CHAPTER5:CONTAINERISATIONANDMULTIMODAL

TRANSPORTATION
CONTAINERISATION
History of containerisation???

cont 20’ = ? TEU

cont 40’ = ? TEU
cont 40’ HC = ? TEU
Definition of container (https://www.bic-code.org/)

 Considered as one of those innovations which has had a revolutionary effect on

transport
 Its development has been so rapid since 1965, and the effects have been so
far-reaching
 If all containers in the world were lined up, it would have a length of 108,000
km (www.Maerskline.com)
🞑 This is a third of the way to the moon, equivalent to 18 times the length of
the Great Wall or 2.7 times around the earth at the Equator
 In 1967 an international agreement was unanimously reached by the
International Standards Organisation (ISO) with respect to standard sizes of
containers
Characteristics
According to ISO, a container is a transport unit characterized by:
- A permanent, durable structure, designed for repeated use.
- Capable of being moved by one or more modes of transport, without the need
to handle the cargo itself along the route.
- Facilitates handling operations and transfer from one mode of transport to
another.
- Allows convenient stuffing (loading) and stripping (unloading) of cargo.
- Having an internal volume of not less than one cubic metre.
- A container is not an ordinary package of goods, nor a part of a means of
transport; rather, it is a distinct unit that can be leased or hired in the transport
market.
 Advantages and disadvantages
Flexible scheduling
Flexibility in types of cargo transported
Advantages Reasonable freight rates Disadvantages
High flexibility thanks to the use of High capital investment
internationally standardized containers Geographical limitations
(ISO containers), which can be
Limitations in the types of cargo that
combined with various modes of
can be transported
transport
Imbalance in backhaul (two-way
→ Supports multimodal transport
transport constraints)
→ Provides safe and reliable
transportation solutions, with
convenient door-to-door service for
customers
Structure
It is a rectangular box with six sides mounted on a steel
frame, consisting of the following components:
👉 Frame
👉 Bottom and Floor
👉 Roof Panel
👉 Side Wall
👉 Front End Wall
👉 Rear End Wall and Door
👉 Corner Fittings
 Classification of Containers
By Size By Structure By Purpose of Use By Material
• Small Container (payload < • Open Container • General Cargo Container • Steel Container
5 tons and volume < 3 • Frame Container • Dry Bulk/Bulker Freight • Aluminum Container
cbm) • Tilt Container Container • Plywood Container
• Medium Container (Collapsible/Collapsible- • Thermal Insulated / • Composite Plastic
(payload 5–8 tons and frame Container) Heated / Refrigerated Container
volume < 10 cbm) • Flat Container (Flat Rack) Container
• Large Container (payload > • Rolling Container • Tank Container
10 tons and volume > 10 (Wheeled Container) • Special Container
cbm)
Container Condition Inspection Checklist
 External Inspection of the Container
 Internal Inspection of the Container
 Inspection of Container Doors
 Inspection of Container Cleanliness / Sanitary Condition
 Inspection of Container Technical Specifications
 COLU 200084122 G1
• COL? • 200841? •?
• U? • 22?
Container Codes
◦ DC (Dry cont) (cách viết cũ: GP – General purpose)
◦ HC (High cube)
◦ RE (Reefer)
◦ HR (Hi-cube Reefer)
◦ OT (Open top)
◦ FR (Flat rack)
"USD 1,500 / 20'DC from Cat Lai to Long Beach"
"USD 2,800 / 40'HC from Hai Phong to Hamburg"
"USD 4,500 / 40'HR from Cai Mep to Rotterdam"
Freight Charges in Container Transport

Definition: Freight charges in container transport are the amount of money that
the shipper must pay to the carrier for transporting a container from one place to
another.
Formula:

FCL: Freight = Containers × Rate per Container.

LCL: Freight = Chargeable Weight (W/M) × Rate per W/M.
Types of Freight Rates
→ Commodity Box Rate (CBR)
Freight rate applied to containers based on the specific commodity carried.
→ Freight All Kinds Rate (FAK)
A flat freight rate applied to containers regardless of the type of cargo.
→ Less than Container Load Freight (LCL Freight)
Freight rate applied to consolidated cargo shipments when a single shipper’s
goods do not fill a full container.
Surcharges
Terminal Handling Charges -THC
Equipment Handling charges - EHC
LCL Service charge
Inland Haulage Charge
Delivery order fee
Container imbalance charges
Cleaning fee
Container freight station
FCL vs. LCL in Container Shipping
 FCL – Full Container Load
- Cargo of similar characteristics, sufficient to fill one or
more containers.
- Carrier receives and delivers the container as a whole
(full, sealed).
- One shipper – one consignee.
- If delivery/receipt is at Container Yard (CY), the Bill of
Lading (B/L) is marked CY/CY.
 LCL – Less than Container Load
- Cargo volume is insufficient to fill one container.
- Carrier receives and delivers cargo in smaller lots
(consolidated).
- Multiple shippers – multiple consignees.
- If delivery/receipt is at Container Freight Station (CFS),
the Bill of Lading (B/L) is marked CFS/CFS.
Methods of containerized cargo shipment
• FCL/FCL
• LCL/LCL
• LCL/FCL
• FCL/LCL
FCL shipping process flow
LCL shipping process flow
The Transport Chain
Definition of multimodal transport
 An multimodal or
combined transport
service entails the use
of more than one mode
of transport offered by a
single operator acting
as principal
 Any mode of transport –
road, rail, inland waterway,
sea or air – may be
involved in a multimodal
transport operation
 The efficiency of the
whole transport journey
depends on each link in
the transport chain being
Characteristics
 At least two different modes of transport involved
 One Multimodal Transport Operator (MTO) – the
contracting carrier/shipper’s principal
 Goods move continuously – usually containerized cargo
 Single transport document issued
 Freight: “Through freight” agreed upon by the parties
 Liability for the goods during the entire carriage: borne by
the MTO
The Difference Between Multimodal
And Intermodal Transport
Intermodal Transport Service
The role of multimodal transport
 Establishing a Door-to-Door transport focal point
 Creating new transport services, contributing to job creation
 Efficient utilization of transport equipment, handling facilities, and
infrastructure; adoption of new transport technologies and integrated,
effective management
 Reducing delivery time
 Lowering transport costs
 Simplifying procedures and documentation
Legal Systems
 International convention
 UNCTAD/ICC Rules for Multimodal Transport Documents (1992)
 United Nations Convention on International Multimodal Transport of Goods
(1980)
 ASEAN Framework Agreement On Multimodal Transport
 National legal system
 Vietnam Maritime Code 2015
 Decree No. 87/2009/NĐ-CP
 Decree No. 89/2011/NĐ-CP
 Consolidated Document No. 03/BVHN-BGTVT
 General legal documents: Civil Code 2015, Commercial Law 2005, …
Forms of Multimodal Transport
 Sea–Air Transport
 Road–Air Transport
 Rail–Road Transport (Piggyback: TOFC/COFC)
 Rail–Sea Transport (Land Bridge)
 Road–Sea Transport (Ro-Ro, Ferry Services)
 Rail–Road–Inland Waterway–Sea Transport
Multimodal Transport Operator
 Definition:
The Multimodal Transport Operator (MTO) is the sole party responsible for the
goods throughout the entire transport process.
It refers to any person who, on his own behalf or through another person acting
on his behalf, concludes a contract of multimodal transport and acts as a
principal, or on behalf of the consignor, or the carriers involved in multimodal
transport operations, and assumes responsibility for the performance of the
contract.
(UNCTAD/ICC Rules for Multimodal Transport Documents)
Classification of MTO
 Vessel Operating Multimodal Transport Operators

This category includes sea carriers who own and operate vessels, but also
extend their business to provide multimodal transport services. These carriers
do not own or operate road, rail, or air transport means; instead, they must
enter into contracts to subcontract carriage on those segments.

 Non – Vessel Operating Multimodal Transport Operators – NVO –

MTOs

This category refers to the following service providers:

- Owners of transport means other than seagoing vessels, who still provide
through multimodal transport services.
- Enterprises engaged in transport-related services such as handling,
warehousing.
- Public carriers without vessels.
- Freight forwarders.
MTO’s liability
UNCTAD/ICC Rules for Multimodal Transport Documents (1992),
Chapter III – Responsibility of the MTO.
 Period of liability
 Basis of liability
 Limitation of liability
Period of liability
 Rule 4.1 (Period of responsibility)
The responsibility of the MTO for the goods under these Rules covers the
period from the time the MTO has taken the goods in his charge to the time of
their delivery.
 Rule 4.2 (Liability for servants, agents, and other persons)
The multimodal transport operator shall be responsible for the acts and
omissions of his servants or agents, when any such servant or agent is acting
within the scope of his employment, or of any other person of whose services
he makes use for the performance of the contract, as if such acts and
omissions were his own.
Basis of liability
 Rule 5 – Basis of Liability
Presumption of liability
The multimodal transport operator shall be liable for loss of, damage to or delay
in delivery of the goods if the occurrence which caused the loss, damage or
delay took place while the goods were in his charge, unless he proves that he,
his servants or agents or any other person referred to in Rule 4.2 took all
measures that could reasonably be required to avoid the occurrence and its
consequences.
Delay in delivery
Delay in delivery occurs when the goods have not been delivered within the
time expressly agreed or, in the absence of such agreement, within the time
which it would be reasonable to require of a diligent multimodal transport
operator, having regard to the circumstances of the case.
Compensation for delay
If the goods have been delivered, the multimodal transport operator shall not be
liable for loss caused by delay in delivery unless the consignee has given notice
of loss within 60 consecutive days after delivery of the goods.
Limit of liability
 Rule 6 – Limitation of Liability
General limitation
When the multimodal transport operator is liable for loss of, or damage to, the
goods, such liability shall not exceed 666.67 SDR per package or unit, or 2 SDR
per kilogram of gross weight of the goods lost or damaged, whichever is the
higher.
Special declaration of value
However, the consignor may make a special declaration of the value of the
goods and pay a corresponding freight surcharge if required. In such case, the
MTO will be liable up to the declared value, unless he proves that the declared
value is higher than the actual value.
Delay in delivery
For loss resulting from delay in delivery, the liability of the MTO shall not exceed
the amount of the freight under the multimodal transport contract.
Higher liability
The limits mentioned above shall not apply if it is proved that the loss, damage,
or delay resulted from an act or omission of the MTO done with the intent to
Transport Documents
 FBL (FIATA B/L)
 COMBIDOC (BIMCO, VO-MTO uses)
 MULTIDOC (United Nation)
 B/L for combined transport or port to port shipment
Current Multimodal Transport Models in Vietnam

 Rail – Road – Inland Waterway – Sea Transport Model

 Road–Rail Combined Transport (2R / R-R)
 Road–Air Combined Transport (R-A)
1.Rail – Road – Inland Waterway – Sea Transport Model

 It is the most common transport model for international trade.

 Goods are first transported by rail, road, or inland waterway to the seaport
of the exporting country. From there, they are shipped by sea transport to
the port of the importing country, and then delivered to the consignee
located in the hinterland by road, rail, or inland waterway transport.
2.Road–Rail Combined Transport (2R / R-R)

 The Road–Rail Transport Model combines the high flexibility of road

transport using trucks with the large capacity of rail transport using trains.
This model integrates the mobility and flexibility of road transport with the
safety, speed, and high payload capacity of rail transport.
3. Road–Air Combined Transport (R-A)

 The Road–Air Transport Model (R-A) combines the high flexibility of road
transport using trucks with the high safety and long-distance, short transit
time advantages of air transport using aircraft.
 The R-A model integrates the mobility and flexibility of road transport with
the long-haul capability of air transport, also commonly referred to as a
pick-up and delivery service.
*transit time = thời gian vận chuyển
long-haul capability = khả năng vận chuyển đường dài của máy bay
pick-up and delivery service = dịch vụ giao nhận đầu – cuối
Incoterm 2020
 EXW - Ex Works
 FCA - Free Carrier
 CPT - Carriage Paid To
 CIP - Carriage and Insurance Paid To
 DAP - Delivered at Place
 DPU - Delivered at Place Unloaded
 DDP - Delivered Duty Paid
 Freight charges

LCC LCC
freight 1 freight 2 Total charge
exporter importer
 Example: Air - Truck
Stage 1 – Domestic Stage 2 – International Stage 3 – Inland Transport in Stage 4 – Import Customs
Transport in Vietnam Transport the EU and Final Delivery

• Cargo consolidation at • Direct flight or transit to • Delivery to road hauliers. • Customs clearance (if not
warehouse. Frankfurt Airport • Trucking service to completed at the airport).
• Customs clearance at Tan (Germany), Charles de consignees’ warehouses in • Final delivery to
Son Nhat or Noi Bai Gaulle Airport (France), neighboring EU countries. consignee.
airport. etc.

 High speed.
 Suitable for high-value cargo requiring urgent
delivery.
 Example: Sea - Rail
Stage 1 – Domestic
Transport in Vietnam
Stage 2 – International
Transport
Stage 3 – Inland Transport
within the EU
Stage 4 – Import
Procedures
• Cargo consolidation at • Ocean freight from • Transshipment of • Customs clearance in
warehouse. Vietnam → Rotterdam containers onto rail at the EU (typically at the
• Customs clearance for (Netherlands) or the seaport terminal. first point of entry).
export at port of Hamburg (Germany). • Rail transport to inland • Final delivery to
departure (e.g., Hai • Ports of discharge are EU countries such as consignee’s warehouse.
Phong, Cat Lai, etc.). usually well connected Germany, France,
to the EU rail network. Poland, etc.

 More cost-effective compared to air

freight.
 Suitable for heavy and large-volume
cargo.
Economic and Service Characteristics of the
Modes of Transport
 Air: very high-value, low-volume, time-
sensitive products
 Truck: moderately high-value, time-
sensitive products including semi- finished
& finished
 Rail: low-value products including many
raw materials
 Water: very low-value products moved
domestically; high-value if moved
internationally
 Pipeline: generally limited to
petroleum products & natural gas;
sometimes minerals (with water)