The objective of this study is to explain the effect of ACE on Air Cargo TerminalrnWarehouse performances in the case of Ethiopian Airlines Group Cargo section. Arnsystematic literature review was made on ACE operating system and warehousernperformance to identify the explanatory or independent variables and dependentrnvariables. The four constructs of ACE namely process improvement tools, wasternillumination tools, decision making tools and problem-solving tools are considered as thernindependent variables. The dependent variable was warehouse performance. Structuredrnquestionnaire was used to collect data through self-administered way. The collected datarnwas analysed through SPSS version 20. Descriptive analysis namely percentage, meanrnand standard deviation were used to describe the variables in the study while inferentialrnanalysis specifically of Correlation and regression analysis was conducted to determinernthe effect of ACE on air cargo terminal warehouse performance. Filed observation,rninterview, and questionnaires were used to collect data. A total of 55 questioners wererndistributed to be filled by warehouse operation employees from sections namely, CargornImport, Cargo export and cargo Transit section, of which 48 questioners were filled andrnreturned with a response rate of 87%. SPSS statistical software was employed for thernanalysis. The study reviled that waste elimination tools and decision-making tools haverndirect and strong relationship with 71.1 % of the variation in performance of ECLS AirrnCargo Terminal warehouse with the other two variables also have positive relationship.