- In international trade, a number of goods often takes place through more than one carrier & more than one mode of transports.
- Under the conventional practice, the liability of each carrier is limited to the carriage performed by him.
- The first carrier whom the shipper engages may often act as his agent in dealing with subsequent carriers.
- He may often issue a “Through Bill of Lading” & collect freight for the transport of the goods.
- Alternatively, the shipper may contract with the forwarding agent who in turn on behalf of the shipper may contract with one or more carriers.
- The shipper or his agent has also to make all other arrangement required for transshipment of the goods from one mode to another mode of shipment including if necessary for warehousing of the goods at any of the transshipment point.
- Under MMT system, the position is different. The shipper entrusts the goods to the person who undertakes to organize MMT & make all intermediate arrangement necessary for the through movement of the goods & their delivery to the Buyer/consignee at the destination.
Definition of International Multimodal Transport
It is defined as the carriage of the goods from one country to another by more than one of transport on the basis of the single contract.
Features of MMTO system
- It is a single contract system between the shipper and MMTO
- The MMTO who assumes responsibility for execution of the contract act as PRINCIPAL & and not as AGENT
- It maximizes the efficiency in transport by transporting the goods door to door on the basis of a single contract.
- The burden of issuing multiple documentation & other formalities connected with each segment of the transport chain is reduced to a minimum
- Faster transit of goods reduces the disadvantage of distance from the market & the capital being employed
- This will also help to restore the stocks more quickly with great certainty.
- The usefulness of MMTO is greatest when cargo is unitized (containerized)
- The MMTO in break bulk is comparatively slow & unproductive because of the time & expensive cargo handling at various transshipment points.
- On the other hand, utilization reduces the time & the labors require in the handling of the cargo & bring down the overall cost.
- Containerized MMTO reduces damage, pilferages & contamination of cargo.
Status of MMTO
In the execution of the contract, the MMTO has to necessarily engage the service of several carriers & noncarriers.
The carriers may be
- Ship Owner
- Road Operators
- Inland Water Operators
The Non-carrier may be
- Container Terminals (Terminal Operators)
- Container Freight Station (CFS)
- Container Leasing Organization
- CHA, Freight Forwarder or Clearing & Forwarding Agent
Types of Multimodal Transhipment Operators
Vessel Operating MTO’s
- Individual shipping companies or consortium of shipping companies
- Producers/Exporters of certain commodities who are the main users of their own MMTO
Non-vessel Operating MTO’s
- Freight Forwarders
- Road Transport Operators
- New companies specialized in MMT operations