Djibouti’s port sector is experiencing increased transshipment activity as geopolitical tensions in the Red Sea continue to disrupt international shipping routes, but rising fuel prices, equipment maintenance expenses and cargo-handling costs are putting pressure on operations and contributing to higher consumer prices.
Aboubaker Omar Hadi, chairman of the Djibouti Ports and Free Zones Authority (DPFZA), said the country’s maritime sector had demonstrated resilience despite uncertainty surrounding regional shipping routes. However, he warned that the financial burden associated with the disruptions was becoming increasingly difficult to ignore.
Speaking at a press conference at the Red Sea World Exhibition Center in Djibouti City on Thursday, Hadi assessed port performance amid regional maritime disruptions.
Djibouti’s strategic location at the southern entrance to the Red Sea, near the Bab el-Mandeb Strait and the Gulf of Aden, has made it a critical gateway for trade connecting Asia, the Middle East, Africa and Europe. Its ports serve as important logistical hubs for regional commerce, particularly for landlocked Ethiopia and other markets across the Horn of Africa.
As security concerns have prompted shipping companies to change their traditional routes, Djibouti has benefited from increased transshipment volumes, with major carriers unloading containers for distribution to East African countries and other Red Sea destinations.
“From a maritime traffic standpoint, we are doing well—I would even say slightly up—simply because our transshipment volume has increased,” Hadi said.
Under the revised arrangements, some shipping companies unload cargo in Djibouti before vessels sail around the Cape of Good Hope to reach destinations in Europe and the Atlantic region.
However, Hadi described the increase as an unexpected development driven by circumstances beyond the country’s control, expressing hope that the disruption would not continue for long.
Despite the additional traffic, rising operational expenses are creating challenges for port management. Higher fuel prices, influenced by geopolitical tensions and volatility in international energy markets, have increased the cost of operating port infrastructure and maintaining containers and equipment.
“In terms of operational costs, for fuel used to maintain goods and containers in our ports, everything has gone up,” Hadi said.
Maintenance of heavy machinery and cargo-handling equipment has added to the financial burden, raising concerns about the sustainability of port operations if costs continue to climb.
The effects are also extending beyond the maritime sector. Higher shipping and logistics expenses can increase the cost of imported commodities, placing additional pressure on businesses and households across the region.
“Prices are indeed rising for consumers,” Hadi acknowledged. The developments are particularly important for Ethiopia, which depends heavily on Djibouti’s ports for international trade. Increases in shipping and port-related expenses can affect import costs and the prices of goods reaching Ethiopian markets.
Meanwhile, Hadi highlighted the Francophonie Economic Mission as an opportunity to attract investment and strengthen Djibouti’s international commercial relationships.
He welcomed the event, saying it was helping raise the country’s profile among French-speaking business communities and international investors.
Djibouti aims to capitalize on its strategic location, port infrastructure and free zones to diversify trade partnerships and strengthen its position as a regional logistics hub.
However, the long-term benefits of increased transshipment activity will depend partly on developments in the Red Sea. A return to normal shipping routes could reduce some of the additional traffic, while prolonged instability could sustain demand for alternative logistics arrangements and keep operating costs elevated.