Multimodal Transport: What is it and what does it consist of?
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One of the most used terms in international logistics is multimodal transport. It refers to the transfer of loads using more than one means of transport.
This means that along the way the cargo can be transferred to means of land, sea or air transport. You can even go through all three during your tour.
Multimodal transport is widely used in international trade as goods usually travel through several countries before reaching their destination.
For example, to import a container of household appliances made in China into Paraguay, it is very possible that it would have to leave the factory by truck to a railway terminal in that country.
From there it will be taken to a large sea port and shipped to Paraguay. Upon arrival it will be placed on a truck for final delivery to the importer.
Complexity of multimodal transport operations
Multimodal transportation requires careful planning. It helps to avoid any inconvenience when the load passes from one means of transport to another.
Each means of transport used requires different contracts, insurance and documentation. You must also comply with specific regulations depending on the country where you are going to transit.
The times required for cargo transshipment operations must be considered, as well as the different documents and permits that are required.
Furthermore, when using more than one means of transport, it is important to choose the container properly. It must be able to be transported without complications by the different transport systems available on the way.
It is noteworthy that in multimodal transport the cargo is kept together in its container until it reaches the final destination. It cannot be manipulated or separated when changing from one means of transport to another.
Increase in multimodal transport in the world
The enormous growth of international trade from the second half of the 20th century to the present has favored the construction of a gigantic port infrastructure throughout the world.
The main ports are usually located near the main centers of consumption or production of goods, or are easily connected to them through railways, highways and airports.
This in turn has been a decisive factor for the majority of international trade to make use of multimodal transport to move goods from one place to another on the planet.
Who hires multimodal transport?
The multimodal transport service is contracted by a logistics operator, a freight forwarder or a cargo agency, which will have full responsibility for the operation and for the cargo entrusted to it.
This forces you to organize all the documents and contracts very well so that the cargo passes smoothly through different countries and means of transport, in the most fluid and expeditious way possible.
It is important to note that not every cargo operation that uses more than one means of transport is itself multimodal.
For this, the following conditions must be met:
Have a single transport document called FIATA Bill of Lading (FBL).
The load must be consolidated and remain so throughout the journey. This means that there can be no separation or division of the load after it leaves its point of origin.
What documentation is used for multimodal transport?
When moving international cargo under the multimodal mode of transport, only a document called FIATA Bill of Lading (FBL).
This unique document is a bill of lading through which the freight forwarder or freight forwarder assumes the role of carrier.
The FBL is valid for all means of transport that the cargo will use on the way to its final destination.
What are the characteristics of multimodal transport?
In principle, this type of operation is the only one where a single contract between customer and operator is enough to carry out the movement of cargo from origin to destination.
It is also a type of transport with national and international scope. Thanks to the use of different means that allow you to carry the load to considerable distances.
Nor does it have a minimum distance: it is possible to contract multimodal transport on short routes, such as border areas or between nearby continental and island areas.
Its basic characteristic is that it combines at least two different means of transport to carry a load, depending on the route or distance to be covered.
These means can be terrestrial, rail, maritime, river or air.
However, there are two forms that are the most common, multimodal maritime and land transport.
In multimodal maritime transport, vessels of different tonnage are combined to move cargo.
For example, small ships can be hired to receive merchandise in smaller ports and then use large-tonnage ships to take it to another continent.
For its part, multimodal land transport involves both the use of road vehicles and railways.
This variant is widely used when carrying mining or industrial materials, especially in countries with excellent rail systems, which tend to have lower freight costs per ton.
In those cases, the cargo is taken by train to the closest possible point and from there it is completed by road to the final destination.
What are the advantages of using multimodal transport?
First, multimodal transport saves money and time during the execution of the operation.
This is because you can choose the fastest and most economical combination of means of transport for each type of cargo.
Furthermore, the use of unified documentation for the entire operation greatly simplifies the process of preparing international transport logistics.
It offers greater security for the customer who contracts the operation, since any loss or damage to the merchandise will be assumed by the logistics operator, freight forwarder or freight forwarder.
Thanks to the unique FBL document, cargo under multimodal transport has priority when passing through customs or entering ports.
This system greatly facilitates the planning of routes, contracting insurance and services, as well as reducing the overall costs of the operation.
Another advantage is that in multimodal transport it is easier to track cargo with the use of satellite technology or digital means, which is important when moving high value goods.
The time required for cargo loading and unloading operations, which are only carried out at the points of origin and destination, is reduced by up to 70%.
Being a method less prone to theft and damage, insurance costs are reduced.
And what are the disadvantages of this system?
There are some situations and reasons why it is not always convenient to use multimodal transport.
For example, differences in the legal and customs framework between some countries make it more difficult to move certain types of cargo between them.
This implies that in certain cases the multimodal transport operation could be limited for bureaucratic reasons or that international regulations cannot be applied.
Although the cargo remains consolidated throughout the journey, the container may be subject to stricter security checks in some countries, complicating its transfer.
Furthermore, the support infrastructure for multimodal operations is not developed equally in all countries.
This can force the operator to take different or longer routes to avoid serious logistical problems, increasing the overall costs of the operation.
Always consult an expert
When hiring a multimodal transport service to import to Paraguay, it is important to seek the advice of experts to guide you on the best options available.
Alfa Trading is a Paraguayan company with more than 25 years of experience in cargo transportation and international logistics.
At Alfa Trading we help you throughout the process of sending and receiving international cargo from the supplier to the final destination.
And above all, our experienced team can advise you on each procedure, requirement and the best transport system, whether multimodal or otherwise, for your import activity to Paraguay.
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