The Ethio-Djibouti Standard Gauge Rail Transport S.C., a bi-national public company headquartered in Addis Ababa, was formed in 2017 to operate the railway.

The line then runs southeast to Modjo and Adama, both towns located in the Ethiopian Great Rift Valley.

Crossing the Ethiopia-Djibouti border between Dewale and Ali Sabieh, the line reaches the Djibouti passenger terminal at Nagad railway station, near Djibouti–Ambouli International Airport.

Four of the 21 railway stations are designed as passing loops only, so there is no freight loading / unloading or passenger service.

[4] All station buildings along the line contain facilities for ticketing and refreshment, and they even have prayer rooms.

[citation needed] Ethiopia is not a member of the Northern Corridor Integration Project, which has selected the Chinese Class 1 standard for all of its railways.

The single-track sections are equipped with passing loops, each of which is triple-track so that two trains can wait for the main line to clear.

[10][19] As the railway deteriorated in the 1980s due to a lack of spare parts and maintenance, Addis Ababa lost railroad access to the sea by 2004.

Since 2014, operation has only been possible on 213 km of rehabilitated tracks in Ethiopia between Dire Dawa and the border with Djibouti at Guelile.

The connection between the commercial centres of Ethiopia (e.g. Addis Ababa) and the sea ports in Djibouti had been broken.

At that time, Ethiopia initiated an ambitious Growth and Transformation Plan (GTP) to develop the country's economy through infrastructure investment.

A new electrified standard gauge railway was expected to reduce cargo transit times from three days by road to twelve hours by train, and cargo transport costs to one-third of the cost of road transport.

[29] In 2015, farmers in Ethiopia had suffered crop failures of between 50% and 90% due to a catastrophic drought, and the port of Djibouti was backed up with ships waiting to unload grain for hungry Ethiopians.

[30] Although construction was still in progress on some sections, the completed portion of the railway was put into emergency operation in November 2015 to carry grain to drought-stricken Ethiopia.

[31][32] The officially completed Ethiopian section was formally inaugurated on 5 October 2016 in the new Furi-Labu railway station in Addis Ababa, by the presidents of Ethiopia and Djibouti.

The two prime contractors, CREC and CCECC, formed a consortium to operate the entire railway for the first 3–5 years, while local personnel are trained.

[25][39][40] Despite being inaugurated in October 2016 and January 2017, Djiboutian authorities still considered the railway to be under construction and expected it to become operational not before the end of 2017.

[18] There are plans about further extension of the Addis Ababa-Djibouti railway to Yemen via mixed-use 32 km (20 mi)-long Bridge of the Horns but cancelled by various reasons (e.g. Yemeni Civil War since 2014 and tectonically active Arabian Plate that caused earthquakes raging in Turkey).

The railway line was built without access roads [citation needed] or freight trunk connections to existing sea and dry ports, industrial zones, and other storage depots.

[46] It was official policy to prioritize low initial construction costs, as the integration work was considered to be "easy and quick".

[47] Another official said that railway integration was too complex to consider at the planning stage, as many local authorities would have to coordinate their efforts.

No spur lines were built to the three different terminals in question, and the infrastructure for handling bulk goods and fuels was totally missing.

As a result, there was no additional funding available to complete the surrounding infrastructure necessary to place the railway into commercial operation.

The Modjo Dry Port railway loading and unloading facilities became partially operational at the end of 2017, but are (2018) still not completed.

[44][50] In the second half of 2017, construction works started at the Port of Doraleh near the DCT to link this container terminal with the railway.