Djibouti is strategically located, acting as a natural port at the meeting point of the Red Sea and the Gulf of Aden, serving as a bridge between East Africa and the Arabian Peninsula. The country is well positioned as an international transit port, having one of the busiest shipping lanes in the world. After the war between Ethiopia and Eritrea, it became the main port and route to the sea for landlocked East African countries, dramatically increasing its importance. This was a turning point for Djibouti and more developments are planned to upgrade the existing port facilities with the support of major investments.

In 2006, the government of Djibouti and Dubai Port World (DP World) established a joint venture granting the company a 20 year concession to manage the international airport of Djibouti at Ambouli and to build a new oil and cargo terminal at Doraleh, worth $397 million.

The old port of Djibouti (Port Autonome International de Djibouti - PAID) has been operating as the center of the country’s cargo traffic since 1985 and was expanded through several investment during the 2000s. In 2013, 16,596 vessels, carrying 754,461 million tons of load, passed through the Suez Canal and 1,644 of these (9.9% of the total) visited the port of Djibouti. Of the total vessels, 39.1% were containers, 22.3% were navy vessels, 13.1% general cargo ships, 6% tankers and other categories accounted for 19.5%. The port of Djibouti handled nearly 6.5 million tons in 2013. In that year, total container traffic grew by 0.40% with 794,731 TEU, up from 791,463 TEU in 2012.

Container Port Traffic (TEU per year) 2011 2012 2013 Change
Doraleh Cargo Terminal (DCT) 703,617 743,273 743,793 0.1%
Port of Djibouti (PDSA) 40,361 48,190 50,938 5.7%
Transshipment (Total) 384,065 368,498 352,109 -4.4%
Total 743,978 791,463 794,731 0.4%

Transshipment is a major economic activity in the transport sector in Djibouti. Djibouti’s transshipment volumes have not been stable in recent years due to heavy competition from other ports in the Red Sea, such as Aden (Yemen), Salalah (Oman), Port Sudan (Sudan) and Jeddah (Saudi Arabia). However, transshipment still has an important share in the country’s port-related activities, accounting for 44% of total traffic. In 2013, Djibouti handled 352,109 TEU in transshipment in total, 4% lower than the 368,498 TEU of the previous year.

In 2006, the government of Djibouti and Dubai Port World (DP World) established a joint venture granting the company a 20 year concession to manage the international airport of Djibouti at Ambouli and to build a new oil and cargo terminal at Doraleh, worth $397 million. Opened in 2009, Doraleh Container Terminal (DCT) has become a leading terminal, processing 93% of the country’s total traffic, with 743,793 TEU by the end of 2013. Additionally, it is the center of transshipment services for many major global shipping routes, accounting for 98% of Djibouti’s total transshipment volume. With the most advanced facilities in the region and an annual handling capacity of 1.2 million TEU, Doraleh is regarded as the fifth major container port in all of Africa after Port Said (Egypt), Durban (South Africa), Tanger Med (Morocco) and Damietta (Egypt). As Doraleh has continued to improve its efficiency, Djibouti announced the launch of a new expansion project to upgrade its capacity to 3 million TEU per annum. The plan is scheduled to be completed at the end of this year and costs about $300 million.

The new investment program amounts to a total of around $6 billion, financed mostly by Chinese investors.

The latest economic statistics for Djibouti demonstrate it is likely to strengthen its position in East Africa as a regional logistics hub. As such, new ports, container facilities, roads and railways are being planned by the government to boost the country’s cargo traffic. The new investment program amounts to a total of around $6 billion, financed mostly by Chinese investors. Chinese interest in Djibouti is relatively new, beginning with the privatization of PAID in 2012, of which China Merchant Holding International (CMHI) now holds a share of 23.5% worth $185 million. This partnership led to new Chinese investments in the country’s transport sector, such as Exim Bank of China funding the expansion of railway transportation with US$ 2.7 billion in 2013. This project will both renew existing railway routes and construct new ones. This will result in a 756 km transit line which will operate between Addis Ababa and the port of Djibouti. A Chinese company, China Civil Engineering Construction Cooperation (CCECC), is also involved in the construction, which has been underway since 2013.

Djibouti is a transit country and is highly dependent on regional trade, of which the Ethiopian market represents the vast majority of the trade Djibouti receives. The port of Djibouti play a vital role for Ethiopia, a landlocked country. Ethiopian transits represent 83.2% of Djibouti’s cargo traffic. The highest amount of total throughput thus far seen was in 2009, when it reached 8.83 million tons, compared to 848,000 tons of local trade. Ethiopia reached an agreement with Djibouti to invest $61 million to build a new port in Tadjoura. The new port will be an alternative route to the sea for Ethiopia’s re-exports and will greatly contribute to their trade volume.

Total Cargo Throughput 2008 2009 2010 2011 2012 2013
Djiboutian Traffic 1.188 0.848 0.515 0.871 0.853 0.648
Ethiopian Transits 6.798 8.830 5.095 5.663 5.843 5.532
Other 1.344 1.603 413 207 166 464
Total 9.330 11.281 6.023 6.741 6.872 6.644

*World Bank

Despite its modern facilities and unchallenged capacity levels, Djibouti faces tough competition with respect to transit traffic and transshipment from other ports in its region. Ethiopia is a geographically large country, surrounded by multiple neighbors with sea access. Assab and Massawa are definitely not options due to Ethiopia’s political problems with Eritrea. However, at almost the same distance to Addis Ababa (705 km), Berbera is one potential rival for Djibouti and accounts for a 10% share of all Ethiopian transit traffic, but this is unlikely to rise as long as Somalia continues to face political instability and national security problems concerning maritime piracy. Unlike the ports in Eritrea and Somalia, however, Port Sudan and Mombasa are real alternatives showing significant performance with respect to port traffic in East Africa. In 2013, the port of Mombasa handled around 22 million tons and Port Sudan processed more than 10 million tons. Each of these is at a greater distance from Addis Ababa (Mombasa 1,450 km; Port Sudan 1,195 km), whereas the distance from Djibouti is only 525 km. Thus, Djibouti remains the dominant port for Ethiopia, accounting for more than 85% of all Ethiopian trade.

South Sudan, as a landlocked country, has also benefited from Djibouti’s sea access since its independence. It has become a new oil producer in Africa with 3.5 billion barrels of proven reserves. South Sudan already has two pipelines that pass through Sudan but an alternative corridor would decrease its dependency on Port Sudan to export its oil. In 2012, Djibouti, Ethiopia and South Sudan agreed on a deal to build a new oil pipeline from Juba to Djibouti, which will cost nearly $3 billion, in parallel to the Juba-Nairobi-Lamu pipeline plan. Although the Kenyan coast, 1300 km away, is closer to South Sudan than the port of Djibouti, Djibouti is a more secure option owing to the presence of foreign military facilities in the country.

Air Transport

Djibouti has one international airport with paved runways in Ambouli (AID), just outside of the capital city. The airport is used for both civil and military purposes. It mainly serves the needs of foreign forces based in the country. The airport hosts many commercial lines operated by major air companies coming from Africa, Europe and Middle East. Turkish Airlines’ number of passengers grew by an incredible 352% in 2013. It became the second largest operator in Djibouti, spurred on by recent Turkish investments. Ethiopian Airlines had the biggest share of total passengers with 22% but this has decreased. According to the records, the total number of passengers travelling by air increased in 2013 by 7.7% with 262,108 passengers, compared to 243,194 in 2012. Additionally, transit passengers represented about one-fifth of the total number and accounted for 56,630 of these last year.

Like the maritime sector, the air transport sector benefits from the country’s strategic position and serves as a transit zone between Europe, Asia and Africa, but has not been able to attain significant volumes of business. Given the current situation, more work is still needed for Djibouti to become an active hub in the region for this sector.

Number of Passengers 2012 2013 Total Share
Change
Ethiopian Airlines 64,179 57,760 22% -10.0%
Turkish Airlines 7,863 35,617 13% 352%
Fly Dubai 23,726 24,237 9% 2.15%
Kenya Airways 27,306 23,976 9% -12.2%
Yemenia Airlines 24,390 20,344 7% -16.5%
Transit 49,661 56,630 14% 14%
Total Traffic 243,194 262,108 100% 7.7%

*AID; COMESA; DISED