Multimodal Transport Notes

Overview of Multimodal Transport

Course Objectives

  • Knowledge on freight transport and multimodal transport

  • Understanding the characteristics of various modes of transportation

  • Knowledge of legal requirements and responsibilities of Multimodal Transport Operators

  • Skills to execute multimodal transport operations

  • Comprehension of customs clearance & cargo insurance in multimodal transport

Contents

  1. Modes of transport in Multimodal transport

  2. Customs clearance in Multimodal transport

  3. Multimodal transport Operations

  4. Cargo Insurance in multimodal transport

Key Textbooks

  • Intermodal Freight Transport and Logistics by Jason Monios & Rickard Bergqvist (2017)

  • Transportation: A Global Supply Chain Perspective by John Joseph Coyle et al. (2019)

  • The Handbook of Logistics and Distribution Management by Alan Rushton et al. (2014)

Chapter 1: Overview of Multimodal Transport

I. Transport Concepts

1. Definition of Transport

  • Logistics Definition: Activities related to the movement and coordination of goods from the source of origin to the final point of delivery, including production and distribution. (Bektas, 2017)

  • Transport Definition: Movement of goods from one location to another using a means of transport and infrastructure. (Bektas, 2017)

2. Participants in Transportation

  • Shippers: Decide to operate own fleet or hire external carriers.

  • Carriers: Provide transportation services, can include consolidation services.

  • Intermediaries:

    • Third-Party Logistics Providers (3PLs): Handle part or all logistics functions for companies.

    • Freight Forwarders: Manage shipments, including storing, packaging, and handling goods, identifying transportation modes, and consolidating shipments.

Comparison of 3PLs and Freight Forwarders

  • Similarities: Both assist in freight movement.

  • Differences:

    • 3PLs: Focus on broader logistics responsibility.

    • Freight Forwarders: Specialized in transportation, provide fewer services.

3. Modes of Transport

  • Road

  • Rail

  • Air

  • Water (Inland Water & Sea)

  • Pipeline

4. Transport Mode Selection Criteria

  • Freight Cost: Influenced by weight, distance, type of freight, special services, hazardous materials, high-value goods, and frail goods.

  • Service: Consider speed, reliability, location flexibility, capability, and security.

Example: Cost and Service Tradeoffs

  • Delivering 10,000 pounds of paint:

    • Direct truck: 24 hours, $4,100

    • LTL: 3 days, $3,200

    • Rail: 6 days, $4,600

    • Air: 8 hours, $19,600

II. Multimodal Transport Concepts

Definition

  • Multimodal transport is the movement of goods by at least two different modes under a multimodal transport contract. (MT Convention 1980)

Principal Features

  1. Involves multiple transport modes.

  2. Operates under one contract.

  3. One responsible party for the entire carriage.

Legal Framework in Vietnam

  • Multimodal transport defined under Decree No. 87/2009: involves goods moved under a contract from Vietnam to other countries or vice versa.

Intermodal Transport

  • Combination of two or more suitable modes without intermediate handling of the cargo between modes. (Lowe, 2006)

Differences between Multimodal and Intermodal Transport

  • Multimodal: Use of multiple transport modes.

  • Intermodal: Transport in a single loading unit without intermediate handling.

Conditions for Multimodal Transport

Infrastructure Requirements

  • Adequate terminal infrastructure.

  • Integrated networks and efficient interfaces.

  • Multimodal liability regime needs improvement.

Advantages of Multimodal Transport

  • Cost-effectiveness and lower transit costs.

  • Safety in transporting hazardous products.

  • Environmental benefits through reduced emissions.

Disadvantages of Multimodal Transport

  • High investment costs.

  • Synchronization requirements for equipment.

  • Multimodal transport operators face greater responsibilities.

Containerization in Multimodal Transport

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Definition of Container

  • An item of transport equipment suitable for repeated use, designed to facilitate the carriage of goods by different modes of transport without intermediate reloading.

Advantages of Containerization

  • Increased safety and reduced loss & damage.

  • Reduced terminal costs.

  • Efficient use of storage space.

  • Flexibility for various cargo types.

ISO Standards for Containers

  • Various ISO standards define classification, dimensions, and marking of containers (ISO 668, ISO 6346).

Container Characteristics

  • TEU: Twenty-Foot Equivalent Unit, used to measure ship capacity.

  • Largest container ship: Over 21,400 TEU capacity.