Define the following
Multimodal Transport:
Defined as the practice of using two or more different means of transport and also through the use of intermediate handling organized by one carrier (MTO) under one contract with one freight document under one liability and one price.
Intermodal Transport – is the use of several means of transport (multimodality) while the goods remain in the same loading unit (e.g. container).
Combined Transport – This is intermodal transport which is principally carried out with the trips beginning and ending by road.
Multimodal transport contract - means a single contract for the carriage of goods by at least two different modes of transport.
Carrier means the person or company who undertakes to perform the carriage, or part thereof, whether he is identical with the multimodal transport operator or not.
Consignor means the person who concludes the multimodal transport contract with the multimodal transport operator.
Consignee means the person entitled to receive the goods from the multimodal transport operator.
Taken in charge: means that the goods have been handed over to and accepted for carriage by the MTO.
Delivery means:
(a) the handing over of the goods to the consignee, or
(b) the placing of the goods at the disposal of the consignee in accordance with the multimodal transport contract
(c) Special Drawing Right (SDR) means the unit of account as defined by the International Monetary Fund.
(d) Goods means any property including live animals as well as containers, pallets or similar articles of transport or packaging not supplied by the MTO.
Advantages of Multimodal Transport.
1. Minimises time loss at trans-shipment points thereby provides faster transit of goods - The MTO maintains his own communication links and coordinates interchange and onward carriage smoothly at transshipment points.
Reduces burden of documentation and formalities.
Saves Cost as it reduces costs for export
Establishes only one agency to deal with
Responsibility of the MTO
Period of responsibility - The responsibility of the MTO for the goods from the time the goods is in his charge to the time of its delivery.
The liability of the MTO for his servants, agents and other persons - The multimodal transport operator shall be responsible for the acts and omissions of his servants or agents, acting within the scope of his employment.
Delivery of the goods to the consignee.
EXPECTATIONS FROM THE MTO.
An MTO should therefore have the knowledge and skill to organize the transportation of goods through different modes of transport.
He should be aware of what is happening in the areas of technological development, political stability of countries, and congestion of routes.
Offer services which covers a wide geographical area, either through an In-house branch network or by means of reputable third party agencies.
The Advantages and Disadvantages of the various modes of Transport.
Maritime and Rail modes are safer and economical because they can transport at one go, large volumes of goods over very long distances at relatively cheaper cost compared to the other modes.
The sea mode is however criticized as being relatively slow.
Road transport is relatively faster than rail and sea but not economical as it can only transport smaller quantities at a time.
E.g. Quantities of goods that can be conveyed by a small ship on a single voyage will require hundreds of trucks to carry them.
Air transport on the other hand is the fastest mode but is handicapped in terms of volume. Aircrafts cannot carry much load compared to a train or a ship. Air transportation is also known to be very expensive compared to all the other modes.
What are the challenges for Multimodal Transport in West Africa and How Can MULTIMODAL TRANSPORT improve in Africa
Where transport networks are well integrated nationally, regionally or globally, they provide a good opportunity for multimodal transportation because transport sector operators could explore optimum combination of the various transport modes to convey goods from origin to destination faster, safer and at optimum price.
In West and Central Africa (WACAF), a region where goods transportation suffers from a myriad of bottlenecks, the shipper would most readily embrace multimodal transportation since it,
- Saves costs, minimizes time loss during transshipment, induces faster transit of goods and reduces burden of documentation formalities
As such Challenges of mT in Wacaf includes;
A) Weak freight forwarding sector
B) Complex customs procedures
C) Weak management systems
D) High Freight rates
E) Large volumes of empty export containers
F) Lack of interconnectivity between modes where they exist.
G) High transport cost and inefficiency of ports.
H) Poor quality of rail in the transportation of general freight
I) Not sufficient intermodal facilities and Poor hinterland connections (roads, rail networks)
Solutions
a) Ideal practices for the transport modes involved - low transport cost, high frequency, high connectivity and quality of service
b) Adequate Terminal Infrastructure - sufficient capacity, fast handling and limited dwell time.
c) Efficient Interface - existence of interoperable sea/rail/road networks, prompt information flow, effective documentation processing and customs clearance.
d) Diminish delays in preparation of shipping documents and customs clearance - Greater emphasis should be placed on paperless system.
NB:
Air Cargo interchanges require large numbers of small, very specialized units, often desired to only handle one specific class of aircraft.
Except for very long haul route, Cargo shipped by sea spends 22% of its transit time waiting to be transported. And
Generally, two main interfaces cannot be easily combined directly i.e. air and sea.
- It is however unusual to have a rail and air connection other than for passenger services.
Question: How can MT be most appropriate for wacaf?
Ans: When there's a convention that unifies all MT logistics, liabilities and paperworks
Forms of multimodal transport operations
1. Land-Sea-Land; e.g. An empty 20’ container is picked up from Maersk Line’s container yard from Kumasi and trucked to Tamale and stuffed with shea butter. Thereafter, the FCL is then trucked to Tema and transported by ocean vessel to Mumbai in India. From Mumbai, this is then sent by rail to New Delhi.
2. Road /Air/Road; A combination of air carriage with truck transport - Undoubtedly, pick up and delivery services by road transport are usually incidental to air transport.
3. Sea – Air-Sea - This combines the economy of sea transport and the speed of air transport and requires a land transit intermediary.
4. Ro-Ro
This mode combines different means of transportation (sea and road), and is used most often with new automobiles, which are shipped by sea and then simply driven off the vessel to the importer’s warehouse - Heavy and over dimensional cargo is also suitable for Ro-Ro transport.
5. L.A.S.H. (Lighter Aboard Ship)
Lash transport is a combination of deep sea and inland waterway transportation.
- An example is the route from Germany to the Mississippi Ports where the barges sail down to the Rhine river in Germany and are loaded onto LASH container vessel in Hamburg; which is then carried across the Atlantic, only to be unloaded at a Mississippi Delta port to sail upstream in the U.S.
Systems in the multimodal transport system
Swap-body : This is an inter-changeable body system where the truck body is lifted off the chassis, transported by rail and, at the point of destination, placed on another truck chassis for final delivery
Kangaroo-System
This is the situation whereby both trucks and trailers are transported by rail.
Courier and Parcel Systems
Courier and parcel transport systems are part of the fast freight market.
Fast freight market includes the scheduled carriage of goods from door-to-door within a minimum of time. The fast freight market can be divided into four service segments;
Examples of fast freight markets
Courier Service
Express Service
Parcel Service
Integrators
Pallet: This is a raised platform on which loads can be stacked and constructed for easy movement by a forklift or sling.
Heavy Lift Transport
This requires a solid preparation of the whole transport chain in advance. Every heavy lift transport has to be planned and carried out as a door-to-door transport.
River-Sea Shipping: This is a through shipping, starting or ending at an inland port via inland waterways and ocean going traffic.
Barge-Carrier
This refers to a ship borne system in which the barges are loaded inland, linked together and pushed down an inland waterway to a point that can be reached by a ship where the barges are lifted into the mother ship with the use of gantry cranes or by lowering the mother ship.
Two (2) types of barges exist namely:
a) LASH – Lighter Aboard SHip for use of up to 370 tonnes
b) LYKES and SEABEE for use of up to 850 tonnes
PRICING IN MULTIMODAL TRANSPORT
The basic measure is the monetary price of moving each tonne over one kilometre (tonne/kilometre)
Also In calculating the multimodal transport, the MTO needs to identify all the independent price components he/she would need to determine the total cost involved. Eg.Loading charges, trucking charges, sea freight, forwarding and handling charges, Surcharges (Bunker adjustment factor, congestion surcharges and war risk surcharges) and clearing charges.
Ad Valorem freight - freight for very expensive goods and it is 20% - 25% of the total cost of goods.
Question Example;
Determine the cost elements that would be taken into consideration when an MTO is contracted to transport a 20’ FCL of shear butter from Tamale in Ghana to the customer’s warehouse in New Delhi in India. (Assume that, an empty container is to be picked from the container Terminal of a Shipping Line in Kumasi. Also assume that you are going to use Gold Star Line as the Sea carrier)
Solution
Positioning of the empty container on shipper’s premises in Tamale
Pick up loaded container on shipper’s premises in Tamale (Lift on charges)
Trucking of loaded container from Tamale to Tema.
Forwarding and Handling charges at the port of Tema.
Cost of freight from Tema to Mumbai
Handling charges at Port of Mumbai
Rail transportation charges from Port Mumbai to Inland Container Depot (ICD) in New Delhi
Handling charges in ICD New Delhi.
Clearing charges in ICD New Delhi
Trucking charges from ICD Delhi to Customer’s Warehouse.
MTOs margin.
Different types of MTOs
Carrier owning MTO (eg MSC, Maersk line, cosco)
Non-Carrier owning MTO (eg. All ship logistics limited)
Non-vessel-operating MTO’s
Non-vessel-operating common carriers - NVOCC (They advertise regular shipping schedules and arrange consolidation or multimodal transport services under HBL or FBL)
What is Unitizing
“unitisation”. This is the consolidation together of numerous smaller packages into a “unit” that can be handled throughout the journey as one piece.
What is Standard
The “standard” form of unitized through freight transport is the freight container, enabling goods to be packed into the container, as a single unit, and transferred easily between road, rail, sea and/or air
QUESTION 1: WHAT LEd TO THE DEVELOPMENT OF MTO
Ans: Containerization and Globalization
Question 2: Which Convention defined International multimodal transport as the means of moving goods door-to-door under a single liability system leading to lower costs.
Ans: MT (United Nations Convention on international multimodal transport of goods) of 1980
Question 3: Mention two traditional freight transportation documents
Ans: Railway Consignment Notes and Ocean Bill of Lading
Question 4: Why is The Multimodal Transport sector of ECOWAS a very important input for development.
Ans: advantages include 1. door-to-door low transport costs 2. flexibility and 3. Affords opportunities for the landlocked countries to trade internationally.
Question 5: what is the Difference between a Traditional Freight Forwarder and an MTO.
Ans: The traditional Freight Forwarder acts only as an intermediary, the MTO acts as a genuine carrier and principal to his sub-contractors
NB: Any unit in international combined rail transport system must carry a rail approved dimension code and certification plates.
Overview of the Freight Forwarder in Multimodal Transportation
The freight forward is the individual or company that concludes an international contract of affreightment under one document, one liability and price.
A Multimodal Transport Operator (MTO) is a Freight Forwarder who acts as a Carrier and as a Principal for sub-contractors and who sets up a single multimodal transport document on behalf of their customers which covers the entire transport operation from door-to-door.
The freight forwarder may enter into separate contracts with individual transport operators and providers of services, but these sub-contracts would not affect his obligations to the consignor (shipper) for the performance of the multimodal transport contract and his liability to him arising under the contract.
The duties of a Freight Forwarder include booking space on a ship, providing all the necessary documentation and arranging Customs clearance.
To the Shipper, the Forwarder is an intermediary or an agent.
The functions of MTOs include but are not limited to.
a) To identify and to provide the proper means of carriage for the thorough transportation of shippers’ goods.
b) To schedule time-tables to suit both the shipper and the receiver.
c) To provide transportation for the whole journey.
d) To provide a standardized documentation set to ensure a minimum delay in transit through national borders.
e) To provide for a simple billing structure to minimize the number of invoices
f) To provide tracking and tracing facilities
g) To provide cargo-handling advice for stowage of goods in containers and swap-bodies.
Factors influencing the Choice of the Transport Method
Reliability – to be present in the place at the moment that it is needed.
Flexibility – The skill of the service provider to react rapidly to changing situations such as high traffic periods.
Time Limits – For certain types of goods, such as fresh or frozen foodstuffs, flowers etc., the rapidity of transit-time can be essential for their preservation.
In general, high value goods and those necessitating a high capital investment tend to use the faster methods of transport.
Security – This concerns the various misfortunes that can happen to the goods in the course of a transport operation during the loading, transshipment or unloading phases while the goods stay at intermediate handling points such as the ports, airports, bonded warehouses etc. This misadventures can include theft, breakage, shortages and others.
Cost – The cost of transport services is the primary criterion in the choice of what means of transport to be contracted.
In general, the price includes:
Packing: (relating to the intrinsic characteristics of the goods)
Insurance: ( relating to the value of the goods and the probability of their being subjected to risks)
Handling and Warehousing: ( at intermediate handling points) and Associated services ( forwarding, Customs operations etc.)
NB:
Aside the ICC UNIFORM RULES FOR A COMBINED TRANSPORT DOCUMENT”
multimodal transport documents have been evolved by international organizations such as the Baltic and International Maritime Council (BIMCO) and the International Federation of Freight Forwarders’ Associations (FIATA).
Multimodal Standard Contracts
a) Combidoc – This document which was developed by BIMCO is generally used by VO-MTOs and has been approved by International Chamber of Commerce (ICC)
b) FIATA Combined Bill of Lading (FBL) – This document was established by FIATA for the use of Freight Forwarders operating as Intermodal transport operators.
c.) Multidoc – This document has been evolved by UNCTAD to facilitate the entry into force of the Convention on Multimodal transport of goods. It incorporates the liability provisions of the United Nations Convention. However, the convention is not yet in force.
Liability
1. Warsaw Convention – Air Traffic
2. Hague, Hague-Visby Rules, Hamburg Rules - Sea Traffic
3. CMR - Road Traffic
4. COTIF / SMGS - Rail
Two main streams of liability development are considered here as follows:
1. Uniform Solution – There is one uniform liability, independent from which mode the damage occurred.
2. Network-Solution - The liability depends on the mode where the damage occurred.
The Liability of the Freight Forwarder according to the terms of the FBL is a mixture of the uniform and the network solutions.
The Freight Forwarder’s Liability is limited to 666.67 SDR per package or unit or 2SDR per kg of gross weight of the goods lost or damaged, whichever is higher.
If an Ad Valorem freight rate has been paid as stated in the FBL, then this shall be the limit for the compensation.
If the multimodal transport does not according to the contract, include carriage of goods by sea or by inland waterways, the liability is limited to an amount not exceeding 8.33 SDR per kg of gross weight of the goods lost or damaged.
Question; what are the legal frameworks in Multimodal transport
Ans: MT 1980 (United Nations Convention on international multimodal transport of goods) and the UNCTAD/ICC rules for multimodal transports.
Basis of liability : liability for loss, damages and delays
unless the MTO proves that no fault of his own, his servants or agents has contributed to the loss, damage or delay in delivery, the MTO shall not be liable for loss following from eg. delay in delivery unless the consignor has made a declaration of interest in timely delivery which has been accepted by the MTO.
Conversion of delay into final loss - If the goods have not been delivered within ninety consecutive days following the date of delivery, the claimant may, in the absence of evidence to the contrary, treat the goods as lost.
Defences for carriage by sea or inland waterways - the MTO shall not be responsible for loss, damage or delay in delivery with respect to goods carried by sea or inland waterways when such loss, damage or delay during such carriage has been caused by the act, neglect, or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship or fire, unless caused by the carrier. However, whenever loss or damage has resulted due to unseaworthiness of the ship, the MTO can prove that due diligence has been exercised to make the ship seaworthy at the commencement of the voyage.
Assessment of compensation: for loss of or damage to the goods shall be made by reference to the value of such goods at the place and time they are delivered to the consignee or at the place and time in accordance with the multimodal transport contract, they should have been so delivered. The value of the goods shall be determined according to the current commodity exchange price or current market price or, by reference to the normal value of goods of the same kind and quality.
Limitation of liability of the multimodal transport operator
Unless the nature and value of the goods have been declared by the consignor before the goods have been taken in charge by the MTO and inserted in the MT document, the MTO shall in no event be or become liable for any loss of or damage to the goods in an amount not exceeding the equivalent of 666.67 SDR per package or unit or 2 SDR per kilogramme of gross weight of the goods lost or damaged, whichever is the higher.
two main types of specialist MTO services
1. Project Transportation: The movement of very large shipments over an extended period, ranging from a few months to a few years.
In traditional terms, project transportation is the shipment of a complete plant facility from several points of origin and several manufacturers to a single site where the plant is to be built.
Some of the more common issues that an MTO ought to be aware of include:
- The need to analyze and categorize points of origin of raw materials.
- Familiarity with the ports of departure and arrival and shipping schedules for heavy or oversized cargo.
- Kowledge of the charter terms for the various modes of transport likely to be used.
-Skill in rate negotiationsn
- Inland transportation options and Personal requirements
2. Transportation of household goods for families relocating to other parts of the world.
Handling Equipment In MTO
Reach Stackers : Relatively Low initial capital - High maintenance cost - Moderate productivity - High flexibility
Gantry Cranes - High initial capital is required - Relatively low maintenance cost - High Productivity - Partial / full automatic operation - High infrastructure requirements.
Road Trailers - Conventional flat bed fitted with a combination of twist lock units to ensure that a wide range of units (4 x 10ft, 2 x 20ft, 40ft) can be carried on
Rail Trailers - This consists of a number of low level flat bed railcars that are connected together. This system is used in Switzerland where foreign trucks exceeding the maximum permissible weight for road use, transit the country on board a train from north to south.
Piggyback Trailers - Road-going semi-trailers suitable for lifting on to railcars in a manner similar to swap bodies. It enables a carrier to make maximum use of the loading capacity of a vehicle as railways do not suffer from weight limitations.
Waybill
This is a document sent with goods that sates where the goods are to be delivered, how much they are worth and how much they weigh.
It is issued by the carrier or his agent to the shipper and serves as a receipt for the goods and evidence of the contract of carriage.
In this respect it resembles a Bill of Lading but unlike a B/L, it is not a document of title; it bears the name of the consignee who has only to identify himself in order to take delivery of the cargo..
Because it is not negotiable, the waybill is not acceptable to banks as collateral security.
The purpose of the waybill is to avoid the delays to carrier and cargoes which occur when Bills of Lading are late in arriving at the discharge port.
1. Air Waybill (AWB) - This is a document issued by the airline to the shipper which represents evidence of the air transport contract as well as the flight number.
The airline draws up the AWB while at the same time informing their customer of the dates and times of departure and arrival at the destination port.
2. Sea Waybill - As ship movements are getting faster while on the other hand, document transmission (typical for traditional negotiable B/L) has remained slow, the goods often arrive before the documents required for delivery at the destination.
This hindrance can be avoided by means of a sea waybill which actually enables the goods to be delivered to the consignee named in the document.
The consignee then must prove his identity in order to take delivery of the goods.
Also this document is not a title to the goods and thus cannot not be negotiated.
Thus faced with the need for fast document transmission, the shipping lines have computerized the completion of Sea waybills.
The Sea Waybill is transmitted to their agent at destination by means of EDI (Electronic Data Interchange)
One single copy used as a receipt for the shipper is then completed; it is non-negotiable “Data Freight receipt” also known as computerized Bill of Lading.
Abbreviations
UCP - Practice for Documentary credits
DFR - Data Freight Receipt (nb: aka computerized Bill of Lading)
EDI - Electronic Data Interchange
ICC - International Chamber of Commerce
BAF - Bunker Adjustment Factor
BIMCO - Baltic & International Maritime Council
CMI - International Maritime Commitee
HBL - House Bill of Lading
FBL - FIATA Multimodal Bill of Lading
NVOCC - Non Vessel Owning Carriers
FCT - Forwarders Certificate of Transport (nb: non-negotiable)
FWB - FIATA Multimodal Transport Waybill (nb: non-negotiable)
CIM - Uniform rules concerning the contract of international carriage of goods by rail
CMS - Carrier Management System
CMR : Standard contract of carriage of goods being transported internationally by road
COTIF - Convention on the contract for the international carriage of goods by rail
SMES - A consignment note that confirms the conclusion of a transport contract with a railway undertaking.
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