Ethiopia Relied on Djibouti for Bulk of Trade
Ethiopia routed nearly all of its seaborne cargo through Djibouti during the 2025/26 financial year amid regional instability.
Updated on Sept. 27, 2026 in Transportation
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Data from the 2025/26 financial year shows Ethiopia routed 96.71 percent of its 17.57 million metric tonnes of seaborne trade through the Port of Djibouti. The heavy reliance on a single corridor highlights persistent logistical challenges for the landlocked nation.
Why it matters
Regional security concerns, including volatile Red Sea shipping and diplomatic disputes, have hindered efforts to diversify trade corridors. These complexities continue to exert significant pressure on national transit logistics.
During the 2025/26 period, road transport carried 80 percent of Ethiopia's total freight, while the Ethio-Djibouti railway moved the remaining volume. Berbera Port, meanwhile, operated at only 30 percent of its 500,000 TEU annual container capacity.
The players
DP World
A multinational logistics company based in Dubai that manages global port terminals and cargo infrastructure projects.
Ethiopia
A landlocked nation in the Horn of Africa that relies on neighboring coastal countries for access to international maritime trade routes.
The details
Shipping volatility and Houthi-led conflict along the Red Sea coastline have caused a 50 to 55 percent drop in regional shipping volumes since 2023. While DP World has committed $442 million toward the development of Berbera Port, diplomatic tensions regarding sovereignty claims have stalled the anticipated shift toward alternative maritime gateways.
Timeline
2021: DP World signed a corridor development agreement with Ethiopia.
2023-2025: Red Sea shipping volumes declined by 50 to 55 percent.
January 2024: Ethiopia and Somaliland signed a memorandum of understanding.
2025/26 financial year: Ethiopia routed 96.71 percent of trade through Djibouti.
December 2024: Turkey mediated the Ankara Declaration.
Market Landscape
The trade reliance on Djibouti reflects a broader bottleneck in the Horn of Africa's logistics infrastructure, where political friction prevents the utilization of secondary ports. This situation reinforces a regional dependency on established corridors despite the push for infrastructure diversification.
Consumers in the region face potential price volatility as shipping operators continue to redirect vessels away from the Red Sea to avoid security risks. These logistical hurdles may ultimately influence the availability and cost of imported goods within the Ethiopian market.
The takeaway
Geopolitical instability in the Horn of Africa significantly limits the efficiency of landlocked trade routes and increases reliance on single-corridor gateways. Companies and stakeholders should monitor regional sovereignty negotiations as the primary driver for future infrastructure and supply chain diversification.
Further reading
For broader context on current trade logistics, visit the Transportation section.
Source note: This article includes information reported by Mereja.
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