MULTIMODAL TRANSPORT

Pham Thi Be Loan

loanptb@due.edu.vn
 COURSE OBJECTIVES
• Provides knowledge on freight transport and multimodal
transport
• Provides knowledge on characteristics of various modes of
transportation, legal requirements and responsibilities of
Multimodal Transport Operator
• Helps to execute multimodal transport operations
• Helps to understand customs clearance & cargo insurance
in multimodal transport
 CONTENTS
Insert title here
1 Overview of Multimodal transport
Insert title here
2 Modes of transport in Multimodal transport

3 Customs clearance in Multimodal transport

4 Multimodal transport Operations

5 Cargo Insurance in Multimodal transport

 TEXTBOOKS

Intermodal freight transport and logistics, Jason Monios

1
& Rickard Bergqvist, 1st Edition, CRC Press, 2017
Insert title here

Transportation: a global supply chain perspective, John Joseph

2
Coyle, Robert A. Novack, Edward J. Bardi, Brian Gibson,
Cengage
Insert title here Learning, 2019

3 The handbook of logistics and distribution management:

Understanding the supply chain, Alan Rushton, Peter Baker &
Phil Croucher, Kogan Page Publishers, 2014
Chapter 1
OVERVIEW OF
MULTIMODAL TRANSPORT
Chapter 1: Overview of Multimodal transport
I. Transport concepts
1. Definition of transport
2. Modes of transport
3. Transport mode selection criteria
4. Rights to transport

II. Multimodal transport concepts

1. Definition of Multimodal transport
2. Conditions for Multimodal transport
3. Advantages and disadvantages of Multimodal transport
4. Containerization and Multimodal transport
I. Transport concepts
Definition of Transport
Definition of Logistics
“Logistics includes all activities related to the movement
and coordination of goods from their source of origin to
the final point of delivery, and includes production and
distribution.” (Bektas, 2017)

→ Logistics is concerned with the flow of goods inbound

to and outbound from the firm. Transportation,
warehousing (storage), information, and logistics network
design are all included in logistics.
Definition of Transport

“
“Transport is the actual movement of
goods from one location to another using a
means or a vehicle of transport and a
transport infrastructure” (Bektas, 2017)
Definition of Transport
Transportation participants
(1) Shippers: decide whether to operate their own fleet or to use an
external party
(2) Carriers: operate and offer transportation services for shippers
(3) Intermediaries:
+ Third-Party Logistics Providers (3PLs): perform all or part of
companies’ logistics functions
+ Freight forwarders: act as a third party and manage the shipments
on behalf of the shipper, including:
o Store, package, and handle the goods
o Help to identify a suitable mode(s) for the shipper; and book
cargo with transportation companies
o Consolidate shipments
Compare Third-Party Logistics Providers and Freight
forwarders

3PLs Freight forwarders

Similarity Intermediaries assisting in freight movement, and
performing many of the same functions
Difference - Focus and business - Focus and expertise is
model is more general specifically in
transporting
- Assume the most - Provide less services
responsibility and
conduct the largest
amount of service
Modes of Transport
• Road
• Rail
• Air
• Water (Inland water &
sea)
• Pipeline
Transport mode selection criteria

Freight Cost Service

(Schroeder & Goldstein, 2018;

Georgia Institute of Technology, 2021)
• Freight Cost:
o Weight, volume of freight
o Distance
o Type of freight being shipped, including:
▪ Special services products: (e.g., temperature or climate control)
cost more to ship due to specific equipment or handling.
▪ Hazardous materials: cost more to ship as not all carriers handle
hazardous materials & specialized training and extra
precautions must be taken
▪ High-value goods: cost more to ship due to the amount of
security and care exercised & higher costs of insurance
▪ Frail goods: cost more to ship due to being more likely to be
damaged in transit (e.g., eggs or glass products)
• Freight Cost:
o Balance of freight: requires the amount of freight going to a
destination matches the amount going back to the starting point.
o Seasonality: Prices for transportation tend to fluctuate with
popular freight movement seasons of the year.
• Service:
o Speed of delivery: The time required to deliver the order.
o Service reliability: Percentage of orders shipped on time.
o Location flexibility: Ability to ship from different origins to
different destinations.
o Capability: Ability to accommodate the size, weight, volume of
shipment, requirements, and needs of the product or material to
be shipped (e.g. wide load, hazardous materials...)
o Security: Transportation modes with fewer handling points are
more secure.
Transport mode selection criteria

Example: Cost and Service Tradeoffs

The ABC paint company needs to ship 10,000 pounds of paint from
Kansas City, Missouri to Los Angeles, California. The paint will be
loaded on 8 pallets that weigh 1,250 pounds each. What is the best
transportation mode to use given the following information?

Mode Delivery Time Handling Cost

Direct truck 24 hours 2 times $4,100
Less-than-truckload (LTL) 3 days 6 times $3,200

Rail 6 days 6 times $4,600

Air 8 hours 4 times $19,600
What transport mode should be chosen for the glass
shipment?
Transport mode selection criteria
Transportation Economics: spreading fixed costs over
more units and reaping economies of scale, economies of
distance.
- Economies of scale: Larger shipments cost less per unit
of weight
→ full truckloads cost much less per unit of weight than
partial loads.
- Economies of distance: Longer distances cost less per
unit of distance
→ when shipping across the country, the cost per unit of
distance will be much lower than local shipments.
Transport mode selection criteria
Example: Freight consolidation
A company has two shipments of 20,000 pounds, each going to the same
location from different nearby cities. The carrier charges $10 per 100 pounds for
each of the two shipments by truck. But, if the two shipments are consolidated
into one truck, the carrier will take the 40,000 pounds in one truck for $7 per
100 pounds, but charge $500 for the extra stop to load and unload the second
shipment. Should the company consolidate the two shipments?
Rights to Transport

• Rights or obligations to arrange the transport, including

selection of modes of transport, selection of itinerary and
organization of transportation; and pay the freight directly to the
carrier, not through another person.
• Benefits of gaining the rights to transport include:
o Actively choose routes, modes of transport & carriers
o Actively deliver goods
 Loading DestinationT
INCOTERMS Seller Buyer
Terminal erminal
2010
All modes of
Transport
5
1 2 3 4 6 7 8 9
Ex Works (Named place)
RISKS
COST EXW
S Free Carrier (Named place)
RISKS
COST FCA
S Carriage paid to (Named place of destination)
RISKS
COST CPT
S Carriage and Insurance paid to (Named place of destination)
RISKS
COST CIP
S Delivered at Terminal (Named place of destination)
RISKS
COST DAT
S Delivered at Place (Named place of destination)
RISKS
COST DAP
S Delivered Duty Paid (Named place of destination)

DDP
 Port of
Port of
INCOTERMS Seller Loading
discharge Buyer
2010
Sea and
Inland 5
waterway 1 2 3 4 6 7 8 9
transport
only
Free Alongside Ship (Named port of shipment)
RISKS FAS
COST
S
Free On Board (Named port of shipment)
RISKS
COST
FOB
S
Cost and Freight (Named port of destination) )
RISKS
CFR
COST
S
Cost, Insurerance and Freight (Named port of destination)
RISKS
CIF
COST
S
Main differences between Incoterms 2020 and
Incoterms 2010
- Bills of lading with an on-board notation and the FCA
Incoterms rule: the Buyer can instruct its carrier to issue an on-
board Bill of lading to the Seller after the loading of the goods, the
Seller then being obliged to tender that Bill of lading to the Buyer,
typically through the banks.

- Different levels of insurance cover in CIP:

+ CIF: The status quo has been retained, with Institute Cargo
Clauses (C)
+ CIP: Seller must now obtain insurance cover complying with ICC
(A)
Main differences between Incoterms 2020 and
Incoterms 2010

- Arranging for carriage with Seller’s or Buyer’s own means of

transport in FCA, DAP, DPU and DDP

- Change in the three-letter initials for DAT (Delivered at

Terminal) to DPU (Delivered at Place Unloaded): emphasising
the reality that the place of destination could be any place and not
only a “terminal”
When we should not/do not gain rights to transport?

• Freight rates are predicted to increase

• CFR – FOB or CPT - FCA < actual transportation cost
=> The buyer should buy................
=> The seller should sell.................
• Laws and commercial practices give the rights to transport
to the counter partners
• Contract requirements
• Knowledge and skills
Rights to Transport
Example:
Suppose a company is exporting rice with price of $500/MT FOB Ho Chi Minh
City Port Incoterms 2020. Insurance premium rate is R=0.5% (The insurance
shall cover the price provided in the contract plus 10%, i.e. 110%).
If that company wants to sell at the new unit price of $600/MT CIF port of
destination, what is the highest freight cost they should accept? (MT: metric ton)
II. Multimodal transport
concepts
Definition of Multimodal transport
Definition of Unimodal transport
Unimodal transport is the carriage of goods by a single
mode of transport such as air, road, rail, sea or inland
waterway.
Definition of Multimodal transport

“
phải là vận chuyển qua 2 quốc gia khác nhau
Definition of Multimodal transport
Three main features of a multimodal transport:
(1) the carriage of goods by two or more modes of
transport
(2) under one contract, one document
(3) one responsible party for the entire carriage, who
might subcontract the performance of some, or all
modes, of the carriage to other carriers.
Definition of Multimodal transport
Vietnam: Decree No. 87/2009/ND-CP of October 19, 2009
on Multimodal transport:
+ Multimodal transport means the carriage of goods by at least
two different modes of transport on the basis of a multimodal
transport contract.
+ International multimodal transport means multimodal
transport from a place in Vietnam where the goods are taken in
charge by the multimodal transport operator to a place
designated for goods delivery in another country and vice
versa.
+ Domestic multimodal transport means multimodal transport
conducted within the Vietnamese territory.
Definition of Multimodal transport
Definition of Intermodal transport:
- (Lowe, 2006): “Intermodal freight transport, is the concept of
utilizing two or more ‘suitable’ modes, in combination, to form
an integrated transport chain aimed at achieving operationally
efficient and cost-effective delivery of goods in an
environmentally sustainable manner from their point of origin to
their final destination.”
- The movement of goods in one and the same loading unit (e.g.
container), which uses successively two or more modes of
transport without handling the goods themselves in changing
modes (without intermediate handling).

intermodel và multimodel giống nhau là

đều dùng ít nhất 2 phương thức vt khác
nhau nhưng inter dùng loading unit khác
nhau
What are differences between multimodal transport &
intermodal transport?
Multimodal transport refers to the use of more than one
mode in a transport chain (e.g. road and water), while
intermodal refers specifically to a transport movement in
which the goods remain within the same loading unit.
(Monios & Bergqvist, 2017)
Definition of Multimodal transport
Definition of Combined Transport
- A form of intermodal transport
- The major part of the journey is by rail, inland
waterways or sea, and any initial and/or final legs
carried out by road are as short as possible
Ex: Using rail as the main medium of transportation of
goods from Germany to Italy: The goods are delivered
via truck to a terminal in Hamburg and then transported
by rail to Milan. From there, the container is transferred
to a truck for the final leg of the journey to its
destination in Rome.
Conditions for Multimodal transport
- Infrastructure
+ Adequate terminal infrastructure (sufficient capacity,
fast handling, limited dwell time).
+ Integrated infrastructure and transport means
- Efficient interfaces: Existence of interoperable
sea/rail/road networks, prompt information flow, effective
documentation processing and customs clearance.
- An appropriate multimodal liability regime: The
discussion for the wide implementation of the United
Nations Convention on International Multimodal
Transport of Goods has been reopened.
Advantages and disadvantages of Multimodal
transport
• Advantages
- Cost: lower transit costs over long journeys
- Time: potentially faster delivery times in certain
circumstances and a reduction in road congestion
- Safety: safer transit for some dangerous products
- Environment: a more environmentally acceptable
solution to congestion and related problems, such as the
emission of noise and fumes
Advantages and disadvantages of Multimodal
transport
• Disadvantages
- Request synchronization on equipment and infrastructure
of terminals
- High investment costs to build intermodal transport
transfer hubs to connect transport modes
- The interdependence between modes of transport
- The greater responsibility of multimodal transport
operators
Containerization and Multimodal transport

Crate

Pallet

Container
Box
Containerization and Multimodal transport
• Definition of Container
Article of transport equipment:
a) of a permanent character and accordingly strong enough to
be suitable for repeated use;
b) specially designed to facilitate the carriage of goods by one
or more modes of transport, without intermediate reloading;
c) fitted with devices permitting its ready handling, particularly
its transfer from one mode of transport to another;
d) so designed as to be easy to fill and empty;
e) having an internal volume of 1 m3 (35.3 ft3) or more.
(ISO 668:2020 & TCVN 7553:2005)
Containerization and Multimodal transport
• Advantages of Containerization
- Increased safety and reduced loss & damage: Containers
are locked, which means that their contents cannot easily be
modified except at origin or destination.
- Reduction of terminal costs: Transfer operations at
terminals are tailored to process containerised cargo fast and
with minimal amount of effort.
- More efficient use of storage space within the port:
Containers can be stacked.
- Accommodation for a variety of cargo types: Cargo of
various sizes, shapes, dimensions or weight can be carried in
a container.
Containerization and Multimodal transport
• ISO standards for containers
- ISO 668:2020 Freight Container – Classification,
dimension and rating
- ISO 6346:2020 Freight Container – Coding, identification
and marking
- ISO 1161:2016 Freight Container – Corner and
intermediate fittings
ISO 668:2020 Freight Container – Classification, dimension and
rating
- Types of ISO containers:
Code Type designation
G General purpose container
V General purpose container with ventilation
B Dry bulk cargo
S Named cargo
R/H Thermal container
U Open-top container
P Platform (container)
K Pressurized tank container (liquids and gases)
N Pressurized and non-pressurized tank container (dry)
A Air/surface container
ISO 668:2020 Freight Container – Classification, dimension and
rating
- Dimension of ISO containers:
+ Width: ISO freight containers have a uniform width of 2.438
m (8 ft).
Freight
container Height Length
designation
m ft m ft
1EEE 2.896 9 ft 6 in
13.7 45
1EE 2.591 8 ft 6 in
1AAA 2.896 9 ft 6 in
1AA 2.591 8 ft 6 in
12.2 40
1A 2.438 8 ft
1AX < 2.438 < 8 ft
1BBB 2.896 9 ft 6 in
1BB 2.591 8 ft 6 in
9.1 30
1B 2.438 8 ft
1BX < 2.438 < 8 ft
1CCC 2.896 9 ft 6 in
1CC 2.591 8 ft 6 in
6.1 20
1C 2.438 8 ft
1CX < 2.438 < 8 ft
1D 2.438 8 ft
3.0 10
1DX < 2.438 < 8 ft
The capacity and also the cargo of a container ship is
given in TEU (Twenty-Foot Equivalent Unit):
1 TEU = a 20-foot ISO container
The currently largest container ship has a capacity of over
21,400 TEU.
ISO 6346:2020 Freight Container – Coding, identification and
marking
 Container code:
A standardised method of
identification for intermodal
containers.

1. Container owner code: internationally registered with the Bureau

International des Containers (BIC)
2. Equipment identifier: U (containers), J (detachable freight
container-related equipment), Z (container-related trailers and
chassis)
3. Serial number: BIC does not register the 6 serial numbers, being
left to the owner’s choice
4. Check digit: validate the accuracy of the data.

Check BIC container code: https://www.bic-code.org/bic-codes/

 Size & Type code: represent the
size and type of the container.
1 2

1. Size code: 1st character representing the length, 2nd character

representing the width and height
2. Type code

Check size and type code: refer to the reference file “Container_size
type code”
What is the meaning of this marking?

MSKU 0803081
45G1
- TARE - Tare weight: the total weight of the empty container
- NET - Maximum payload/Net weight: the maximum weight of the
cargo or contents that a container can hold
- MAX. GROSS - Maximum gross weight = Tare weight +
Maximum payload
- CU. CAP - Cubic capacity: the volume of the container
What is the meaning of this marking?