trade transactions,
was the primary reason for long logistics Assessment of e-services
delivery lead times. This finding suggests Respondents were asked to rate their per-
that there is a need from policy makers and ception on their level of logistics digital
institutions, like the National Bank of Ethi- technology and emerging technology use to
opia, to prioritize trade logistics financing effectively perform their essential business
by making forex available. This will reduce functions on the similar five-point Likert
logistics service delays and enhance Ethi- scale of very important (5), to unimportant
opia’s competitiveness in the international (1) score. Accordingly, digital platform use
trade logistics arena. integrated with other organizations sys-
tem as an interface was rated better with
Shipping agents are the most likely to above average score of (mean 3.15), fol-
use technology lowed by technology system use like ERP,
Respondents rated key logistics service digital warehouse management system,
providers and cargo owners for who is most automated transport management, system,
likely to use technology. The rating was and so on with average rating (mean=3.08),
done using a five-point Likert scale. Highly and new emerging technologies use like
likely was rated a 5, least likely a 1, and an IoT, blockchain, big data, cloud logistics ob-
average user was rated 3. In a descending tained least score with (mean=3.03) (see
order, shipping agents (mean = 3.5), order Appendix F, table 6.13). This implies that
processing (mean = 3.48), customs transit key logistics stakeholders are on average,
(mean = 3.47), freight forwarder (mean = more willing to collaborate for system in-
3.45), customs clearing agent (mean=3.4), tegration and logistics information sharing,
laboratory service providers (mean = 3.39), and less risk prone to adopt new technolo-

38 Gap Assessment of Logistics Digitalization in Ethiopia

 4. Data Presentation and Analysis of the Logistics Digitalization Gap

gies that demands awareness creation on (55.2 per cent). Emerging technologies re-
the use of new technologies for adoption by lated to big data analytics (48.6 per cent of
these logistics actors. respondents), mobile technologies (45.8
per cent) and cloud computing technolo-
Perceptions of infrastructure and ICT gy also got significant responses as tech-
utilization capability are low nologies respondents were searching to
Respondents were asked to rate infrastruc- use. Across the technologies, between 20
ture and ICT utilization capability on a scale and 30 per cent of the respondents replied
of 1 (very poor) to 5 (excellent). Both were they were piloting or initiating the use of
rated below average (see Appendix F, table emerging technologies in their organiza-
6.14). Based on respondents’ perceptions, tions. But a significant number of respon-
the availability of these resources is below dents said they were not interested in the
the expectations of key logistics stakehold- following emerging technologies—robotics
ers. This is a gap that needs to be mitigated and automation (41per cent), virtual reality
when logistics digitalization initiatives are (38.7per cent), machine learning and cloud
undertaken. Although the current Ethio Tele- computing, (34 per cent each) replied (see
com network expansion and 4G upgrade are Appendix F, table 6.15).
a boost to infrastructure and network quality,
frequent electric power interruptions remain Most logistics stakeholders are either ac-
challenges to implementing logistics digitali- tively searching for or initiating the use of
zation in Ethiopia. The emphasis should be on emerging technologies in their business
improving existing infrastructure. organizations. But a significant number are
not interested in emerging technologies.
Most respondents are actively Many leaders in the logistics sector are not
searching for emerging technologies searching for, initiating or using emerging
to use technologies. This could be because they
Respondents were asked to assess the are unaware of the potential these technol-
use of emerging technologies by their or- ogies have in helping their organizations.
ganization. Responses were measured on This is problematic, especially in the era of
a 5-point scale: 1 for actively searching, Industrial Revolution 4.0 where digital lo-
2 for piloting an initiative, 3 for current- gistics services are needed in all process-
ly using or implementing, 4 for upgrading es. Unless leadership in the logistics sector
and refining and 5 for respondents not in- is brought on board, this will be a source
terested in using emerging technologies. of bottlenecks in the future. Stakeholders
Most respondents were actively searching need to be continuously engaged in digital
for emerging technologies to use. Artifi- transformation and training needs to be in-
cial intelligence scored the highest score stitutionalized so that digital logistics ser-
(68 per cent of respondents), followed by vices become the way of operating logistics
internet of things (66.4 per) and chat bots activities in Ethiopia.

Gap Assessment of Logistics Digitalization in Ethiopia 39

 5
“As-Is” Analysis on Logistics
Digitalization in Ethiopia

This analysis, using applied diagnostic and Further analysis suggests that:
dialogue methodologies, found the follow-
ing gaps in the logistics sector: • Logistics digitalization should be based
on the requirements dictated by the di-
There are no unified digital platform rection of the transaction—an import or
initiatives and export transaction.
Logistics stakeholders are in the early stag-
es of technology use. To transform the sec- • Systems should be customized based
tor, stakeholders need to leapfrog from the on the unique nature of operating pro-
manual to the digital stage. Stakeholders cedures.
have digitalized some processes, and that
these have often failed. In 2013–14, the There is no central logistics
Mari-log software was developed locally coordination and information
by Ethiopian Maritime Affairs Authority for exchange
freight forwarders to use in tracking cargo. Although email communication among
But, because of limitations, it was aban- stakeholders is a key step in the process of
doned. A fleet management system was at- digitalization, there is a need for manda-
tempted by the Ministry of Transport, but it tory standardized sharing of documents,
is no longer in use. In-house systems were procedures and platforms. For coordinat-
built at the Ethiopian Shipping and Logistics ed business processes—such as order pro-
Service Enterprise but these were replaced cessing and requests for import and export
by Enterprise Resource Planning. These services—there is no central source of in-
fragmented initiatives indirectly effect the formation that can accommodate all stake-
performance of the sector, especially con- holders. Also, the absence of logistics data
sidering there are no governing digitaliza- and material tracking from port of loading
tion standards. to destination (customs warehouse) impos-
es limitations on real-time traceability.

40 Gap Assessment of Logistics Digitalization in Ethiopia

 5. “As-Is” Analysis on Logistics Digitalization in Ethiopia

There is no integration and no There are no enforceable regulatory

interoperability within internal frameworks
systems and among key logistics Because of illegal brokers and organized
stakeholders criminals, the logistics sector faces theft and
To integrate and make logistics systems in- fraud when goods are in port and in transit.
teroperable, the logistics sector must stan- This is a problem for the sector’s sustainable
dardize operating procedures for key logis- productivity. To overcome these issues be-
tics stakeholders. The causes of the gaps in yond civil lawsuits and criminal cases, there
integration are poor digital platform plan- should be a regulatory framework that fo-
ning and identification requirements, the cuses on using digital technology in the lo-
absence digitalization standards, and the gistics sector to prevent the distortion of
absence of any governance of data sharing. imports and exports. The legal framework
There is no legally establish institution to should back civil and criminal law enforce-
ensure standardize system requirements ment against illegal attempts to misuse the
and to regulate standards for logistics data digital platform.
sharing and exchange.
There are no cargo, commodity and
There is no skilled human capital to truck tracking and tracing systems
implement and run digital technology Seventy percent of survey respondents did
The assessment found that support for digi- not use a digital platform, and did not have
talization was marginal among top manage- access to a cargo, commodity or truck track-
ment and board of directors. Eighty per cent ing system. They also did not have remote
of survey responses were not fully support- sensing, internet of things, global position-
ive. There is a digital leadership problem, ing systems or radio frequency identifica-
and the skills needed to identify, plan and tion technologies to track and trace goods
implement the appropriate technology are during transportation. The study’s findings
lacking. Having top management on board suggest that the logistics sector in Ethiopia
is vital for the successful implementation of has a long way to go before it is fully digi-
logistics digitalization, and managers and talized. All stakeholders in the logistic sec-
firms will ultimately reap the benefits of the tor need to be made aware of the need to go
transformation as Ethiopia becomes more digital. And there should be an actionable
competitive. Senior management should legal framework to enforce the use of track-
be made aware of the benefits. They should ing and tracing technologies by importing
commit to the technology, to developing and exporting trucks and their cargoes.
human capital, to investing in technology
and to a regulatory framework.

Gap Assessment of Logistics Digitalization in Ethiopia 41

5. “As-Is” Analysis on Logistics Digitalization in Ethiopia

There are no GPS-enabled checkpoints. Both governments need to

warehouse location identification and enact legal frameworks to eliminate these
inventory management information bottlenecks as they cause delays, duplicate
systems efforts and lead to unnecessary costs.
The mandate of customs to control goods
at border entry and exit points limits lo- There are no data analytic, advanced
gistics data to that captured at the port of technology and business intelligence
loading and port of dispatch. This means systems used on available data
that little is known about the value and vol- Logistics service providers generate, use
ume of goods disposed of by legal action in and accumulate different types of data from
a year at the Djibouti port due to the expiry various data sources. This data can be anal-
of dwell time at the port. The customs man- ysed by trending technologies— blockchain,
date also means that the value and volume machine learning, business intelligence and
of available inventory is unknown and so big data analytics—to proactively antici-
foreign currency cannot be optimally allo- pate needs, optimize for best and worst
cated for reordering. case scenarios and mitigate against risk and
fraud. But there are no bold initiatives for
Warehouses are not built to standard, using data analytics and the possibilities of
and those in service are not clustered to- using artificial intelligence technologies for
gether based on safety considerations or autonomous decision making and predic-
on accessibility to logistics infrastructure. tions are not being exploited.
So, there is a need to develop information
management systems to improve customs
control across these dispersed warehous- The major findings
es after the goods have been released from
customs. A synchronized working logistics
system within Ethiopia and between
There is no synchronized working Ethiopia and Djibouti is needed
system between Ethiopia and Djibouti This assessment finds that there is a sig-
customs nificant gap in the synchronized working
The assessment found that old trucks, lo- environment between actors in the logis-
gistics facilities problems, inadequate tech- tics sector in Ethiopia and Djibouti. Bold
nology, limited working hours at ports and interventions are also required to digitalize
non-synchronized working hours between logistics in Ethiopia so that the sector is a
Ethiopia and Djibouti Customs are the synchronized process paradigm from the
factors that cause bottlenecks and reduce beginning (bank applications for letters of
efficiency. There is no consolidated con- credit) to the end (customer control after
trol and monitoring, there is no integrated cargoes have been released). This process
single-window service between the two should be extended to distribution centres
countries and there are multiple inland so that there is tracing and tracking through

42 Gap Assessment of Logistics Digitalization in Ethiopia

 5. “As-Is” Analysis on Logistics Digitalization in Ethiopia

warehouse management information and Information sharing and data

commodity tracking systems. governance standards are needed
To make logistics processes more efficient,
Infrastructure and a logistics strategy customs needs to be made the centre of
are prerequisites to digitalization gravity. This can be done by sharing cus-
Nearly half of the respondents to the sur- toms data, starting with the first transac-
vey (47.4 per cent) said information and tions and continuing to distribution to retail
communications technology (ICT) infra- outlets. And the sharing should be done for
structure and a digital strategy were pre- all key logistics stakeholders—regulators,
requisites for digitalization in their organi- financers, importers, exporters, logistics
zations. And having a digital strategy at the service provides, distribution centres and
organizational level, underpinned by ICT retailers. Information on inventories also
infrastructure, is a prerequisite for logistics needs to be shared, starting at the origin
digitalization in Ethiopia. But digitization and going through to the final destination
needs to be done in a socially responsible at retail outlets. The objective of this shar-
way as it could bring about unemployment ing is not to control markets, but to ensure
that then leads to social instability. Digi- accountability and access to information
tization needs to be accompanied by the about the availability of inventory among all
support of top management and board supply chain members.
members, and by a bold digital leadership
and skilled experts to develop and operate Integration and interoperability
the technology. According to respondents, standards are needed
three main factors—lack of forex, poor in- The assessment found that business pro-
ternet service and power disruptions—con- cesses in the Ethiopia logistics sector are
tribute to the service delays in logistics pro- not digitized, partially digitized or fully
cesses. As a prerequisite to digitalization, digitalized. But the fully implemented digi-
these need to be addressed. tal platforms have system-to-system com-
munication or interoperability gaps. To
A legal framework for using and integrate and transform the logistics and
implementing technology is needed supply chain sector, businesses need to be
The assessment found that 18.8 per cent identified and there needs to be coordina-
of respondents think that digital laggards tion across regions and between all actors,
exit because there is no government policy including indirect actors.
enforcing digitization and because there is
uncertainty over the future of technolog- Infrastructure readiness and removing
ical developments. A legal framework is bottlenecks are prerequisites to
needed to ensure the security of systems digitalization
at the institution level in the areas of data Logistics sector stakeholders have low ex-
and document sharing and cashless pay- pectations regarding internet and power
ment protocols. supply reliability. Internet quality and fre-

Gap Assessment of Logistics Digitalization in Ethiopia 43

5. “As-Is” Analysis on Logistics Digitalization in Ethiopia

quent electric power interruptions are con- upgrading to 4G can be regarded as a step
sidered the main causes of service delay. towards setting up adequate infrastructure
While they are the main challenges to im- to host the first basic stages of digitaliza-
plementing complete logistics digitalization tion. But Ethiopia has a long way to go be-
in Ethiopia, they can be overcome by im- fore it is full digitalized. Awareness needs to
proving the existing infrastructure. The cur- be created among all logistics actors about
rent Ethio Telecom revamp, expansion and the importance of digitizing the sector.

44 Gap Assessment of Logistics Digitalization in Ethiopia

 6
“To-Be” Analysis of Logistics
Digitalization in Ethiopia

The digitalization of the logistics sector in Ethiopia needs a sustainable system to stay
Ethiopia should follow a holistic approach competitive in the disruptive global logis-
with clear inclusive requirements. Bottle- tics ecosystem, with institutionalized hu-
necks should be eliminated and emerging man capital development and a platform for
technologies included, thus boosting reve- research and development. To do this:
nue and generating economic value. Logis-
tics technologies should be adopted to the • Top management and board members
Ethiopia context to facilitate trade. To do this, need to be made aware of the impor-
the following digital platforms are needed: tance of digitalization so that they can
implement, support and follow through
• Integrated cross-border smart fleet on digital initiatives in their institutions.
management.
• Leaders and experts need to identify,
• Integrated cross-border electronic car- plan, adopt, adapt and operate technol-
go management. ogies for the continuous improvement
of processes.
• Integrated scanning machine terminals.
• Professional capacity development
• Integrated logistics, parks or hubs man- needs to be institutionalized and con-
agement. tinuous.

• Integrated logistics freight information • Key logistics stakeholders need to be

exchange management. made aware of digital transformation
initiatives.
• National central logistics information
hub. • Information and communications tech-
nology (ICT) policy needs to be action-
• Integrated national warehouse registry able so that digital technology is used
management. appropriately and so that distorting ille-

Gap Assessment of Logistics Digitalization in Ethiopia 45

6. “To-Be” Analysis of Logistics Digitalization in Ethiopia

gal activities cannot be deployed against able for all logistics stakeholders in Ethiopia.
the system. The architecture’s design is based on the
findings from the assessment desk reviews
• A Logistics Centre of Excellence for Re- and from the best practices case studies of
search and Innovation should serve as a other countries’ initiatives. ELDIXA serves
logistics academy to ensure the sector as a road map. It is a critical step forward
is continuously sustainable and produc- for logistics visualization, optimization and
tive. interoperability. It will serve as a decentral-
ized information exchange in which actors
• The sector should be organized so that use or contribute data through cloud ser-
there is continuous evaluation and im- vices. And it will help to address the chal-
provement, and this should be done lenges of inefficiency, interoperability and
through platforms such as national and logistics bottlenecks.
international logistics expos, forums,
conferences and symposiums. The architecture covers all aspects of logis-
tics digitalization, from the requirement for
• There should be a platform for encour- stakeholder identification through to the
aging logistics start-ups and for entre- deployment of advanced emerging technol-
preneurs who work on emerging tech- ogies. The architecture’s action plan serves
nologies. as a vision paper for other sectors in Ethio-
pia and as a blueprint for scaling up the Pan
• Small- and medium-scale enterprises African Logistics Information Exchange for
should be empowered. the African Continental Free Trade Agree-
ment. The principal motivation for this ar-
chitecture is to create a sustainable and
The Ethiopian Logistics interoperable logistics service provider
Digitalization and Information framework. The architecture is designed as
an open network that allows for inclusion
Exchange as a proposed high-
and scalability. The platform can be imple-
level logistics digitalization mented in the short term, medium term
architecture (ELDIXA) and long term and it can be fully operational
The assessment found that a common in- within 32 months (table 6.1).
tegration framework is absent in Ethiopia.
There is no common architecture and no The ELDIXA components
business process integration. Trending
technology is not used and there is no open Cloud and data source
data governance for information exchange. Multiple actors produce a variety of data in
The Ethiopian Logistics Digitalization and the logistics industry. The sources of data
Information Exchange Architecture (ELD- are people, trains, trucks, vessels, aircraft,
IXA) (figure 6.1) is a high-level platform suit- warehouses, cloud and mobile applications,

46 Gap Assessment of Logistics Digitalization in Ethiopia

 6. “To-Be” Analysis of Logistics Digitalization in Ethiopia

and the internet of things (IoT). To commu- the introduction of trending technologies.
nicate with ELDIXA, the data from these This component (figure 6.1, box 4) is where
sources needs to be transformed. This cloud emerging technologies—such as artificial
and data source component is shown in the intelligence (AI) or machine learning—are
cloud and data source box in figure 6.1. introduced so that analysis, prediction and
optimization can be done with the data.
Logistics actor applications
This assessment found that stakeholder Integration engine
legacy systems—such as those at Ethiopian The assessment revealed that the most
Customs, Ethiopian Airlines and Ethiopian challenging issue for logistics service pro-
Shipping and Logistics Service Enterprise— viders was the lack of interoperability of
were fragmented and limited in their in- digitalized and non-digitalized business
teractions with other systems. The second processes. The IE component (figure 6.1,
ELDIXA component (figure 6.1, box 2) is a box 5) provides connectivity and interoper-
propitiatory integration engine (IE) that al- ability services for data exchanges among
lows for integration among stakeholders. stakeholders and systems. The RESTful
The IE can accept, feed or exchange data API web service should be implemented
with partner systems. in a standard data format. Logistic service
providers published web services can then
ELDIXA value-added solutions talk directly to available systems through
The value-added solutions component (fig- JavaScript Object Notation/Extensible
ure 6.1, box 3) covers consolidated cloud- Markup Language. The IE helps to facilitate
based core logistics services that support this connectivity through API and software
and implement the business needs of lo- development kits (SDK). It connects logistic
gistics service providers. The proposed service providers that need to exchange in-
technologies are electronic cargo tracking formation with their partners and with oth-
system (ECTS) software as a service (SaaS) er systems .
planning services, fleet management ser-
vices (FMS), warehouse management ser- Logistics process digitalization enablers
vices (WMS) and fusion solutions—unimod- Digital transformation requires digital
al and multimodal management services, strategies, business models, enablers and
order management tools and dangerous orchestration (WEF, 2018). The ELDIXA
goods transport management. ELDIXA considers the national strategies, policies,
solution services interact by using the IE regulations and common understandings
through the RESTful application program- that underpin digitization (figure 6.1, box 6).
ming interface (API).
Implementing the ELDIXA architecture will
Trending technologies be teams of consults, software develop-
The accumulation of the raw data and the ers, security experts, AI and infrastructure
convergence of various systems leads to specialists, and business process–standard

Gap Assessment of Logistics Digitalization in Ethiopia 47

6. “To-Be” Analysis of Logistics Digitalization in Ethiopia

operating procedure analysts. Governance • Architectural and operational require-

of project will be through MoT, EMAA, and ments.
advisors drawn from key stakeholders and
regulatory authorities. • Functional and non-functional require-
ments for all logistics service providers.
To mitigate challenges to implementation, Data privacy, sharing, and security re-
there should be consistency and conformi- quirements.
ty to the following:
• Policy and legal requirements for data
exchange and governance.

48 Gap Assessment of Logistics Digitalization in Ethiopia

 6. “To-Be” Analysis of Logistics Digitalization in Ethiopia
Figure 6.1 ELDIXA high-level architecture

Gap Assessment of Logistics Digitalization in Ethiopia 49

 The ELDIXA action plan for logistics digitalization in Ethiopia

50
Table 6.1 ELDIXA implementation action plan

Action Key Activities of each milestones Deliverables Duration

Plan
AP 1.0 Bringing together all logistics actors to outline their respective standard operating Standards for digitalization 6 months
procedures—logistics service providers, public authorities, regulatory agencies, and
Memorandum of understandings
leaders in supporting industries such as law, finance, industry and information and
for interoperability and data
communications technology ICT, law, finance and industry
sharing requirements
Design and initiate and logistics digital integration strategy, enact digitalization
Stakeholder requirement for
usage policy, identify and integration approach for existing digital systems in the
identification for interoperability
sector, standardize logistic digitalization, set implementation priorities, and re-
engineer business processes for implementing ELDIXA
Stakeholders identify relevant partners and sign memorandums of understanding/
agreement for integration, open data access, the application programming
interface (API), and business process re-orienting
6. “To-Be” Analysis of Logistics Digitalization in Ethiopia

Establish a project team office, allocate resources, and establish a monitoring and
evaluation committee

Gap Assessment of Logistics Digitalization in Ethiopia

Identify and develop infrastructure requirements (that is, a data centre and disaster
recovery centre
Establish a standalone project program office with security, counselling,
development, infrastructure and system administration teams, and a monitoring,
evaluation and steering committee
AP 1.1 The output of AP 1.1 is a test phase for logistics service stakeholders to check the Identified stakeholders business 10 months
initial requirements for interoperability of their respective proprietary systems (LSPs process integration requirements
solutions) through APIs or software development kits of stakeholders
Design and development of the main functionalities of the ELDIXA platform (IE,
dashboard, web services API and ELDIXA solutions)
 Action Key Activities of each milestones Deliverables Duration
Plan
AP 2.0 Web services or RESTful API implementation that considers emerging technologies. API connectivity and data sharing, 10 months
The technologies will provide added value services to stakeholders third party system integration
Implement integration for data feeds and demonstrate how APIs connect service
providers
AP 2.1 Pilot test the platform on the existing infrastructure. Launching the product and Final prototype for end-users 6 months
demonstrate the available ELDIXA services
Improvement through R&I,
Set training and capacity- building tools with appropriate material and use the tools new value-added disruptive
with specific stakeholders applications
Sustainable R&I, open the system to innovation and competition.
Fund innovative start-ups that focus on the new value-added technologies
AP 3.0 Leveraging emerging technologies for analytics, prediction and optimization Duration of implementation is 32 months

ELDIXA beneficiary ecosystem

End users include ports, LSPs (all modes), shippers, terminal operators, freight forwarders and other logistics businesses. Also included as end users
are regional and federal regulatory authorities who provide rules and information, as well as infrastructure managers and developers from all the
relevant modes of logistics services.
ELDIXA implementation plan
The national logistics council monitors and evaluates progress during the implementation, and the Ministry of Transport/EMAA assigns members
to the steering committee. Personnel consist of ICT and logistics experts—project manager, system analysts, software developers (both API and
SDK developers) testers, and quality assurance and team leaders.
Benchmarks
In 1999, China released the first stage of an electronic data tracking system. The system identified episodes of smuggling worth about 80 billion
yuan in 1999, and for that year the amount of the collected customs duties increased by 71 billion yuan compared with the year before. The
government also encouraged investments in logistics by providing concessional land leases to set up warehouses, and created free trade zones to
encourage cross-border e-commerce through digital integration. For example, the government set up a free trade zone in Hangzhou and adopted

Gap Assessment of Logistics Digitalization in Ethiopia

an integrated digitalized online system that led to faster processing and clearing of customs (Karpova and Mayburov, 2019). In Ethiopia, ECC
adopted the e-SW in January 2020. This improved the performance of 51 key logistics stakeholders and yielded an overall saving of Birr 1.3 billion

51
for the year.
6. “To-Be” Analysis of Logistics Digitalization in Ethiopia
 Estimated Economic value of ELDIXA
Considering the wide spectrum of stakeholders ELDIXA will cover, and its potential for combatting fraud, smuggling and customs evasion, it is

52
possible that ELDIXA’s direct economic value in savings could be more than Birr 2.7 billion per year.

Action Main Activities Per Action Plan Unit System Cost ($) All System Cost All system cost Unit System cost
Plan ($) (Birr) (Birr)
AP 1.1 Requirement gathering and Analysis $62,900.00 $503,200.00 21,134,400.00 2,641,800.00
AP 2.0 System Design and Integration Engine $70,485.00 $563,880.00 23,682,960.00 2,960,370.00
Development
AP 2.1 Building and Evaluating Prototype $39,775.00 $318,200.00 13,364,400.00 1,670,550.00
AP 3.0 System Development and Testing $27,935.00 $223,480.00 9,386,160.00 1,173,270.00
AP 3.1 User Acceptance Testing and $12,950.00 $103,600.00 4,351,200.00 543,900.00
Deployment
Miscellaneous cost $211,650.00 $1,693,200.00 71,114,400.00 8,889,300.00
6. “To-Be” Analysis of Logistics Digitalization in Ethiopia

Grand Development Cost $425,695.00 $3,405,560.00 143,033,520.00 17,879,190.00

Contingency (5%) $21,284.75 $170,278.00 7,151,676.00 893,959.50

Gap Assessment of Logistics Digitalization in Ethiopia

Grand Total Project Cost $446,979.75 $3,575,838.00 150,185,196.00 18,773,149.50
Data Center $1,216,597.38 $1,216,597.38 52,313,687.38
Disaster Recovery $1,216,597.38 $1,216,597.38 52,313,687.38
Grand total ELDIXA $235,329.75 $4,792,435.38 202,498,883.38 9,883,849.50
Implementation Cost
Note: The above costs are a rough estimation that do not take into consideration off-shelf products, IoT devices and the costs of the licensed software that will need
to be integrated. But the estimation considers all other costs: software development, action plan implementation, program office setup, regional and international
travel, and program office setup costs—stationary, computers, internet service, workshops, training, consultancy on policy and other miscellaneous costs.
 6. “To-Be” Analysis of Logistics Digitalization in Ethiopia

Action plan implementation

governance
and
Figure 6.2 ELDIXA implementation action plan

Gap Assessment of Logistics Digitalization in Ethiopia 53

 6. “To-Be” Analysis of Logistics Digitalization in Ethiopia
Figure 6.3 ELDIXA dashboard

54 Gap Assessment of Logistics Digitalization in Ethiopia

Appendix A Survey Questionnaire

Dear respondents,
Thank you for taking the time to participate in this survey. This survey is conducted as part
of the Gap Assessment of Logistics Digitalization in Ethiopia, at the request of the Ethiopian
Ministry of Transport and sponsored by UNECA–MoT. The survey’s objective is to assess
gaps, challenges, bottlenecks, emerging technologies and areas of concern. The informa-
tion will help to realize the full potential of digitalization logistics systems in Ethiopia. It will
help logistics stakeholders and decision makers gain insight into the direction of Ethiopian
logistics digitalization and help them form a clear action plan.

We understand how precious your time it is. That is why we have made sure that this sur-
vey will take only about 30 minutes of your time. Your full response is valuable and greatly
appreciated.

Your responses are voluntary and will be kept confidential. Your will remain anonymous
and you will not be identified by any means.

Thank you!

1. General Information
1.1. What is your service/business type or role in logistics sector? (Select all that apply.)

Freight forwarder �

Custom clearing agent �

Regulator �

Importer �

Exporter �

Warehouse provider �

Shipping agent �

Gap Assessment of Logistics Digitalization in Ethiopia 55

Appendix A Survey Questionnaire

Government service provider �

Other ________________________________________________________________________________________

1.2. Do you have digital transformation/digitalization strategy in your organization?

Yes � No �

1.3. Do you use digital logistics platforms such as cargo tracking, smart fleet management,
real time tracking?

Yes � No �

1.4. Do you use software/digital technology to run your business in your organization?

Yes � No �

1.5. What is holding back your organization to digitalize your business process? (Select all
that apply.)

a. Lack budget or suitable funding options for digitalization �

b. Lack IT experts to run, control and support digitalization �

c. Uncertain about future technological development �

d. Uncertain about national digital standards �

e. Unaware of possible applications/benefits ` �

f. Data security and data protection �

g. No need to replace legacy systems �

h. High investment cost and operating costs �

i. Staff resistance to change �

56 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix A Survey Questionnaire

j. Lack of physical ICT infrastructure �

k. Lack of digital leadership in the organization �

l. Lack of enforcing government policy �

m. Belief that digitalization will not benefit our organization �

n. Technologies not available for purchase �

o. Lack of clearly stated return on investment (ROI) �

p. Other _________________________________________________________________________________

1.6. How do you rate your board or senior management’s commitment and support for dig-
italization in your organization?

a. They are supportive for digitalization �

b. They are slightly supportive for digitalization �

c. They do not support digitalization �

d. They resist digitalization �

e. Other _________________________________________________________________________________

1.7. What are the pre-requisites for digitalization in your organization? (Select all that apply.)

a. Senior managers involvement �

b. Organization-wide information initiative �

c. ICT infrastructure �

d. Digital strategy �

e. Digital skill training for employees �

Gap Assessment of Logistics Digitalization in Ethiopia 57

Appendix A Survey Questionnaire

f. Digital leadership �

g. Other _________________________________________________________________________________

1.8. How are data or information exchange managed with your stakeholders (national and
international, business partners, and customers)? (Select all that apply.)

a. By phone �

b. E-mail �

c. In-person/paper letter �

d. Social media �

e. Other _________________________________________________________________________________

1.9. What method is used for information exchange between the major functions within
your company or organization? (Select all that apply.)

a. Enterprise Resource Planning (ERP) �

b. Isolated digital systems �

c. E-mail �

d. fax �

e. Excel files �

f. Social media �

g. Other _________________________________________________________________________________

1.10. Rate your stage of business digital usage.

a. Already applied/running digital business �

58 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix A Survey Questionnaire

b. Integrating digital technology �

c. At early stages of adoption digitalization �

d. Not started yet �

e. Unable to determine _________________________________________________________________

1.11. What is the principal reason for delays for your service? (Select all that apply.)

a. Banking transaction (forex related) �

b. Internet connectivity �

c. Electricity (power interruption) �

d. Custom clearances �

e. Other _________________________________________________________________________________

2. Digitalized logistics service providers

Which type of logistics sectors are Very Likely Neither Unlikely Very
mostly using digital technologies Likely Unlikely
currently in Ethiopia?
Freight forwarder
� � � � �
Shipping agents
� � � � �
Custom cleaning agents
� � � � �
Order processing
� � � � �
Customs transits
� � � � �
Laboratory service providers
� � � � �
Exporters/importers
� � � � �

Gap Assessment of Logistics Digitalization in Ethiopia 59

Appendix A Survey Questionnaire

Warehouse owners
� � � � �
Inventory, Packaging & Material
handling � � � � �
Other justification: ( Please list and rate them)

� � � � �

� � � � �

3. E-services or technology usage assessment

Rate the software or digital technology you use

Unimportant
Moderately
to effectively perform your essential business Important

Important

Important

Important
functions.

Slightly
Very

3.1. How do you rate the use of digital � � � � �

platforms/software to run your business or to
collaborate with other organizations today

3.2. How do you rate the use of technologies—

such as ERP, digital warehouse management, � � � � �
automated transport management systems—in
your business currently
3.3. Rate your organization’s use of IoT AI, ML,
big data, blockchain and cloud logistics in your � � � � �
business currently

Other justification: ( Please list and rate them)

� � � � �

� � � � �

60 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix A Survey Questionnaire

4. Infrastructure and ICT utilization capability

Excellent
assessment

Good

Poor

Poor
Very
Fair
4.1. To what extent do you rate internet access
� � � � �
in your work place to run your business?

4.2. To what extent you rate power/electricity

reliability in your workplace to run your � � � � �
business?

4.3. How do you rate current ICT utilization in

end-to-end logistics operations and services? � � � � �

4.4. To what extent do you rate the usage of

e-services such e-government, e-commerce, � � � � �
e-portal, e-payment, e-banking and e-voucher in
your business process?
4.5. To what extent do you rate effective trade
facilitation and regulatory programs, such as � � � � �
single-window system or computerized transit
checkpoints?
4.6. To what extent you rate a comprehensive
legal framework or initiatives for the digital � � � � �
logistics industry?

Other justification: ( Please list and rate them)

� � � � �

� � � � �

Gap Assessment of Logistics Digitalization in Ethiopia 61

Appendix A Survey Questionnaire

5. Digital technologies status and relevance assessment

Please choose the digital platform Using cur- Planned to use Not
you are currently using and how many rently planned
years you plan to use the platform
0-2 3-5 +5
for your business process: [Are these
years years years
changes okay?]
5.1. Enterprise Resource Planning
� � � � �
5.2. Warehouse Management Systems
� � � � �
5.3. Transportation or Fleet Manage-
ment Systems � � � � �
5.4. Online Request for Quotes
(RFQ) � � � � �
5.5. Electronic Cargo Tracking
System
� � � � �
5.6. Web-based communication plat-
� � � � �
forms
5.7. Software as a Service (SaaS)
� � � � �
5.8. Cross-company machine-to-ma-
chine communication � � � � �
5.9. Mobile data access for partners/
customers � � � � �
5.10. Analysis of data from Social
Media platforms � � � � �
5.11. Smart terminal and corridor
Management system
� � � � �
5.12. Intelligent transport system
� � � � �
5.13. Real-time cargo tracking system
� � � � �
5.14. National single-window service
providers’ (banks, insurance, shipping � � � � �
companies, freight forwarders) systems
5.15. Robotics and Automation
� � � � �
5.16. Augmented Reality
� � � � �

62 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix A Survey Questionnaire

5.17. IoT Technologies and Sensors

� � � � �
5.18. AI and Machine Learning
� � � � �
5.19. Blockchain
� � � � �
5.20. National logistics digital
information hub � � � � �
5.21. Big Data Analytic
� � � � �
5.22. E-Commerce
� � � � �
5.23. Logistics control tower
� � � � �
5.24. Single-window service at sea-
ports (customs office, port authority, � � � � �
ship agents)

Other justification: ( Please list and rate them)

� � � � �

� � � � �

6. Organizations emerging technologies usage assessment

To what level you are Actively Pilot- In use/ imple- Upgrad- Not interest-
using the following researching ing mented ing or ed
technologies? initia- refining
tive
6.1. Artificial Intelli- � � � � �
gence (AI)
6.2. Internet of Things � � � � �
(IoT)
6.3. Robotics and auto- � � � � �
mation
6.4. Augmented (AR)/
Virtual Reality(VR) � � � � �

Gap Assessment of Logistics Digitalization in Ethiopia 63

Appendix A Survey Questionnaire

6.5. Machine Learning

� � � � �
6.6. Cloud computing /
web technology � � � � �
6.7. Mobile technolo-
gies � � � � �
6.8. Big Data analytics
� � � � �
6.9. Chat bots
� � � � �
Other justification: ( Please list and rate them)

Digital themes and initiatives assessment

To what extent you rate your aware- Very High Medi- Low Don’t know
ness or knowledge on the following high um
topics?
6.10. Logistics control tower
� � � � �
6.11. Analytics as a service
� � � � �
6.12. Digitally-enhanced cross-border
platform � � � � �
6.13. City logistics
� � � � �
6.14. Drones-based delivery
� � � � �
6.15. Autonomous Vehicles
� � � � �
6.16. 3D printing
� � � � �
6.17. Crowd sourcing
� � � � �
6.18. Circular economy
� � � � �
6.19. Shared transport capacity
� � � � �

64 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix A Survey Questionnaire

6.20. Shared warehouse capacity

� � � � �
6.21. Same-day delivery
� � � � �
7. Work environment ICT capability and readiness assessment
Please indicate the extent to which Strongly Dis- Neutral Agree
Strong-
you agree with the following state- disagree agree
ly Agree
ments.
7.1. Senior managers understand and
support digitalization � � � � �
7.2. My organization’s ICT infrastruc-
ture is enough for digitalization � � � � �
7.3. My organization employee’s resist
new technologies (digital platforms) � � � � �
7.4. My organization’s ICT department
is capable of support or can facilitate � � � � �
new digital technologies
7.5. Most of my organization’s employ-
ees have skills to use a computer
� � � � �

7.6. My organization uses data-driven

services and data-driven decisions � � � � �

8. Additional information
8.1. Any comments on logistics digitization, bottlenecks, best practices:

8.2. Do you think digitalization can empower your business? How? Please explain.

Gap Assessment of Logistics Digitalization in Ethiopia 65

Appendix B Key Informant
Interviews and Focus Group
Discussion Guide and Checklist

Dear Sir/Madam,

UNECA, at the request of the Ministry of Transport, sponsored a study on assessing gaps
in logistics digitalization in Ethiopia.

Ethiopia has embarked on a 10-year prosperity plan and it aspires to be a middle-income

country with inclusive development by 2030. At the sectoral level, the Ministry of Trans-
port also developed a 10-year plan, aligned to the prosperity plan, to ensure the develop-
ment of service, regulation and infrastructure in the transport sector. Two years ago, the
Maritime Affairs Authority under the Ministry of Transport developed a National Logistics
Strategy to guide the development of the logistics sector and to ultimately make Ethiopia
competitive in international trade.

The national logistics strategy document indicated the need for developing the logistics in-
formation technology infrastructure so that regulators and logistics service providers can
improve logistics efficiency and effectiveness.

Based on the UNECA–MoT initiative, a team of consultants would like to get first-hand infor-
mation through interviews and focus group discussions from regulators, infrastructure devel-
opers and logistics service providers on the current use of logistics information technology,
future aspiration to adapt new technology and the gaps in logistics digitalization in Ethiopia.

The information obtained from the interviews and focus group discussions will be analysed
together with results from a survey of logistics service providers. This information will help
make evidence-based policy recommendations on the identified gaps and on the future lo-
gistics digitalization in Ethiopia.

We would sincerely like to request 30–45 minutes of your time for an interview or for par-
ticipation in a focus group discussion related to the following questions.

Thank you in advance for your willingness to participate in the study.

The research team,

66 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix B Key Informant Interviews and Focus Group Discussion Guide and Checklist

Part I: Background information of participant in the interview/focus group

discussion
1. Name:_____________________________________________________________________________________

2. Organization:_____________________________________________________________________________

3. Role/Position:_____________________________________________________________________________

4. Years of experience in current position:

0-2 Years � 2-5 years � s 5-10 years � More than 10 Years �

5. Qualification/Area of specialization: _____________________________________________________

6. Mobile Number/Office phone number:___________________________________________

Part II: Key informant/focus group discussion questions

1. What are the bottlenecks to digitalization and biggest possibilities for improved orga-
nization, and what opportunities are there for modernizing the logistics sector through
the application of ICT products and digital platforms?

2. Can you assess the current state of digitization of your organization and summarize the
strengths and weaknesses of your institutional with regard to the digital transforma-
tion process?

3. Based on your experience, describe on the status of Ethiopia’s logistics sector in the
context of digitization and assess the logistics companies’ reasons for not fulfilling the
expectations of today’s connected consumers.

4. How do you see the entire digitalization setting of the country’s logistics industry? (For
discussion)

5. From your perspective, what are the barriers, prerequisites, key opportunities and ex-
pectable impacts of the digital transformation in the context of the logistics fourth in-
dustrial revolution—called Industry 4.0 in Ethiopia?

6. In your view, how can logistics digitalization be aligned with the Digital Ethiopia 2025
Strategy?

Gap Assessment of Logistics Digitalization in Ethiopia 67

Appendix B Key Informant Interviews and Focus Group Discussion Guide and Checklist

7. Considering current bottlenecks, ineffective logistics, import–export growth, cost of lo-

gistics, and national home-grown economic strategy, which logistics stakeholders (ser-
vice providers) should get priority in implementing digitalization?

8. Based on your experience, what approach, stage or pathway is the most suitable one to
follow in the logistics sector for digital platforms, business models and applications for
emerging technologies in the Ethiopian context?

9. In your experience, what is the best logistics digitalization practice or global key tech-
nology trend and what would the challenges be in adopting it in Ethiopia’s logistics sec-
tor?

10. What action plans, roadmaps or drivers for logistics service development do you rec-
ommend as a clear strategy for increasing digitization levels in the sector and for accel-
erating Ethiopia’s digital transformation?

11. Are there any issues that we have not discussed but that you would find worth discuss-
ing in relation to this study?

Thank you again for your participation!

68 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix C Selected Key
Informants

1. Ministry of Trade and Industry

2. Ministry of Transport
3. Ministry of Innovation and Technology
4. Ethiopian Maritime Affairs Authority
5. Modjo Dry Port
6. Ethiopian Airlines
7. Ethiopian Shipping and Logistics Service Enterprise
8. Ethiopian Logistics Community of Practice
9. One private freight forwarder and shipping agent
10. One custom clearing agent
11. One cargo owner from exports
12. One cargo owner from imports
13. One government institution as a case observation on vehicle tracking systems
14. Federal Transport Authority
15. Ethiopian Commodity Exchange (ECX)
16. National Bank of Ethiopia (Commercial Bank of Ethiopia)
17. Ethiopia Roads Authority
18. Ethiopian Railway Corporation/Ethio–Djibouti Standard Gage
19. Ethio Telecom and Ethiopian Communication Authority
20. Ethiopian Electric Utility
21. Addis Ababa University School of Information Science
22. Ethiopian Custom Commission
23. Ethiopian Investment Commission (EIC)
24. Ethiopian Industrial Park Corporation
25. Bole Lemi Industry Park

Gap Assessment of Logistics Digitalization in Ethiopia 69

Appendix D Multiple Case
Study Protocol

Dear Sir/Madam,

UNECA, at the request of the Ministry of Transport, sponsored a study on assessing gaps
in logistics digitalization in Ethiopia.

Ethiopia has embarked on a 10-year prosperity plan, and it aspires to be a middle-income

country with inclusive development by 2030. At the sectoral level, the Ministry of Trans-
port also developed a 10-year plan, aligned to the prosperity plan, to ensure the develop-
ment of service, regulation and infrastructure in the transport sector. Two years ago, the
Maritime Affairs Authority, under the Ministry of Transport, developed a National Logistics
Strategy to guide the development of the logistics sector and to ultimately make Ethiopia
competitive in international trade.

The national logistics strategy document indicated the need for developing the logistics in-
formation technology infrastructure so that regulators and logistics service providers can
improve logistics efficiency and effectiveness.

Based on the UNECA initiative, a team of consultants would like to get first-hand informa-
tion through a deep dive into current use of logistics information technology and aspira-
tions for adapting and adopting new technology. The findings could possibly be used as a
benchmark for logistics sector digitalization in Ethiopia.

We would like to sincerely request one hour or more of your time for an interview, and
for access to documentation (if available) on the nature of the adopted technology by your
organization.

Thank you in advance for your willingness to participate in the study.

70 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix D Multiple Case Study Protocol

Part I: Background Information

1. Name of the company: ___________________________________________________________________

2. Type of organization: _____________________________________________________________________

3. Year of establishment: ____________________________________________________________________

4. Size of business (number of employees/capital/or revenue): ______________________________

Part II: Logistics technology usage questions

1. When did you start using logistics technology?

2. What is the name of the technology?

3. Did your organization develop the technology or was it bought off-the-shelf?

4. What was the cost of buying/developing this technology?

5. Can you describe in detail (if possible, with supporting documentation) the features of
this technology and its degree of application?

6. What benefits and limitations has this technology brought to your organization (in
terms of costs, quality and time)?

7. To what extent has this technology been adapted to other aspects of the logistics sector,
and does it interface with other institutions? (What is your recommendation?)

8. Is there anything else about this technology you would like to share?

Gap Assessment of Logistics Digitalization in Ethiopia 71

Appendix E Qualitative Analysis
Based on Key Informant
Interviews

Interview with Elizabeth Getahun— interface needs to be streamlined from be-

President of the Freight Forwarders ginning to end and this should be centrally
and Shipping Agents Association, coordinated and controlled by the Ministry
Chairperson of the board of the of Transport.
Ethiopian Logistics Community of
Practice, owner and Chief Executive She stressed that no national-level logis-
Officer of PanAfric Global Logistics tics system has been adopted or developed
PLC, and member of the National and used as an interface among key logis-
Logistics Council tics stakeholders, except for the e-CMS of
Date: 26 February 2021 Ethiopian Customs. And e-CMS is in its in-
fant stage and has limitations. This situation
Time: 2:00 pm—5:00 pm can be considered a gap in the digitalization
of logistics in Ethiopia. Although there are
Place: Addis Ababa, head office of Pan Afri- multiple logistics systems developed at the
ca Global Logistics PLC company-level, such as transport and fleet
management systems, and support sys-
Interview questions were on the current tems—like ERP—for procurement, finance,
logistics digitalization gap in Ethiopia, in- and human resources, these do not inter-
ternational trade logistics in particular and, face with other companies. Off-the-shelf
based on her experience, her recommen- systems lack customization to Ethiopian
dations for how the sector should be dig- logistics process requirements and most of
italized to make Ethiopia internationally these could not deliver the required logis-
competitive. tics service efficiency to make it worthwhile
investing hard currency in the technology.
She said there is a need to view logistics as a
supply chain process from origin to destina- She said the interventions required to dig-
tion, and where all direct and indirect logis- italize logistics in Ethiopia should be based
tics stakeholders are involved. The system on logistics as a process paradigm, starting

72 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix E Qualitative Analysis Based on Key Informant Interviews

at the beginning (the application to the bank He said, “We understand the significance of
for a letter of credit) and going through GPS, FTS, CCTV cameras, and WMS. How-
to the end (when goods are released from ever, we don’t yet have fully installed GPS
customs). This process should also be ex- systems on our trucks and sub-contrac-
tended to distribution centres, where dig- tor trucks to trace and track the cargo. If
ital processes can trace and track through there were tracking mechanisms for cargo,
warehouse management information and it would be possible to overcome the chal-
commodity tracking systems. Logistics dig- lenges we face with fraud, theft, and unnec-
italization should be based on logistics sys- essary delays, which all negatively impact
tem requirements set by the direction of the the sector. Regarding the digitalization at
transaction—as an import or export at bank, Modjo Port, since 1 October 2019 we have
suppliers, port of origin, preferred port of been using the web-based WMS from Or-
destination, preferred mode of transport, acle. But, in the business processes con-
freight forwarders selection, port opera- text, it has customization limitations ” The
tors, customs, regulators, transporters (in- current WMS has limited functionality in
land), accompanied by system development addressing dry port services and this lead
customized to the unique nature of logistics to inefficiency. He also expressed the view
service in both directions. that deploying AI is a necessity for detecting
fraud and theft, and AI should be deployed
Interview with Ato Solomon— at terminals in Djibouti and at Modjo Port.
Terminal Operations Manager, Modjo
Port Regarding the bottlenecks, he said: “There
Date: 3 March 3 2021 are partners and stakeholders in the Mod-
jo Port with one common customer, but
Time: 9:32 am—11:50 am the way we communicate is fragment-
ed. Most partners and stakeholders have
Place: Modjo, Oromia, Modjo Dry Port partially automated their business pro-
cesses, and we exchange information daily
The guided interview questions focused on with customs, banks, cargo owners, tran-
port-related digitalization. sits and others. However, the mechanism
of information exchange is not interopera-
In a multi-modal service various modes ble.” He stressed that integrating bank and
of transportation and information ex- customs system so that bills of loading and
change are used, from when the cargo is legal documents for transit can be validat-
loaded on to the vessel abroad to the de- ed was a priority.
livery of the cargo at Modjo Port. In this
process the common means of information Ato Solomon suggested a discussion on dig-
exchange is email. Even though there are italization issues with Ato Melese, ICT man-
other systems available, they are not inte- ager at Modjo Port. During the discussion
grated. with Ato Melese, he told the consultants

Gap Assessment of Logistics Digitalization in Ethiopia 73

Appendix E Qualitative Analysis Based on Key Informant Interviews

that there was no consolidated system for Eden Girma’s office serves as the regu-
information exchange among Modjo Port latory body for the maritime and logis-
and the ESLSE head office, customs, banks tics sector. Regarding digitalization and
and other stakeholders. He confirmed that technology adoption, she said the causes
the current WMS has functionality limita- of bottlenecks start with bank letters of
tions, such not having a container location credit requests and go through to unload-
tracking system. Operation workers re- ing cargo at the destination port. Bottle-
cord the location of containers on paper necks are caused by old trucks, unsuitable
and then enter the information into Excel warehouse locations, process integration
spreadsheets. So, it is difficult to track and problems, logistics facilities problems, un-
trace the containers automatically. He said available or inadequate technology, and
digitalized services—such as instant push unsynchronized working hours between
notifications, customer satisfaction ratings Ethiopia and Djibouti customs. And these
and integrated service inquiries—need to lead to inefficiency. She said the Ethiopian
be a priority to decrease congestion. and Djibouti governments must enact pol-
icy that works 24/7 to avoid delays, bottle-
Both managers stressed the significance of necks and unnecessarily costs.
integration to achieve interaction between
stakeholders and partners. To transform She said there was a high commitment from
the logistics and supply chain sector they high-level officials to transforming the lo-
pointed out the important requirements of gistics sector, starting with the prime min-
strong policy, staff capacity building, iden- ister office. Foreign investors would also be
tification of businesses for integration, the interested in initiatives, such as public–pri-
need for coordination with regions, and the vate partnership and joint ventures. These
re-orienting and digitalizing of business are opportunities that will improve the
processes, all in the context of the Ethiopi- country’s logistics competitiveness.
an logistics system.
Stakeholders have tried to adopt various
Interview with Eden Girma—Maritime technologies to improve efficiency, but
and Logistics office head fraudsters introduce counter-distorting
Date: 15 March 2021 measures to disrupt the newly introduced
technologies. Regarding her office’s pri-
Time: 10:30 am—11:30 am or experience with digitalization, she said
there were cargo and truck tracking sys-
Institution: FDRE Ministry of Transport tems in place but currently they are not in
use. The absence of digitalized processes
Eden Girma has served at FDRE for more meant high costs and inefficiency.
than seven years. The discussion on logis-
tics digitalization was guided by the key in- She recommended that priority be given to
formant/focus group discussion questions. process integration and digitalization, and

74 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix E Qualitative Analysis Based on Key Informant Interviews

it should be implemented by all stakehold- times, he said, cargo owners sell their
ers. Removing human engagement in the product directly from containers. These
process would help pave the way for ending challenges require infrastructure, proper
fraud and crime in the sector. planning, process integration and informa-
tion exchange standards to overcome.
Interview with Eshetu Abebe—
Demurrage Law and Logistics He said stakeholders need to equip their
Support Director services with technology such as GPS sys-
Date: 15 March 2021 tems, cargo and truck tracking systems, and
rapid scanning machines. And the govern-
Time: 3:30 pm—5:10 pm ment needs to establish a special court to
enforcement the 2006 law.
Institution: Federal Transport Authority
As an action plan, he recommended creat-
Eshetu Abebe’s office is working to make ing awareness among stakeholders, having
imports and exports more efficient by in- 24/7 working hours in both countries, and
specting stakeholders. A demurrage law having all stakeholders implement the ap-
was enacted in 2006 with the aim of in- propriate technologies. Priority should be
creasing efficiency. Demurrage is the dam- given to logistics transport sector efficien-
ages paid in compensation to a shipowner cy and effectiveness since logistics service
when a ship is detained when it is being providers are all directly or indirectly af-
loaded or unloaded. Before the new stan- fected by transport services.
dards, one truck used to have two tripe.
Standardization has set the stay for trucks Aynalem Albene on Ethio Telecom
to one hour. And warehouses work with a capacity Info
standard of 8/5 loading and 6/4 for unload- Date: 14 March 2021
ing. And an efficiency evaluation can be
done periodically by stakeholders. Because By email
of these changes, the 2006 law has helped
to overcome delays and bottlenecks. Ethio Telecom is facing ever-growing cus-
tomer demand, a changing business envi-
There is no digital platform yet for his office ronment and a competitive market. The ma-
for logistics. But a trip schedule system is in jor aspirations of Ethio Telecom are to grow
progress. His office uses email for exchang- financial capacity, develop into a people-ori-
ing information. ented organization, offer the best customer
experience and be a reputable brand with
He said bottlenecks in the sector were innovative products and services. The com-
caused by the number of border check- pany is introducing new products and ser-
points, the lack of a single-window service, vices to enhance the efficiency of internet
and no standardized warehouses. Some- coverage, an introduction that coincides

Gap Assessment of Logistics Digitalization in Ethiopia 75

Appendix E Qualitative Analysis Based on Key Informant Interviews

with the national initiative to end the inter- to tons of shipment, the arrival time at
net service provider oligopoly. port, and the port and customs station.
But the Mari-log project was aborted
The company is experiencing promising because of limitations in the software.
growth and the 2019/2020 annual report Now this lack of logistics data tracking
outlines its infrastructure expansion. Ethio from the port of loading to arrival at the
Telecom generated Birr 47.7B in revenue, customs warehouse creates limitations
and $147.7 million in foreign currency. And as imported goods are not traceable
over the 2019/2020 period?]. Telecom cov- once they have cleared customs.
erage reaches 95 per cent of the popula-
tion, and covers 85.4 per cent of the coun- • Although the Customs Commission’s
try. Teledensity—the number of landlines modernization of the customs man-
per 100 people—is 46.1 per cent. Internet agement system—for transit, payment
coverage was 23.8 million users in 2020. and warehouse management for cus-
toms-controlled bonded warehouses—
Interview with Ethiopian Maritime the orientation of the system is towards
Affairs Authority General Director trade facilitation and control to manage
Time: 9: 00 am–10am. duty and traffic (lack of logistics infor-
mation oriented system at customs),
Place: EMAA Head Office, 5th Floor based on the value of goods and import
focused, limited the nature and type of
The gaps in the application and utilization logistics data to be captured at customs
of logistics technology, and interventions station during import/export trade ac-
needed to modernize logistics information tivities.
systems through logistics digitalization in
Ethiopia, were discussed in depth. • As Customs’ mandate is to control
goods at border entry and exit, logistics
The general director of EMAA identified data is limited to what is capture at the
five gaps. These are: port of loading or dispatch. There is a
lack of information on the value and vol-
• There is no centralized logistics infor- ume of goods disposed of in a year by le-
mation hub to capture data in a holistic gal action at Djibouti port due to expiry
way. In 2013–2014, the Mari-log soft- of dwell time at the port.
ware was developed to enforce data
capture and input by freight forwarders • The limited Customs’ mandate means
when goods arrived at port. This was there is a lack of tracking and tracing
done to enable regulatory bodies to of the location of goods at central and
track and trace the whereabouts of car- regional warehouses. Because of this,
go for control purposes. The locally-de- there is no information on the value
veloped software captures data related and volume of inventory availability

76 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix E Qualitative Analysis Based on Key Informant Interviews

in the country, and it is not possible to Interview with Ato Bailu Nigussie—
optimally allocate foreign currency for ECX Chief Warehouse Management
reordering. Officer
Date: 5 March 2021
• There is no legal framework to estab-
lish an institution to standardize system Time: 3:25 pm to 4:50 pm
requirements and regulate logistics in-
formation—including the mandatory Place: Addis Ababa, Head office of ECX, 5th
sharing of standard information among floor
key logistics stakeholders. Without this
information, informed decisions cannot Ato Bailu has more than 12 years of expe-
be made on import and export trade rience, and the interview focused on his
logistics—starting from the beginning knowledge of bottlenecks, digitalization
(the bank) and going through to the end and warehouse management, and on his
(the importer/exporter warehouse). recommendations.

The Director General made following rec- ECX has more than 65 warehouses in 23
ommendation to modernize the logistics branches, and they have invested heavily in
information system using a systematic ap- warehouse infrastructure and utilities. To
proach. A managed logistics information manage the warehouses, they use a local-
hub that captures all logistics data from ly-developed WMS with limited features.
source to end should be developed. It Even though they are using software for
should legal enforce logistics information warehouses, the warehouses do not have
use and sharing among stakeholders. It CCTV cameras, motion sensors, tempera-
should be introduced as a phased approach ture sensors for hydrophobic goods, and
for all logistics stakeholders. The phased other protective technologies for the safety
approach should follow the standardization of edible goods. These shortfalls challenge
of operating procedures and the digitaliza- their productivity.
tion of logistics processes for all logistics
stakeholders. ECX can get trucks for exporters to load
and carry goods. But, as there is no digital
platform to enable competition and com-
petency-based trucking, the sector faces
non-value-added broker commissions and
additional costs to get trucks. Every step of
loading and unloading is done manually and
this is inefficient. And trucks do not have
GPS, RFID, RS, or IoT technologies to track
and trace commodities in transit. The result
is theft and fraud during transportation.

Gap Assessment of Logistics Digitalization in Ethiopia 77

Appendix E Qualitative Analysis Based on Key Informant Interviews

“We have a report ‘fully coffee-loaded truck Wondwossen Mulugeta (PhD),

lost,’ and we have to report ‘driver has sold Director, Academic Staff Affairs
full [shipping] container of coffee,’ and oth- Office, AAU Assistant Professor,
er serious crimes. Without immediate tech- School of Information Sciences
nology interventions it is difficult to see the Date: March 05, 2021
sector becoming sustainably productive.”
What technologies are currently available
He recommended that an enforceable reg- to use with logistics systems—transport,
ulatory framework (a digital strategy) is warehouse management, inventory man-
needed to bring about change and it needs agement and cargo and vehicle tracking?
to be an interoperable, all-stakeholder-en-
gaged digital technology. Socially responsi- Even though it is a key function in day-to-day
ble digitalization is a prerequisite otherwise operations of many businesses, logistics is
social crises could be an issue. In a modern obviously slow to change. City logistics sys-
warehouse technology (that is, forklifts) tems are services that can be supplemented
can perform efficiently and less expensive- by digital technology. The most widely-used
ly. But using technology might bring about technologies in city logistics are sensor
unemployment that then leads to a social technology and vehicle tracking systems
crisis. He stressed that, “stakeholders must powered by GPS technologies. Beyond the
consider social risks when they plan for dig- on-the-move technological services, infor-
italizing the logistics sector.” mation systems solutions—like inventory
management and fleet management sys-
Ato Bailu said it was also necessity to cluster tems—provide reliable and efficient func-
warehouses based on safety and accessibil- tionalities to integrate logistics services.
ity, government needs to pay attention to Such systems help to keep track of resourc-
where agricultural goods are warehoused es availability at different warehouses and
and human capacity needs to be built. He assist in the distribution system in meeting
said having a national digital warehouse organizational objectives. Currently, there
registry would help track the status of each are many software and sensor-enable solu-
warehouse, track imported and export- tions that help in providing modern services
able goods, track the location of dangerous to A range of stakeholders. Such solutions
goods, and trace when goods are invalidly are also integrated with global and local
stored to cause artificial scarcity. He said traffic flows and mapping systems to help
implementing interoperable logistics digi- logistic services attain maximum utiliza-
talization was import to overcoming fraud, tion of resources. These services capture,
inefficiency, crime and bottlenecks. manipulate and use the information from
warehouses, inventory and traffic systems
via integration to help create optimal ser-
vices. These solutions give visibility to fleets
through live vehicle tracking and real-time

78 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix E Qualitative Analysis Based on Key Informant Interviews

weather and traffic data. Route optimiza- edge to make use of digital technologies.
tion, performance analytics and engine di- While technological skills can be acquired
agnostics are additional functionalities that swiftly, people working in the sector are
help streamline business operations. also challenged by having to operate mul-
tiple digital platforms. The digital literacy
What are the constraints, bottlenecks and of the workforce needs to be continuously
challenges in adopting these technologies kept up to date.
in Ethiopia?
The interoperability of the available digital
Technologically-enabled services contribute services is another challenge faced in digi-
to efficient resource management. But dig- tizing logistics system in Ethiopia. Many au-
ital services are challenged by two things. tomated solutions exists across numerous
The first is the availability of services pow- firms in the logistics sector. But, because
ered by internet infrastructure. The second the systems are not interoperable, firms
is the availability of skilled people to manage are forced to recreate data and business
and use the technologies. Technology, as an processes. And this adds to the time delay
enabler for the development of other sec- in services.
tors, faces these two challenges everywhere.
What future logistics- and supply chain-re-
Many open source and proprietary technol- lated technologies and information man-
ogy services can be purchased, customized agement systems do you recommend for
and deployed for modernizing Ethiopia’s logistics stakeholders in Ethiopia in the ar-
logistics. The technologies can provide a eas of logistics—finance (bank), import–ex-
wide variety of services in the sector—with port, carriers (airlines, shipping and trucks),
different level of granularity and based on port and customs operations, distribution
an organization’s needs. But since technol- centres, transporters, retailers and end-use
ogies for logistics systems are highly time customers—to help revolutionize Ethiopia’s
sensitive, real-time service is challenged by logistics digitalization.
internet connectivity issues, especially in
rural area. As real-time access is limited, un- The role of the logistics industry is to effi-
reliable connectivity will challenge fully uti- ciently organize, execute and control the
lizing many of these solutions. The service movement of products, services and infor-
not affected by connectivity problems is ve- mation from source to consumer. In these
hicle tracking as it depends on geographic processes, the area that can best modernize
location services from satellites. through digitization is organizing and using
information. Current logistics management
Human capital is another challenge when systems integrate services like order, inven-
modernizing logistics services. Personnel tory and warehouse management, strategic
working in process points in the logistics transport planning and management and
sector need to have the appropriate knowl- reverse logistics into one solution. This inte-

Gap Assessment of Logistics Digitalization in Ethiopia 79

Appendix E Qualitative Analysis Based on Key Informant Interviews

gration helps keep vehicles and assets safe approaches are found to liberate not only
by offering immediate geofence alerts when logistic services but other sectors as well by
a vehicle enters or exits a location. They providing data and information in a shared
also prevent unauthorized vehicle use and manner to achieve efficient access and pro-
prevent tampering with devices through an cessing of business data.
automated alert system. They also reduce
customer route inquiries by letting custom- Ato Aminu Juhar—Ethio-Djibouti
ers track the progress and receive alerts Standard Gauge Railway S.C, Expert
of shipments. They also provide a superior Date: 15 March 15, 2021,
customer experience by proactively sharing
arrival times and delays, thus keep call vol- Time: 9:10 am to 10:10 am
ume down. Modernized systems are also at
the stage where warehouses are managed By email
by robotic systems that provide real-time
and efficient services. Ethio–Djibouti Standard Gauge Railway
S.C. (EDR) was established in April 2017.
Logistics is a sector where stakeholders EDR has 24 stations in Ethiopia and Dji-
from many other sectors engage in the pro- bouti and provides logistics services, such
cess. The integration of such solutions with as passenger transportation and freight
e-payment and banking systems and other services for containers.
solution providers using web API (applica-
tion programming interface) are common The research team spoke to EDR expert
practices. The decentralized nature of the Ato Aminu Juhar about currently available
ecosystem shows that data management will technologies related to railway transport
be a challenge. Such cross-sectional services logistic systems. Ato Aminu Juhar said the
require collaboration and information shar- line has all necessary operational, mainte-
ing among various service providers. The nance and safety policies at hand. It has its
service from inventory Data as well as ser- own freight transportation system, adapt-
vices from the various stakeholders should ed from the Chinese railway sector. There
work in harmony for its smooth operations. is a central operation control centre that
The current state of the art for business of controls and tracks all movement along the
such nature is the use of Blockchain tech- railway line and in the stations. But, he said,
nology. The basic idea behind blockchain is unstable electric supply, unstable internet
to decentralize the storage of data so that connections and knowledge gaps are bot-
such data cannot be owned, controlled or tlenecks and present challenges for adopt-
manipulated by a central actor. Blockchain ing new technologies.
is an especially promising and revolution-
ary technology because it helps reduce risk, In terms of digitalization, he said the com-
stamps out fraud and brings transparency pany has a long-term goal of utilizing SAP
in a saleable way for numerous uses. Such for all its functions.

80 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix E Qualitative Analysis Based on Key Informant Interviews

Abiyot Bayu, PhD—Ministry of Meseret Tsegaye—Manager, Cargo

Technology and Innovation Export Traffic Handling, at Ethiopian
Date: March 18, 2021 Airlines, Cargo Terminal
Date: 16 March 2021
By email and phone
Time: 2:00 pm— 5:00 pm
An initial email has sent for Dr. Abiyot Bayu
guiding questions. A follow-up discussion Place: Addis Ababa, Ethiopian Airlines via
has then done by phone. During the phone phone and email
call Dr. Abiyot mentioned the National Dig-
ital Strategy 2025 was a guiding document The interview has made via phone and the
that helps other sectors to enact their re- supplementary information has ingested
spective digital strategies. through email and from Ethiopian Airlines
website.
He said he had reservations commenting
on the digital transformation domain guid- For the guiding question related to current-
ing question as this was addressed in the ly available technologies in logistics digita-
Digital Strategy 2025 document. lization she outline the available platforms
saying “Cargo Spot that can be used for
Regarding the logistics digitalization, he Cargo Handling system for Booking, docu-
said the Ministry of Transport was working mentation, Trucking, Finance, and etc.” She
on e-commerce as this was aligned with lo- added that other platform is “Inventory
gistics service providers. E-commerce must Control System (ICS) for Warehouse man-
align with delivery technology, which is part agement system and inventory manage-
of logistics. Logistics has to be digitalized for ment. Website tracking page that is in use
e-commerce to be successful. Implementa- for Cargo tracking and there is Cargo track-
tion e-commerce depends on fast delivery ing mobile App”
that can only be realized through digitalized
logistics. Digitalization is a critical founda- On another hand Meseret viewed her per-
tional step for creating the right enabling ception on digital transformation setting
environment for e-commerce. For example, of the country’s in logistics industry saying
the Chinese government encouraged invest- “There is much to be done on the various
ment in logistics by providing concessional system being used by all logistics stakehold-
land leases to set up warehouses and creat- ers to address system interface problem”
ed free trade zones to encourage cross-bor-
der e-commerce. The Chinese government Finally she commented about the logistics
set up a free trade zone in Hangzhou that digitalization benefit to overhaul the sector
was accompanied by the adoption of inte- inefficiencies saying that “logistics sector
grated online systems. This led to faster pro- digitalization will avoid inefficiencies and
cessing and customs clearing. increase productivity of all involved stake-

Gap Assessment of Logistics Digitalization in Ethiopia 81

Appendix E Qualitative Analysis Based on Key Informant Interviews

holders, Minimizes related costs emerging merce will be attainable in order to support
from manual and unaligned processes and and encourage Small And Middle Income
system” she stressed that “Digitalization Entrepreneurs.” From point of her discus-
has major impact on ease of doing business sion there is promising digitalization initia-
for investors which have direct impact on tives whereas there is also systems interac-
local and foreign direct investment, With tion challenge is in place.
logistics digitalization, commencing ecom-

82 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey
Quantitative Analysis

Data collection was made through a survey to assess the perceptions of respondents from
key logistics actors, including cargo owners (exporters and importers), freight forwarders
and shipping agents and customs clearing agents.

The data collection was made using two approaches. An online survey was designed and
sent to the email addresses of more than 600 freight forwarders, shipping agents, customs
clearing agents and importers and exporters during the period 25 February 2021 to 12
March 2021. Only 32 responses were received.

The collected data from the survey was audited, transcribed, translated, cleaned, trans-
ferred and analysed by the consultants using SPSS software. The quantitative data was
summarized to ease classification and to facilitate tabulation and interpretation. Descrip-
tive statistics were used to interpret the average number in each stratum for cargo owners
and logistics service providers for each variable of the digital logistics gap assessment.

Because of the low response rate to the online survey, the consultants changed course and
distributed the questionnaire using their networks. An enumerator was also hired to dis-
tribute and collect the questionnaires. In this second approach, 386 questionnaires were
duplicated and distributed (table 4.3.1 gives the distribution and response rates for the
different types of respondents).

Of the target 418 questionnaires distributed via online survey and by hand, 70 question-
naires were not returned due to non-response or were not returned within the expected
time.

Before proceeding with the analysis of the survey, it is important to look at the criteria for
representativeness and the response rate of the survey. Representativeness refers to how
well the questionnaire sample aligns with and is drawn from (is representative of) the pop-
ulation of interest. This issue was addressed in the survey design by identifying the logistics
stakeholders—logistics service providers and cargo owners—who are users [or potential
users] of logistics digitalization technology. Response rates of 60 per cent should be the

Gap Assessment of Logistics Digitalization in Ethiopia 83

Appendix F Survey Quantitative Analysis

goal of researchers for the returned surveys. For this survey, of the 418 distributed ques-
tionnaires, 345 questionnaires were returned giving an average response rate of 82.5 per
cent. Response rates varied for each variable, with a minimum response rate of 73.4 per
cent (n = 307). Hence, the minimum response rate for all variables (79) were found to be
eligible for analysis.

Most of the respondents to the digital logistics gap assessment were cargo owners (im-
porters and exporters)—184 respondents (53.3 per cent)—followed by key logistics ser-
vice providers (freight forwarders, shipping agents and customs clearing agents) with 151
respondents (43.8 per cent) (table A6.1). The 18 government service provider respondents
were senior officers from a state owned enterprise, and there were 7 warehouse service
providers who responded.

Table A6.1 Questionnaire response rate

Respondent Type Distributed Collected Response rate

(%)
Freight forwarder 70 67 95.7
Customs clearing agent 70 66 94.3
Importer 150 100 66.7
Exporter 100 84 84
Warehouse provider 7 7 100
Shipping agent 3 3 100
Government service provider 18 18 100
Total 418 345 82.5

Digital strategy
Respondents were asked whether their organization had a digitalization strategy and the
majority—218 respondents (66.3 per cent)—said they did not (table A6.2). This suggests
that digitization initiatives of logistics services at the firm or organization level is low.

Table A6.2 Availability of digital strategy by the organization

Digital strategy Frequency % Valid % Cumulative %

Valid yes 111 3.9 33.7 33.7
No 218 7.6 66.3 100.0
Total 329 11.5 100.0

84 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey Quantitative Analysis

Use of digital platforms

Respondents were also asked if they use digital platforms and most of them (70 per cent)
do not, implying a huge gap in the use of technology in the logistics service provisions of key
stakeholders (table A6.3).
Table A6.3 Use of digital platforms

Use of digital platform such as cargo Frequency % Valid % Cumulative

tracking, smart fleet management, real %
time tracking
Valid yes 100 3.5 30.3 30.3
no 230 8.0 69.7 100.0
Total 330 11.5 100.0

Use of software for business operation

Respondents were asked if they used software to run their business organization and a sig-
nificant majority (65.5 per cent) replied that they did not (table A6.4). This finding indicates
the existence of large gap in the use of software in Ethiopia to provide efficient logistics
services.
Table A6.4 Software usage

Software Usage Frequency % Valid % Cumulative %

Valid yes 113 3.9 34.2 34.2
no 216 7.5 65.5 99.7
Total 330 11.5 100.0 100

Gap Assessment of Logistics Digitalization in Ethiopia 85

Appendix F Survey Quantitative Analysis

Bottlenecks to digitize business process

Respondents were asked what holds them back from optimizing digitalization of their busi-
ness processes, and most of the respondents mentioned more than one factor (table A6.5).
The top five factors (bottlenecks) identified as significant by respondents were:

• Lack of IT experts to run, control and support digitalization—271 respondents (9.7 per
cent).

• Lack of enforcing government policy—264 respondents (9.4 per cent)

• Uncertainty about future technological developments—262 respondents (9.4 per cent);

• Belief that digitalization will not benefit the organization—255 respondents (9.1 per cent),

• Lack of availability of technologies to purchase—250 respondents (9 per cent).

The least identified factors (bottlenecks) for business process digitalization were:

• No need to replace legacy systems—53 respondents (1.9 per cent).

• High investment and operating costs—63 respondents (2.3 per cent).

• Staff resistance to change—79 respondents (2.8 per cent).

• Data security and data protection—131 respondents (4.7 per cent).

• Lack of a budget or suitable funding options for digitalization—134 respondents (4.8

per cent).

These responses confirm that there is a demand for digitalization capacity building, but
there is a lack of skilled IT experts, there is no government enforcement policy, and there is
an uncertainty surrounding digitization and a lack of awareness in the benefits.

86 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey Quantitative Analysis

Table A6.5 Bottlenecks in digitalization of business process

Bottlenecks in digitalization of business Frequency % Valid % Cumulative

processes %
Valid Lack of budget or suitable funding 134 4.7 4.8 4.8
options for digitalization
Lack of IT experts to run, control and 271 9.5 9.7 14.5
support digitalization
Uncertainty about future 262 9.1 9.4 23.9
technological developments
Uncertainty about national digital 248 8.7 8.9 32.8
standards
Lack of awareness about possible 191 6.7 6.8 39.6
applications/benefits
Data security and data protection 131 4.6 4.7 44.3
No need to replace legacy systems 53 1.8 1.9 46.2
High investment and operating costs 63 2.2 2.3 48.5
Staff resistance to change 79 2.8 2.8 51.3
Lack of physical ICT infrastructure 182 6.4 6.5 57.8
Lack leadership on digitization in the 224 7.8 8.0 65.9
organization
Lack of enforcing government policy 264 9.2 9.5 75.3
The belief that digitalization will not 255 8.9 9.1 84.5
benefit the organization
Lack of availability of technologies to 250 8.7 9.0 93.4
purchase
Lack of clearly stated return on 173 6.0 6.2 99.6
investment (ROI)
Other 8 0.2 0.2 99.8
Total 2790 100 100.0

Gap Assessment of Logistics Digitalization in Ethiopia 87

Appendix F Survey Quantitative Analysis

Top management/board commitment and support for digitalization

The support of top management and boards of directors for digitalization in organizations
was found to be marginal by a significant majority—199 (54.7 per cent)—of the respon-
dents (table A6.6). A quarter of respondents—93 (25.6 per cent)—do not support or resist
digitalization in their organization. A low level of support comes from just 17.9 per cent of
respondents who are supportive of digitization.

Table A6.6 Top management/board commitment and support for digitalization

Management commitment Frequency % Valid % Cumulative %

Valid They are supportive of 65 2.3 17.9 17.9

digitalization
They are slightly supportive of 199 6.9 54.7 72.5
digitalization
They do not support digitalization 61 2.1 16.8 89.3

They resist digitalization 32 1.1 8.8 98.1

Other 7 0.2 1.9 100.0
Total 364 12.7 100.0

Prerequisites for digitalization in your organization

Respondents were asked about prerequisites for digitalization in their organizations. They
replied as follows: Nearly half (47.4 per cent) of the respondents said ICT infrastructure
and a digital strategy were prerequisites, followed by digital leadership and senior manage-
ment involvement (19.6 per cent). Digital skill training for employees accounted for 18.6
per cent or responses and organization-wide information initiative was mentioned by 14.4
per cent of respondents. Based on this analysis, having a digital strategy at the organiza-
tional level that is underpinned by ICT infrastructure is a significant factor for logistics dig-
italization in Ethiopia. Leadership commitment and involvement follow.

88 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey Quantitative Analysis

Table A6.7 Prerequisite for digitalization in your organization

Prerequisite for Digitalization Frequency % Valid * Cumulative

%
Valid Senior managers involvement 122 4.3 10.3 10.3
Organization-wide information 170 5.9 14.4 24.7
initiative
ICT infrastructure 291 10.2 24.6 49.3
Digital strategy 269 9.4 22.8 72.1
Digital skill training for employee 220 7.7 18.6 90.7
Digital leadership 110 3.8 9.3 100.0
Total 1182 41.3 100.0

Information exchange among stakeholders

A significant number of respondents use e-mail for information exchange (31.4 per cent),
followed by an equal number of respondents (29.5 per cent) who exchange information by
phone and in person or by paper letter (29.5 per cent) (table A6.8). Social media is used as
a form of communication, but by only 6.0 per cent or respondents.

Table A6.8 Information exchange management among stakeholders

Stakeholders Information Exchange Frequency Percent Valid Cumulative

Percent Percent
Valid By phone 284 9.9 29.5 29.5
E-mail 303 10.6 31.4 60.9
In person/paper letter 284 9.9 29.5 90.4
Social media 58 2.0 6.0 96.4
Other 33 1.2 3.4 99.8
Total 964 33.6 100.0

Gap Assessment of Logistics Digitalization in Ethiopia 89

Appendix F Survey Quantitative Analysis

Method of information exchange system

Very few respondents (1.6 per cent) mentioned their use of the ERP system (table A6.9).
But a significant majority of respondents (64.3 per cent) use both e-mail and fax, followed
by excel files (16.6 per cent) and isolated digital systems (12.5 per cent.

Table A6.9 Method of information exchange system

Method of Information exchange Frequency % Valid % Cumulative %

system
Valid Enterprise Resource Planning (ERP) 18 0.6 1.6 1.6
Isolated digital systems 145 5.1 12.5 14.1
E-mail 482 16.8 41.6 55.6
Fax 263 9.2 22.7 78.3
Excel files 193 6.7 16.6 94.9
Social media 52 1.8 4.5 99.4
Other 7 0.2 0.6 7.8
Total 1160 40.5 100.0 100.0

Digital usage stage

Key logistics stakeholders were asked to rate their level (stage) of digital usage in their or-
ganizations. A significant number of respondents—152 (39.9 per cent)—replied that they
have not yet started digitalizing their business processes (table A6.10). This suggests a
large gap exists in the adoption of technology by organizations. Only 83 respondents (21.8
per cent) said they have already applied or are running digital businesses, 93 respondents
(24.4 per cent) are integrating digital technology, and 31 respondents (8.1 per cent)—an
insignificant number of respondents—are in the early stages.

Table A6.10 Digital usage stage

Digital Usage Stage Frequency % Valid % Cumulative %

Valid Already applied/running digital 83 2.9 21.8 21.8

business
Integrating digital technology 93 3.2 24.4 46.2
At early stages of adoption 31 1.1 8.1 54.3
digitalization
Not started yet 152 5.3 39.9 94.2
Unable to determine 22 .8 5.8 100.0
Total 381 13.3 100.0

90 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey Quantitative Analysis

Sector responsible for service delay

Respondents were asked to identify the principal reasons for delays in service. Forex avail-
ability was mentioned as a primary reason by 282 (27.9 per cent), followed by Internet con-
nectivity with 273 respondents (27.1 per cent), and power interruption with 258 respon-
dents (25.6 per cent). Three of the factors constitute 80.6 per cent of the respondents.
Customs clearance was perceived to be the reason for service delay by 187 respondents.
According to this perception survey, customs clearance processes only moderately account
for service delays in Ethiopia.

Table A6.11 Sector responsible for service delay

Principal sector responsible for creating a Frequency % Valid % Cumulative

delay for your service %
Valid Banking transaction(forex related) 282 9.8 27.9 27.9
Internet connectivity 273 9.5 27.1 55.0
Electricity (power interruption) 258 9.0 25.6 80.6
Custom clearances 187 6.5 18.5 99.1
Others 8 0.3 0.8 99.9
Total 1009 100.0 100

Digitalized logistics services providers

Respondents, using a five-point Likert scale, rated who among key logistics stakeholders
is most likely to use technology. The scale ranged from highly likely (5 points) to less likely
(1 point), with three as the average user (table 4.3.12). Shipping agents (mean = 3.5) and
order processing (mean = 3.48) scored the highest. Warehouse owners (mean = 3.36), ex-
porters/importers, and the least tech users per the respondents; perception are compa-
nies engaged on logistics activities of inventory, packing, and material handling. Based on
the above response, logistics service providers are more pro tech organizations than cargo
owners, and high-end logistics especially in the delivery services of warehousing, inventory
management, packaging and tracking systems in the distribution/warehouse centres are
perceived to be the logistics digitalization gaps as reflected in their low score of the likeli-
hood on the use of logistics technologies by these actors.

Table A6.12. Technology use by logistics service providers

Which type of logistics sectors are mostly using digital N Mean Std.
Deviation
technologies currently in Ethiopia?
Shipping agents 322 3.5124 1.05672
Order processing 320 3.4875 1.13086

Gap Assessment of Logistics Digitalization in Ethiopia 91

Appendix F Survey Quantitative Analysis

Which type of logistics sectors are mostly using digital N Mean Std.
Deviation
technologies currently in Ethiopia?
Customs transit 320 3.4688 1.09671
Freight forwarder 331 3.4502 1.11726
Customs cleaning agent 318 3.4182 1.09108
Laboratory service providers 320 3.3969 1.19376
Warehouse owners 320 3.3656 1.15319
Exporters/importers 320 3.3563 1.20004
Inventory packaging and material handling 320 3.2438 1.12674

E-service assessment
Respondents were asked to rate their perception on their level of logistics digital technol-
ogy and emerging technology use to effectively perform their essential business functions
on the similar five-point Likert scale continuum of very important (5), to unimportant (1)
score (table A6.13). Accordingly, digital platform use integrated with other organizations
system as an interface was rated better with above average score of (mean = 3.15), fol-
lowed by technology system use like ERP, digital warehouse management system, auto-
mated transport management, system, etc with average rating (mean = 3.08), and new
emerging technologies use like IoT, blockchain, big data, cloud logistics obtained least score
with (mean = 3,03). This implies that key logistics stakeholders are on average, more willing
to collaborate for system integration and logistics information sharing, and also less risk
prone to adopt new technologies that demands awareness creation on the use of new tech-
nologies for adoption by these logistics actors.

Table A6.13 E-service assessment

Rate the software or digital technology you use to N Mean Std. Deviation
effectively perform your essential business functions

To what extent you rate the use of digital platform/software to 320 3.1563 1.17736
run your business or in collaboration with other organization
today
To what extent do you rate the usage of technologies such 321 3.0841 1.12184
as ERP, digital warehouse management, automated transport
management systems in your business currently
Rate your organization’s current use of IoT AI, ML, big data, 322 3.0311 1.08758
blockchain, cloud logistics in your business

92 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey Quantitative Analysis

Infrastructure and ICT utilization capability assessment

On similar fashion, respondents were asked to rate on infrastructure and ICT utilization
capability in the scale of 5 (excellent) to 1 (very poor) and all rated below average as follows:
Internet access(mean = 2.7), legal framework for digital logistics industry (mean = 2.65),
usage of e-services like e-government, e-commerce, e-payment, e-banking, e-voucher, etc
(mean = 2.57), end to end ICT utilization(mean = 2.55), and power/electricity reliability
with least score(mean = 2.54) (table A6.14). Based on the respondents’ infrastructure and
ICT capability assessment, the availability of these resources are below expectation of the
key logistics stakeholders that can be categorized as huge gaps that need to be mitigated in
the logistics digitalization initiatives to be undertaken.

Table A6.14 Infrastructure and ICT utilization capability assessment

Question N Mean Std. Deviation

To what extent you rate Internet access in your workplace? 324 2.7006 .92432
To what extent you rate a comprehensive legal framework 307 2.6515 .97971
or initiatives for the digital logistics industry?
To what extent you rate the usage of e-services such 320 2.5719 .87520
e-government, e-commerce, e-portal, e-payment,
e-banking, and
e-voucher in your business processes?
How do you rate current ICT utilization in the end-to-end 323 2.5542 .89478
logistics operation and services?
To what extent you rate power/electricity reliability in your 323 2.5480 .81904
workplace/to run your business?

Organizations emerging technologies usage assessment

Respondents were asked to assess their rate of use of emerging technologies by their or-
ganization and measurement was made on a scale of 5 point being: 1 is actively searching,
2 for piloting initiative, 3 for in use or implemented and 4 upgrading and refining, whereas
5 is left for those not interested to use emerging technologies. Accordingly, the perception
survey revealed that significant majority of respondents are actively searching for use of
emerging technologies, being artificial intelligence secured the highest score of respon-
dents (68 per cent), followed by Internet of things (66.4 per cent respondents) and chat
bots (55.2 per cent). On the other hand, emerging technologies related to big data analytics
(48.6 per cent), mobile technologies (45.8 per cent), and cloud computing technology also
got significant response rate on active searching to use them by the respondent organiza-
tions (table A6.15). Most of the respondents in the range of 20-30 per cent, of the respon-
dents replied they are piloting or initiating the use of emerging technologies in their organi-
zations. However, quite significant number of respondents; on robotics and automation (41

Gap Assessment of Logistics Digitalization in Ethiopia 93

Appendix F Survey Quantitative Analysis

per cent), virtual reality (38.7 per cent), machine learning and cloud computing, 34 per cent
each replied, they are not interested on these emerging technologies. Based on this survey,
it can be interpreted as: most logistics stakeholders are either actively searching to use or
initiating to use emerging technologies in their respective business organizations, whereas,
there are quite significant number of companies who are not interested in these emerging
technologies that could potentially be attributed to lack of awareness by leadership in their
respective organizations.

Table A6.15 Organizations emerging technologies usage assessment

To what level you are N Actively Piloting/ In use/ Upgraded/ Not

using the following Searching initiative implemented refined Interested
technologies? (%) (%) (%) (%) (%)
Artificial Intelligence (AI) 315 68.0 22.5 0.3 9.2
Internet of Things (IoT) 315 66.4 23.3 10.4
Robotics and automation 315 31.1 27.0 0.3 0.3 41.3
Augmented (AR)/Virtual 313 36.7 23.3 0.3 1.0 38.7
Reality(VR)
Machine Learning 311 41.8 23.5 0.6 34.1
Cloud computing /web 312 39.4 25.3 0.6 0.3 34.3
technology
Mobile technologies 312 45.8 28.2 1.0 25.0
Big Data analytics 311 48.6 20.6 30.9
Chat bots 288 55.2 12.4 0.7 1.0 30.7

Digital technologies status and relevant assessment

Respondents were asked on to rate on the current usage (table A6.16), near term and fu-
ture plan use of logistics technologies for their business, and scaled as current = 1, 0-2 years
as 2, 3–5 years as 3, above 5 years as 4, and not planned to use at all is 5. Accordingly, on
average the response category falls between to 5 years, but varies on the type of technol-
ogy to adopt early or later. Technologies related to: ERP (mean = 2.87), Mobile data access
for partners/customers(mean=2.8), Transportation or Fleet Management Systems (mean
= 2.85), Real time cargo tracking system (mean = 2.85), Warehouse Management Systems
(mean = 2.86), Online Request for Quotes (RFQ) (mean = 2.91), Smart terminal and corri-
dor Management system (mean = 2.93), Electronic Cargo Tracking System(mean=2.97),
and Analysis of data from Social Media platforms (mean = 2.99). As per the perception
survey, the result indicates that, there are logistics technologies that can be identified and
early adopted by key logistics stakeholders within two to three years with possible inte-
gration among the key logistics stakeholders. On the other hand, on average, respondents

94 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey Quantitative Analysis

stated their plan on those logistics technology adoption in a later stage between three to
four years is ranked as follows: Robotics and Automation (mean = 3.79), Augmented Real-
ity (mean = 3.66), AI and Machine Learning (mean = 3.64), IoT Technologies and Sensors
(mean = 3.61), Blockchain (mean = 3.58), National logistics digital information hub (mean
= 3.5), Big Data Analytics (mean = 3.3), Cross-company machine-to-machine communica-
tion (mean = 3.29), Logistics control tower (mean = 3.16), E-Commerce (mean = 3.16), In-
telligent transport system (mean = 3.16), Web based communication platforms (mean =
3.08), Single window service at seaports (customs office, port authority, ship agents)(mean
= 3.08), National single window service providers’ (banks, insurance, shipping companies,
freight forwarders) systems (mean = 3.07), and Software as a Service (SaaS)(mean = 3.02).
Based on the respondents’ average estimate, planned use of digital logistics technologies
like blockchain can be realized in less than five years.

Table A6.16 Digital technologies status and relevant assessment

Please choose the digital platform you are currently using N Mean Std.
and indicate how many years you plan to use the platform for Deviation
your business processes.
Robotics and automation 311 3.7974 1.11332
Augmented Reality 315 3.6603 1.12110
AI and Machine Learning 310 3.6419 1.03851
IoT technologies and sensors 313 3.6134 1.07451
Blockchain 313 3.5847 1.00321
National logistics digital information hub 314 3.5032 .98632
Big Data analytics 310 3.3097 1.02757
Cross-company machine-to-machine communication 317 3.2934 1.09907
Logistics control tower 313 3.1661 .95636
E-commerce 313 3.1661 .95636
Intelligent transport system 314 3.1624 1.02791
Web based communication platforms 323 3.0867 1.10837
Single-window service at seaports (customs office, 310 3.0806 1.06273
port authority, ship agents)
National single-window service providers (banks, 314 3.0732 1.09503
insurance, shipping companies, freight forwarders)
Software as a Service (SaaS) 316 3.0285 1.01535
Analysis of data from social media platforms 318 2.9906 1.02796
Electronic Cargo Tracking System 319 2.9718 .97572

Gap Assessment of Logistics Digitalization in Ethiopia 95

Appendix F Survey Quantitative Analysis

Please choose the digital platform you are currently using N Mean Std.
and indicate how many years you plan to use the platform for Deviation
your business processes.
Smart terminal and corridor management system 317 2.9306 1.02573
Online request for quotes (RFQ) 316 2.9146 .99314
Warehouse management systems 322 2.8665 .89870
Real time cargo tracking system 316 2.8513 1.00477
Transportation or fleet management systems 316 2.8513 .98563
Mobile data access for partners/customers 320 2.8031 1.09801
Enterprise Resource Planning 320 2.7875 .97548

Digital themes and initiatives assessment

Respondents were also asked to rate their level of awareness or knowledge on general
global logistics digital themes in a five-point Likert scale of being 5= very high to 2= low;
and 1 left for those respondents who preferred to say “I don’t know”. Accordingly, all of
the respondents response category are below average as indicated as: Logistics control
tower (mean = 2.35), Analytics as a service (mean = 2.26), Digitally enhanced cross border
platform(mean = 2.28), City logistics (mean = 2.28), Drones based delivery (mean = 2.18),
Autonomous Vehicles (mean = 2.31), 3D printing(mean = 2.17), Crowd sourcing (mean =
2.19), Circular economy (mean = 2.16), Shared transport capacity (mean = 2.2), Shared
warehouse capacity (mean = 2.28),and Same day delivery (mean = 2.3). Based on the re-
spondents’ view about their level of knowledge or awareness in logistics digital technolo-
gy can be rated as low that is due to lack of platform to create awareness or exposure or
knowledge transfer through institutional based training and human capital development
that applies in the logistics sector.

Table A6.17 Digital themes and initiatives assessment

To what extent you rate your awareness or N Mean Std. Deviation

knowledge on the following topics?
Logistics control tower 311 2.3569 .83740
Analytics as a service 313 2.2620 .80963
Digitally enhanced cross border platform 313 2.2843 .81981
City logistics 313 2.2812 .83830
Drones based delivery 309 2.1845 .87995
Autonomous Vehicles 309 2.3172 .93787
3D printing 310 2.1774 .88724
Crowd sourcing 310 2.1935 .89657

96 Gap Assessment of Logistics Digitalization in Ethiopia

 Appendix F Survey Quantitative Analysis

To what extent you rate your awareness or N Mean Std. Deviation

knowledge on the following topics?
Circular economy 311 2.1672 .82169
Shared transport capacity 310 2.2097 .87646
Shared warehouse capacity 310 2.2839 .92959
Same day delivery 311 2.3312 .95527

Work environment and ICT capability and readiness assessment

Respondents were asked to rate in a five-point Likert scale their level of agreement/dis-
agreement (table A6.18), being 1=extremely disagree to, 5= strongly agree on the work
environment and technology capability assessment and responded as follows in descend-
ing order Accordingly, employee resistance to new technologies (digital platforms) se-
cured the highest mean score (mean = 3.92), followed by ICT department’s capability to
support or facilitate new digital technologies with (mean = 3.9), and then senior managers
understanding and support for digitization with (mean = 3.85);employees enough skill to
use computer (mean = 3.76), followed by organization level ICT infrastructure availability
for digitalization (mean = 3.72), and organization level data driven service and data driven
decision making. Based on this analysis, it can be safely interpreted that, the management
commitment to enable digitalization process and the availability of ICT infrastructure in-
cluding employee’s level of competency favourably rated above average by respondents.

Table A6.18 Work environment and ICT capability and readiness assessment

Please indicate the extent to which you agree with the N Mean Std.
following statements Deviation
Senior managers understand and supportive for digitalization 306 3.8529 .83839
My organization ICT infrastructure is enough for digitalization 305 3.7246 1.01123
My organization employee resist to new technologies (digital 313 3.9297 .86316
platforms)
My organization ICT department is capable to support or facilitate 312 3.9071 .88631
new digital technologies
Most of my organization employees have skills to use computer. 314 3.7643 1.08218
My organization uses data-driven services and data-driven decisions 307 3.7003 1.16376

Gap Assessment of Logistics Digitalization in Ethiopia 97

Appendix F Survey Quantitative Analysis

Overall logistics digitalization assessment

As portrayed in table A6.19, overall logistics digitalization assessment was aggregated
based on each variable and computed target variable by calculating mean of the mean and
revealed as follows: Supportive work environment from top management (mean = 3.8),
followed by digital technology users by logistics service providers and cargo owners with
(mean = 3.4), then assessment of digital technology use assessment currently or in the
near future with mean of 3.15 years, and e services with (mean = 3.09). These variables got
above average score on logistics digitalization assessment based on the perception survey.
On the other hand, variables related to Infrastructure and ICT capability with (mean = 2.6),
emerging technologies (mean = 2.38), and digital themes (mean = 2.27) are among the vari-
ables that got below average score of respondents rating. In nutshell, Infrastructure and
ICT utilization capability assessment, emerging technologies usage assessment, and digital
themes and initiatives assessment are regarded as gaps in digital logistics assessment.

Table A6.19 Overall logistics digitalization assessment

Aggregate Mean N Mean Std. Deviation

Work environment 316 3.8069 .70677
Technology users 338 3.4052 .83523
Digital technology 343 3.1554 .49183
E-services 323 3.0939 .94095
ICT infrastructure 327 2.6034 .57003
Emerging technologies 322 2.3890 .81245
Digital themes 323 2.2763 .56770

98 Gap Assessment of Logistics Digitalization in Ethiopia

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100 Gap Assessment of Logistics Digitalization in Ethiopia