MULTIMODALISM IN

INTERNATIONAL TRADE

SUBMITTED BY –
MATHEW FEBIN CHARLES
B2539
Q1. Why is multi-modalism popular? Why it difficult to pick up in India?

Multi-modal transport is when multiple modes of transport such as air, rail, sea, road
is used for the movement of cargo from the start point to the destination.

Multi-modalism is popular because of the following reasons –

• It has extended door-to-door movement of goods under the responsibility of a

single transport operator.
• It helps in reducing documentation, costs and time.
• With the help of an efficient logistical infrastructure, multimodal transportation
can help in beating deadlines.
• It helps in reducing logistic costs for importers as well as importers and other
bureaucratic work on the part of the exporter.
• For an exporter who handles his operations through an MTO can concentrate
more on his regular business and marketing operations.

It is difficult to pick up in India for the following reasons –

• The Act passed for multi-modal transport is still in a primitive stage as far
as its use is concerned in the country.
• Unlike other countries, India does not have air transport covered under its
Act as airlines in India do not issue air waybill as negotiable instrument.
• Indian exporters and importers have poor awareness regarding the concept,
usefulness and regulatory framework of multimodal transport.
• There are lot of doubts regarding the negotiability of multimodal transport
documents while negotiating trade documents with bank for payments.
• Many banks in India still do not recognize the document of multimodal
transport as a single document valid for all modes of transport.
• Unlike other developed countries, MTO’s in India have not been entrusted
with full legal responsibilities regarding the transport of goods from country
A to B.
Q2. What are the regulatory hurdles in the effective implementation and use of
multi-modalism in India?

The regulatory hurdles in the effective implementation and use of multi-modalism in

India are as follows –

• The Multimodal Transports of Goods Act passed in India is still considered to

be in a primitive stage as far as it’s use is concerned.
• Airway bill is not considered as a negotiable instrument in India unlike
developed countries which leads to multi-modalism transport happening only
through rail, road and sea.
• Despite having 320 MTO’s registered with the Director General of Shipping,
the exporter response is poor because of the lack of awareness of the regulatory
framework.
• The Act passed has not be able to achieve its objectives because of the many
problems faced in the modes of transport.
• When it comes to Road freight. Poor road conditions, inter-state check posts,
surprise checks of the cargo lead to bottlenecks.
• In the case of Rail freight, critical process of documentation, freight tariffs,
quality of operations lead to bottlenecks.
• In the case of Port freight, delay in loading and unloading of goods, turnaround
time of vessels, poor hinterland connectivity lead to bottlenecks.