**Expanded Distribution & Supply Chain Strategy for Boaz Trading PLC**
### **1. Import Logistics via Djibouti Port**
**Strategic Choice**:
- **Gateway to Ethiopia**: As a landlocked nation, Ethiopia relies on Djibouti Port, which handles 95% of its imports. The port’s modern infrastructure (e.g., Doraleh Multipurpose Port) ensures efficient offloading of Russian oil shipments.
- **Geopolitical Advantage**: Djibouti’s stable political climate and Ethiopia-Djibouti trade agreements reduce tariff barriers (5% import duty under *COMESA*).
**Operational Workflow**:
- **Shipping Routes**: Oil tankers from Novorossiysk (Russia) to Djibouti (14–18 days via Suez Canal).
- **Customs Clearance**: Partner with Djibouti-based logistics firm *SGTD* for expedited clearance (24–48 hours vs. industry average 5 days).
- **Overland Transport**:
- **Rail**: Ethio-Djibouti Standard Gauge Railway (750 km, 12-hour transit) for 70% of shipments.
- **Road**: Partner with *Selam Trucking* for remaining 30%, using ISO-tank trucks (capacity: 30,000 liters).
**Challenges & Mitigation**:
- **Port Congestion**: Pre-book slots via *Djibouti Ports Authority* at 15% premium.
- **Tariff Fluctuations**: Leverage Ethiopia’s *Priority Sector Import Scheme* for 8% duty reduction on fuel.
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### **2. Storage & Warehousing in Addis Ababa**
**Facilities**:
- **Capacity**: 3 leased warehouses (total 15M liters) in Addis Ababa’s Eastern Industrial Zone.
- **Specifications**:
- Climate-controlled tanks to maintain fuel quality (ISO 8217 standards).
- Fire suppression systems and 24/7 security via *G4S Ethiopia*.
**Inventory Management**:
- **Real-Time Tracking**: SAP Integrated Business Planning (IBP) software for demand forecasting.
- **Safety Stock**: Maintain 20% buffer inventory (3M liters) to hedge against supply disruptions.
**Sustainability**:
- Solar panels (500 kW capacity) power 30% of warehouse operations, reducing diesel generator reliance.
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### **3. Last-Mile Delivery Network**
**Partnerships**:
- **Local Trucking Firms**:
- *Ethio-Djibouti Transport*: 50-truck fleet with GPS tracking for urban/rural deliveries.
- *GreenFreight Ethiopia*: Fuel-efficient Euro V trucks (15% lower emissions).
- **Service Level Agreements (SLAs)**:
- 48-hour delivery guarantee to industries; 72 hours for rural areas.
- Penalty: 5% refund for delays exceeding 24 hours.
**Micro-Distribution**:
- **Motorcycle Vendors**: 500 “Boaz Fuel Boda” riders with 20-liter containers for remote households.
- **Kiosk Partners**: 200+ shops in Addis Ababa offering prepaid 5-liter jerrycans.
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### **4. Risk Management & Contingency Planning**
- **Political Instability**: Diversify routes via Dire Dawa (alternative rail hub).
- **Fuel Spills**: Insure shipments via *African Trade Insurance Agency* (ATI).
- **Customs Delays**: Pre-clear shipments using Ethiopia’s *Single Window System*.
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### **5. Technology Integration**
- **IoT Sensors**: Monitor fuel temperature/purity during transit (partner: *Siemens MindSphere*).
- **Blockchain**: Digital Bill of Lading (DBL) via *WaveBL* to streamline documentation.
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### **6. Cost Efficiency & Scalability**
- **Economies of Scale**: Reduce per-liter logistics cost from ETB 2.5 to ETB 2.0 by Year 2 via volume discounts with rail operators.
- **Future Expansion**: Negotiate warehouse leases in Hawassa (textile hub) and Mekelle (Tigray demand).
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**Conclusion**
Boaz’s supply chain combines Djibouti’s strategic port access, tech-driven warehousing, and agile last-mile partnerships to ensure reliable, cost-efficient fuel distribution. By embedding sustainability and risk mitigation, the model aligns with Ethiopia’s industrial growth while underpinning Boaz’s 150% ROI target.