Jebel Ali Port. Photo credit: DP World
In a strategic move to enhance trade connectivity, the UAE-based logistics giant DP World has introduced a new shipping route linking Dubai’s bustling Jebel Ali Port with Berbera Port, located in the self-proclaimed state of Somaliland. This initiative aims not only to strengthen trade relations between the Gulf and East Africa but also to tap into the lucrative market of neighboring Ethiopia via Berbera Port, a facility that has been rapidly evolving since DP World took the reins there in 2017.
Berbera Port is no ordinary port; it occupies a prime location on the Gulf of Aden, near the Bab al-Mandab Strait—an essential maritime passage through which a staggering 12% of global trade flows. Since its operational overhaul, the port has garnered attention as a strategic asset, particularly with DP World’s ambitious plans to significantly expand its capacity. Currently, the terminal can accommodate 500,000 twenty-foot containers annually, but future expansions aim to boost that figure to an impressive 2 million. Additionally, over 4.1 million livestock pass through Berbera each year, representing trade estimated at over US$1 billion.
To fortify this trade infrastructure, DP World has been actively developing the Berbera Special Economic Zone, which will further enhance the port’s capacity and capabilities. With the new shipping service operating every nine days, this route is expected to facilitate seamless cargo movement from Berbera to Ethiopia, a country that depends heavily on importing goods through Djibouti due to its landlocked status.
Trade relations between Berbera and Ethiopia are critical, especially as this Horn of Africa nation, with a population exceeding 130 million, seeks alternative routes for its international commerce. In 2021, DP World and Ethiopia’s Ministry of Transport signed a memorandum of understanding aimed at concentrating efforts on transforming the corridor from Addis Ababa to Berbera into a major logistics and trade route. This plan envisions substantial investments in supply-chain infrastructure—covering everything from dry ports to cold-chain depots—bolstering the existing logistical capabilities and ensuring smooth transportation of goods.
In a recent diplomatic visit, Somaliland’s new president, Abdirahman Mohamed Abdullahi, also known as Irro, traveled to Ethiopia to further discussions on a long-anticipated trade and transit agreement. This agreement holds the potential to streamline and enhance trade relations significantly between the two regions, and it aligns closely with DP World’s ambitions.
The path to formalizing this trade agreement hasn’t been without hurdles. In January 2024, a controversial memorandum of understanding (MoU) was signed, proposing access for Ethiopia to 20 kilometers of Somaliland’s coastline for the development of a commercial facility and naval base. In return, Somaliland sought recognition of its independence. This agreement triggered tensions with Somalia’s federal government, which lays claim to Somaliland. Despite initial setbacks, including the MoU being placed on indefinite hold, discussions between Somaliland and Ethiopia reportedly continue, moving toward a practical trade agreement.
The new deal is expected to address vital aspects such as customs regulations for goods traversing the border, along with technical provisions related to insurance and truck movement authorizations. Notably, Somaliland is also exploring opportunities to export natural gas from the Ogaden LNG project through the Berbera port, further expanding its trade capacity and offerings.