Capt. Prakash Joag

MULTIMODAL TRANSPORT OPERATIONS

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Objectives

How does multimodal transport differ from the earlier conventional system of transport ?In what ways has multimodal transport helped the shipper ?Why are containers the best mode of utilization for multimodal transport ?What is the role of Multimodal Transport Operator ?Enumerate different types of multimodal transport operationsExpand the following abbreviations :

MTD MTNVO-MTOCFS

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Brief Overview

Goods moving in international trade have to often pass through the hands of more then one carrier and in more than one mode of transport.

Conventional System

The consignor enters into separate contracts with each carrier , the liability of each carrier being limited to the carriage performed by him

The consignor or his agent has also to attend to all the arrangements required for the transshipment of the goods from one mode of transport to another , including , if necessary warehousing of the goods at any transshipment points

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Brief Overview

Multimodal Transport

The consignor entrusts the goods to the person who undertakes to organize MMT(Multimodal Transport ) and make all the intermediate arrangements for through movement of goods and their delivery

International MMT has been defined as the carriage of goods from one country to another by more than one mode of transport on the basis of single contract.

Essential feature of this system are as below;

>Based on single contract

>MMT operator act as principal and not as agent of the consignor or the carriers participating in the MMT operations

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The concept of international multimodal transport covers the door-to-door movement of goods under the responsibility of a single transport operator. Although the concept might not be new, it developed with the container revolution initiated in the late 50's by Malcom McLean and his trucking operations
The emergence of the container technology and of the multimodal transport concept came from and facilitated growing international trade. Trade and transport are inextricably linked: efficient transport services are a prerequisite to successful trading
International transport generally implies the use of various transport links (interfaces and modes), each link corresponding to a transfer, storage or transport operation either in the country of origin, in a transit country, or in the country of final destination.

MMT Concept

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d) This situation has created a number of problems over the years, as more and more shippers are realizing that this new concept is involving the effective participation of various transport mode operators but does not always make clear who is responsible for delivering cargo at destination in safe conditions, according to agreed schedules

e) Considering the variety of cultures, languages and commercial practices at both ends of a trade, and the resulting complexity of assembling such an international transport operation, it would appear reasonable to a trader to let one qualified operator organize andbe responsibleand accountable for the entire transport chain

MMT Concept

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f) Multimodal transport implies the safe and efficient movement of goods, where the MTO accepts the corresponding responsibility from door-to-door. With technological development of transport means and operations, as well as in communications, coupled with liberalization in the provision of services, more and more transport operators are able to provide such safe and efficient transport. These services are increasingly market-segment oriented rather than transport mode oriented.

g) The absence of international rules governing the successive carriage of goods resulted in peculiar problems in the matter of carriers' responsibility and the liability for loss of or damage to the goods occurring in the course of a multimodal transport operation.

MMT Concept

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UNCTAD MANDATE

The United Nations Conference on Trade and Development (UNCTAD) is a permanent organ of the General Assembly of the United Nations, established by General Assembly resolution 1995 (XIX). The general aim of UNCTAD is to promote international trade and economic development, especially those of developing countries. Hence, the economic, commercial and related legal aspects of maritime transport including ports and connected inland transport are necessarily subjects of direct concern to UNCTAD. Subsequent decisions of various United Nations bodies have considerably expanded the scope of competence of UNCTAD to embrace the entire spectrum of the transport sectors involved in multimodal transport operations and in the standardization of containers

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UNCTAD MANDATE Contd

In its Resolution 2098(LXIII) on Programming and Co-ordination in the United Nations system, ECOSOC (Economic & Social Council) endorsed the conclusions and recommendations of the Committee for Programme and Co-ordination. Among other recommendations, it assigned to UNCTADthe responsibility, at the global level, for trade and development and related aspects of shipping.The Committee also recommended that the primary responsibility with respect to multimodal transport and containerization be given to UNCTAD as the focal point within the United Nations system

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Overview

Multimodal Transport

The MMT system is based on the principle that maximum efficiency in transport can be achieved if goods are transported from door-to-door on the basis of a single contract and through freight rate

When such door-to-door service is planned and coordinated as a single operation, the burden of documentation and other formalities connected with the conventional is reduced to minimum

To the traders the fast transit of goods made possible under such system would reduce the disadvantage of distance from market to the capital being tied up, further they will be able to replenish the stocks more quickly and with greater efficiency

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Multimodal Transport

Although multimodal transport is not compatible , in principle , with the break-bulk cargo but its usefulness is greatest when cargo is unitized

MMT of break-bulk cargo is comparatively slow and unproductive because of the expensive and time consuming handling operations at transshipment port

Containerisation has been widely adopted mainly because it gives great protection to cargo against damage , pilferage and contamination, containerization has facilitated the trend towards international transport and multimodal transport services

Unitization reduce the time and labor in handling operations , brings down overall cost

Overview Contd

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MMT STATUS OF OPERATORS

Status of Multimodal Transport Operator (MTO)

> The MTO is a new legal entity which has engaged out of the introduction of multimodal transport.

> MTO act a principal for the performance of the MMT contract and , in that capacity, undertakes to contract and provide for the different modes of transport and other services required for the expeditious , efficient transport of the goods from the place where he takes the goods in charge to the place where he delivers the goods according to the contract

> In execution of the contract, he has necessarily to engage the services of several carriers and non-carriers except to the extent that he himself directly provides such services. The carriers may be;

Ship-owners , Road operators, Railways , Airlines , Inland waterway operators

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The non carriers may be those who own or control :

Container terminals (in which case they may be called terminal operators)WarehousesCFSs or groupage of consolidation depotsContainer leasing organizationsOrganizations like freight forwarders attending to packaging , customs clearance, Exim formalities , foreign exchange transactions and related documents

The MTO enters into separate contracts with each other of the persons or organizations whose services he engages , subject to the applicable international conventions; national law or customary practice, but the terms of such contracts in no way affects his obligations to the consignor of the goods under the MT contract. Some MTOs have subsidiary organizations instead of sub-contractors for rendering such services

MMT STATUS OF OPERATORS

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Types of MTOs

1.Vessel Operating MTOs

2. Non Vessel Operating MTOs ( NVO MTOs)

a)The individual shipping companies or groups of consortia of shipping companies

b) Producers / exporters of certain commodities who are the major users of their own multimodal transport operations who operate with owned or charted ships

Freight ForwardersRoad Transport OperatorsRailwaysAirlinesNew specialized companies in MT operations

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In pursuing its mandate, UNCTAD has achieved a number of recognized results in the field of multimodal transport: the elaboration of the Multimodal Transport Convention (1980), the elaboration of model multimodal container tariff rules, a constructive participation with the private sector towards the elaboration of new rules on multimodal transport documents, the monitoring -on behalf of developing countries- of technological development in containerization, the organization of groups of experts to discuss issues on multimodal transport, the implementation of technical assistance activities as well as the creation of awareness on the subject through the organization of workshops and seminars (some 100 seminars and conferences all over the world)

UNCTAD ROLE IN MMT

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The challenges ahead are two-fold;

With the globalization of production and the liberalization of services, developing countries and countries in transition, more than ever, need more than ever to increase their capabilities in offering reliable and cost-effective transport and logistics services, taking advantage of technological development through appropriate "leap-froging" into modern technologies and commercial practices;

There is a world-wide need for harmonization of the legal environment for multimodal transport, in particular considering the development of new forms of international transport (combined road/rail transport and short-sea shipping in Europe, for example).

CHALLENGES

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