MULTIMODAL TRANSPORTATION

• Learning objectives:
• This chapter gives you an insight into the
aspects of Multimodal Transportation System
which is an important element in Foreign
Trade.

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 MULTIMODAL TRANSPORTATION
• 1.1 MULTIMODAL TRANSPORTATION
• CONTAINER SHIPS
• SEA-AIR CARGO LOADING SYSTEM
• DOUBLE STACKED COUNTAINER TRAIN
• CONTAINER ROAD TRAILER

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• Transport system helps to raise the production of raw
materials, fuels and machineries etc by providing larger
markets to it.
• Freight transport, or shipping is a key in the value chain
in manufacturing.
• Bulk transport is common with cargo that can be
handled without deterioration.
• Logistics refers to the entire process of transferring
products from producer to consumer, including
storage, transport, transshipment, warehousing,
material-handling and packaging with associated
exchange of information.
• Incoterm deals with the handling of payment and
responsibility of risk during transport.

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• The infrastructure and operation of transport has a great impact on
the land and is the largest drainer of energy, making transport
sustainability a major issue.
• While moving the container, the exporter is faced with several
choices such as:
• By Road : This is done using equipment's like direct lifting cranes,
forklift trucks, portal frames and other self loading devices.
• By Rail : For long distances, road may prove uneconomic and thus
the rail transport can be used to transfer containers.
• By port terminals : The container finally arrives at the port to be
shipped whether road or rail transport is used to transfer
containers.
• By ships : To secure benefits of rapid loading and unloading and
thus to ensure efficient utlization of space, containers are built or
customized. Wide hatches give complete access to holds in these
ships.

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• 1.2 DRY PORTS
• A Dry port also called sometimes an inland port or multimodal
logistic centre, is an inland terminal connected to a seaport by rail
or road.
• A dry port is called so because it is very similar to a seaport in the
services it offers, except that it is not near a sea. A dry port is also
employed to relieve a major seaport of some work load and
congestion. It consists of facilities like container yards, warehouses,
railway sidings, cargo-handling.
• In addition to their role in cargo transshipment, dry ports may also
include facilities for storage and consolidation of goods,
maintenance for road or rail cargo carriers and customs clearance
services.
• The number of dry ports within a region or a country would depend
on geography as well as diversity and extent of economic activity.

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• On realizing the importance and potential of
containerization and intermodal business,
Government of India decided to set up a
separate Government-owned corporate body
for the facilitation and promotion of
multimodal transport in the country.

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• 1.3 CONTAINER FREIGHT STATIONS – ICD &
CFS
• With the development of multi-modal
transport system with its stress on greater
facilitation to importers/exporters, a need was
felt to develop Inland Container Depots(ICDs)
or Container Freight Stations (CFSs). These
were to essentially function like a dry port.
These ICDs/CFS were to function as common
user facilities offering all the services for
Customs clearances like any other port.
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• An Inland Container Depot (ICD) / Container
Freight Station (CFS) may be defined as “A
common user facility with public authority status
equipped with fixed installations and offering
services for handling and temporary storage of
import/export laden and empty containers
carried under Customs transit by any applicable
mode of transport placed under Customs control.
All the activities related to clearance of goods for
home consumption, warehousing, temporary
admissions, re-export, temporary storage for
onward transit and outright export,
transshipment, take place from such stations.”

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• 1.4 UNCTAD CONCEPT ON MULTIMODAL
TRANSPORTATION
• The concept of international multimodal
transport covers door-to-door movement of
goods under the responsibility of a single
transport operator. This concept 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.

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• 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 libealization 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.
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• 1.5 MULTIMODAL TRANSPORTATION OF GOODS
ACT,1993
• The business environment is moving faster than
ever before. Increased competition at home and
abroad means quality as well as profitability must
be preserved. We live in a constantly evolving
world where harmonization is extremely
important and the trade desperately requires an
efficient and simple door to door liability system.
This was one of the reasons why ICC and UNCTAD
developed the new UNCTAD/ICC Rules for
Multimodal Transport Documents.
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• The Multimodal Transportation of Goods Act,1993 (MMTG)
provides for the regulation of Multimodal Transportation of Goods
from any place in India to any place outside India involving two or
more modes of Transport on the basis of a single Multimodal
Transport Contract.
• This act came into force from 2.4.1993 and it provides a registration
of a person a Multimodal Transport Operator and Multimodal
Transportation can be carried out only by persons registered as
MTO under MMTG Act,1993.
• The Director General of Shipping has been notified as the
competent authority to perform functions under the act including
registration of MTOs. The MTO registration is valid for period of 1
year and may be reviewed for further period of one year from time
to time.
• The Director General of Shipping has, after the prior approval of
Ministry of Surface transport, prescribed the Multimodal Transport
Document under Rule 3 of Multimodal Document Rules, 1994.

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• The Multimodal Transportation of Goods Act, 1993 was
introduced to facilitate the exporters and give them a sense
of security in transporting their goods. The concept of
door-to-door delivery, which is MULTIMODAL
Transportation is all about is catching up fast in
international trade.
• Reduction of logistic costs is one of the important aspects
of Multimodal Transportation, thereby reducing the overall
costs to the exporter and making his products more
competitive in the international market.
• It is in this context that the Government of India thought it
necessary to codify the rules and regulations governing
Multimodal Transportation and enacted the Multimodal
Transportation of Goods Act, 1993 based on UNCTAD/ICC
rules which have gained widespread acceptance.

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• As per the MMTG Act three categories of
companies are eligible to be registered as
MTOs. They are:
• (1) Shipping Companies
• (2) Freight Forwarding Companies
• (3) Companies which do not fall in either of
the above two categories.

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• MULTIMODAL TRANSPORT DOCUMENT:
• Previously, a document called Combined Transport Document was being
issued. However, although the format of the document broadly confirmed
to a specimen prescribed by the International Chamber of Commerce(ICC),
the CTD has not been adopted by all operators uniformly. Thus, there was
an absence of uniformity of liability and other condition.
• In India the Foreign Exchange Dealers Association of India (FEDAI) has
evolved its own rules laying down the responsibilities and liabilities of
Combined Transport Operators from the inland containers depots.
However these rules could not obtain wide acceptance mainly because
the Combined Transport document evolved by FEDAI did not confer
negotiability and title to the goods and also because such documents were
required to be exchanged for a regular on-board ocean bill of lading at the
port unless the letter of credit specifically permitted the production of a
combined transport document in place of a regular Bill of Lading.
• The Director General of Shipping with the approval of the Government has
issued an order on 17th March,1994 prescribing a model for the
Multimodal Transport Document.

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• The Multimodal Transport Document issued
under the present law would be :
• (i) a contract for the Transportation of Goods
by Multimodal Transport
• (ii) a negotiable document unless it is marked
non negotiable at the option of the consignor
• (iii) a document of title on the basis of which
its holder can take delivery of the goods
conveyed by it.

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• MULTIMODAL TRANSPORT OPERATOR:
• The concerned parties who would have commercial
interest who would be governed by the document once
it is executed would be:
• The MTO who is the person responsible for the
execution of the Multimodal Transport Contract
• The consignor who places the goods in question with
the MTD for transporting the same and the consignee
who is to take delivery at the destination.
• The bankers who would provide the mechanism for
documentary credit.
• The insurers who insure the goods against loss or
damage and the liability insurers who would cover the
MTOs liability under contract.
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• STANDARD CONDITIONS GOVERNING MULTIMODAL
TRANSPORT:
• There are 24 main paras with sub-paras laying down
the standard conditions governing MultiModal
Transportation in accordance with the MultiModal
Transportation of Goods Act 1993.
• The scope of applicability of the document is to be
restricted in accordance with the preamble of the Act.
The negotiability and the title to the goods has been
incorporated in the standard conditions in accordance
with section 8 of the Act. The limits of liability are
clearly spelt out in the said conditions.

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• 1.6 CONTRACT OF CARRIAGE
• During the course of International Trade goods are
required to be moved from one country to another. For
these purpose, a contract of carriage is to be entered
into.
• The law relating to carrying of goods is as follows
• (1) LAND (i) The Carriers Act, 1965 (ii) The Railways Act,
1989
• (2) SEA (i) The (Indian) Bills of Lading Act,1856 (ii) The
Carriage of Goods by Sea Act, 1925 (iii) The Merchant
Shipping Act, 1958 (iv) The Marine Insurance Act,1963
• (3) AIR (i) The Carriage by Air Act, 1972

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• COMMON CARRIERS:
• The Carriers Act, 1865 defines a common
carrier as any individual, firm or company (
other than the government, who or which
transports goods as a business, for money,
from place to place, over land or inland water
ways for all persons(consignors) without any
discrimination between them.
• A carrier must carry goods of the consignor for
hire and not free of charge in order to be
called a common carrier.
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• PRIVATE CARRIERS
• A Private carrier is one who does not transport
goods from one place to another regularly; he
may engage in some casual jobs of carrying
goods for certain selected persons between
certain terminals.
• In fact he carries his own goods and that’s why
he is known as a private carrier and not a
common carrier. Also he does not make a
general offer to carry goods for any one from
one place to another for hire.
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• GRATUITOUS CARRIER
• When a person carries goods of another free
of charge, he is a gratuitous carrier. Similarly a
person may give lift in his transport to another
person voluntarily without any compensation.
Thus a gratuitous carrier may carry not only
goods but persons also free of charge.

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• 1.7 SUMMARY AND CONCLUSION
• A scenario in which Cargo is stuffed in a Container at the Sellers factory
in New York and brought by Road to New York Port where it is loaded
On Board a Ship and brought to Nhava Sheva Port, then carried by
Lorry to the Railhead and Loaded on to a Rail Wagon and the Cargo in
the same Container is delivered to the Buyer in Delhi at his
Factory/Warehouse is a Multi-Modal Transportation which has been
made possible due to Containerization.
• The speed, efficiency and safety of the Cargo has enhanced all types of
Foreign Trade Transactions. There are four modes of transportation –
SEA, AIR,ROAD & RAIL, Carriage of Import-Export Cargo by two or more
modes of transportation is MULTI-MODALISM. A single operator
known as Multi-Modal Transport Operator can perform any or all four
forms of Transportation.

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• We have completed Chapter 15

• Next we move to Chapter 16
• MARINE INSURANCE, SURVEYS &
CLAIMS

Chapter 15 Import Export Management