REPUBLIC OF KENYA

LEARNING GUIDE

FOR

MULTI-MODAL TRANSPORT.

KNQF LEVEL 6

BANDARI MARITIME ACADEMY

P O Box 99469 – 80107
MOMBASA
PRELIMINARY PAGES

1. Copyright statement

2. Foreword –Principal Secretary

3. Preface- Chairman TVET CDACC

(Chapter 1: Background information, purpose of developing the learning
guide)

4. Acknowledgment- CEO TVET CDACC

5. Acronyms

6. Table of content

7. List of figures and tables

8. Learning guide layout

CHAPTER 17: MULTI MODAL TRANSPORT.

Unit of learning code: 1041 554 17A

Related Unit of Competency in Occupational Standard: This unit addresses the unit
of competency: Coordinate multi–Modal Transport Operation

1.1 Introduction to the unit of learning.

This unit of competency describes coordinating multi-modal transport operations. It
involves plan multi modal transport, determining prices in multi-modal transport,
processing multi-modal transport documents, performing international cargo

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 transport, managing resources in multi modal transport and process multi-modal
transport claims.

1.2 Summary of Learning Outcomes.

 Plan multi modal Transport

 Determine prices in multi modal
 Process multi modal transport documents
 Perform international cargo transportation
 Managing resources in multi modal
 process multi-modal transport claims

1.2.1 Learning Outcome 1: Plan Multi-Modal Transport.

1.2.1.1 Introduction to the learning outcome.

This learning outcome targets definitions of various terms and interpretation of
multimodal transport plan. Different regulations and framework in multimodal transport
and identification of the multimodal transport claims. Identification of multi modal
transport route.

1.2.1.2 Performance Standard.

 Planning objectives are identified as per organization’s procedures
 Transport needs are assessed as per the cargo requirements
 Regulations governing multi-modal transport are identified as per the freight
contract
 Route analysis is carried out as per cargo requirements
 Freight mode is selected as per cargo requirements
 Capacity is determined as per the shipment.
 Coordination framework is established as per organization procedures

1.2.1.3 Information Sheet.

Definition of terms.
Multi-modal transport is a carriage of goods by at least two different transport modes
Thus, the main features of a multimodal transport are;
a) The carriage of goods is done by two or more modes of transport.
b) The goods are carried under one contract.

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c) There is one document of transport
d) There is one responsible party known as a Multimodal Transport Operator (MTO)
for the entire carriage.

Modes of transport
These are the means of transport used for the movement of goods. There is a wide
range of modes but geographers generally group them into three broad categories
based the medium they exploit: land, water and air corresponding to road and rail, ship
and airplane respectively.

Each mode has its own requirements and features, and is adapted to serve the specific
demands of freight and passenger traffic. There are marked differences in the way the
modes are deployed and utilized in different parts of the world. Each mode has its own
infrastructure, vehicles, and operations and often has unique regulations.

Documentation
in its simplest form can be defined as paperwork or digital material that gives
instructions, information or references about something.

The UNCTAD/ICC Rules for Multimodal Transport Documents (1992) defines a

Multimodal transport document (MT document) as a document evidencing a multimodal
transport contract and which can be replaced by electronic data interchange messages
insofar as permitted by applicable law and be, (a) issued in a negotiable form or, (b)
issued In a non-negotiable form indicating a named consignee.

When the goods are taken in charge by the multimodal transport operator, he shall
issue a multimodal transport document which, at the option of the consignor, shall be in
either negotiable or non-negotiable form. The multimodal transport document shall be
signed by the multimodal transport operator or by a person having authority from him.

Unitization
is the act of packaging cargo into unit loads. It can also be defined as a combination of
boxes, cartons, packages etc. into one load (such as a pallet) for ease of handling,
identification and transportation as one unit.

Logistics
is the management of the flow of goods, information and other resources, including
energy and people, between the point of origin and the point of consumption in order to
meet the requirements of consumers. It includes all the activities that are needed to
ensure a smooth conveyance of materials from original suppliers, through supply chains
and on to final customers.

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Multi-modal transport logistics means the activities involved in the carriage of goods
by at least two different modes of transport on the basis of a multimodal transport
contract from a place in one country at which the goods are taken in charge by the
multimodal transport operator to a place designated for delivery situated in a different
Country.

INTERPRET MULTIMODAL TRANSPORT PLAN.

A multimodal transport plan integrates different geographical scales from the global to
the local.

It basically involves the use of a minimum of two modes of transport to carry freight or
passengers.

In the provision of a multimodal transport service, the Multimodal Transport Operator

(MTO) is liable from the point of origin to the point of destination.

He thus issues one transport document that will include invoice for freight charges, and
also a guarantee for the transit time.
The MTO also enters into a number of sub-contracts with individual carriers, road, rail,
shipping lines, port authorities, terminal operators, stevedores, etc., on the MTO’s own
name by doing so, only the MTO is entitled to take delivery of the goods from each
actual sub-carrier and pass them to the next sub-carrier.

The MTO, in acting as a principal, is therefore responsible for the whole transport chain.
Road/sea transport system. This transport system combines both road and sea modes.
The cargo is moved on land via road and then by sea to final destination by a carrier
that issues a combined transport document.

ASSESS TRANSPORT NEEDS.

The choice of a transport mode

Before making a choice on mode of transport to be used in distribution of materials, the

following factors must be thoroughly assessed:

Cost of Service:
The cost of transportation adds to the cost of the goods so it should always be kept in
mind.

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 Rail transport is comparatively a cheaper mode of transport for carrying heavy and
bulky traffic over long distances. Motor transport is best suited and economical to carry
small traffic over short distances. Motor transport saves packing and handling costs.

Water transport is the cheapest mode of transport. It is suitable to carry only heavy and
bulky goods over long distances where time is not an important factor.

Air transport is the most costly means of transport but is particularly suited for carrying
perishable, light and valuable goods which require quick delivery.

Speed of Transport:
Air transport is the quickest mode of transport but it is costliest of all. Motor transport is
quicker than railways over short distances.

However, the speed of railways over long distances is more than that of other modes of
transport except air transport and is most suitable for long distances. Water transport is
very slow and thus unsuitable where time is an important factor.

Flexibility
Railways, water and air transport are inflexible modes of transport. They operate
services on fixed routes and at preplanned time schedules.
The goods have to be carried to the stations, ports and airports and then taken from
there.
Motor transport provides the most flexible service because it is not tied to fixed routes or
time schedules. It can operate at any time and can reach the business premises for
loading and unloading.

Regularity of Service:
Railway service is more certain, uniform and regular as compared to any other mode of
transport.
It is not much affected by weather conditions. On the other hand, motor transport, ocean
transport and air transport are affected by bad weather such as heavy rains, snow, fog,
storms etc.

Safety
Safety and security of goods in transit also influence the choice of a suitable means of
transport.
Motor transport may be preferred to railway transport because losses are generally less
in motor transport. Water transport exposes the goods to the perils of sea and, hence
from safety point of view, sea transport is thought of as a last resort.

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Nature of Commodity:
Rail transport is most suitable for carrying cheap, bulk and heavy goods. Perishable
goods which require quick delivery may be carried through motor transport or air
transport keeping in mind the cost and distance.

Other Considerations:
A number of special services such as warehousing, packing, loading and unloading are
also taken into consideration while deciding about a mode of transport.

From the above discussion it is clear that each mode of transport is suited for a
particular type of traffic.

The rail transport is particularly suited for carrying heavy and bulky goods over long
distances. Motor transport is suitable for carrying small consignments over short
distances. Air transport is suited to light and 99 precious articles which are to be
delivered quickly. Ocean transport is appropriate for carrying heavy bulky goods over
long distances at the cheapest possible cost.

MULTI MODAL TRANSPORT ROUTES.

Trade routes are logistical networks identified as a series of pathways and stoppages
used for commercial transport of cargo. A single trade route contains long distance
arteries which may further be connected to several smaller networks leading to different
markets. The three most important sea trade routes connecting the world continents
are;

Trans-Pacific.
This route connects North America (West coast USA and Canada) and the Far East
/South East Asia (Japan to Singapore). The type of goods moved in this trade route
include manufactured goods and garments from the Far East/South East Asia to the
North American market and food products and beer, scrap metal among others as well
spirits from North America to Asia. The major ports serving this route in North America
are Long Beach, Loss Angeles, Seattle and Oakland and in the Far East we have ports
like Tokyo, Busan, Kobe, Shanghai, and Klang among others. This route connects two
major markets of Asia and North America.

North Atlantic.
This route connects the eastern sea bound of North America and North West Europe
(Baltic Sea to France). The type of goods moved in this trade route from North America
are Beer, food products, fruits to Europe and beer, automobiles, house hold goods
among others from Europe to North America. The major ports served by this trade route

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in East Coat USA are New York, Newark, Charleston, Savannah, Virginia and in Europe
we have Hamburg, Antwerp, Amsterdam, Rotterdam, LeHavre, Felixtowe, and New
castle among others. This route connects two major markets of Europe and North
America.

Europe/Far East.
This route connects north-west Europe and the Far East via South East Asia. The type
of goods moved in this trade route include manufactured goods and garments from Asia
and from Europe is dairy products, scrap metal, automobiles among others. The major
ports serving this route in Asia are Singapore, Hong Kong, Klang, shanghai, Tokyo,
Kobe, Busan among many others and Antwerp, Rotterdam, Hamburg, play mouth,
Felixtowe among others in Europe. This is the busiest route in the world and it serves
two major markets of Asia and Europe.

It is evident that these three routes are not carrying large quantities of raw materials or
semi-manufactured goods but are concerned with the supply of finished manufactured
products and, to a large extent, consumer goods in both directions. This represents a
complete change from the exchange of raw material in one direction for manufactured
goods in the other. This also applies to many of the secondary routes that are described
below.

The East/West flows of the southern hemisphere are also significant. Trade between
the Far East and South America and Africa plays an important role and these are routes
with enormous potential. Trade to and from Australasia still has the potential for great
growth.
Some of the long-standing north/south trades are still important including those from
Europe and North America to Africa and South America. However, there are also
important newer routes, for example between the Far East and Australasia or Indian
Subcontinent and Arabian Gulf to Africa, the latter a re-establishment of one of the
oldest trade routes.

The Intra-Asia trade comprise of one of the most important areas of liner activity. In
aggregate, they are of equivalent or greater size than the Trans- Pacific trade. Despite
the relatively short distances of many of these trade routes, because of inaccessibility or
lack of infrastructure these tend to be short shipping routes in their own right operated
by ‘lift-on-lift-off’ (LO-LO) container ships. This unlike the Europe where overland land
transport would be used over similar distances with ‘roll-on-roll-off’ (RoRo) ferries
providing the sea links. The size of the movements between Asian countries
demonstrates that to an extent their economies have become specialized with both
finished goods and raw materials moving between them.

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REGULATIONS GOVERNING MULTIMODAL TRANSPORT.
MULTIMODAL TRANSPORT CONVENTIONS AND REGULATIONS.

Introduction
International convention" means an international agreement concluded among States in
written form and governed by international law. “Regulations” are rules or directives
made and maintained by an authority. Multimodal transport conventions and regulations
are thus formal written rules, directives and agreements that have been agreed upon by
member states, specialized agencies and other stakeholders on how multimodal
transport will be carried out and controlled in terms of documentation, liability for any
loss or damages and also outline the level of responsibility at any stage in the transport
chain.

Some unimodal conventions also extend their scope into multimodal transport. For
example the CMR (article 2), CIM (article 2) and Montreal Conventions specifically
include provisions dealing with transport of goods by more than one mode. Among the
conventions and regulations that are meant to govern multimodal transports are:
a) United Nations Convention on International Multimodal Transport of Goods
(Geneva, 24 May 1980) – not yet in force

b) UNCTAD/ ICC Rules for Multimodal Transport Documents – these rules came into
force in January 1992, but still do not have the force of law. They are standard
contract terms for incorporation into multimodal transport documents. The rules,
being contractual in nature, will have no effect in the event of conflict with
mandatory law.

Carriage by Sea.
Hague rules.
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The Hague Rules represented the first attempt by the international community to find a
workable and uniform means of dealing with the problem of ship owners regularly
excluding themselves from all liability for loss or damage of cargo. The objective of the
Hague Rules has to establish a minimum mandatory liability of carriers which could be
derogated from.

Under the Hague Rules the shipper bears the cost of lost/damaged goods if they cannot
prove that the vessel was unseaworthy, improperly manned or unable to safely
transport and preserve the cargo, i.e. the carrier can avoid liability for risks resulting
from human errors provided they exercise due diligence and their vessel is properly
manned and seaworthy.

These provisions have frequently been the subject of discussion between ship- owners
and cargo interests on whether they provide an appropriate balance in liability.

The Hague Rules form the basis of national legislation in almost all of the world's major
trading nations, and probably cover more than 90 per cent of world trade. The Hague
Rules have been updated by two protocols, but neither addressed the basic liability
provisions, which remain unchanged.

Hague-Visby rules

This is a set of international rules for the international carriage of goods by sea. The
official title is "International Convention for the Unification of Certain Rules of Law
relating to Bills of Lading" and was drafted in Brussels in 1924. After being amended by
the Brussels Amendments (officially the "Protocol to Amend the International
Convention for the Unification of Certain Rules of Law Relating to Bills of Lading") in
1968, the Rules became known as the Hague-Visby Rules. A final amendment was
made in the SDR Protocol in 1979.

The premise of the Hague-Visby Rules is that a carrier has far greater bargaining
power than the shipper; and that to protect the interests of the shipper/cargo-owner; the
law should impose minimum obligations upon the carrier.

Under the Rules, the carrier's main duties are to "properly and carefully load, handle,
stow, carry, keep, care for, and discharge the goods carried" and to "exercise due
diligence to make the ship seaworthy" and to "... properly man, equip and supply the
ship".

It is implicit (from the common law) that the carrier must not deviate from the agreed
route nor from the usual route; but Article IV (4) provides that "any deviation in saving or
attempting to save life or property at sea or any reasonable deviation shall not be

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deemed to be an infringement or breach of these Rules". The carrier's duties are not
"strict", but require only a reasonable standard of professionalism and care; and Article
IV allows the carrier a wide range of situations exempting them from liability on a cargo
claim.

These exemptions include destruction or damage to the cargo caused by: fire, perils of
the sea. Act of God and Acts of war. A controversial provision exempts the carrier from
liability for "neglect or default of the master ... in the navigation or in the management of
the ship". This provision is considered unfair to the shipper; and both the later Hamburg
Rules (which require contracting states to denounce the Hague-Visby Rules) and
Rotterdam Rules (which are not yet in force) refuse exemption for negligent navigation
and management.

Also, whereas the Hague-Visby Rules require a ship to be seaworthy only "before and
at the beginning" of the voyage, under the Rotterdam Rules the carrier will have to keep
the ship seaworthy throughout the voyage (although this new duty will be to a
reasonable standard that is subject to the circumstances of being at sea.

By contrast, the shipper has fewer obligations (mostly implicit), namely: (i) to pay
freight; (ii) to pack the goods sufficiently for the journey; (iii) to describe the goods
honestly and accurately; (iv) not to ship dangerous cargoes (unless agreed by both
parties); and (v) to have the goods ready for shipment as agreed.

Hamburg rules.
These are a set of rules governing the international shipment of goods, resulting from
the United Nations International Convention on the Carriage of Goods by Sea adopted
in Hamburg on 31 March 1978. The Convention was an attempt to form a uniform legal
base for the transportation of goods on oceangoing ships. A driving force behind the
convention was the attempt of developing countries' to level the playing field. It came
into force on 1 November 1992.

Pursuant to Article 31 of the convention is Entry into force of the Rotterdam Rules
coupled to denunciation of the Hamburg Rules and at the latest five years after entry
into force of this convention, ratifying states should denounce the conventions
governing the Hague-Visby Rules.

Rotterdam rules.
Adopted by the General Assembly on 11 December 2008, the Convention establishes a
uniform and modern legal regime governing the rights and obligations of shippers,
carriers and consignees under a contract for door-to- door carriage that includes an
international sea leg.

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The Convention builds upon, and provides a modern alternative to, earlier conventions
relating to the international carriage of goods by sea, in particular, the International
Convention for the Unification of Certain Rules of Law relating to Bills of Lading
(Brussels, 25 August 1924) ("the Hague Rules"), and its Protocols ("the Hague-Visby
Rules"), and the United Nations Convention on the Carriage of Goods by Sea
(Hamburg, 31 March 1978) ("the Hamburg Rules").
The Rotterdam Rules provide a legal framework that takes into account the many
technological and commercial developments that have occurred in maritime transport
since the adoption of those earlier conventions, including the growth of containerization,
the desire for door-to-door carriage under a single contract, and the development of
electronic transport documents.

The Convention provides shippers and carriers with a binding and balanced universal
regime to support the operation of maritime contracts of carriage that may involve other
modes of transport.

Carriage by Road (C.M.R)

The Convention on the Contract for the International Carriage of Goods by Road
(C.M.R.)

Convention is a United Nations convention that was signed in Geneva on 19 May 1956.

It relates to various legal issues concerning transportation of cargo by road. It has been
ratified by the majority of European states. The history and origins of CMR are much
less complicated than those of the sea carriage conventions.

It was simply brought about by the increasing growth and complexity of international
road traffic in Europe after the World War II.
The CMR is primarily a European convention. It has 118 the force of law in practically all
European states. As of 2013, it has been ratified by 55 states.

All the European countries are members of this Convention, and several other
countries, such as Lebanon and Iran are members. Based on the C.M.R., the
International Road Union (IRU) developed a standard C.M.R. waybill.

The CMR waybill is prepared in three languages. On the back is the text again in three
languages. This aids the waybill in being accepted and recognized throughout Europe.
Checked by customs and police, a transport document must be present when the
shipment is transported. The document itself is not prescribed; there is a minimum of
information required on the C.M.R.

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If hazardous substances are being shipped, some additional information is required, as
described in ADR.
The C.M.R. contains a specific rule on multimodal transport in case of the combination
of road transport with another transport mode. Where the goods carried on road vehicle,
which is then itself carried on another means of transport, the C.M.R. will continue to
govern the contract as between cargo interests and road carrier.

When the goods are not unloaded from the road vehicle, the C.M.R. will apply
throughout, notwithstanding the interference of another mode of transport. Thus, the
C.M.R. actually creates a uniform liability system for a certain kind of multimodal
transport operation.

Carriage by Rail - the C.O.T.I.F.

The international convention on rail carriage is the oldest of the international transport
conventions.
Its first version was made in 1980, after the considerable commercial success of the
railways and the use of a common truck gauge made it clear that international
regulation was called for.

The entry into force in 1985 of the 1980 Convention concerning International Carriage
by Rail (COTIF) marked the birth of the Intergovernmental Organization for International
Carriage by Rail, known today as OTIF.

This Convention was signed in Bern on 9 May 1980 and amended by the Vilnius
Protocol in 1999. 119 The C.O.T.I.F regime may also apply to international carriage
which is performed not only on railway lines but on complementary land, sea and inland
waterways lines, provided that the lines are included in the lists maintained by the
central office.

This rule will apply both to cases where the goods are discharged from the wagons and
loaded to the other means of transport and to cases where actual piggyback transport
takes place (which, due to the weight and bulk of railway wagons, would appear to be
limited to rail/sea and, conceivably, rail/inland waterways combinations).

Carriage by Air - The Warsaw System.

This Convention applies to all international carriage of persons, luggage or goods
performed by aircraft for reward.
It applies equally to gratuitous carriage by aircraft performed by an air transport
undertaking. The Warsaw Convention is an international convention which regulates
liability for international carriage of persons, luggage, or goods performed by aircraft for
reward.

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 The first international air convention, the "Convention for the Unification of Certain
Rules relating to International Carriage by Air", was signed in Warsaw in 1929
(hereinafter referred to as "Warsaw Convention 1929"). As its title suggests, the
convention is aimed at unifying the rules on international carriage by air.

According to Article 1 (1) the Warsaw Convention 1929 "applies to all international
carriage of persons, luggage or goods performed by aircraft for reward. It applies
equally to gratuitous carriage by aircraft performed by an air transport undertaking.

The Convention:
a) Standardizes particulars to be included in the documents of carriage;
b) Creates a penalty for non-compliance with the particulars to be included in the
documents of carriage, (carrier loses monetary cap limiting his liability);
c) Sets out rules whereby the claimant does not need to prove the fault of the carrier, or
his agents, in respect of a loss;
d) Specifies a limited number of defenses to liability for the benefit of the air carrier;
e) fixes a monetary cap limiting the liability of the air carrier;
f) defines the circumstances in which the carrier may lose the benefit of the monetary
cap limiting his liability.
g) sets out rules as to time limitation and jurisdiction;
h) Provides for the exclusive application and mandatory effect of the rules.

MULTI MODAL TRANSPORT FRAMEWORK.

THE COMPONENTS OF MULTI-MODAL INFRASTRUCTURE.

Multi-modal transport as we know it today arose out of several strands that had been
developing over slightly different timescales.
These components are:

a) the main international carrying vehicle – ship, aircraft, train or truck;

b) port and terminal handling – gantry cranes, straddle carriers, rubber-tyred gantry
cranes (RTGs), rail mounted gantry cranes (RMGs), fork-lift trucks, tractor and
trailer units, automated guided vehicles;
c) the railway systems and, in some countries and the inland waterway system;
d) road haulage trailer and tractor units; the inland container depots
e) inland clearance depots.
f) the container

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 g) through pricing;
h) computer technology.

1.2.1.4 Learning Activities

Learning Activities Special Instruction

Identification and interpretation of multimodal transport -The activity done in
routes. a group of 5.
-A world map sheet
to be provided,
Analysis and
Indication to be
shown on the world
map.

Discussion and presentation in groups for the different

regulations governing multimodal transport.

1.2.1.5 Self-Assessment.

1. Mutli-modal transport involves the transportation of goods in such a way that

they can be transferred between two or more modes. Highlight the main
features of multimodal transport.

2. A Global world map given below shows the continents and the different parts
of the world. Identify the major geographical routes taken in multimodal
transportation.

3. International conventions supplement any rules that apply in individual

countries to represent the minimum standards that must be adopted.
Describe the main conventions in force directly impacting cargo movement by
multi-modal transport.

4. The IMDG code governs the movement of dangerous goods by sea.

Explain how do the Hague Visby and Hamburg conventions deal with the
carriage of dangerous goods.

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 5. Security of ships, ports and terminals has been emphasised over the last
years.
Describe the major Code governing the security of ship and port/terminal
facilities.

1.2.1.6 Tools, Equipment, Supplies and Materials

 Whiteboard.
 World map sheets.
 Computer software.

1.2.1.7 References
 United Nations Multimodal Convention on International Multimodal Transport of
Goods (Geneva, 24 May 1980)

United Nations Convention on International Multimodal Transport of Goods

1980

 Logistics and multi-modal transport – ICS 2015 edition.

 Multi modal Transport Logistics Trainee Manual , KMA 2018.

1.2.2 Learning Outcome 2: Determine and advice prices in multimodal transport.

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1.2.2.1 Introduction to the learning outcome.
The learning outcome is to understand the meaning and modes of transport. The
trainee to demonstrate understanding of multimodal transport pricing and to apply
computation of multimodal transport cost.

1.2.2.2 Performance Standard.

 Determinants of modal choice are established as per cargo needs;
 Determinants of multi-modal costs are established as per the modal choice;
 Components of multi-modal transport pricing are established as per the
Organization Procedures
 Multi-modal transport costs are computed as per modal choice;

1.2.2.3 Information Sheet.

Modes of transport:

Modes of transport is a term that distinguishes the various ways in which transportation
can be performed. In transport logistics, there are basically five dominant modes of
transport, namely; road, rail, water, air and pipeline. Each has its own dominant
characteristic.

The modes of transport used in distribution of materials include:

Air transport:
Air transport- air transport is the newest means of transport; it was introduced in 1903
but developed into full means of transporting people and goods in 1930s.
The air transport network has rapidly increase over the last for decades which has seen
introduction bigger aircraft for both cargo and passenger transportation.

The Crafts with high capacity jet freighters have made air transport mode more popular
than before. Air transport still stands the best method for perishables, high value cargo,
emergencies or cargo which are required within a small lead time. The most significant
advantage of airfreight lies in the speed with which a shipment can be transported.

The advantages of using air Transport are:

a) It is faster thus suitable for emergencies and perishable
b) Increased cargo safety and security hence suitable for fragile and other valuables
c) Reduced insurance costs as deliveries are only in transit for shorter period of time
d) It serves the whole world hence increased availability
e) Customers carry very small inventories hence reduced risks associated with transit
inventory carrying.

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 f) Reduced packaging costs due to high skilled handling officers
g) No traffic congestions
h) The way is free i.e. no payment for using air space
i) Easier shipment planning as flight is timetabled.

The disadvantages of using air Transport are:

a) High freight cost
b) Limited carrying capacity
c) Only serves urban zones
d) Possible disruptions due to bad weather
e) Possible craft hijacking and crushing.
f) Requires much capital to buy crafts and construct airports.
g) Cannot transport all types of cargo.

Water Transport
Water transport is very important because it is the cheapest way of transporting bulky
goods over a long distance. In the world, there are two major types of water transport
namely: Inland water transport and ocean water transport. Inland water transport- this is
the system of transport through all navigable rivers, lakes and man-made canals.

Many large rivers in different parts of the world are used by ships and barges for
transportation; the main rivers where inland water transport are important are the Rhine
and Dambe in Europe, the Zaire in Africa, the Nile in Africa, the Mississippi in USA etc.
However, ocean waterways carry a lot of the world’s trade, majority of the bulky goods,
materials and passengers pass through ocean waterways from one country to another
at the cheapest cost.
The advantages of using water transport are:

a) Larger Capacity: It can carry much larger quantities of heavy and bulky goods such
as coal, and, timber etc.
b) Flexible Service: It provides much more flexible service than railways and can be
adjusted to individual requirements.
c) Safety: The risks of accidents and breakdowns, in this form of transport, are
minimum as compared to any other form of transport.
d) Flexible Service: It provides much more flexible service than railways and can be
adjusted to individual requirements.
e) Low Cost: Rivers are a natural highway which does not require any cost of
construction and maintenance. Even the cost of construction and maintenance of canals
is much less or they are used, not only for transport purposes but also for irrigation, etc.
Moreover, the cost of operation of the inland water transport is very low. Thus, it is the
cheapest mode of transport for carrying goods from one place to another.

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f) Less Maintenance Cost: Maintenance cost in rail and road transport is quite high but
maintenance cost of water transport is quite less.
g) Useful During Natural Calamities: During natural calamities like flood and rains,
when rail and road transport is disrupted, relief operations can be operated through
water transport.

The disadvantages of using water transport are:

a) Very slow means of transport thus unsuitable for perishable and emergencies.
b) Not all countries have access to water i.e. land locked.
c) Very expensive to construct Harbours where there are no natural ones.
d) Delays due to port congestion and corruption leading to operational disruptions.
e) Deterioration of quality of materials due to poor landing and shipping delays.

Rail transport.
Railways were developed during the period of industrial revolution in the 19th century,
these was partly for political reasons and for economic reasons. In many countries, they
were built especially to penetrate isolated regions and help promote political unity. The
major advantage of railway transport includes provision reliable services. It has ability of
conveying heavy and bulky goods; it is also very cheap, safe and comfortable for
passengers over a long distance. Materials are moved from source to required
destinations through train cars – wagons and boogies.

The advantages of using rail transport are:

a) Very economic over long distances.
b) Very economical for bulky transportation.
c) Have definite schedules hence easy planning.
d) Can carry almost every type of materials hence reduced limitations.
e) Has convenient delivery/collections points thus flexible.
f) It is cheaper to run once set up.
g) Not affected by weather conditions.
h) Has no competitor hence increased market share.
i) No congestions.

The disadvantages of using rail transport are:

a) Very slow hence unsuitable for perishables and emergencies
b) Poor safety and security to materials thus increased damage and losses.
c) Only serve customers along railway lines.
d) Very uneconomical for shorter distances.
e) Very costly to buy trains and construct railway lines.
f) Set timetables may cause inconveniences and delays where there are irregularities.

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Road transport.
Road transport exist in all parts of the world, this involves the use of motor vehicles
(cars, Lorries, buses, bicycles, and trucks). There are various types of roads according
to size and functions, some roads are tarred while others are not. The best of these
roads are the modern roads which links major towns. Road transport when compared
with other modes of transportation is more flexible. It is relatively cheaper and faster.
Road transport has a high capacity of carrying goods over short distances. Maintenance
is one of the major disadvantages of this mode of transport.

The advantages of using road transport are:

a) Very flexible i.e. can serve many destinations.
b) Very economical over shorter distances.
c) Can accommodate every size of delivery.
d) Easily available.
e) Enhances on route sales.
f) Does not require large capital to set up as compared to other modes.

The disadvantages of using road transport are:

a) Very costly over long distances.
b) Very poor road network leading to delays and high maintenance cost.
c) Not suitable for bulk deliveries.
d) Increased traffic congestion especially in urban zones and weighbridges.
e) Easily disrupted by bad weather.
f) More expensive compared to railway and water freight.
g) Lack of timetables resulting to vehicles moving one way empty.

Pipeline.
This system of transportation involves the use of hollow pipes in the transportation of
water, crude oil, (petroleum) and gas. This mode of transportation is safer than using
tankers or trailers in the transportation of these liquids.

The advantages of using pipeline transport are:

a) Increased environmental friendliness due to underground construction.
b) Safer and cost effective to use.
c) Not affected by weather conditions as they are closed underground.
d) Cheaper to operate.

The disadvantages of using pipeline transport are:

a) High construction cost

20
b) Land disturbance during construction
c) Unsuitable for smaller units
d) Requires highly sophisticated monitoring systems
e) Any slight leakage in the system may result in heavy losses.
f) Unsuitable for solid goods.
g) Serves only limited geographical zones.

Features of a good transport mode

The features of a good transport mode are:
a) Cost friendly.
b) Safe and more secure.
c) Speed.
d) Convenient to users i.e. cheap and quick loading and unloading.
e) Flexible i.e. capability of carrying different kinds of materials.
f) Reliable i.e. delivery timely and without shortages or defects.
g) Easy to control materials while in transit.
h) Extensive of added value.

INTERMODALISM.

While any mode of transport may be combined with another, there are several basic
systems that account for most international intermodal movements.

The availability of the different systems, and the pros and cons of their use, geography
of a given trade route will have a large influence, as will the relative cost and speed of
different systems.

Rail/sea
This transport system combines both rail and sea modes. The cargo is moved on land
via rail and later by sea to the final destination by a carrier that issues a combined
transport document.

Road/rail
This transport system combines both road and rail modes. The cargo is moved on land
via road and then by rail to the final destination by one carrier that issues a combined
transport document.

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 Road/air
This transport system combines road and air modes. The cargo is moved on land via
road and then by air to the final destination by one carrier that issues a combined
transport document.
Sea/air
This transport system combines sea and air modes. The cargo is moved via sea and
then air to the final destination by one carrier that issues a combined transport
document.

Rail/air
This transport system combines rail and air modes. The cargo is moved in land via the
rail and then by air to the final destination by one carrier that issues a combined
transport document.

The choice of a transport mode

Before making a choice on mode of transport to be used in distribution of materials, the

following factors must be thoroughly assessed:

Cost of Service:
The cost of transportation adds to the cost of the goods so it should always be kept in
mind. Rail transport is comparatively a cheaper mode of transport for carrying heavy
and bulky traffic over long distances. Motor transport is best suited and economical to
carry small traffic over short distances. Motor transport saves packing and handling
costs.

Water transport is the cheapest mode of transport. It is suitable to carry only heavy and
bulky goods over long distances where time is not an important factor. Air transport is
the most costly means of transport but is particularly suited for carrying perishable, light
and valuable goods which require quick delivery.

Speed of Transport:
Air transport is the quickest mode of transport but it is costliest of all. Motor transport is
quicker than railways over short distances. However, the speed of railways over long
distances is more than that of other modes of transport except air transport and is most
suitable for long distances. Water transport is very slow and thus unsuitable where time
is an important factor.

Flexibility
Railways, water and air transport are inflexible modes of transport. They operate
services on fixed routes and at preplanned time schedules. The goods have to be

22
carried to the stations, ports and airports and then taken from there. Motor transport
provides the most flexible service because it is not tied to fixed routes or time
schedules. It can operate at any time and can reach the business premises for loading
and unloading.

Regularity of Service:
Railway service is more certain, uniform and regular as compared to any other mode of
transport. It is not much affected by weather conditions. On the other hand, motor
transport, ocean transport and air transport are affected by bad weather such as heavy
rains, snow, fog, storms etc.

Safety.
Safety and security of goods in transit also influence the choice of a suitable means of
transport. Motor transport may be preferred to railway transport because losses are
generally less in motor transport. Water transport exposes the goods to the perils of sea
and, hence from safety point of view, sea transport is thought of as a last resort.

Nature of Commodity:
Rail transport is most suitable for carrying cheap, bulk and heavy goods. Perishable
goods which require quick delivery may be carried through motor transport or air
transport keeping in mind the cost and distance.

Other Considerations:
A number of special services such as warehousing, packing, loading and unloading are
also taken into consideration while deciding about a mode of transport. From the above
discussion it is clear that each mode of transport is suited for a particular type of traffic.
The rail transport is particularly suited for carrying heavy and bulky goods over long
distances. Motor transport is suitable for carrying small consignments over short
distances. Air transport is suited to light and 99 precious articles which are to be
delivered quickly. Ocean transport is appropriate for carrying heavy bulky goods over
long distances at the cheapest possible cost.

MULTI MODAL TRANSPORT PRICING.

PRICE DETERMINANT IN MULTIMODAL TRANSPORT.
Meaning of price determinant
Price determinants simply put are the factors that affect price or pricing decisions.
These can be either internal to the entity or external to the entity.

Internal factors include the costs, organizational considerations, marketing mix strategy
and marketing objectives while external factors include among others, nature of the

23
market and demand, competition and other environmental factors like state of the
economy, government policy etc.

Several factors are important when determining pricing for multimodal transport:

Mode of transport
The connectivity that is to be used by the carrier will determine the price of transport of
the cargo. The use of sea and railway to final destination will be cheaper than sea and
road coaction to final destination. The use of sea mode for long distance and land
transport for short distances will be cheaper that using land for long distance and sea
for short distance. The most expensive combination is where air transport is involved.

Type of cargo
They type of cargo being transported will also determine the pricing. Normal general
cargo stuffed in standard shipping containers will attract favourable prices due to the
ease of handling at interchange points. Other types of cargo that require special
handling and securing will definitely attract a higher price. Out of gauge cargo in
multimodal freight containers require special handling at interchange points and special
care hen loading on vehicles. Refrigerated cargo require special care to ensure cargo is
not damaged by change of temperature, they have to be plugged into electricity in
process of transit and this attracts extra cost.

Value of cargo
The value of cargo can also affect the price of transportation. High value cargo is
usually connected via air transport in one leg and requires special attention and security
hence attracting a higher price of transport.

PRICE COMPETITION IN TRANSPORT MODES.

Introduction

Price competition is rivalry between sellers of goods or services based on price. It is a

business relation between the various parties in which they compete to gain customers.

In freight transport logistics, transport modes are the means by which freight achieves
mobility. These modes generally fall into one of three basic types, depending on over
what surface they travel – land (road, rail and pipelines), water (shipping), and air (air
freight). Each transportation mode has key operational and commercial advantages and
properties.

Modes complement each other in terms of geographical markets served, transport

markets and service levels. At the same time, modal competition exists at various

24
degrees and takes several dimensions. This is generally in terms of: cost, speed,
accessibility, frequency, safety, comfort, etc. Therefore there usually is modal
competition when there is an overlap in geography, transport and level of service.

Cost of transport is one of the most important considerations in modal choice.

Because each mode has its own price/performance profile. The actual price competition
between the modes depends primarily upon: the distance travelled, the quantities that
have to be shipped and the value of the goods. Other exogenous factors that may affect
pricing of different modes are safety and security, level of infrastructure, market access
etc. For example, maritime transport might offer the lowest variable costs, over short
distances and for small bundles of goods, road transport tends to be most competitive.
A critical factor is the terminal cost structure for each mode, where the costs (and
delays) of loading and unloading the unit impose fixed costs that are incurred
independent of the distance traveled.

The increasing international trade in manufactured goods and parts has impacted
differentially upon the modes. Those that offer the faster and more reliable services gain
over modes that might offer a lower cost, but slower, alternative. Rail and shipping have
suffered from competition from road and air modes for high value shipments. While
shipping, pipelines and rail still perform well for bulkier shipments due to their lower unit
cost in terms of pricing.

Government policy and decisions also affect pricing. The government of each country
have their own policy, decisions, rules and regulations. Price determination considers
price control policy of government, sale tax, income tax policy etc.

Prevailing geo-political environment has a very huge effect on transportation pricing

for the different modes of transport. Geopolitics basically focuses on political power in
relation to geographic space. This can be seen in the form of embargoes and
blockades. Since multimodal transport is to a large extent international in nature
especially in the African and Kenyan context, then it is no wonder that the setting of
prices for the different modes will be highly affected by the prevailing geopolitical
considerations. For modes which must cross over hotspots e.g. piracy prone areas – in
the case of maritime transport – freight will be high to compensate for the extra costs of
diversion or hiring security personnel. This will in turn be exploited by air transport since
they may offer better rates with the added advantage of taking shorter time hence faster
delivery.

25
PRICING STRATEGIES IN MULTIMODAL TRANSPORT.
Introduction
Simply put, pricing strategy is the method that companies use to price their products or
services. The following are examples of pricing strategies in multi-modal transport:

Cost based: A pricing method in which a fixed sum or a percentage of the total cost is
added (as income or profit) to the cost of the product to arrive at its selling price. Cost
based pricing strategies in multi-modal transport is one the method of determining the
freight rate of moving a consignment by a carrier, wherein the freight rate is determined
by adding a profit element (percentage) in addition to the cost of making the movement.
It uses the actual costs of moving the product as its basis for coming to the final freight
rate for the voyage. Either a fixed amount or a percentage of the total voyage cost is
added as profit to the cost of the movement to arrive at destination.

Value base
Value-based pricing (also value optimized pricing) is a pricing strategy which sets
prices primarily, but not exclusively, on the value, perceived or estimated, to the
customer rather than on the cost of the product or historical prices.

Customer based
A method of pricing in which the seller makes a decision based on what the customer
can justify paying. Customer-driven pricing is not simply what the consumer is willing to
pay, but reflects the value of the product or service from the consumer's perspective.
Pricing decisions are made to justify purchase decisions and are at a level that
convinces the customer he/she benefits from the transaction

Competitor based
A pricing method in which a seller uses prices of competing products as a benchmark
instead of considering own costs or the customer demand. This is a method of
determining the price at which a particular product is sold based on the prices of
competing products rather than on the cost of production or the amount of demand from
customers. Competition-based pricing can be effective when the average price of
competing goods is noticeably different from prices suggested by production cost or
demand.
Other pricing strategies in multi-modal transport are:
a) Geographical pricing
b) Price discounts and allowances pricing
c) Promotional pricing
d) Discriminatory pricing
e) Product-mix pricing.

26
COMPUTATION OF MULTIMODAL TRANSPORT COSTS.

Introduction
MTOs instead of providing segmented prices (according to the different stages of
carriage/haulage), –offer an all-inclusive price which maximizes on the competitive
advantage of different modes of transport in the multimodal transport chain. The
different segments in the chain can be broken down into three main parts: Pre-carriage,
Main-carriage and On-carriage. Each of these has its own charges which correspond to
the respective stage.

Pre-carriage charges.
Pre-Carriage is the term given to any inland movement activity that takes place prior to
the container being loaded at a port of loading. Such activity can take place at the same
location as the port of loading, or at a location close to the port of loading. Example:
Empty container is released in Johannesburg and moved to Pretoria for packing and
then moved by road or rail to Durban port. This activity is known as pre-carriage. If the
activity is performed by the shipping line on behalf of the client, that is called Carrier
Haulage. In this case, normally the bill of lading shows place of origin as Pretoria. If the
activity is performed by the client or their transporter, that is called Merchant Haulage.
The charges associated with the above are referred to as the Pre-carriage charges.
When computing pre-carriage charges by the MTO, several costs are taken into
consideration; container positioning costs, container stuffing costs, pickup costs,
consolidation costs, brokerage costs, terminal handling costs, any storage costs if
storage is required, and cost of loading the container onto the vessel.

On-carriage charges.
On-Carriage – is the term given to any inland movement activity that takes place after
the container is discharged at a port of discharge. Such activity can take place at the
same location as the port of discharge, or at a location close to the port of discharge.
Example: Full container is discharged at the Port of Mombasa and then moved by rail to
Embakasi inland container depot and then further moved by road to Thika for
unpacking. This activity is known as on-carriage. If the activity is performed by the
shipping line on behalf of the client, that is called Carrier Haulage. In this case, normally
the bill of lading shows final destination as Thika. If the activity is performed by the client
or their transporter, that is called Merchant Haulage. The charges associated with the
above are referred to as the On-carriage charges.

Origin charges.
This is a fee added to the freight rates to take care of the origin activities at the port of
loading.

Main carriage charges.

27
Main carriage is the term given to the transportation of the cargo or container
while it is on-board the vessel on the ocean from the port of loading in route
to the port of discharge. An example of this would be when a container is
transported from New York to any foreign port via ocean freight. This
portion of the transportation is known as carriage. The charges associated
with the above are referred to as the main carriage charges which is the
charge to carry goods on a vessel from Port of loading to Port of discharge.

Destination charges
A fee added to the freight rates to take care of the destination activities at the port of
discharge. This fee caters for stevedoring and terminal handing charges.

 Meaning of terms, Methods, Processes/ procedures/ guidelines, Illustrations

(photographs, pictures, videos, charts, plans, digital content links, simulations links)
and case studies

 Provides additional information sources related to the learning outcome e.g. books,
web links

1.2.2.4 Learning Activities

Learning Activities Special Instruction
Interpretations of case studies to determine multimodal -The activity done in
costs and components of multimodal pricing. a group of 5.

1.2.2.5 Self-Assessment.
1. Before making a choice on mode of transport to be used in distribution of
materials, different factors must be thoroughly assessed. Highlight Five
factors that influence the choice of a transport mode.

2. You are the pricing manager for a global logistics provider. You have a
regular door-to-door shipment of FCL containers of electronic equipment
produced 100km from Shenzhen, China, to be delivered to Duisburg

28
 (Germany), located on the river Rhine, via the port of Rotterdam. The
distance from Rotterdam to Duisburg is 215 km.

Identify the different factors to consider when deciding on which price to

quote.

1.2.2.6 Tools, Equipment, Supplies and Materials

 Whiteboard.
 World map sheets.
 Computer software.

1.2.2.7 References
 United Nations Multimodal Convention on International Multimodal Transport of
Goods (Geneva, 24 May 1980)

United Nations Convention on International Multimodal Transport of Goods

1980

 Logistics and multi-modal transport – ICS 2015 edition.

 Multi modal Transport Logistics Trainee Manual , KMA 2018.

1.2.3 Learning Outcome 3: Process multi-modal transport documents.

1.2.3.1 Introduction to the learning outcome.

29
The learning outcome of the unit is the identification of shipping document. The trainee
to understand the conventions governing multimodal transport operations and to able to
process, store and maintain shipping documents.

1.2.3.2 Performance Standard.

 Shipping documents are identified as per the contract
 Shipping documents are screened as per organization Procedures
 Shipping documents are processed as per organization Procedures
 Processed Shipping documents are issued as per organization Procedures

1.2.3.3 Information Sheet

Explaining the meaning of multi-modal transport documents.

A Multimodal transport document means a document evidencing a multimodal transport

contract and which can be replaced by electronic data interchange messages insofar as
permitted by applicable law and is issued in a negotiable form or, issued in a non-
negotiable form indicating a named consignee.

As per International Chamber of Commerce uniform customs practice (UCP ) 600

Article 19, a multimodal transport document is a form of bill of lading covering two or
more modes of transport, such as shipping by rail and sea or rail and road or sea and
road, road or rail and inland waterway etc.

The Bill of lading:

The bill of lading is one of the most important documents in international trade in
relation to shipment. The United Nations Convention on the Carriage of Goods by Sea
(The Hamburg Rules) 1978 defines the Bill of Lading thus:

"Bill of lading" means a document which evidences a contract of carriage by sea and
the taking over or loading of the goods by the carrier, and by which the carrier
undertakes to deliver the goods against surrender of the document…”

It is a document that conveys title to goods, and proves that goods are loaded on board
the vessel, complying with all conditions and packing for shipment hence it is not just a
title to the goods but is also a Receipt for the goods.

Some characteristics of a Multimodal Bill of Lading

a) A Bill of Lading for a multimodal transport shipment can be a document of title, while
a land carriage document is not such a document.

b) Multimodal Transport Bills of Lading are issued subject to the network liability system
whereby the existing mandatory rules governing unimodal carriage will apply when the
loss or damage to the goods occurs on that particular mode.
30
c) The Bill of Lading evidences multimodal transport when the notations in respect of
places of receipt and delivery are situated inland.

Through Bill of lading.

This document is basically used for multimodal transportation (i.e. a single bill of
lading used for two or more modes of transportation), where the multimodal carrier
assumes the responsibility for the entire shipping movement of the cargo, i.e. from
factory to final destination.

Bills of lading do not necessarily signify that goods are actually loaded on a ship (or
plane, or train); in effect, most of the above bills of lading come in different forms.

Describing the salient features of multi-modal transport documents.

The Bill of Lading as a document has some salient features that distinguish it from
other documents.
The following are the usual items of information appearing on the face of standard
Bills of Lading:
The name of the shipper: this is the first part to the contract of carriage and for this
reason it should be the name of the cargo owner and not that of its agent.

Name of consignee or ‘order’ and notify party It is possible to simply insert the
words ‘To order’ in the consignee box and then complete the name of a ‘notify party’
below it.

Ship’s name This is the name of the carrying vessel. If transshipment is involved in
the voyage it is customary for the deep sea or main leg carrying vessel’s name to
appear in this space.

Place of receipt/port of loading In the case of combined transport bills or through

bills, the place of receipt will be shown. In all cases, the port of loading will be
shown.

Port of discharge The port of discharge will be shown and, in the case of combined
transport or through bills, the place of delivery.

When and where freight to be paid

Freight paid, or payable at destination often called collect.

31
Number of original Bills of Lading There are usually two or three, although only one
original is actually needed.

Full description of the cargo: marks, numbers, weight, cubic

The place and date of issue of the bill of lading

In case of a ‘received’ bill it is the date the goods were received for shipment, while
on ‘shipped’ bill it is the date the goods were loaded.

Signed ‘for the carrier’ Traditionally the Master of the ship signed the Bills of
Ladings, but this is not practical for the larger volumes of consignments on liner
vessels. The modern form of signature must identify the carrier and whether an
agent on its behalf signs the bills.

Combined Transport bill of lading

When a B/L is issued as a Combined Transport Bill of Lading, it involves multiple
modes of transport from the Place of Receipt to Place of Delivery and all these
movements are carried out as a single contract by multiple service providers under
the employment of the carrier. Carrier takes responsibility for any loss or damage for
the entire transport including the sea and other mode of transport. When a Bill of
Lading is released as a Combined Transport Bill of Lading, the boxes “Pre-Carriage
by”, “Place of receipt by pre-carrier”, “Place of delivery by on-carrier”, “On-Carriage
by” etc. will be filled in.

Through Bill of lading.

In the case of Through Bill of Lading the carrier is directly responsible only for the
sea leg while for the inland movement the carrier only acts as an agent in arranging
the inland movement. This will be specifically stated in the terms. Again when a Bill
of Lading is released as a Through Bill of Lading, the boxes “Pre-Carriage by”,
“Place of receipt by pre-carrier”, “Place of delivery by on-carrier”, “On-Carriage by”
etc. will be filled in.

Describing e-documentation in multi-modal transport.

An electronic document is any media content that is intended to be used
electronically. It is information that is recorded in a manner that requires a computer
or other electronic device to display, interpret and process it.

In multimodal transport, e-documentation encompasses not just the replication of

the paper documents into the electronic versions and transmitting them
electronically but also incorporates a combination of a legal framework and
technology, which can replicate the functions of a traditional paper document and
thus enable trade to take place without any encumbrances.

32
 Electronic Bill of Lading is transmitted by use of information communication
technology which replicates the core elements of a traditional paper bill of lading,
namely its functions as a receipt, as evidence of the contract of carriage and as a
document of title. The electronic bill of lading is therefore the legal and functional
equivalent of a paper bill of lading.

Describing other documents in multi-modal transport.

There are other documents apart from the primary multimodal transport documents
that are used in multimodal transport. Among them are:

The CMR road Consignment Note.

The CMR is a consignment note with a standard set of transport and liability
conditions, which replaces individual businesses' terms and conditions. It confirms
that the carrier (i.e. the road haulage company) has received the goods and that a
contract of carriage exists between the trader and the carrier.

CIM consignment note.

This document confirms that the rail carrier has received the goods and that a
contract of carriage exists between trader and carrier. The key details to be
provided in the note include:
a) a description of the goods.
b) the number of packages and their weight.
c) the names and addresses of the sender and recipient.
d) The option for issuance of CMR Consignment Note or CIM Consignment Note
for Combined/Multimodal Transport does not depend on the second mode of
transport used but rather on the type of haulage operation.

Booking notes:
A Booking Note is a contract that has been drawn up between either a Cost
Insurance and Freight (CIF) seller or on Free On Board (FOB) buyer and a shipping
company for the carriage of cargo. A Booking Note differs from other form of
contract in that, once the cargo is shipped; its terms and conditions are superseded
by those in the Bill of Lading
Shipping orders:
Shipping order is a copy of the shipper’s instruction issued by the shipping company to
a shipper regarding the disposition of goods to be transported. It is an inventory control
document that identifies the confirmed space booking, the goods to be shipped from the
warehouse, and the place to which the goods must be shipped.

CONFORMITY WITH LOCAL/INTERNATIONAL REGULATIONS.

Introduction.

33
In the absence of international Convention, the International Chambers of Commerce
(ICC) has drafted a set of minimum uniform rules to govern an acceptable and easily
recognizable Combined Transport document (CT). The Rules may be given legal effect
by their incorporation into a private contract, the combined transport contract evidenced
by the CT document.

The ICC Rules are applied by the issuance of the CT document, and by the issuance of
this document the Combined Transport Operator accepts full responsibility for the
performance of the combined transport, as well as liability, throughout the entire
combined transport. The applicability of the combined transport Rules can be described
on basis of the following key areas.

Contract of carriage
These Rules apply to every contract concluded for the performance and/or procurement
of performance of combined transport of goods which is evidenced by a combined
transport document. The issuance of such combined transport document confers and
imposes on all parties having or thereafter acquiring an interest in it the rights,
obligations and defenses as set out in these Rules. Except to the extent that it increases
the responsibility or obligation of the combined transport operator, any stipulation or any
part of any stipulation contained in a contract of combined transport or in a combined
transport document evidencing such contract, which would directly or indirectly derogate
from these Rules shall be null and void to the extent of the conflict between such
stipulation, or part thereof, and these Rules. The nullity of such stipulation or part
thereof shall not affect the validity of the other provisions of the contract of combined
transport or combined transport.

Mode of transport

Apart from the application of these Rules to the contract of carriage ,these Rules also
apply even if the goods are carried by a single mode of transport contrary to the original
intentions of the contracting parties that there should be a combined transport of the
goods as defined by the Rules.

When the Rules are applied by private contract the liability for loss or damage has to be
governed by the following:
i) the appropriate single mode rules when the loss or damage can be attributed to a
particular stage of transport (cf. Rule 13), or
ii) The ICC Rules when the loss or damage is concealed i. e. cannot be attributed to
a particular stage of transport (cf. Rules 11 and 12).

34
The liability for delay has to be governed in all cases by the single mode rules regarding
delay, where such single mode rules exist, applying to the stage of transport where the
delay occurred (cf. Rule 14).

Nevertheless, the Rules do not preclude the voluntary acceptance by the CTO of a
greater responsibility or obligation than that outlined above.

Party liability.
The Rules ensure that the vessel-operating CTO would benefit from the same defenses
which would have applied to a contract for a unimodal sea transport and that a non-
vessel operating CTO (NVO-MTO) would have the possibility of instituting recourse
actions against the actual (performing).

Discussing the implication of conventions governing multi- modal transport.

The conventions governing multi-modal transport contracts have had implications on

both cargo liability and documentation notably the bills of lading. This two parameters
can be discussed separately as follows;

Cargo liability.
One of the most important implications of this scenario is the liability of the multimodal
carrier (also called multimodal transport operator – MTO) for the loss of, or damage to,
goods.

The problem which arises is the extent to which these mandatory conventions
applicable to unimodal transportation would also influence multi-modal contracts
bearing in mind that some of these unimodal conventions also extend their scope into
multimodal transport.

For example the CMR (article 2), CIM (article 2) and Montreal Conventions specifically
include provisions dealing with transport of goods by more than one mode. In any event,
in the absence of a uniform liability system for multimodal transport, the liability for each
stage of transport is determined by the relevant unimodal convention or national laws
which adopt varying approaches to issues such as the liability questions.

Therefore, the liability of the multimodal transport operator for loss or damage to goods
can differ depending on which stage of transport the loss has occurred. The question
becomes even more complicated if the loss or damage cannot be localized, or the loss
occurs gradually during the entire transport.

35
In conclusion, the applicable liability rules and the degree and extent of a carrier’s
liability vary greatly from case to case and are unpredictable. Liability for delay in
delivery is not always covered by the same rules as liability for loss of or damage to the
goods.

Bills of lading.
Combined transport without a single document as evidence of the contract of carriage
can cause problems if different liability regimes are used. The cargo interests will have
to discover and establish at what stage the loss or damage may have occurred and then
bring an action against the carrier under separate contracts of carriage.

The conventions have necessitated the inclusion of mandatory clause to offer one-
document with single liability i.e. the combined transport bill of lading or multi-modal
transport document.

SCREENING OF SHIPPING DOCUMENTS.

Customs Documentation.
The exporter or importer will have to submit documentation to customs authorities on
the cargo being loaded or unloaded, together with the payment of any appropriate duty.
Although the operator may act as its agent to arrange customs clearance, it
nevertheless remains the responsibility of the owner of the goods to ensure that
customs permission is obtained to move goods in or out of the country and to pay the
necessary duties.

The benefits of intermodal through transport cannot be fully achieved if through

transportation is held up at key points because of documentary requirements. Similarly,
the benefits of through transport movements (which start and finish away from the port
area) would be negated if all goods were subject to customs inspection and clearance
at the port itself.

To deal with both these requirements, customs authorities in many countries have
updated their procedures and facilities to suit the concept of through transport
movements by taking the process of customs clearance away from the port area.

In many countries, imports can be moved to an inland depot for customs clearance. In
such cases the operator will normally have to furnish appropriate details of such
movements to the customs authorities, so that all units moving out to the port can be
accounted for. In effect, the operator is held responsible for the safe arrival of the goods
at the inland depot, and the goods cannot be removed from the depot until they have
been cleared.

36
Some flexibility may be allowed in the timing of submission of customs entries to
facilitate through transport movement. For example, if import entries can be submitted
before the arrival of the vessel, goods may be cleared before arrival with physical
inspection on a sample basis only.

This will help to ensure there are no unnecessary delays to the final delivery of the
goods.

On export movements, if the goods are not subject to export duty or any other
constraint, customs authorities may allow a certain time period after the ship has sailed
for the customs entry to be submitted.

Licensing.
This is a particular form of customs control that may apply to either imports or exports.
Import licensing may be applied to protect a home industry, permitting only a very small
import of a product or commodity for a special purpose and supplying the ordinary home
market internally. For example, in some countries the import of foreign liquor is only
permitted for the tourist trade.

It may also be used to control restricted goods such as firearms or other military
supplies to approved users. Import licensing is also often used in conjunction with
exchange control rules to minimize a deficit on balance of payments.

Export licensing is more often used for political purposes such as enforcing sanctions
against other countries or for security by controlling the export of strategic goods such
as weapons or scientific applications.

Fiscal rules.
Many countries have regulations to protect the currency of the country from
speculation, known as exchange control regulations. All movements of money into and
out of the country must be approved, usually by the central bank.

This can make it difficult to collect freight due and often it means that inland transport
charges cannot be paid in another country to that where it is carried out. This obviously
interferes with house-to-house combined transport quotations.

If any form of exchange control is in operation or any tax is payable, other than that
administered by the customs authorities, the central bank or income tax authorities may
also require a copy of the manifest or other transport document. In some countries, for
example, shipping companies pay a tax assessed on the freight payable on imported or
exported goods and the tax authorities would require copies of the manifest in order to
assess the tax to be paid.

37
Ports and airports.
Port authorities require a copy of the manifest before arrival for both safety and
charging purposes. Both ships and aircraft will be required to show compliance with port
regulations on hazardous cargoes or any other goods on which they impose a
restriction.

Many ports levy a charge on the tonnage of the cargo being loaded/discharged and
such charges will be calculated from the manifest.

PROCESSING SHIPPING DOCUMENTS.

The requirements for documentation within a through transport system can be broadly
identified as set out below.

Communication between the customer and carrier including contractual

arrangements.

At the start of a through transport movement, the shipper must advise the operator of
various details of the cargo being shipped and the instructions for shipping it, including
the vessel, vehicle, aircraft and destination.

In return, the operator must confirm to the shipper that the cargo has been dispatched
and provide a document to form the basis of the contract for the movement. The
operator will also normally send a statement of charges (invoice). Before arrival at
destination, the operator will normally send the importer advice that the cargo is due,
together with notification of charges to be paid by the importer.

Internal control information for the operator and for exchange between the
operator and its subcontractors.
As the cargo/container progresses through the through transport system, information
needs to pass between the offices/depots and terminals handling the movement, and to
the hauliers, rail operators and others undertaking parts of the through transport
operation.

Requirements of statutory bodies.

When cargo enters or leaves a country there will normally be documentation associated
with customs requirements, security, port, health and, in some countries, tax and
exchange control authorities.

It will be the responsibility of the exporter/importer to provide some of this information,

although the through transport operator may perform this function as an agent for the

38
exporter/importer. Additionally, the operator will have duty to provide specified
information to the authorities on the ship, its crew and its cargo.

Commercial transactions associated with the goods.

In many cases there will be a commercial transaction between the exporter and
importer, or some other party, associated with the movement of goods.

In such instances, a through transport document has a role to play in the commercial
transaction, in much the same way that a cheque plays an important role in a financial
transaction.

In addition to considering the documentation associated with a through transport

movement, it is also appropriate to consider the liability of the respective parties
involved in the movement, since generally the terms of the liability will be reflected in the
documents/agreements involved.

Without information – whether in electronic form, or as a hard copy document , ships,

ports and labour would be unable to operate and nothing would move. It is therefore
important to understand the roles of the various documents and the part they play in all
movements.

The most important document by far is the bill of lading. Other contractual documents
include air and sea waybills and consignment notes. Further documents of significance
are the booking notes, shipping notes, Mate’s Receipts, manifests, packing lists,
hazardous lists and indemnity letters.

THE SALE CONTRACT.

Before considering the transport documentation it is essential to understand the basic
agreements made between the sellers and buyers of cargo.

The exchange of goods.

The buying and selling of goods, of whatever kind and wherever it is done, involves the
creation of a ‘contract’ or agreement between two parties, one offering goods for sale
and the other offering something in exchange for those goods. It does not matter how
many other agents become involved.

The contract created binds the two parties together and does not necessarily have to be
in writing. The simple matter of a purchase in a shop is an example of a straightforward
contract of sale, although in many countries such a contract involves other elements

39
required by sale of goods legislation to protect consumers, such as the availability of
refunds or replacement for faulty goods.

Both sides of the contract have an obligation and if either party fails to fulfil its obligation
there are remedies in law that can be applied through the courts if the matter is
sufficiently serious. Should both parties be based in the same country the legal
remedies can be easily enforced. Normally, one party requires money and the other
requires the goods being offered in exchange for the money.

Within a single country this is simple, because the purchaser can use credit cards, cash,
cheques or one of the various forms of electronic transfer. Sale and purchase contracts,
or deals, are almost instantaneous in a shop, but take a few days longer when goods
are bought over the internet.

The transfer of funds from country to country.

The ease with which money can be sent from one country to another varies
considerably.

Some countries impose no barriers at all whereas others have strict exchange controls.
The stringency of the control is usually a reflection of the balance-of-payments
weakness of the country concerned or the extent to which it operates a centrally-
managed economy.

Where no controls are imposed, various methods of money transfer are available. The
simplest of all is a cheque or banker’s draft drawn on the buyer’s bank in the currency of
its home country.

Although this is the most straightforward for the payer, it creates some problems for the
payee, whose bank has to sell the currency in which the cheque is drawn and credit the
payee’s account after deducting the charges that the bank will make for providing this
service.

In the case of a cheque (rather than a banker’s draft, which is reckoned to be as good
as cash), such funds will usually be credited ‘with recourse’, which means that the
payee’s bank reserves the right to cancel the credit should there be any irregularity in
the cheque being honored by the payer’s bank.

1.2.3.4 Learning Activities

Learning Activities Special Instruction

40
 Sample hard copies of multimodal documents to be Identification and
shared. processing of
document. (Working
in groups)

1.2.3.5 Self-Assessment
1. The bill of lading is one of the most important documents in international trade in
relation to shipment. Explain the different types of bills of lading used in
multimodal transport and discuss their functions.
2.

1.2.3.6 Tools, Equipment, Supplies and Materials

 Sample Shipping documents.
 Computer software.
 Whiteboard.
 Projector.

1.2.3.7 References
 United Nations Multimodal Convention on International Multimodal Transport of
Goods (Geneva, 24 May 1980)

United Nations Convention on International Multimodal Transport of Goods

1980

 Logistics and multi-modal transport – ICS 2015 edition.

 Multi modal Transport Logistics Trainee Manual , KMA 2018.

1.2.4 Learning Outcome 4: Perform international cargo transportation.

1.2.4.1 Introduction to the learning outcome.

The learning outcome is to understand the meaning of international cargo
transportation. The trainee to demonstrate understanding of cargo booking and
processing shipping documents.
To demonstrate the freight computation and process shipping documents.

41
1.2.4.2 Performance Standard.
 Cargo shipment is booked as per Organization Procedures
 Shipping instructions are received as per Organization Procedures
 Cargo is handed over as per Organization Procedures
 Shipment is weighed as per Organization Procedures
 Freight is computed as per Organization Procedures
 Shipping documents are processed as per Organization Procedures
 Cargo is shipped as per the contract of carriage
 Cargo is delivered as per the contract of carriage;

1.2.4.3 Information Sheet

Meaning of International cargo transportation.
Receiving Shipping instructions.
The agent is the eyes and ears of the principal and it is a major responsibility of the
agent to keep the principal fully informed of all events that occur while the ship is in their
care.

That is to say, from the time the agent receives the appointment they should be
updating the principal constantly on the prospects for the vessel’s port of call including
ETA, berthing, cargo operation and sailing prospects.

It is only with this information that the principal can programme the next voyage and
make arrangements for future cargoes. Prior to the ship’s arrival, the agent receives
ETAs on which they make arrangements for port entry, berthing and cargo operations.
This information is transmitted to the local harbour authority and cargo terminal.

They, in turn, feed back information on port entry time, berth availability and prospects
for cargo completion. The agent becomes the central point of communication relaying
this information back to their principal and, on the principal’s instruction, to the next port
call so that it knows when to expect the vessel’s arrival.

As events change, so do prospects and these should be constantly transmitted to the

various parties concerned and, of course, to the principal.

When the ship arrives, certain information becomes factual and this should be
transmitted as events occur. This will normally include:
1. Time of arrival.
2. Anchorage time if vessel anchored off the port to await entry.
3. Time weighed anchor, if appropriate
4. Time of entering river or port.

42
 5. Time and location of vessel berthing.
6. Time the master presented the notice of readiness.
7. Time the notice of readiness was accepted.
8. Time cargo operation started. It is normal from here on to detail cargo events as
they occur, hour by hour or day by day, depending upon the nature of the
commodity and type of cargo handling involved.
9. Time cargo operation complete.
10. Time cargo documents on board and vessel ready to sail.
11. Time vessel left berth.
12. Time vessel cleared river or port and on passage.
13. Details of cargo loaded or discharged in accordance with either the bill of lading,
if loaded, or outturn report, if discharged.
14. 14.ETA next port.
Cargo booking.
Cargo delivery and weighting.
Freight computation.
Shipping cargo on board.
Cargo is mentioned before the ship itself because freight or hire is the shipowner’s
sole income, making the cargo commercially paramount.
The place of cargo handling. The all-important task is to establish where the cargo will
be loaded and discharged.

Charter parties may be constructed to allow operations to take place at specific berths,
ports or a range of ports. The cargo interests may have the right to nominate the
handling place, but this is not always the case.

They will almost certainly have a favoured place even though cheaper, more efficient
alternatives may exist.

The agent should bring such alternatives to the principal’s notice and leave them to
resolve the matter with cargo interests. Occasionally a similar problem arises when
there is no provision in the charter party for working at more than one berth, but where
there are two or more cargo interests each insisting that work should take place at their
choice of berths.

Once the place for working has been decided, arrangements have to be confirmed with
the conservancy administration, such as the river authority, port authority, wharf, berth
and or terminal operator.

Different arrangements need to be made depending upon where the cargo is to be

handled as this may be via barge or offshore pipeline rather than alongside a berth
facility.

43
Those controlling the place of cargo handling will require an accurate description of the
cargo including (if applicable) a declaration of hazardous cargo, together with the name,
flag and full details of the ship plus the ports of loading or discharge.

Once the place of cargo handling has been agreed by all concerned, the agent’s
principal task is to keep that place advised on a regular basis with the ship’s position.

The cargo handler. Sometimes, in the case of dry bulk or breakbulk cargo operations,
the agent may be entrusted with obtaining competitive rates for the job from different
stevedores, rigger, heavy-lift operators and so on.

The decision on which company to use will be based upon:

 its ability to handle the type of cargo.

 the availability of sufficient labour to meet the ship’s cargo handling programme.

 the cost.

For a discharging ship, it is customary to provide the stevedoring company with cargo
manifests plus stowage plans, which will assist the stevedores in determining the
amount of labour required and the type of ship working operations envisaged. For
instance, with a multi-hatch ship with cargo operations in each hold, the ship could be
working all hatches simultaneously and require manpower accordingly.

For a loading ship, the stevedores will need details of the sizes of hatches and
capacities of holds available for cargo, and ideally a capacity plan. This will enable them
to be ready to discuss the loading programme with the ship’s command who, of course,
have the final say as to how much is to be loaded into each compartment.

The stevedores may be restricted in the range of cranage, slings and other lifting gear
that are available to suit the cargo commodity.

Quayside operations to receive and/or to despatch cargo after discharge sometimes fall
within the terminal operator’s domain or may be in the hands of another party, according
to the custom and practice of the port.

Principals will wish to know the normal working hours of the port and what options are
open to them for working overtime. This information will be available from the
stevedoring company or terminal operator, but the decision on working times,
particularly during overtime, will be taken by the principal in conjunction with cargo
interests. The stevedoring company may also be able undertake rigging operations

44
such as lashing and securing of cargo or this may be a task that will be performed by
the ship’s crew or a third-part

Processing shipping documents.

Cargo delivery.

 Meaning of terms, Methods, Processes/ procedures/ guidelines, Illustrations

(photographs, pictures, videos, charts, plans, digital content links, simulations links)
and case studies

 Provides additional information sources related to the learning outcome e.g. books,
web links

1.2.4.4 Learning Activities

Learning Activities Special Instruction

1.2.4.5 Self-Assessment
 This section must be related to the Performance Criteria, Required Knowledge
and Skills in the Occupational Standards.
 This section requires the trainee to evaluate their acquisition of skills, knowledge
and attitude in relation to the learning outcome
 A variety of assessment items such as written and practical tests which
emphasizes on the application of knowledge, skills and attitude is recommended
 The self-assessment items should be valid, relevant and comprehensive to the
level of qualification in the learning outcome

1.2.4.6 Tools, Equipment, Supplies and Materials

 This section should provide for the requirements of the learning outcome in terms
of tools, equipment, supplies and materials
 The section should be adequate, relevant and comprehensive for the learning
outcome.

1.2.4.7 References

45
  Information sources should be quoted and presented as required in the APA
format

1.2.5 Learning Outcome 5: Manage resources in multi-modal transport.

1.2.5.1 Introduction to the learning outcome.

The learning outcome is to understand the meaning of multimodal resources. The
trainee to demonstrate understanding of allocation of resources and development of
resources management plan and to undertake monitoring and evaluation.

46
1.2.5.2 Performance Standard.
 Resources are identified as per the transport requirements
 Resource management plan is developed as per Organization Procedures
 Resources are allocated as per the Resource management plan
 Resources are monitored, controlled and evaluated as per organization
procedures

1.2.5.3 Information Sheet.

Multi-modal transport resources

Multimodal transport resources refer to the various tools, infrastructure, and systems
used to facilitate multimodal transportation—a method of transporting goods or
passengers using two or more different modes of transport (such as road, rail, sea, and
air) under a single contract or journey.

Examples of Multimodal Transport Resources:

 Physical infrastructure
o Ports, airports, rail terminals, warehouses, logistics hubs.
 Transport equipment
o Containers, cargo handling machinery (e.g., cranes, forklifts), multimodal
trailers.
 Vehicles
o Ships, trucks, trains, airplanes that are equipped to handle intermodal
cargo (like containerized goods).
 Technology systems.
o GPS, tracking systems, transport management systems (TMS), electronic
data interchange (EDI).
 Human resources.
o Skilled personnel such as logistics managers, port operators, and customs
officers.
 Institutional support
o Policies, regulations, customs procedures, and legal frameworks enabling
smooth transfer between modes.

Allocation of Resources in Multimodal Transport

Efficient resource allocation is vital for the success of multimodal transport logistics.
Resources include financial investment, infrastructure, technology, equipment, and
human capital.

47
 Ports, rail terminals, warehouses, and container depots require substantial capital for
development and maintenance. Technological tools such as tracking systems,
Transport Management Systems (TMS), and automated scheduling platforms help
optimize operations.

Human capital allocation ensures skilled professionals are placed in key roles like
logistics management, customs processing, and cargo handling. Proper allocation
results in improved operational efficiency, reduced delays, and cost savings.

Modes of Transport in Multimodal Logistics

Multimodal transport uses a combination of different transport modes under a single

journey contract. The key modes include:

-Maritime Transport – Ideal for large volumes and long-distance international

trade.

-Road Transport – Offers flexibility and is essential for first and last-mile
connectivity.

-Rail Transport – Suitable for bulk cargo over long distances inland.

-Air Transport – Best for high-value, urgent shipments.

-Inland Waterways – Efficient for cargo movement along rivers and canals.

Each mode has its strengths and is selected based on cost, time, cargo type, and
geographic reach.

Advantages and Disadvantages of Multimodal Transport

Advantages:

 Minimizes cargo handling, reducing damage risks.

 Simplifies documentation with a single contract for multiple modes.

 Enhances tracking and coordination through integrated systems.

48
  Saves time and cost in long-distance and international shipments.

Disadvantages:

 Requires advanced infrastructure and coordination across modes.

 Transfer points can cause delays if poorly managed.

 Liability and insurance complexities in case of cargo damage.

 Higher initial investment in multimodal-compatible equipment.

Types of Equipment Used in Multimodal Transport

A wide range of specialized equipment is used to support multimodal operations:

 Containers – Standardized for easy transfer across ships, trains, and trucks.

 Chassis and Trailers – Facilitate Road transport of containers.

 Handling Equipment – Includes gantry cranes, forklifts, reach stackers, and

straddle carriers used at ports and terminals.

 Transport Vehicles – Ships, trucks, freight trains, and aircraft capable of

carrying containers.

 Cargo Securing Devices – Twist locks, lashing rods, and container seals
ensure cargo safety during transport.

Interchange Facilities in Multimodal Logistics

Interchange facilities are crucial points were cargo transitions takes place between
transport modes. These include:

 Container Terminals – Where containers are loaded/unloaded from ships, trucks,

and trains.
 Inland Container Depots (ICDs) and Dry Ports – Extend port services inland and
reduce congestion.
 Rail-road Yards – Allow smooth transfer between rail wagons and trucks.

49
  Logistics Hubs – Central points for warehousing, customs clearance, and cargo
distribution.
 Automated Systems – Help track cargo, plan routes, and streamline modal shifts.

Effective interchange facilities reduce delays, handling time, and cargo misplacement.

Safety and Security in Maritime Modal Transport and Logistics

Safety and security are paramount in maritime and multimodal logistics. Compliance
with international standards such as the International Maritime Organization (IMO)
guidelines, including the ISPS Code and SOLAS, is mandatory. Cargo must be
inspected, and hazardous materials handled following strict protocols.

Ports and terminals should have surveillance systems, access control, and fire safety
measures. With the rise of digital systems, cybersecurity is also crucial to protect
logistics data. Training staff in emergency response further strengthens safety and
resilience in the supply chain.

Human Capital Requirements in Multimodal Transport Logistics

A skilled workforce is essential to manage the complexities of multimodal transport. Key

personnel include:

 Logistics Planners – Oversee route planning, scheduling, and cargo coordination.

 Customs and Compliance Officers – Ensure cargo meets legal and regulatory
requirements.

 Port and Terminal Workers – Handle loading/unloading and equipment operation.

 Transport Operators – Truck, train, and crane drivers trained in multimodal

operations.

 IT and System Analysts – Manage tracking, inventory, and digital platforms.

 Safety Officers – Enforce safety protocols across modes.

Resource Management Plan for Multimodal Transport Logistics (Based on SOPs)

50
A Resource Management Plan ensures optimal use of people, infrastructure,
equipment, and technology in line with standard operating procedures. The goal is to
enable smooth coordination across different transport modes while maintaining
efficiency, safety, and compliance.

1. Objective of the Plan

To develop and implement a standardized approach for managing all resources used in
multimodal transport logistics—ensuring efficiency, safety, timely delivery, cost-
effectiveness, and compliance with national and international regulations.

2. Scope.

Covers all phases of multimodal operations: planning, execution, monitoring, and

closure.

Applies to all transport modes: sea, road, rail, air, and inland waterways.

Includes resource categories: human, physical, technological, and financial.

3. Key Elements of the Resource Management Plan

a. Resource Identification

 Human Resources: Logistics planners, drivers, operators, customs agents, safety

officers.

 Physical Resources: Containers, trucks, rail wagons, ships, cargo handling

equipment.

 Technological Resources: GPS trackers, TMS, WMS, automated gates, EDI

systems.

 Financial Resources: Budget allocations for operations, training, maintenance,

and insurance.

b. Roles and Responsibilities (R&R)

Defined in the SOPs to avoid duplication and confusion:

 Logistics Coordinator: Oversees multimodal operations and resource

deployment.

 Transport Supervisors: Manage loading/unloading and mode-specific transitions.

51
  Safety Officer: Ensures compliance with safety regulations and procedures.

 IT Personnel: Maintain tracking systems, data platforms, and digital logs.

4. Resource Planning Process

Step 1: Demand Assessment

Estimate resource requirements based on volume forecasts, routes, and customer

demand.

Identify critical interchange points needing higher capacity.

Step 2: Scheduling & Allocation

Allocate transport vehicles and personnel based on shipment schedules.

Assign equipment based on cargo type and route complexity.

Step 3: Standard Operating Procedures (SOP) Alignment

Ensure all resource usage aligns with documented SOPs such as:

 Cargo handling procedures.

 Interchange protocols.

 Equipment safety checks.

 Communication and reporting standards.

Step 4: Contingency Planning

 Define backup plans in case of resource failure (e.g., equipment breakdown, staff
shortage).

 Maintain reserve fleets and alternative suppliers.

5. Resource Monitoring and Control

 KPIs and Performance Metrics: On-time delivery, fuel efficiency, equipment

uptime, staff productivity.

52
  Daily/Weekly Reports: On resource usage, delays, and incidents.

 Audits and Inspections: Routine checks to ensure SOP compliance.

 Digital Tools: Real-time dashboards, alerts, and analytics for decision-making.

6. Training and Development

 Periodic training programs for all roles based on SOP updates.

 Simulation-based exercises for critical roles (e.g., cargo transfer, emergency

response).

 Certification and compliance training (e.g., IMO, IATA, customs clearance).

7. Communication and Documentation

 Maintain clear communication channels among all transport mode operators.

 Use standard forms and digital platforms for tracking resource deployment.

 Log all actions and deviations from SOPs for accountability and improvement.

8. Continuous Improvement

 Review feedback from operations to identify resource bottlenecks.

 Update SOPs and training manuals based on audits and performance trends.

 Integrate new technologies to improve resource visibility and control.

1.2.5.4 Learning Activities

Learning Activities Special Instruction

Determining and interpretation of technology systems -To take note on
such as transport management systems(TMS), Real time Tracking
Electronic Data Interchange. and Management of
shipments.

-Shipment tracking
and evaluation of
Shipping options.

53
1.2.5.5 Self-Assessment
1. Efficient resource allocation is vital for the success of multimodal transport
Logistics. Highlight the major challenges in the allocation of resources in
multimodal transport.

2. Multi modal resource planning process ensures the efficient and effective
utilization of resources across the organization. Discuss the various steps taken
in resource planning process.

3. Interchange facilities are crucial points were cargo transitions takes place
between transport modes. Highlight the major interchange facilities that plays
critical role in the multi modal logistics.

1.2.5.6 Tools, Equipment, Supplies and Materials

 Whiteboard.
 Video clips for different multimodal resources.
 Projector.
 Computer software.

1.2.5.7 References
 United Nations Multimodal Convention on International Multimodal Transport of
Goods (Geneva, 24 May 1980)

United Nations Convention on International Multimodal Transport of Goods

1980

 Logistics and multi-modal transport – ICS 2015 edition.

 Multi modal Transport Logistics Trainee Manual , KMA 2018.

54
1.2.6 Learning Outcome 6: Process multi-modal transport cargo claims.

1.2.6.1 Introduction to the learning outcome.

 The learning outcome of the unit is the lodging of different cargo claims. The trainee
to understand the investigation of claims and the documents involved and to be able
to process claim amount of loss or damage covered by the insurance policy.

1.2.6.2 Performance Standard.

 Cargo claim is lodged as per Organization procedure
 Cargo covered is identified as per insurance policy
 Claim investigation is carried out as per Organization Procedure
 Amount of loss or damage covered by the insurance policy is determined as per
the investigation.
 Claim is settled or dismissed as per the investigation.

1.2.6.3 Information Sheet.

Incident Reporting in Multimodal Transport Operations

In multimodal transport operations, incident reporting is a crucial initial step when cargo
is lost, damaged, or delayed.
Timely and accurate reporting ensures that the chain of accountability is maintained
across different modes of transport and service providers.

The report typically includes the nature of the incident, time and place of occurrence,
mode of transport involved, and any immediate observations. Incident reports should be
filed promptly by the party discovering the issue, whether it’s the carrier, freight
forwarder, terminal operator, or consignee.

This helps to preserve evidence, notify insurers, and initiate the claim investigation
process without delay.

55
Claim Investigation Process.

Once an incident is reported, a claim investigation is launched to determine the extent,

cause, and liability for the loss or damage.

This process involves gathering evidence, interviewing witnesses, reviewing transport

documents, and inspecting the cargo and containers.

The investigation must consider all stages of the cargo journey and assess whether
proper handling and custody procedures were followed. The multimodal nature of
transport makes the investigation complex, as it may involve multiple jurisdictions, legal
frameworks, and service providers.

Parties Involved in Claim Investigation.

Several parties may be involved in a multimodal claim investigation, including the cargo
owner or consignee, multimodal transport operator (MTO), freight forwarders, insurers,
surveyors, port and terminal operators, and legal advisors.

Coordination among these stakeholders is essential to ensure a fair and transparent

investigation.
The insurer and appointed surveyor play a key role in assessing the damage, while the
carrier or MTO is responsible for providing relevant documentation and responding to
inquiries.

Documents Involved in Claim Investigation.

Proper documentation is vital in substantiating claims. Key documents include the

multimodal transport document (MTD), bill of lading, cargo manifest, packing list,
delivery receipts, incident report, photos of the damaged cargo, and records of handling
instructions.

Additional documents may include communication logs, insurance policy documents,

and inspection or survey reports. Accurate and complete documentation helps in
establishing the timeline and responsibility for the cargo at each stage.

56
Joint Survey.

A joint survey is typically arranged when damage or loss is reported, involving

representatives from the insurer, MTO, and cargo owner.

This on-site inspection aims to assess the condition of the cargo and identify the
possible cause of the damage. Conducted at the location where the damage is first
noticed—such as a terminal, warehouse, or consignee’s premises—the joint survey
ensures that all parties witness the findings, minimizing future disputes.
Detailed observations, photos, and preliminary assessments are documented during
this process.

Determination of Loss or Damage.

After conducting the joint survey and analyzing the evidence, the extent and nature of
the loss or damage are determined.

This involves quantifying the physical damage to goods, assessing depreciation in

value, and estimating repair or replacement costs. The cause of damage—such as poor
handling, improper stowage, environmental factors, or negligence—is also identified.
The findings guide the next steps in the claims process, including evaluating the
legitimacy and value of the claim.

Claimant’s Insurance Policy Review.

The claimant’s insurance policy is reviewed to determine coverage scope, conditions,

and exclusions.

The insurer checks whether the policy is active, whether the type of loss or damage is
covered, and if all policy conditions have been met by the insured.

Any clauses related to packaging, declaration of value, or mode-specific risks are

examined. This review is crucial in deciding the insurer’s liability and the extent of
indemnity that may be provided.

Identification of Items Covered by the Insurance Policy.

Not all items in a shipment may be covered under the insurance policy.

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During the investigation, the covered items are identified by comparing the packing list
and shipping documents with the insurance schedule.

This step ensures that claims are filed only for insured goods. If some cargo items are
excluded due to policy terms or undeclared value, those portions are removed from the
scope of indemnity.

Joint Survey Report.

The joint survey report compiles all findings from the inspection and serves as a key
reference document in claim settlement. It includes photographs, descriptions of
damages, probable cause, estimated financial loss, and comments from all involved
parties.

The report must be objective, factual, and signed by all participating surveyors. This
document often plays a decisive role in claim assessment and negotiation.

Evaluation of Loss or Damage.

Based on the joint survey report and other evidence, the insurer or MTO evaluates the
total loss or damage value. This includes calculating the depreciation in market value,
costs of repairs, salvage value, and any consequential losses (if covered).

The evaluation must be fair and supported by documentation, market rates, and
professional assessments. This step helps in ensuring that the compensation proposed
aligns with the actual damage suffered.

Claim Settlement or Dismissal.

After thorough review and evaluation, the claim is either settled or dismissed. If the
claim is validated and covered under the policy or liability of the transport operator,
compensation is processed accordingly.

Settlement can be in the form of monetary reimbursement, replacement goods, or credit

notes. If the claim is denied—due to policy exclusions, insufficient evidence, or
contributory negligence—the reasons are clearly communicated to the claimant.

Disputes may then proceed to mediation, arbitration, or legal action depending on the
contract terms.

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1.2.6.4 Learning Activities

Learning Activities Special Instruction

Determine the various cargo claim investigation report.
Use the sample
investigation report.

Determining the amount of loss ordamage covered as Use the sample

per the investigation of claims. investigation claim
report.

1.2.6.5 Self-Assessment
1. Claim investigation process involves gathering evidence in all stages of the cargo
journey and assess whether proper handling was followed.
Highlight the major parties involved in claim investigation.

2. Proper documentation is vital in substantiating claims and actions.

Highlight the major documents involved in claim investigation as per United
Nations Conference on a Convention on International Multimodal Transport.

1.2.6.6 Tools, Equipment, Supplies and Materials.

 Whiteboard.
 Projector.
 Computer software.
 Sample incident reports, claims.
 Sample policy documents, survey report.

1.2.6.7 References.
 United Nations Multimodal Convention on International Multimodal Transport of
Goods (Geneva, 24 May 1980)

United Nations Convention on International Multimodal Transport of Goods

1980

 Logistics and multi-modal transport – ICS 2015 edition.

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 Multi modal Transport Logistics Trainee Manual, KMA 2018.

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