MULTIMODAL TRANSPORT OPERATIONS

Capt. Prakash Joag

Objectives
1. How does multimodal transport differ from the earlier conventional system
of transport ?
2. In what ways has multimodal transport helped the shipper ?
3. Why are containers the best mode of utilization for multimodal transport ?
4. What is the role of Multimodal Transport Operator ?
5. Enumerate different types of multimodal transport operations
6. Expand the following abbreviations :
MTD

MT

NVO-MTO

CFS

Brief Overview
Conventional System
1. 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.
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

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

MMT Concept
a) The concept of international multimodal transport covers the door-todoor 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
b) 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
c)

International transport generally implies the use of various transport

links (interfaces and modes), each link corresponding to a transfer,

MMT Concept
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
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

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

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

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

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

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

MMT STATUS OF
OPERATORS
The non carriers may be those who own or control :
a) Container terminals (in which case they may be called terminal
operators)
b) Warehouses
c) CFSs or groupage of consolidation depots
d) Container leasing organizations
e) Organizations like freight forwarders attending to packaging , customs
clearance, Exim formalities , foreign exchange transactions and
The MTO enters into separate contracts with each other of the persons or
related documents
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

Types of MTOs
1.Vessel Operating 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

2. Non Vessel Operating MTOs

( NVO MTOs)

a) Freight Forwarders
b) Road Transport Operators
c) Railways
d) Airlines
e) New specialized
companies in MT
operations

UNCTAD ROLE IN MMT

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)

CHALLENGES
The challenges ahead are two-fold;
(1) 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;
(2) 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).