Multi-Modal Transportation - Updated

Multi-Modal Transport & Applications
Nagendra Aswatha
Agenda
Slide 2
 Multi-Modal Transport Operator (MTO): Definition,

Scope & Role
 Benefits
 Challenges
 Legal, Tax Implications & Documentation
 Performance Measurement
 Best Practices
 Effective Enablers
 NLEAPS
Modal Contribution
Road and Rail transportation still dominates in other regions
Source: Mint news article - 17 th October 2020

Transport Sector in India
Source: Moneycontrol (April 2018)

Transport Sector for various industries in India
1 – Average yearly exchange rate for 2017 of 1 EUR = 0.923 USD

Source: Mckinsey (September 2019) 2 – Splits line-haul across sectors; includes intra-city road transportation for all sectors
in “Other Sectors”
Agenda
Slide 6

Scope & Role
 Benefits
 Challenges
 Best Practices
MTO - Definition
Slide 7
Multi-Modal Transport Operator
The chain that interconnects different links/modes of transport (air, sea & land)
into complete one process that ensures an efficient and cost- effective door-to-
door movement of goods under the responsibility of a single transport operator,
known as a Multimodal Transport Operator(MTO), on one transport document
MMT - Scope
Slide 8
• Multi-Modal Transport of Goods Act 1993

• Company eligibility for registration as an MTO
• Relevant documentation procedures
• Legal framework and standards
• Key differences between multi-modal and inter-
modal transport
• Main stakeholders involved and their roles
MTO - Role
Slide 9
Shipper
Regulatory
Authority
Multimodal
Transport
Operator
Individual
Contracts
Truckers/Shipping
Ports/Airports
Lines/Railways
CFS/ICD’s
MTO – Role (contd)
Slide 10
Shipper is provided with one or more value added service

in Multimodal Transport System
MTO’s may provide following value added services:
• Consignee billing
• Logistical support for time sensitive products
 Inventory control
 Distribution
 Reporting
• Pickup-on-call for air freight
• Electronic tracking of shipments

• Delivery confirmation service
MTO – Role (contd)
Slide 11
The multimodal transport sector is still nascent

More competition is expected with growth
Key differentiating factors for MTO’s quality of service
• Speed
• Door-to-door capability
• Reliability
• Security
• Safety
• Flexibility & Availability
Multimodal Organization Types
Slide 12
Vessel Operating MTOs

• Individual Shipping companies or groups of consortia of
shipping companies
• Large exporters utilizing their own MTOs by engaging their
chartered ships
Non-Vessel Operating MTOs (NVO-MTOs)

• Freight Forwarders
• Road transport Operators
• Railways
• Airlines
MTO - Registration Requirements
Slide 13
Applicant
Company/Firm/Proprietary concern
Engaged in business Must have a minimum annual turnover of

Rs 50 lacs preceding Financial year
of shipping or freight OR
forwarding in India or Average annual turnover of Rs 50 Lacs
abroad during preceding 3 Financial Year’s
Applicant/Partners/Proprietor Subscribed
Not engaged in share capital not be less than 50 lacs
OR
business of shipping
Aggregate balance in its capital account
or freight forwarding not be less than 50 lacs
in India or abroad • Needs to have office, agents or
representatives in 2 or more countries
MTO - Registration Requirements (contd)
Slide 14
Applicant
Company/Firm/Proprietary concern
• Must establish a registered place in
Applicant not a India
resident of India and • Fulfill the other requirements
not engaged in the • Competent authority will grant the
certificate to commence operations as
business of shipping MTO
FDI Policy
Slide 15
FDI in Logistics and MTO in India
Automatic Route Government Route
All activities which

are not covered
under automatic
Investors do not
route can be
require approval
scrutinised and
from RBI or GOI
cleared by
departments
concerned.
Road Transport
• Most extensive network for

domestic distribution
• Very small fixed investments
compared to other modes of
transport
• It is means for rapid
industrialization and agricultural
advancement
• Used to carry range of products
both high and low value
Road Transport
• India has the 2nd largest road network spanning 5.89

million kms.
Road Network • Carrying 64.5% of goods carried and 90% of total
passenger traffic in India
• According to the data released by Department for

Promotion of Industry and Internal Trade Policy (DPIIT),
Investments construction development including townships, housing,
built-up infrastructure and construction-development
projects attracted Foreign Direct Investment (FDI)
inflow worth US$ 25.66 billion were recorded in the
construction development^ sector between April 2000
and March 2020.
• Private sector companies have emerged as key players

Private Sector in road infrastructure development in India such as
Reliance Infrastructure, GMR Infrastructure Limited,
IRB Infrastructure Developers Limited
Source: IBEF (July 2020)

Major road infrastructure road initiative
Sr. No. Project Start Date End Date
Golden
1 2001 2012
Quadrilateral
To be completed by
2 NSEW Corridor 2017
2021
3 Bharatmala 2015 To be completed by

2026
Golden Quadrilateral
 Project type: National Highway

 Start of construction: 2001
 Completion: 2012
 Estimated investment: Rs. 308.58 billion ($6.2
billion)
 Operator: National Highway Authority of India
 Connecting India’s top 4 metropolitan cities:

o Delhi
o Mumbai
o Chennai
o Kolkata
 Overall length: 5,846 km consisting of 4/6 lane express highways
 It establishes transportation links between major cities of India, such as
New Delhi, Jaipur (Rajasthan), Gandhinagar (Gujarat), Mumbai and Pune
(Maharashtra), Bangalore (Karnataka), Chennai (Tamil Nadu),
Visakhapatnam (Andhra Pradesh), Bhubaneswar (Orissa), Kolkata (West
Bengal) and Kanpur (Uttar Pradesh).
 The Golden Quadrilateral has four sections

o Section I is a 1,454km stretch of National Highway 2 (NH2) from Delhi
to Kolkata
o Section II is a 1,684km stretch from Kolkata to Chennai. It consists of
NH6 (Kolkata to Kharagpur), NH60 (Kharagpur to Balasore) and NH5
(Balasore to Chennai).
o Section III is a 1,290km stretch from Chennai to Mumbai. It constitutes
parts of NH4 (Mumbai to Bangalore), NH7 (Bangalore to Krishnagiri,
Tamil Nadu) and NH46 (Krishnagiri to nearby Chennai).
o Section IV is a 1,419km stretch between Mumbai and Chennai. It
constitutes parts of NH 8 (Delhi to Kishangarh), NH 79A (Ajmer
bypass), NH 79 (Nasirabad to Chittaurgarh) and NH 76 (Chittaurgarh to
Udaipur).
North South East West Corridor (NSEW)
 The North–South–East–West Corridor (NS-EW) is the

largest ongoing highway project in India. It is the
second phase of the National Highways Development
Project (NHDP), and consists of building 7300
kilometers of four/six lane expressways associating
Srinagar, Kanyakumari, Kochi, Porbandar and Silchar,
at a cost of US$12.317 billion (at 1999 prices).
 As of 31 March 2018, 6875 of the 7142 kilometers
project was finished.
 Total Length of NS–EW Corridor is 7,300 km with two

routes:
o North – South – 4,000 km
o East – west – 3,300 km
 The NS–EW project is managed by the National
Highways Authority of India under the Ministry of
Road Transport and Highways.
Bharatmala
Bharatmala
 6 initiatives
o Economic Corridors
o Inter-Corridors & feeder roads
o National Corridor Efficiency improvement
o Border & International connectivity roads
o Coastal & port connectivity roads
o Expressways
Bharatmala
 Bharatmala Pariyojana is a new umbrella program for

the highways sector that focuses on optimizing
efficiency of freight and passenger movement across
the country by bridging critical infrastructure gaps
through effective interventions like development of
Economic Corridors, Inter Corridors and Feeder
Routes, National Corridor Efficiency Improvement,
Border and International connectivity roads, Coastal
and Port connectivity roads and Green-field
expressways.
Bharatmala
 Key highlights:
o Improvement in efficiency of existing corridors through development of
Multimodal Logistics Parks and elimination of choke point
o Enhance focus on improving connectivity in North East and leveraging
synergies with Inland Waterways
o Emphasis on use of technology & scientific planning for Project Preparation
and Asset Monitoring
o Delegation of powers to expedite project delivery - Phase I to complete by
2022
o Improving connectivity in the North East
Bharatmala
 Budget:
o A total of around 24,800 kms are being considered in Phase I of Bharatmala
o In addition, Bharatmala Pariyojana phase -I also includes 10,000 kms of
balance road works under NHDP, taking the total to 34,800 kms at an
estimated cost of Rs.5,35,000 crore
o Bharatmala Phase I - is to be implemented over a five years period of i.e. 2017-
18 to 2021-22.
Bharatmala
Sr. No. Scheme Length (km) Cost (Rs. crore)

1 Economic Corridors 9,000 120,000
2 Inter-Corridors & feeder roads 6,000 80,000
3 National Corridor Efficiency 5,000 1,00,000
improvement
4 Border & International 2,000 25,000
connectivity roads
5 Coastal & port connectivity 2,000 20,000
roads
6 Expressways 800 40,000
7 Sub Total 24,800 3,85,000
8 Ongoing Projects, including 10,000 1,50,000
NHDP
9 Total 34,800 5,35,000
Source: https://morth.nic.in/bharatmala-phase-i
Road Transport
Advantages Disadvantages
• Ease of availability • Limited Load carrying
• Flexible operations capacity
• Last mile connectivity • Most polluting mode
• Low cost for certain loads & • Multiple check points
distances • Poor infrastructure
• Customized services • Fragmented sector
• Lower capital investment • More expensive compared to
rail & sea
Wagon Transport
 Goods wagons or freight wagons also known as goods

carriages, goods trucks, freight carriages or freight trucks, are
unpowered railway vehicles that are used for the
transportation of cargo
 Types of wagons:
o Open wagons
o Covered wagons
o Refrigerated vans
o Flat wagons
o Wagon with opening roof
o Special wagons
o Tank wagons
o Spine cars
Containerization
 Containerization is a system of intermodal freight

transport using intermodal containers
 The containers have standardized dimensions
 They can be loaded and unloaded, stacked,
transported efficiently over long distances, and
transferred from one mode of transport to another—
container ships, rail transport flatcars, and semi-
trailer trucks—without being opened
 Containers can be made from a wide range of
materials such as steel, fibre-reinforced polymer,
aluminium or a combination of all.
Background of CONCOR
 Container Corporation of India Limited (CONCOR) is a

Navratna Public Sector Undertaking under the Indian
Ministry of Railways.
 Incorporated in March 1988 under the Companies
Act, CONCOR commenced operations in November
1989 taking over an existing network of seven inland
container depots (ICDs) from Indian Railways.
 CONCOR operates three core businesses
o terminal operator
o warehouse operator
o MMLP operation
Background of CONCOR
 India privatized container rail freight services in 2006 through a policy that
effectively ended Concor’s monopoly in this business
 In 2006, CONCOR increased tariffs four times.
 The railway ministry prescribed haulage charges for transportation of
containers by rail from time to time.
 The haulage charges set by the ministry become the base rate to which
operators such as Concor used to add their own capital and operating
costs to arrive at the rates to be charged from exporters and importers.
 These operators used to pay haulage charge to the ministry for using the
railways’ track, locomotives, signalling infrastructure and staff for running
their container trains to ports from inland locations and back.
Private Container Train Operators (PCTO)
Sr. No. Name of the Company Parent Company

1 Adani Logistics Ltd Adani Group
2 CONCOR IR (Public Sector Undertaking)
3 Container Rail Road Services DP World
4 CWC CWC (Public Sector Undertaking)
5 Freightstar ETA Star Group (Dubai)
6 Gateway Rail Freight Ltd Gateway Distriparks
7 Hind Terminals Sharaf Group (UAE) and MSC Agency
(belonging to Mediterranean Shipping
Company, Geneva)
8 India Infrastructure and APL India (subsidiary of NOL, Singapore)
Logistics (76%), and Hindustan Infrastructure
Project and Engineering (24%)
Private Container Train Operators (PCTO)
Sr. No. Name of the Company Parent Company

9 Reliance Infrastructure Reliance (ADAG)
10 SMART SICAL Logistics
11 Boxtrans (India) Logistics JM Baxi & Co
Services
12 Pipavav Railway Corporation Ltd PRCL (A JV between IR and Gujarat
(PRCL) Pipavav Port Limited, a subsidiary of
Maersk)
13 TransRail Logistics Ltd Delhi Assam Roadways (Transport and
Logistics Company)
14 Innovative B2B Logistics Bagadiya Shipping, and Bothra Brothers
Solutions (P) Ltd
15 KRIBHCO Infrastructure Ltd KRIBHCO (Public Sector Undertaking)
16 Arshiya Rail Infrastructure Arshiya International
Rail Transport
• Rail transportation has been the

key contributor to domestic and
international trade across the globe
• In India Rail freight transported
1.221 billion metric tons in 2019
• Potential for freight movement
remains largely untapped due to
under investments
• Major products shipped include
metals, fuel, small or large
machinery etc
Rail Transport
• Indian Railways (World’s 3rd largest) route length

network is spread over 1,23,236 kms, with 13,452
Rail Network passenger trains and 9,141 freight trains plying 23
million travellers and 3 million tonnes (MT) of freight
daily from 7,349 stations.
• Various technologies such as electronic interlocking at

Modernization/ all interlocked broad-gauge stations and automatic train
Technology upgrade protection (ATP) system have been introduced by
Indian Railways.
• All electric locomotives have been provided with
vigilance control devices (VCD) to check the alertness
of loco pilots (LPs)
• Adarsh Station Scheme for 1050 stations
Cabinet approval for private ownership of rail lines

Private Sector
through “participative models for rail connectivity
and capacity augmented projects”.
Source: IBEF (September 2020)
Rail Transport
• Lower cost for the load that • Inadequate and aging
is dense & transported over network
long distances • Slower speed
• Economic mode for bulk • Dominance of govt. control
movement • Inadequate technology &
• Less check points between automation
point of origin & destination • Dependence on road for
• Better accessibility in the last mile connectivity
difficult terrain as compared • Complex procedures &
to road paperwork for booking
Dedicated Freight Corridor
• Dedicated Freight Corridor(DFC) is an

marquee initiative by Indian Railways
• Envisages construction of two

corridors spanning 3300kms
• Eastern Corridor from

Ludhiana(Punjab) to Dankuni(WB)
• Western Corridor from Dadri(UP) to

JNPT, Mumbai
Dedicated Freight Corridor – Plan
Dedicated Freight Corridor – Objectives
Increase rail
Segregate Creation
freight share in of
freight modal
& additional
mix freight
passenger lines capacity
DFC
Unit cost
reduction by Adoption of high
speeding freight end technology
train operations to track freight
DFC – A Game Changer
The completion and start of DFC will bring a more balanced mode mix
% share Projected 2020

100 1 1
6 5 6
25
75 36
46
Air
50
Water
69 Rail
25 57 Road
47
0
2007 From 2007 Balanced
Modal Mix
Expected to be completed by Dec 2023
Source: Financial express, July 2020
Marine/Water Transport
• Marine Transport is the traditional

growth engine of trade
• An efficient and cost-effective mode
of transportation
• Less time sensitive and large
quantities of non-perishable cargo
are shipped by this mode
• Products shipped can range from
coal, fuel oil to electronic
components
• Indian ports serve as gateway to International trade
• Total volume of cargo handled in ports across India till

financial year 2019 was 1.281 billion metric tons
• Potential to increase the domestic freight share through inland

and costal shipping
• A coastline of 7,516.6 km and about 14,500km of navigable

inland waterways can be utilized with more investment in
developing infrastructure
Key issues :
• Inadequate capacity
• Global competitiveness
• Lack of support infrastructure
• Cabotage laws
• Lowest cost as compared to • Slowest speed compared to
other modes other modes
• Can carry up to 500,000 • Accessibility and frequency
DWT loads may vary by routes
• Most suitable for long haul • Dependence on road for
and low cost commodities last mile connectivity
• Port congestion and
capacity bottleneck may
lead to delays
Major 13 Ports in India
1. Kandla Port (Gujrat)

2. Jawaharlal Nehru Port (Maharashtra)
3. Mumbai Port
4. Visakhapatnam Port (Andhra Pradesh)
5. Chennai Port
6. Mormugao Port, Goa
7. Port Blair Port (Andaman and Nicobar Islands)
8. Kolkata Port
9. Paradip Port (Orissa)
10. Tuticorin Port (Tamil Nadu)
11. Cochin Port, Kochi (Kerala)
12. Ennore Port (Chennai)
13. New Mangalore Port (Karnataka)
Marine/Water Transport: Costal & IWT
• India is blessed with 7,516.6 km of coastline and about

14,500kms of navigable inland waterways
• This mode is more fuel efficient, environment friendly and
more economical than rail and road
• This sector has remained largely untapped
• India transports only 7% of its domestic cargo by coastal
shipping, or so-called short-sea shipping, while the European
Union transports 42%, China 43% and the US 15%
• Inland water transport (IWT) accounts for less than a 1%
share of goods transported within India
Source: The Hindu article

Marine/Water Transport: Costal & IWT
IWT routes utilized for bulk cargo & project related over
dimension cargo
• Cement from Farakka to Nabadweep,
Bhagalpur and Patna
• Hot-rolled(HR) coils from Kolkata to
Tripura via Ashuganj
• Project cargo for planned hydel power projects in Arunachal
Pradesh
• Coal for thermal power plants on Ganga and Brahmaputra
• Iron-ore shipments in Goa region
• Transportation of fly-ash from West Bengal to Bangladesh
Developing and Deploying India’s Supply Chain Talent
Sagarmala Project
Sagarmala Project
 The concept of Sagarmala was approved by

the Union Cabinet on 25th March 2015
 As part of the programme, a National
Perspective Plan (NPP) for the comprehensive
development of India’s 7,500 km coastline,
14,500 km of potentially navigable waterways
and maritime sector has been prepared which
was released by the Hon’ble Prime Minister,
on 14th April, 2016 at the Maritime India
Summit 2016.
Sagarmala Project - Components
 Port Modernization & New Port Development: De-bottlenecking and capacity

expansion of existing ports and development of new greenfield ports
 Port Connectivity Enhancement: Enhancing the connectivity of the ports to
the hinterland, optimizing cost and time of cargo movement through multi-
modal logistics solutions including domestic waterways (inland water transport
and coastal shipping)
 Port-linked Industrialization: Developing port-proximate industrial clusters and
Coastal Economic Zones to reduce logistics cost and time of EXIM and domestic
cargo
 Coastal Community Development Promoting sustainable development of
coastal communities through skill development & livelihood generation
activities, fisheries development, coastal tourism etc.
 Coastal Shipping & Inland Waterways Transport Impetus to move cargo
through the sustainable and environment-friendly coastal and inland
waterways mode.
Sagarmala Project
Sagarmala Project - Impact
Sagarmala 2025 scenario

Summary of projects under Sagarmala
Theme Total Completed Under Implementation
(As on 30-
September- No. of Project Cost No. of Project Cost No. of Project Cost
Projects (Rs. Crore) Projects (Rs. Crore) Projects (Rs. Crore)
2019)
Port
Modernization 236 1,18,352 68 22,551 70 36,998
Port Connectivity 235 2,35,528 35 5,803 94 1,19,360
Port Led
35 2,40,234 2 512 17 1,51,745
Industrialization
Coastal
Community 68 7,369 16 1,362 20 945
Development
Total 574 6,01,483 121 30,228 201 3,09,048

Source: sagarmala.gov.in
Air Transport
• Air Transportation supply chain

increases the competiveness
of global companies
• Cost of air freight services is
around 4-5 times that of road
and 12-16 times of sea
transport
• Perishables, pharmaceutical
products, express mail and
high value cargo
Air Cargo
 At Domestic front, AAl, according to its road

map have identified 24 Airports across the
country for creation of Common User
Domestic Air Cargo Terminals (CUDCT), out of
which Port Blair, Coimbatore, Jaipur, Chennai,
Amritsar and Lucknow (outbound)Airports are
being run departmentally and at Madurai,
Vizag, Raipur, Indore and Mangalore Airports
CUDCT are being managed on O&M contract
basis.
Leading airports in India in financial year
2019-20, by volume of freight(in 1,000 metric
tons)
1)Total tonnage: 3088.29 (in 1000 MT)

Source: Statista 2) % share of tonnage across India: 86.74
Imports - India
Sr. Commodity Price (USD billion) % of total import
No.
1 Mineral fuels including oil 153.5 32
2 Gems, precious metals 60 12.5
3 Electrical machinery, equipment 50.4 10.5
4 Machinery including computers 44.1 9.2
5 Organic chemicals 20.5 4.3
6 Plastics, plastic articles 14.6 3.1
7 Iron, steel 11.6 2.4
8 Animal/vegetable fats, oils, waxes 9.6 2
9 Optical, technical, medical apparatus 9.5 2
10 Fertilizers 7.3 1.5
India’s top 10 imports accounted for about four-fifths

(79.4%) of the overall value of its product purchases from
other countries.
Source: worldstopexports.com (2019)
Exports - India
Sr. Commodity Price (USD billion) % of total export
No.
1 Mineral fuels including oil 44.1 13.6
2 Gems, precious metals 36.7 11.4
3 Machinery including computers 21.2 6.6
4 Organic chemicals 18.3 5.7
5 Vehicles 17.2 5.3
6 Pharmaceuticals 16.1 5
7 Electrical machinery, equipment 14.7 4.5
8 Iron, steel 9.7 3
9 Clothing, accessories (not knit or 8.6 2.7
crochet)
10 Knit or crochet clothing, accessories 7.9 2.5
India’s top 10 exports accounted for about three-fifths

(60.2%) of the overall value of its global shipments.
Source: worldstopexports.com (2019)
Air Transport
Key issues pertaining the Air Transportation sector
• Infrastructure gaps
• Inefficiencies in operations
• High investment and operating costs
• Complex procedures and documentation

Air Transport
• Fast speed • High Cost (4-5 times of road
• Suitable for high value and 12-15 times of rail)
products • Limited Load carrying
• Most suitable for small or capacity
parcel loads, documents • Dependence on road for
• More reliable as compared last mile connectivity
to other modes • High investments &
operating cost
Modal Choice
Services Cost Continuum

Higher Lower
Air Cargo Truck Rail Intermodal Rail Carload Rail Unit Water
Fastest Fast Slower

Most Reliable Reliable Less Reliable
Most Visible Visible Less Visible
• Lowest Weight • Range of Weight and Value • Highest Weight

• Highest Value • Rail intermodal competitive • Lowest Value
• Most Time with truck load over long • Least Time Sensitive
Sensitive Cargo distances Cargo
Pipeline Transport
Fifth mode of Transport
Slide 68
• Pipeline transport network is a new arrival on the transportation

map of India
• These are used for transporting crude oil, petroleum products
and natural gas from oil and natural gas fields to refineries,
fertilizer factories and big thermal power plants
• Initial cost of laying pipelines is high but subsequent running
costs are minimal. It rules out trans-shipment losses or delays.
Source: Ministry of Pipeline & Natural Gas, Annual Report 2019-20

Pipeline Transport
Slide 69
• At present, about 16,800 km long gas pipeline network is under

operation in the country and around 14,200 km pipeline
network is approved/under construction
• At present, the country is having 6 operational LNG re-
gasification terminals operational with capacity of about 39.2
MMTPA
• 1906 CNG stations (as on 01.12.2019) are supplying clean and
economical transportation fuel to about 35.17 lakh CNG
vehicles

Pipeline Transport
Slide 70
Sr. No. Location Owner & Operator Capacity (MMTPA)

Petronet LNG Ltd.
1 Dahej (Gujrat) 17.5
(PLL)
2 Hazira (Gujrat) SHELL 5
3 Kochi (Kerala) PLL 5
4 Dhabol GAIL (Gas Authority 1.7

(Maharashtra) India Ltd.)
GSPC (Gujrat State

Petroleum
5 Mundra (Gujrat) 5
Corporation) LNG
Ltd
IOCL (Indian Oil
6 Ennore (Tamilnadu) 5
Corporation Ltd)
Total Capacity 39.2

Agenda
Slide 71

Scope & Role
 Benefits
 Challenges
 Best Practices
MTO - Benefits
Slide 72
• Increased Flexibility
 Time
 Modality
 Security features
• Reduced cost
 Being an intermediary, the best linkage cost can be obtained
 Exports become more competitive
 Overall cost leadership
MTO - Benefits (contd)
Slide 73
• Single Point Of Contact

• Reduces burden of documentation &
formalities
• Saves time & cuts pilferage at the points of
transhipment
• Makes the best of each mode
• Frees up working capital
• Better distribution of wealth
Agenda
Slide 74
 Multi-Modal Transport Operator (MTO): Scope & Role

 Benefits
 Challenges
 Best Practices
MTO - Operational Challenges
• Greater distances
Increased
Uncertainty
• Longer lead times
• Decreased market knowledge
• Unique customer requirements

• Unique documentation requirements
Increased
Variability
• Different regulations across countries
• Currency fluctuations
• Shifting political environments
Multi-Modal Transport Operator
MTO - Operational Challenges
• Extensive use of international service

Decreased firms
Control • Potential customs requirements
• Trade restrictions by governments
• Longer transit times

Decreased • Longer holding times
Visibility • Less ability to track shipment locations
Macro Challenges
Slide 77
• Infrastructure Development
• Regulatory Reforms
• Investment in Technology
Other Challenges
Slide 78
• Infrastructure Development
 Containerization
 Dry ports (CFS/ICD)
 Port Sector
 Inland waterway
 Road transportation
Other Challenges
Slide 79
• Regulatory Reforms
 Multi-modal Transport of Goods Act 1993
 Private Freight Terminals Policy
 Draft Coastal Shipping Policy
 Cabotage Policy
 Policy to permit private operators to move
container trains on Indian Railways
 Impact of GST
 Foreign Direct Investment
Other Challenges
Slide 80
• Investment in Technology
 Cloud computing and software-as-a-service
 Global Positioning System
 Radio Frequency Identification
 Enterprise Resource Planning
 Mobile Technology
Agenda
Slide 81

 Benefits
 Challenges
 Best Practices
Legal Framework
Slide 82
2002
1993
Act amended
1992 MMTG act to simplify
Legal enacted in rules
1980 recognition India
Multi- for term  Act provides registration for 3
modal under years at a time which can be
1930 transport UNCTAD/ICC renewed for a further period of
1st made term rules 3 years
by  Director General of shipping is
introduced
UNIDROIT
by UN the competent authority
Legal Framework
Slide 83
2020
National Logistics Efficiency and

Advancement Predictability and Safety Act
(NLEAPS) is about to replace MMT Act
Tax Implications
Slide 84
Value
SalesAdded
Octroi
Tax Tax
CGST Customs
Excise
Duty
GST
SGST
IGST
GST subsumes various taxes which makes multimodal

transport arrangements more tax efficient
Tax Implications
Slide 85
• Services consolidation will increase availability

of efficient and organized service providers
• Reorganized country wide networks decrease
cost of primary freight
• Increased secondary freight due to
consolidation of warehouses
• Eliminate cascading effect of taxes
Multi-modal transport document (MTD)
Slide 86
Multimodal transport document(MTD) is the accepted

document whenever two or more modes of transport takes
place from the acceptance of goods in India through the place
of delivery of goods outside India
UNCTAD/ICC definition
“MT document, means a document evidencing a multimodal
transport contract and which can be replaced by electronic data
interchange messages insofar as permitted by applicable law
and be,
a. Issued in a negotiable form or,
b. Issued in a non-negotiable form indicating a named
consignee”
Slide 87
By issuance of MTD, the MTO:

• Undertakes to perform and/or in his own name to procure
performance of the multimodal transport including all services
which are necessary to such transport for the time of taking the
goods in charge to the time of delivery, and accepts
responsibility for such transport and such services to the extent
set out in this conditions
• Accepts responsibility for the acts and omissions of its agents

or servants when agents/servants are acting within their scope
of environment as if such acts or omissions were owned
Slide 88

• Accepts responsibility for the acts/omissions of any other
person whose services he uses for the performance of the
contract evidenced by multimodal transport document
• Undertakes to perform or to procure performance of all acts

necessary to ensure delivery
Slide 89

• Assumes liability to the extent set out in these conditions of
loss or damage to the goods occurring between the time of
taking them in charge and the time of delivery and undertakes
to pay compensation as set out in these conditions in respect
to such loss or damage
• Assumes liability to the extent set out in these conditions for

delay in delivery of goods and undertakes to pay
compensation as set out in that condition
Evidentiary Effect of MTD
Slide 90
• The MTD shall be prima facie evidence of the taking in charge

by MTO of the goods as described therein
• Proof to the contrary by the MTO shall not be admissible if the

MTD is issued in negotiable form and has been transferred to
the third party , including a consignee, who has acted in good
faith in reliance on the description of goods there in
Responsibilities and Liabilities of MTO
Slide 91
• MTO’s remain responsible for the goods throughout the period

from the time they receive the consignment until the same is
delivered
• MTO’s shall be liable for loss resulting from

 Any loss or damage to the consignment
 Delay in delivery of consignment and consequential loss or damage
arising from such delays
• MTO’s shall not be liable if he proves that no fault or neglect

on his part or that of his agents had caused or contributed to
such loss/damage or delay in delivery
Slide 92
Limits of Liabilities
• Any loss of, or damage to any consignment where the nature
and value of the goods have not been declared by the
consigner before such consignment was take in charge by the
MTO where in such loss or damage is not known in transit,
then the liability of the MTO shall not exceed 2 SDR/Kilo of
cross weight of consignment loss or damaged or 666.67 SDR
per package or unit lost or damaged whichever is higher
Slide 93
Limits of Liabilities
• If no sea or inland waterways leg is involved in transit then the
limitation is based solely on weight i.e. 8.33 SDR/Kilo of cross
weight of goods loss or damaged
• If the stage of transport at which the loss of damage occurred

is known the limit of liability of MTO shall be determined in
accordance with the provision of relevant law or convention
governing limitation of liability
Slide 94
Notice of Loss/Damage to goods

• Notice shall be given by the consignee in writing to the MTO
immediately if the losses are apparent
• However if the loss/damage is not apparent such notice shall
be given within 6 days from the date of delivery
Limitation on Legal Action

The MTO shall not be liable under any of the provisions of the
act unless legal action against him is brought within 9 months of:
a. The date of delivery of the goods
b. The date when the goods should have been delivered
c. The date on and from which the consignee has the right to treat the
goods as lost
Agenda
Slide 95

 Benefits
 Key Challenges
 Best Practices
 Case Study
Performance Measurement
Slide 96
• Till today, No inter-sectorally (between rail, road, ocean,

inland waterway and airport transport) accepted concept for
measuring and evaluating the performance of different
transport mode is available
• Individual KPI’s of each mode of transport is monitored
separately in terms of,
 Transit-time
 Cost
 Safety
 Security
 Visibility
Agenda
Slide 97

 Benefits
 Key Challenges
 Legal & tax matters
 Best Practices
Best Practices
Slide 98
Parcel case strapping

• Multiple parcel orders for the same customers are strapped
and shipped to the customer as single shipment
• It reduces cost due to optimal weight/cube bracket
• Shipments that are too light and small and fall outside these
brackets are more expensive if shipped independently
Parcel/LTL minimum charge analysis

• Parcel cost and LTL minimum charges are compared for each
shipment and shipped using the cheaper mode
Best Practices (contd)
Slide 99
Parcel Zone Jumping

• Shipments to expensive zones shipped at a lower cost by
combination of truckload and parcel
• Parcel shipments to the same zone are consolidated and
shipped via truck load to the zone
• Cross-docked and delivered to customers via the parcel
shipments
Cross Docked/pooling
• LTL shipments going to the same geographical area (Same
pin code) are pooled at the origin
• Shipped to the destination pin codes, cross docked there and
finally delivered to end customers via LTL shipments
Slide 100
Aggregation
• Aims at consolidating orders and shipments between the
same origin and destination points
• This builds larger shipments to customers without changing
modes
Example - Shipping fewer LTL shipments in heavier LTL weight brackets
against shipping more LTL shipments in lighter LTL weight brackets.
Consolidation/Co-loading
• Similar to aggregation best practice with the difference of
consolidating LTL and partial truck load shipments into FTL
shipments
Slide 101
Continuous Move Routing

• This practice helps convert partial truck loads to full truck
loads and minimizes empty running
• Instead of going from point A to point B and back to point A
continuous move routing builds routes such as A to B to C
and ultimately back to A
• The interim stops can be either for making customer
deliveries or picking up loads
Multi-Modal Transport
Impact of Best Practices
Slide 102
Shippers
• Lower cost of transportation by collaboration and modal
optimization
• Collaboration will lower lane rates and help reduce
transportation overhead cost of individual organizations
• Lets companies focus on their core competencies such as
manufacturing, new product design, Marketing etc.
• Outsourced parties to concentrate on their core competencies
such as reducing cost through better asset utilization
• Also result in lower carbon footprint, less congestion, lesser
noise pollution etc.
Slide 103
Carriers and Private Fleet

• Will help to minimize empty running and gain incremental
revenue with same distance covered
• Substantial impact on bottom line there by providing
organizations an opportunity to reduce cost-to-serve and lane
rates
• Modal optimization will also help reduce carriers and private
fleet cost-to-serve, improve asset utilization and lower capex
needs
• Carriers and private fleet will also be able to meet their
sustainability goals
Slide 104
3PL Providers
• Can be appointed for multi party collaboration
• Key success factors for 3PLs will be seamlessly integrating
disparate systems of shipper organizations and working with
different cultures of various organizations
• With reasonable fees, shipper organizations would look for
long term engagements
Building World Class Multimodal Transport Network
Slide 105 Developing and Deploying India’s Supply Chain Talent
• Assess current or as-is scenario

• Evaluate alternate options available in market place
• Select the right mix through optimization
• Review performance through close monitoring of
KPIs
• Use optimization as an ongoing process
Agenda
Slide 106

 Benefits
 Key Challenges
 Best Practices
Effective Enablers
Slide 107
• Highly skilled expertise (commercial contract and maritime law,

International freight forwarding, banking and insurance etc.)
and extensively developed use of IT and carrier network
• Regulatory frameworks that can provide freedom to plan and
operate to carriers and reliable liabilities regimes to customers
• Simplified customs administrative procedures and practices at
ports and border points between countries to minimize and
eliminate delays
• Efficient ports with excellent ship turnaround times, high
standards for safety and security of cargo and ships, and high
cargo productivity
Effective Enablers
Slide 108
• Effective and efficient security and safety along the entire

transport chain (Intra and Inter Modes)
• Strong regional co-operation with dedicated political will to
develop, enact and implement legal regimes that favour
multimodal transportation
• Good road, rail, water and air transport infrastructure and
super structure on a national and regional basis
Agenda
Slide 109

Scope & Role
 Benefits
 Challenges
 Best Practices
 NLEAPS
NLEAPS
Slide 110
• The Ministry of Commerce and Industry is considering

replacing the Multimodal Transportation of Goods Act, 1993
(MMTG) with a National Logistics Efficiency and Advancement
Predictability and Safety Act (NLEAPS).
• The move assumes significance as high logistics cost impacts
the competitiveness of domestic goods in the international
market
• India’s logistics sector is highly fragmented and the
government aims to reduce the logistics cost from the present
14% of the GDP to less than 10%.
Source: 1. https://www.iasabhiyan.com/national-logistics-efficiency-and-advancement-predictability-and-safety-act-nleaps/
2. The Hindu
NLEAPS Benefits
Slide 111
• The new law tends to define various participants of the logistics

sector and create a light regulatory ecosystem. There is no
clear definition of the logistics sector in the MMTG.
• Effective implementation of the Act would help provide an
impetus to trade, enhance export competitiveness, and
improve India’s ranking in the Logistics Performance Index and
Ease of Doing Business.
THANK YOU!
Slide 112 Developing and Deploying India’s Supply Chain Talent

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What are the benefits of using multi-modal transport?

What are the benefits of using multi-modal transport?

What are some of the challenges faced in multi-modal transport?

What are some of the challenges faced in multi-modal transport?

Multi-Modal Transport & Applications

 Multi-Modal Transport Operator (MTO): Definition,

Road and Rail transportation still dominates in other regions

Source: Mint news article - 17 th October 2020

Source: Moneycontrol (April 2018)

1 – Average yearly exchange rate for 2017 of 1 EUR = 0.923 USD

 Multi-Modal Transport Operator (MTO): Definition,

Multi-Modal Transport Operator

• Multi-Modal Transport of Goods Act 1993

Shipper is provided with one or more value added service

The multimodal transport sector is still nascent

Vessel Operating MTOs

Non-Vessel Operating MTOs (NVO-MTOs)

Engaged in business Must have a minimum annual turnover of

FDI in Logistics and MTO in India

Automatic Route Government Route

All activities which

• Most extensive network for

• India has the 2nd largest road network spanning 5.89

• According to the data released by Department for

• Private sector companies have emerged as key players

Source: IBEF (July 2020)

Sr. No. Project Start Date End Date

3 Bharatmala 2015 To be completed by

 Project type: National Highway

 Connecting India’s top 4 metropolitan cities:

 The Golden Quadrilateral has four sections

 The North–South–East–West Corridor (NS-EW) is the

 Total Length of NS–EW Corridor is 7,300 km with two

 Bharatmala Pariyojana is a new umbrella program for

Sr. No. Scheme Length (km) Cost (Rs. crore)

 Goods wagons or freight wagons also known as goods

 Containerization is a system of intermodal freight

 Container Corporation of India Limited (CONCOR) is a

Sr. No. Name of the Company Parent Company

Sr. No. Name of the Company Parent Company

• Rail transportation has been the

• Indian Railways (World’s 3rd largest) route length

• Various technologies such as electronic interlocking at

Cabinet approval for private ownership of rail lines

• Dedicated Freight Corridor(DFC) is an

• Envisages construction of two

• Eastern Corridor from

• Western Corridor from Dadri(UP) to

% share Projected 2020

• Marine Transport is the traditional

• Indian ports serve as gateway to International trade

• Total volume of cargo handled in ports across India till

• Potential to increase the domestic freight share through inland

• A coastline of 7,516.6 km and about 14,500km of navigable

• Lack of support infrastructure

1. Kandla Port (Gujrat)

• India is blessed with 7,516.6 km of coastline and about

Source: The Hindu article

 The concept of Sagarmala was approved by