Carriages of goods by Sea, Air, Multimodal Transportation

Multimodal transport (also known as combined transport) is the transportation of goods under a single contract, but performed with at least two different modes of transport; the carrier is liable (in a legal sense) for the entire carriage, even though it is performed by several different modes of transport (by rail, sea and road, for example). The carrier does not have to possess all the means of transport, and in practice usually does not; the carriage is often performed by sub-carriers (referred to in legal language as “actual carriers”). The carrier responsible for the entire carriage is referred to as a multimodal transport operator, or MTO.

Article 1.1. of the United Nations Convention on International Multimodal Transport of Goods (Geneva, 24 May 1980) (which will only enter into force 12 months after 30 countries ratify; as of May 2019, only 6 countries have ratified the treaty) defines multimodal transport as follows: “‘International multimodal transport’ means the carriage of goods by at least two different modes of transport on the basis of a multimodal transport contract from a place in one country at which the goods are taken in charge by the multimodal transport operator to a place designated for delivery situated in a different country

In International Trade the movement of cargo is frequently done through more than one carrier and more than one mode of transport. Normally, the consignor used to engage individual transporters for carriage of their goods depending upon the mode of conveyances involved for a particular transit.

The consignor also enters into separate contracts with each carrier.  The Carriers also limit their liability according to the Contract of Carriage.

However, under Multimodal transport, the consignment handing over to a person arranges multi modal transport operation   and makes all internal/intermediate arrangements necessary for the movement of the goods and delivery to the final destination as per Contract of Carriage.

International multimodal transport is involved for carriage of goods from one country to another by more than one mode of transport on the basis of a single contract.

Multi modal Transportation of Goods Act: In view of the provisions of Section (3) of the Multimodal Transportation of Goods Act (MMTG), 1993, no person shall carry on or commence business on multimodal transportation unless he is registered under the Multimodal Transportation of Goods Act,1993. “Multimodal Transport Contract” to mean” a contract under which Multimodal Transport Operator undertakes to perform or procure the performance of Multimodal Transportation against payment of freight”.

Multimodal transport document: Multimodal transport document is issued when the transportation of goods involve more than one mode of transport. It is a document evidencing contract for performance of combined transport.

Hence, in Multi modal transport document, the carriers are called as multimodal transport operator who takes the liability for safe carriage of goods by different modes of conveyances from the place of receipt of the goods to place of delivery. It is to be noted that this document will only confirm the receipt of the goods and not shipment on board.

This particular document is also termed as “Combined transport document”(CTD) or ” Inter-modal transport document”. Multimodal transport document is safer document than a “Through Bill of Lading” since under through bill of lading there is no guarantee of the carriers for safe carriage of the goods.  It is also to be mentioned that under “Through transport contracts”, the person will undertake to take care of the goods; so long the consignment will be at his control.  The person herein acts as an agent for the cargo interest in entering into contracts with the Carriers and others involved in transportation.

Types of Multimodal Transport Organizations:

Various types of organizations are operating as MTOs but they may be grouped under two categories:

Vessel Operating MTOs

• Individual shipping companies or groups of consortia of shipping companies.
• The large exporters who utilize their own multimodal transport operations by engaging their owned chartered ships.

Non-vessel Operating MTOs (NVO-MTOs)

• Freight forwarders.
• Road transport operators.

Vessel Operating Multimodal Transport Operators (VO-MTOs)

Normally the liability of the Ship-owners for carriage of goods is attached when the cargo is safely placed on board the vessel. However, due to introduction of containerization in International trade, many shipowners start providing their services to include carriage during land transit and even carriage by Air. 

Such combination   of modes of transport recognizes the vessel operating companies as MTOs. The ship-owners do not own or operate to carry the goods by road, rail or air but arranges transportation of goods by subcontracting with unimodal carriers.  They also sub contract inland stevedoring and warehousing services.

Non-vessel Operating Multimodal Transport Operators (NVO-MTOs)

Other than Ocean carriers, some transport operators may also arrange through transport or door-to-door delivery service of cargo by using more than one mode of transport.  Instead of subcontracting the inland or air segments of the transport, they may subcontract to the Ocean carrier but they will not own or operate the vessels for ocean voyage. Therefore, they are regarded as “non-vessel operating MTOs” or ” non-vessel operating common carriers”( NVOCCs).

Does multimodal transport service is accepted to all shippers:

Many shippers do not like to select a single carrier or by conference carriers for availing of different quality of service and prices depending on their requirements.

According to some shippers that a conference carrier does outstanding job in terms of service, documentation, communication, safety and security but it was expensive.  But when they utilize the services of non conference carrier and NVO-MTOs , they do not get the service for inland transportation for which they have to have make a separate arrangement.

The most striking point is this that percentagewise, selection of NVO-MTO is higher where shipper used to arrange inland transportation and rest of the transport is arranged by NVO-MTO. The following are the reasons for preferring single factor door to door rates and preferring to arrange for inland transportation only.

Responsibilities and Liabilities of MTO:

The MTO remains responsible for the goods throughout the period from the time they receive the consignment until the same is delivered. The MTO shall be liable for loss resulting from:

• Any loss of or damage to the consignment;
• Delay in delivery of the consignment and any consequential loss or damage arising from such delay, where such loss/ damage or delay in delivery took place while the consignment was in his charge.

It is, however, provided that the MTO shall not be liable if he proves that no fault or neglect on his part or that of his servants or agents had caused or contributed to such loss/ damage or delay in delivery.

Limits of liability:

• Where the MTO becomes liable for any loss of, or damage to, any consignment, the nature and value whereof have not been declared by the consignor before such consignment was taken in charge by the MTO, and if the stage of transit at which such loss or damage occurred is not known, then the liability of the MTO shall not exceed 2 SDR per kg of gross weight of the consignment lost or damaged, or 666.67 SDR per package or unit lost or damaged, whichever is higher.
• If no sea or inland water way leg is involved in the transit, then the limitation is based solely on weight, i.e., 8.33 SDR per kg. of gross weight of the goods lost or damaged.
• If the stage of transport at which such loss of, or damage occurred is known, the limit of liability of the MTO shall be determined in accordance with the provisions of the relevant law (or convention governing limitation of liability) applicable in relation to the mode and stage of transit during the course of which such loss of, or damaged occurred.

Notice of loss /damage to the goods:

Notice shall be given by the consignees 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 six 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:

• The date of delivery of the goods; or
• The date when the goods should have been delivered; or
• The date on and from which the consignee has the right to treat the goods as lost.

In India, the Multimodal Transportation of Goods Act, 1993 (No28 of 1993) was enacted on 2nd April,1993 and it came into force from 16th October,1993.