INTRODUCTION AND CONCEPT:

Multimodal transport refers to a transport system operated by one carrier with more than one mode of transport under the control or ownership of one operator. In simple terms, it means, carriage of goods by two or more modes of transport such as a combination of truck, train, and airplane or ship in succession to each other.

In international trade due to its very nature, goods indispensably pass through the hands of more than one carrier and one mode of transportation. Under conventional system of transportation, consignee enters into separate contracts with each other where the liability of each carrier is limited to the service provided by him. On the other hand, under multi-modal system only the consignor or his agents have to make all arrangements required for trans-shipment of goods from one mode to another, so much so that this even includes warehousing of such goods i.e. the carrier organizing the transport takes responsibility for the entire door-to-door transport and issues a multimodal transport document.

Therefore, multimodal transport is a system where the responsibility for transport activities is placed on one operator. Hence, a multimodal transport operator (MTO) acts as a principal and accepts whole responsibility and liability to perform the transportation contract; and thus becomes the sole interface point for the shipper’s transport function.

A single contract

The definition of the multimodal carriage contract put forward that the carriage should be based on one single contract between a consignor and a carrier. When a multimodal carrier accepts a consignor’s business, he agrees to be responsible for the complete movement of the goods even though in general it is unlikely that he will carry the goods with his own vehicle or vessel for more than one stage. Many multimodal services are offered by sea carriers who subcontract the other connecting activities of carriage and transhipment.

Typically, if merchandise is moving within India from Rohtak in Haryana to Mumbai, it may be sent by road from Rohtak to Delhi and by rail from Delhi to Mumbai. During the whole process, a road transporter and a rail operator is involved and the shipper has to coordinate with both operators for the cargo to reach its destination. Whereas, in a multimodal transport, a MTO single handedly arranges for the consignment to reach its destination by furnishing a single bill to the shipper rather than providing multiple bills.

A planned and coordinated multimodal transport minimizes the loss of time and the risk of loss, pilferage and damage to cargo at transshipment points. It reduces the burden of issuing multiple documentation and helps to reduce the cost of exports.

Moreover, combining private and public transport in a multimodal transport system offers opportunities to capitalize on the strengths of the various systems while avoiding their weaknesses, and might therefore be an interesting alternative. The manufacturing cores in India are located in terrain lands and faraway from the gateway ports. The major manufacturing centers in India are located in Punjab, Haryana, Uttar Pradesh, National Capital and Gujarat, Maharashtra and Tamil Nadu Region. The manufactured products from these regions contribute a major part of exports. Thus, multimodal transportation system has great potential in India.

Global Perspective

In spite of various attempts to establish a uniform legal framework governing multi-modal transport no such international regime is in force. The MT Convention has failed to attract sufficient ratifications to enter into force. The UNCTAD/ICC Rules for Multimodal Transport Documents, which came into force in January 1992, do not have the force of law. They are standard contract terms for incorporation into multimodal transport documents.

The rules, being contractual in nature, will have no effect in the event of conflict with mandatory law. The lack of a widely acceptable international legal framework on the subject has resulted in individual governments and regional/subregional intergovernmental bodies taking the initiative of enacting legislation in order to overcome the uncertainties and problems which presently exist. Concerns have been expressed regarding the proliferation of individual and possibly divergent legal approaches which would add to already existing confusion and uncertainties pertaining to the legal regime of multimodal transport.

A multimodal operation is made up of a number of unimodal stages of transport, such as sea, road, rail or air. Each of these is subject to a mandatory international convention or national law.

United Nations’ convention on Multimodel Transport of goods 1980

Although the Convention has not succeeded in attracting sufficient ratifications to enter into force, its provisions have significantly influenced the type of legislation enacted in a number of countries/regions. The following are some of the main features of the Convention:

The Convention applies to all contracts of multimodal transport between places in two States, if the place of taking in charge or delivery of the goods as provided for in the multimodal transport contract is located in a contracting State (article 2). While the Convention recognizes the right of the consignee to choose between multimodal and segmented transport, its provisions are to apply mandatorily to all contracts of multimodal transport falling within the provisions of the Convention (article 3).

The liability of the multimodal transport operator (MTO) for loss of, or damage to, goods as well as delay in delivery is based on the principle of “presumed fault or neglect.” That is to say that the MTO is liable if the occurrence which caused the loss, damage or delay in delivery took place while the goods were in his charge, unless the MTO proves that he, his servants or agents or any other person of whose services he makes use for the performance of the contract, took all measures that could reasonably be required to avoid the occurrence and its consequences. This provision is modelled on article 5 (1) of the Hamburg Rules.

A key issue in the context of establishing the liability of the MTO for loss of, or damage to, goods has been the choice between the “uniform” or “network” system of liability. Under the “uniform” system the same liability regime is applied to the entire multimodal transport, irrespective of the stage at which the loss or damage occurred. Under the “network” system, the liability of the MTO for localized damage (i.e. damage known to have occurred during a particular stage of transport) is determined by reference to the international convention or national law applicable to the unimodal stage of transport during which the damage occurred. The Convention adopts a uniform system of liability of the MTO for both localized and non-localized damage (article 16 (1)), except that in cases of localized damage the limits of liability are to be determined by reference to the applicable international convention or mandatory national law which provide a higher limit of liability than that of the Convention (article 19). This approach, which is not entirely the “uniform”, is known as the “modified network” system.

Related activities of organizations

The lack of a uniform liability regime governing maritime and multimodal transport operations and the proliferation of diverse national approaches, prompted a number of organizations to initiate investigations into the subject with the aim of establishing possible solution.

Following mandates from the UN/ECE Inland Transport Committee and the Working Party on Combined Transport (WP. 24) to consider the possibilities for reconciliation and harmonization of civil liability regimes governing combined transport, the UN/ECE secretariat convened two informal ad hoc expert group meetings, to hear the views of the industry including the relevant international organizations. The subject was considered by the UN/ECE Working Party on Combined Transport at its thirty-fourth and thirty-fifth sessions held in September 2000 and April 2001 respectively. It was also discussed by the UN/ECE Inland Transport Committee in February 2001, and the Committee, having endorsed the work carried out so far by the ad hoc expert group, requested the group to pursue the complex task towards a harmonized civil liability regime covering multimodal transport operations.

Indian Perspective

In India, political and social environment is conducive for business like never before. Consequently, there is a significant increase in competition and so both quality as well as profitability has to be preserved. In India, competitive trade requires an efficacious and simpler door-door liability mechanism. Initially, in India there was no uniformity in multi-modal transport of goods. Government introduced a uniform system with an opinion that absence of uniformity leads to ambiguity and imbalance of interests between operators and cargo owners. Consequently, Multimodal Transportation of Goods Act, 1993 (the “Act”) was enacted (which was deemed to come into force in India on 16th day of October, 1992). The Act was introduced to expedite exports by assuring exporters a sense of security in transporting their goods. Multimodal Transportation reduces logistics costs of exporter and makes products more competitive in the international market. The Indian law on Multi-Modal Transportation System has been progressive and has borrowed some of its provisions from the Carriers Act and United Nations Convention on International Multi Modal Transport of Goods held in Geneva in 1980.

Under the provision of the Act only those companies who are registered by the competent authority which has been notified to be the Director General of Shipping, can carry out Multimodal Transportation. This requirement of registration has been imposed by the government to ensure that only such companies which have the necessary expertise infrastructure and financial capability are allowed to undertake Multimodal Transportation so that the interests of shippers are fully protected. As per the MMTG Act three categories of companies are eligible to be registered as MTO's. They are (1) shipping Companies (2) Freight Forwarding Companies (3) Companies which do not fall in either of the above two categories. In the case of Shipping Companies (which own and operate vessels) as well as Freight Forwarding Companies the turnover of the last three years should bed Rs. 50 lakhs or more to make them eligible for registration as MTO.

The Multimodal Transportation of Goods Act, 1993 regulates the transportation of the goods from India to outside India or within India involving one or more modes of transport on the basis of the single transport contract and according to it an unregistered multi-modal transport operator is absolutely forbidden to carry on the business of multi-modal transportation.

Multimodel Transport Document

The Director General of Shipping, with the approval of the Govt., has issued an Order on 17th March, 1994 prescribing a model for the Multimodal Transport Document (MTD). The document has been prepared for carrying out the provisions of the Act keeping in view the primary objective of the legislation that the carriers are there to serve trade and not the other way around. The Multimodal Transport Document issued under the present law would be: i) a contract for the Transportation of Goods by Multimodal Transport. ii) a negotiable document unless it is marked non negotiable at the option of the consignor. iii) a document of title on the basis of which its holder can take delivery of the goods covered by it. The concerned parties who would have commercial interest who would be governed by the document once it is executed would be: i) The MTO who is the person responsible for the execution of the Multimodal Transport Contract. ii) The consignor who places the goods in question with the MTD for transporting the same and the consignee who is to take delivery at the destination.iii) The bankers who would provide the mechanism for documentary credit. iv) The insurers who insure the goods against loss or damage and the liability insurers who would cover the MTO's liability under contract.

MTD as an Instrument to Enforce the Provisions of the Act

Once the Multimodal Transport Operator executes the Multimodal Transport Document, he immediately assumes the role of the owner of the goods, the Principal thereby authorizing the MTO to exercise the rights as that of the owner for claiming damages etc. and for other purposes, wherever necessary. The provisions of the Act shall have overriding effect over all other laws and any contract for MULTIMODAL Transport made in contravention of the provisions of the Multimodal Transport Act would be null and void. The issuance of the Multimodal Transport Document confers and imposes on all interested parties the rights, obligations and defenses set out in the act. In issuing the MTD, the MULTIMODAL transport operator assumes responsibility for the execution of the contract as well as would be liable for the loss or damage to goods or delay in delivery as contained in the Multimodal Transportation of Goods Act 1993.

Section-3, 4, 5 & 6 of Multi-Modal Transportation of Goods Act deal with the law regulating various aspects such as registration, cancellation and appeal against such registration or cancellation of registration of multi-modal transport operator.

The needs / advantages of multimodal transport:

· coordinated and planned as a single operation, it minimizes the loss of time and risk of loss, pilferage and damage to the cargo at trans-shipment points.

· The markets are psychically reduced by faster transit of goods; Reference to Globalization challenge, the distance between origin or source materials and customers is getting to be insignificant thanks to the development of multimodal transport.

· The burden of issuing multiple documentation for each segment of transport is reduced to minimum.

· The consignor / consignee has to deal with only the MTO (multimodal transport operator) in all matters related to the goods transportation.

CONCLUSION:

The present disunified and highly unsatisfactory situation regarding cargo liability regimes in general and multimodal transport in particular, has prompted a number of organizations to initiate investigations into possible measures to improve the situation. The solutions proposed vary from the preparation of a new set of model laws, to a mandatory international convention or a non-mandatory international convention, similar to the UN Convention on the International Sale of Goods 1980, to apply by default. It is recognized that model laws applicable by parties’ contractual agreement or a non-mandatory international regime would be more widely acceptable but they would not be effective in promoting uniformity. While a mandatory international convention would, in principle, be the best means of creating international uniformity, experience has shown that international conventions are difficult to negotiate and very slow to enter into force. After twenty years, the UN Convention on International Multimodal Transport of Goods has not entered into force and is unlikely to do so in the near future, although a significant proportion of its provisions have been used in the preparation of a number of national and regional/subregional legislation.

However, the nature and scope of any possible course of action would need to be decided at a global level and with the involvement and participation of all interested parties. The adoption of individual national or regional solutions would contribute to already existing uncertainty and lack of uniformity and thus work to the detriment of the international community. International coordination and cooperation are essential in order to arrive at a widely acceptable solution.

REFERENCES:

Internet

· http://unctad.org

· http://www.ieor.iitb.ac.in

· http://www.bimabazaar.com

· http://dgshipping.gov.in

· http://www.indiajuris.com

· http://www.etamad.com

Received on 09.03.2015 Modified on 20.03.2015

Int. J. Ad. Social Sciences 3(1): Jan. –Mar., 2015; Page 19-22