ASSESSABLE ACTIVITY

UNIT 7:

UNIT 7: MULTIMODAL TRANSPORT

Due date: 10 th April

A company from Valencia called VALEXPORT, S.A. located in Avda. La Luna nº1,
CP 46010 and CIF A11223344, is dedicated to the production and international marketing of furniture.

VALEXPORT formalized an US sale, client called MYUSAPRODUCT, LTD., is established in 35 Star Avenue,
(Memphis, Tennessee).

The Spanish exporter has contacted different OTM to request prices. The OTM INTERSHIPPING S.A.
located in Avda. Los Soles nº 42, 28002 Madrid, offers the most competitive price for a 20” container.

Road transport from Valencia to port of Valencia is done by MRW S.A., this transport includes insurance.

Transport will be done by INTERSEA, LTD shipping company. This Company offers a Port to Port service.
(Port: Valencia, to Port: Charleston).

Road transport from port to Charleston to Memphis is done by ROADCARRIER LTD., located in 98
Flowers Avenue (Memphis), this transport includes insurance.

Data required to complete FIATA Bill of Lading (FBL):

The shipment consists of 20 boxes/container, weight 100kg/box.

Dimensions of package is 100 x 100 x 100 cm.
Three container ship: dimensions of 20”.
Incoterm is DDP Memphis.
Containers number: TRIU123456, TRIU134562, TRIU145623.
Seal number: 5784183.
L/C (Letter of Credit) number: 510-0300250-010 (issue date 21/07/2020). CITIBANK
Place and date of issue: Valencia 29/07/2020.
Freight amount: 5.000€.
Number of original FBL’s: 3 copies.
No cargo insurance through the undersigned.
Freight payable at: origen.

1. Complete the FIATA Bill of Lading.

2. Calculate the limit of responsibility of the carrier in case of total loss of the
goods. (Assuming 1 DEG = 1,16 € ).

We don’t know the exact part of the journey where the loss of the goods has occurred,
so that, and taking into account that maritime transport is used and that the value of
the goods is declared, we must calculate two things:
• Maximum compensation = 666,67 DEG x package à
666,67 x 1,16 (DEG) x 60 (package) à 46.400.23 €
• Maximum compensation = 2 DEG x kg of gross weight à 2 x 1,16 (DEG) x 6.000
(Kg) à 13.920€
Given these two values in bolds, the biggest value is chosen. For this reason, the limit of
responsibility of the carrier in case of total loss of the goods will be 46.400,23€
 3. List and explain the advantages and disadvantages of Multimodal transport
(two sheets max)

We call multimodal transport the transfer of goods from one country to another with the use of
more than one means of transport.
There are a lot of products that, because of their particular characteristics, need to use this type
of transport. In this way, different means can be used to bring a goods from one place to another.

Many logistics companies use land, sea and air route to transport goods and arrive correctly to
the customer. In this sense, multimodal transport consists of a single contract with the same
undertaking covering all the means available for mobility.

Having different means for mobility, multimodal transport has very particular characteristics.
Many logistics companies choose this mechanism to be able to transport goods.

The main feature and what it does to the essence of this type of transport is that more than one
means of mobility is used. You can combine maritime and land, air and land or all three together.

On the other hand, it is an excellent tool for both domestic and international transport. By using
different means of transport, logistics can exceed borders.

Finally, another of the relevant characteristics is that multimodal transport in logistics is usually
done by a single contract. In addition to the use of various means of transport, the following
requirements must be met:

There can be no load breakage or separation of goods during the journey.

Only a single document or multimodal transport knowledge is used to serve all transports. This
document is FIATA Bill of Lading (FBL). It is the bill of lading issued by the freight forwarder who
assumes the role of porter. The FBL is very similar to a document already very familiar to us: the
maritime B/L.

Multimodal transport has some advantages relevant to a comprehensive logistics company. Even
for customers, it is often beneficial to have this type of transport. The first point to take into
account is the reduction in the delivery time of the goods.
By combining different means of transport you can be more efficient and be much faster.
In turn, another great advantage is the reduction of costs. By making different combinations, we
can choose those combinations that are cheaper and faster.

On the other hand, at a legal level, multimodal transport is simpler than it first appears. In this
type of case, less documentation is needed to be able to transport the merchandise.
Finally, multimodal transport considerably reduces loading and unloading time in logistics. By
being prepared in a multimodal way, it is estimated that times can be reduced by up to 60%.
Regarding the importance of multimodal transport, we can say that it is because there are no
intermediaries. By making a single contract with a logistics company, you can leave out
intermediaries. So not only will you reduce time and costs, but you will also be able to carry out
logistics without intermediaries. The deal will be direct between the client and the logistics
company in charge of transporting the merchandise.

Also, multimodal transport is of great importance to be able to carry out all kinds of distances.
That is, you can make long-distance trips, as well as medium and short distance.

By having different means of transport, you can make very long journeys that allow you to work
internationally. This is of great importance to be able to import and export merchandise. Using
this type of transport for your logistics company can be very useful.

However, each individual company must analyze its own peculiarities before opting for
multimodal transport. Although it has great advantages, it all depends on the type of merchandise
that you must transport. There are products for which it is not worth using this type of tool to use
different media. There are a large number of products that require the use of multimodal
transport, even within the borders of the same country.

Here we can find a few disadvantages that multimodal transport has like they have little
familiarity with new technologies. Presence of legal and operational limitations in the application
of international standards. Security requirements: inspections by different authorities at terminals
and communication routes continue to be a limitation. Lack of an integrated vision of the issue:
on the one hand, there is no infrastructure that facilitates multimodal operations; but at the same
time there is the belief that multimodalism is only achieved with investments in infrastructure
and no actions are taken aimed at expanding the supply of transport services. Structure of the
demand: lack of flow compensation which affects the entry of containers to the interior.

In conclusion, although it has great advantages, it is always better to analyze the type of
merchandise before using multimodal transport. However, many companies use it since it has a
great benefit in terms of costs and time. That's all you need to know about how climate change
affects logistics.

Concluding the aforementioned, it can be said that multimodal transport is very comfortable for
its user since he only has to deal with one service provider. It also significantly reduces
administrative and logistics costs and offers greater security, especially at intermediate points. It
is the mode of transport that provides new commercial opportunities for non-traditional exports,
as a consequence of better transport services.
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