Multimodal Transport: What is it and what does it consist of?

Multimodal transport is the articulation between different modes of transport, in order to carry out more quickly and efficiently the transshipment operations of materials and goods.

Multimodal Transport is understood as the transfer of goods from their origin to their destination using more than one means of transport (land, sea, river, air) at an international level with different transport contracts according to each case.

These allow the transfer from one means of transport to another without the need to manipulate the goods they contain, so there can be no breakage of the load unit, that is, the goods cannot be separated. The creation of large port terminals connected by road, rail and river with production and consumption centers has driven the spectacular development of multimodal transport in recent years. A single document or knowledge of multimodal transport is used: Bill of Lading(FBL). It is a bill of lading through which the freight forwarder assumes the role of carrier. This document is used for all transport.

The organization of an International Transport to cover the route from a point of departure to a point of destination, requires two or more different means of transport, that these means operate in several different countries and that several international transport contracts are issued according to each medium used.

Therefore, multimodal transport consists of a service that is contracted through a logistics operator, an agency or a freight forwarder and this is in charge of transporting the merchandise from the point of departure to the final destination. And in this journey, different means of transport are articulated, that is, more than one vehicle. But this is usually foreign to the client, it is the operator who is in charge of managing the service. Although different means are used during the journey, to be considered as multimodal transport it must meet the following requirements:

  • A single transport document, known as FIATA Bill of Lading (FBL), on the other hand, in intermodal transport this document is for each means of transport used.
  • The merchandise or cargo must be compact as it was delivered at origin, it is not possible to separate it into smaller elements, let’s imagine a full truck, in this case groupage could not be carried out in 2 trucks, there can be no breakage of the burden.As a result of the general definition of multimodal transport, it is possible to transport bulk goods, as well as to carry out domestic multimodal transport operations. Therefore, this global concept of multimodality will be subdivided into intermodal transport – in which only one load measure is used – and combined transport – in which the merchandise is transported in different means but within the same transport chain -.

Characteristics of multimodal transport.

Only one contract is needed.

It is the only medium that allows the use of a single contract, all the others require more than one.

National and international scope.

Multimodal transport has a scope both nationally and internationally, since it allows the use of various means of transport, which makes it possible to reach almost all parts of the world. This is a factor that causes a great use of this modality by important companies.

There is no distance limit.

The distance can be both long and short, since there is no clause that establishes a limitation for the distance to be traveled by multimodal transport.

Different means of transport.

The main characteristic of multimodal transport is the possibility of combining different means of transport, that is, for example, we can use a railway, a ship and a truck for the same transport. In other words, the customer will have the ability to decide whether to carry out their transport with a single type of means or by combining it with others.

Merchandise tracking.

This is another of the fundamental characteristics of this type of transport, which is that the merchandise can be tracked through digital systems and satellites, which is why it is a very useful aspect when it comes to transporting high-value merchandise.

Multimodal transport and its main advantages

  • Costs and travel times are reduced in the operation as a whole.
  • The user assumes less risk of loss or theft of the merchandise, since he only has one interlocutor.
  • The FBL has preference for entry and passage through customs.
  • The global programming of the route and the economic, human and logistical costs are simpler.
  • However, it also has a number of disadvantages:
  • There are legal and operational limitations in the application of international standards
  • Security remains high and terminal inspections continue to limit operations.
  • There is no comprehensive vision of multimodal transport, so there is no infrastructure to facilitate multimodal operations
  • The demand structure is deficient, the lack of flow compensation affects the entry of containers into the interior.

However, not all are advantages, it also has a series of drawbacks, among which the following stand out:

  • There may be both operational and legal limitations in applying international regulations.
  • There are usually inspections at the terminals for security reasons.
  • It is a transport with procedures that are not very simple due to the lack of investment in infrastructures that make it possible.

Therefore, multimodal transport is very advantageous when goods are transported internationally, thanks to the advantage of having a single logistics agent.

To this we add the cost reduction of signing a single agreement. The speed of delivery and the lower cost means that the multimodal transport customer is able to offer their goods at a better price

Multimodal transport and its legal impact

Multimodal transport is governed by international agreements. These international agreements govern what are the responsibilities and restrictions that affect the transport provider.

The agreements that apply to intermodal transport do not alter any of the parties, but the carrier ‘s liability is required when there is a breach of contract.

Multimodal transport and its types of combinations

Any multi-world transport uses at least two combinations of the following types of transport that we detail. Depending on the distance or the route, the transport provider or the client, depending on their knowledge, will choose the best option to reduce costs and delivery time.

  • Ground transportation. It is the most demanded and most used transport. It is based on point-to-point transportation with land vehicles which range from small delivery vans to mega trucks and trailers. Land transport, in turn, is divided into paletería, groupage and full load shipments.
  • Marine transport. It is the most indicated when it comes to long distances, perfect for shipments between continents. It is undoubtedly the most common means of transport on international routes. To carry it out, very different types of boats can be used.
  • Air Transport. Without a doubt the fastest option but also the most expensive. Its main advantage is availability and rapid transit in deliveries. You can send any merchandise to any part of the world in a single day.
  • Railway transport. In recent years, it has been experiencing an increase in its demand due to the fact that it reduces the price of transport and considerably speeds up delivery times when it comes to very long-distance shipments.

Multimodal transport and its great importance

Multimodal transport is of great importance and not only because it has cheaper costs. It is so important because the person who hires it does not have to have extensive knowledge about how it works. This possibility makes this whole process simpler at a commercial level without the need to resort to intermediaries. There lies largely the importance of this type of transport.

Another feature is that its means of transportation are adapted to long, medium or small distances depending on the type of merchandise and its final delivery. As we mentioned in the previous paragraph, there is a great variety of vehicles and types of transport to make the best combinations that represent a greater benefit for both parties.

Likewise, it should be noted that freight forwarders currently play a fundamental role in this type of transport, due to the fact that they assume much more responsibility in the role of carriers. In addition, there are numerous maritime carriers that have developed their activity in multimodal transport and that offer their clients a door-to-door delivery service.

These sea carriers have the ability to provide transportation from the facilities of the seller or exporter of the merchandise to those of the client or buyer. This is one of the reasons why multimodal container shipping is the most important shipment. However, we must not forget that multimodal is not a transport that can be compared to container transport, nor does it need them to function.

The Multimodal Transport Operator

The title of Multimodal Transport Operator (OTM) is granted to the person who carries out a multimodal transport contract on their own or imposed. This individual acts as the principal, not acting as an agent or acting on behalf of the consignee or carriers involved in the transportation operations. Basically, the OTM assumes full responsibility for the development of the contract. In addition, the OTM is responsible for taking full responsibility for the user for the entire route and journey made by the merchandise, from collection to delivery.

That is why the type of route (sea, land or air) that is being used is irrelevant, if there is damage or loss of merchandise, it is the OTM that must respond to the user for said inconveniences. The Multimodal Transport Operator is also committed to providing a direct service to its refueling customers, on a regular and punctual basis.

This type of transport contract includes the Just In Time. What differentiates a multimodal transport contract from a traditional contract is the simplicity when contracting the transport, since the cargo generator needs to make a single contract with a Multimodal Transport Operator. It is the latter that assumes the responsibility both for the coordination of the entire logistics chain and for the damage that may occur to the merchandise and the claims to third parties or to the goods of third parties that may be caused.