{"id":398,"date":"2019-04-24T15:18:13","date_gmt":"2019-04-24T15:18:13","guid":{"rendered":""},"modified":"2019-06-10T19:47:03","modified_gmt":"2019-06-10T19:47:03","slug":"multimodal-carriage-of-goods-0028","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/free-law-essays\/international-law\/multimodal-carriage-of-goods-0028.php","title":{"rendered":"Multimodal Carriage of Goods: Advantages and Disadvantages"},"content":{"rendered":"

Critically analyse the advantages and disadvantages of using a multimodal transport system in the carriage of goods. <\/h4>\n

Introduction: <\/strong>Nowadays,
\nthere is a growing tendency, where most of the shipments are carried under
\ncontract of carriage with the involvement of multimodal or combined transport. In the direction of
\nintegrated approach towards transport, it is considered
\nas the
\nfirst step,[1]<\/a>
\nfor which transportation of goods is now easy between
\ncontinents, and when it is difficult or impossible to use just one mode of
\ntransport. Within the multimodal transport (MT) system, the use of containers, roll-on\/roll-off
\n(ro-ro) vehicles, and barges[2]<\/a>
\nhas reduced risk and saved money and time.[3]<\/a>
\nWith the support of information technology, the transport management improves,
\nand innovative ship and vehicle like articulated lories and cellular ships were
\nintroduced to the transport system which helped MT system to be formed. <\/p>\n

On
\nthe other hand, MT system has brought some legal chaos. It was a new urgency to
\nanswer to the questions like who to sue (actual carrier or freight forwarder or
\ncontacting carrier) if the delivery is delayed or goods are lost or damaged,
\nwhere to sue, time limit for initiating action, the basis of the liability and
\nso on. So, the purpose of this paper is
\nto critically analyse MT\u2019s advantages and disadvantages in carriage of goods
\nwhere regulating Conventions and Acts will have significant impact. <\/p>\n

Definition: <\/strong>Before going into the main discussion, it is essential to know some of the basic definitions. International MT is defined as the carriage of goods by at least two different modes of transport under a \u2018MT contract\u2019,[4]<\/a> where the multimodal transport operator (MTO) takes the responsibility of goods form a place in one county to deliver it to another place of different country.[5]<\/a>  MTO is a person who concludes a multimodal transport contract and assumes responsibility for the performance of the contract as a carrier.[6]<\/a> However, in through transport contract, the carrier shall contract as the merchant\u2019s agent only and liable for any loss or damage between the port of loading and the port of discharge, but not for other parts of the carriage, even though the freight for the whole carriage was collected by him.[7]<\/a> In captain<\/em><\/strong> case, Cargo damaged while stored in Singapore responsibility of the Carrier was limited to the part of the transport performed by him.[8]<\/a> <\/p>\n

Reasons why MT regime is
\nimportant: <\/strong>According to The United Nations Conference on Trade and
\nDevelopment (UNCTAD), since the
\nmid-1960s, there has been an enormous growth in Containerised transport as MT
\nfor carriage of goods, which will continue through future.[9]<\/a> It was also pointed out by UNCTAD that
\nin 2000 container usage was 225.3 million where, as in 1965 it was zero.[10]<\/a><\/p>\n

In the same year, the United Nations Commission on
\nInternational Trade Law (UNCITRAL), noted
\nthat, in 2001, USA carried about 68% of the value of all US foreign waterborne
\ncargo regarding container liner industry (out of a total of US$720 billion, its
\nvalue is of US$490 billion)[11]<\/a> of which 75- 80% was carried by MT. In
\n2000, around 60 million containers were carried, where 50% of them on a
\nmultimodal basis.[12]<\/a><\/p>\n

Through Bills of Lading:<\/strong>
\nThis type of bill involves more than one carrier, and trans-shipping of the
\ngoods at an intermediate port, where original carrier, is responsible for
\nentire voyage, or undertakes responsibility for the part of the voyage, or acts
\nas agent for other carriers involved.[13]<\/a> There
\nis an ambiguity, regarding the issue of being document of title. Sometimes, it
\nbecomes essential to include Himalaya<\/em><\/strong> or circular indemnity<\/em><\/strong>
\nclauses in bills of lading (B\/L) to protect the subcontractors.[14]<\/a>
\nMoreover, it will be difficult to identify responsibility of principle or
\nparticipating careers, therefore, difficulty of proving the place where the
\ndamage has occurred.[15]<\/a> <\/p>\n

Combined Transport Bills: <\/strong>In MT, actual contractor can
\ntake separate B\/L, waybills or other transport documents from the separate
\nactual carriers who are his subcontractors. Under the combined transport bills,
\nthe cargo owners will have contractual right for recovering damage or loss
\noccurred by the contractual career, and as it regulates all stages of carriage,[16]<\/a>
\nit will also be used as right of recourse against actual carriers.[17]<\/a>
\n <\/p>\n

However, to enjoy the
\ncontractual right, this type of B\/L should be a document of title \u2013 by which
\nproperty[18]<\/a> and possession[19]<\/a>
\nin the goods mentioned in the bill can pass, and there is a huge debate of
\nbeing a document of title or not. A \u2018received for shipment\u2019 B\/L can be a
\ncombined transport B\/L, and by annotating it with the date of shipment it will
\nbecome shipped bill, and constitute a document of title.[20]<\/a>
\nActually, the thing that matters is performing careers\u2019 capacity to control
\ndelivery, which was illustrated in Spectra
\n<\/em><\/strong>case,[21]<\/a> where it was stated that
\nby obtaining a right to give direction to the warehouseman to delivery, a party
\ncould become a bailee of goods.[22]<\/a>\n<\/p>\n

Impact of COGSA 1992: <\/strong>Though, COGSA 1992 has not given definition of B\/L, s. 1 (2) (b)<\/em><\/strong> stats that it applies to \u2018received for shipment bills\u2019. However, we have already discussed how received for shipment bills becomes shipped B\/L, and regarded as document of title. Moreover, there is no reference of contract being by sea, but contract of carriage contained or evidenced by B\/L.[23]<\/a> So, the document will regard as document of title between shipment and competition of voyage, therefore, allowing the lawful holder also to sue for the damages occurred outside the sea carriage period.[24]<\/a> If it doesn\u2019t regard as B\/L, then a question may arise whether combined transport bills may fall within the scope of COGSA 1992<\/em><\/strong> relating to waybills, but still there will be risk regarding interpretation. The document which identifies the person to deliver the goods mentioned in the contract is a waybill,[25]<\/a> whereas, with combined transport B\/L delivery will be made if such a document is produced. So, it will be a problem if the person to delivery is not identified. It is evident form the Act that combined transport waybill is excluded from the scope of the Act, which addressed waybills as a receipt for goods of contract of carriage by sea.[26]<\/a> <\/p>\n

Liability System: <\/strong>For the absence of any uniform Convention, currently,
\nprovisions of some unimodal conventions are dealing with multimodal transport,
\nfor example art. 31 of Warsaw
\nConvention<\/em><\/strong> for air transport, for rail COTIF-CIM 1999 <\/em><\/strong>and art.
\n2 of CMR convention<\/em><\/strong>.[27]<\/a>
\nHowever, Geneva Convention on
\nInternational Multimodal Transport of Goods (MT Convention) 1980<\/em><\/strong> was
\ndrawn up by UN to introduce a set of uniform rules.[28]<\/a>
\nThis Convention introduced a modified uniform liability system, limited
\nliability applies to limited liability along with uniform liability.[29]<\/a>
\nArt. 16 <\/em><\/strong>provides a liability
\nfor fault with reversed burden of proof similar to Hamburg Rules<\/em><\/strong>.[30]<\/a>
\nNonetheless, to some extent this system makes the area of multimodal transport
\ncomplex. It provides two limitation
\nfor unlocalised damages. Firstly, if MT involves carriage by sea or by inland waterway,
\nMTO will be liable for 920 SDRs per package or other shipping unit, or 2.75 SDRs
\nper kg, whichever is the higher.[31]<\/a>
\nIn World<\/strong><\/em>[32]<\/strong><\/em><\/strong><\/a> case
\nhis limit was considered.[33]<\/a>
\nThis figure is about 10% higher than Hamburg
\nRules<\/em><\/strong>[34]<\/a> and about 20% higher than Hague-Visby (H-V)<\/em><\/strong> Rules.[35]<\/a>
\nSecondly, if MT does not involve carriage by sea or by inland waterway, the the limitation amount is raised to a higher level of
\n8.33 SDR per kg (same as CMR<\/em><\/strong>
\namount).[36]<\/a> However, the limits of
\nliability will be determined by reference to any applicable International
\nConvention or mandatory national law which provides a higher limit of liability
\nthan that of the 1980\u2019s MT Convention<\/em><\/strong>
\nfor localised loss.[37]<\/a>
\nArts. 18 and 19<\/em><\/strong> clearly apply a network-like system by derogating the principle of a
\nunitary system.[38]<\/a> Moreover, an improvement in the area, MTO will be
\nliable for delay regardless of the stage of occurrence delay, therefore, no
\nneed of proving for the claimant the leg where the delay occurred.[39]<\/a>
\nThe Convention did not solve all the significant problems.[40]<\/a>
\nMode of transport has not been defined, hence, it
\nis not clear whether it is restricted to the vehicle (e.g. ship, plane),
\nthe medium (e.g. sea, air) or, both.[41]<\/a> As
\nthe Convention is seen overly
\nconsignor-friendly, it has not attracted the required number of signatures to
\ncome into force[42]<\/a>
\nand parties of combined
\ntransport needs to come up with the solution of their problem. <\/p>\n

However, there are some situation in MT of carriage such as, road carriage to the seaport Felixstowe; storage of goods following reception by, the sea career and combined transport career in Birmingham; storage of goods pending collection by road career where no International Convention apply.[43]<\/a> Nonetheless, national law like Unfair Contracts Terms Act 1977<\/a><\/em><\/strong> may apply in these stages and it becomes difficult to find out where the loss or damages occurred in containerised goods, on which compensation payable to cargo claimant may depend. Another problem is to determine which career is liable for loss if the freight forwarder doses not act as principal with whom the shipper has contract.[44]<\/a> To get rid of this kind of problems, it becomes essential to introduce uniform system in the operation of the carriage by MT.<\/p>\n

ICC Rules 1975:<\/strong> These rules are applicable to every contract
\ninvolved for the performance of combined transport (CT) of goods, evidenced by
\nCT document.[45]<\/a>  When CT is issued to CTO, he undertakes to do
\nall the steps necessary towards MT from the time of taking charge of the goods
\nto delivery, and he will be liable for his own acts or omission, as well as his
\nagents or servants or other persons whom he involved for the performance of the
\ncontract.[46]<\/a> This is how CTO takes the
\nresponsibility of the omission or acts of the sea and land carriers, whom he
\ninvolved in MT of goods, even though he was not physically involved with MT of
\ngoods.[47]<\/a>
\nWhen the stage where the loss or damage occurred is unknown, the limit of
\nliability is  30 francs per KG,[48]<\/a>
\nbut when known international convention or national law provisions related to
\nthe stage will be applicable.[49]<\/a>
\nHowever, complex question of causation may arise as to who will be liable when
\ndelay occurs more than one stages by successive carriers. CTO will be liable
\nonly when the stages of delay are known,[50]<\/a>
\nthis area remains uncertain. <\/p>\n

UNCTAD\/ICC Rules 1992: <\/strong>UNCTD and ICC joined forces in 1992 to introduce new rules for MT transport \u2013 a movement away liability regime of H-V Rules<\/em><\/strong> to Hamburg Rules<\/a><\/em><\/strong>.[51]<\/a>  <\/strong>These Rules are purely contractual in nature and apply only if they are incorporated into a contract of carriage.[52]<\/a> When they are incorporated, any additional terms of the combined transport contract that conflicts with these will be superseded.[53]<\/a> However, to be effective they must not contradict the mandatory provisions of international conventions or national law which are applicable to the multimodal transport contract.[54]<\/a> These rules are based on MT Convention (modified network liability system).[55]<\/a> Under these rules for ensuring delivery of goods, MTO undertakes to perform or procure to perform all necessary acts and will be liable for the loss, damage or delay in delivery for the negligence of his own, his servants or agents or any other person referred to in Rule 4.1, unless the proves otherwise.[56]<\/a>  Moreover, additional defences such as error in navigation and fire are available for liability in cases of sea carriage or by inland waterways.[57]<\/a> Limitation of liability figure is 2 SDR per kilogramme or 666.67 SDR per package or unit of gross weight of the goods lost or damaged, whichever is the higher will apply in case of carriage by sea or inland waterways (same as Hague \u2013 Visby figure), otherwise, 8.33 SDR per kilogramme of gross weight of the goods lost or damaged will be applied (CMR<\/em><\/strong> package limit).[58]<\/a> For localised loss in network liability system, the provisions of an applicable international convention or mandatory national law will determine the limit of liability of the MTO for such loss or damage. [59]<\/a> Time limit for claiming the loss or damage is 9 months,[60]<\/a> but it will not apply if H-V Rules<\/em><\/strong> or CMR <\/em><\/strong>applies to the contract. Since major seafaring states did not support Hamburg Rules, it seems very unlikely that these Rules will be used widely in future.[61]<\/a><\/p>\n

Standard B\/L: <\/strong>Most container operators have their own standard forms of bills. Further, standard forms of contract were introduced by Baltic and International Maritime Council (BIMCO)<\/em><\/strong>, namely, COMBICONBILL 1995\/2016<\/strong>, MULTIDOC 95\/2016<\/em><\/strong>.[62]<\/a> A modified network system to both liability and limitation is Applied by COMBICONBILL<\/em><\/strong>.[63]<\/a> MTO will be liable between the time he receives the goods into his charge and the time of delivery, and responsible (however, eight specific defences available for MTO) for the acts and omissions of anybody he uses for the performance of the MT transportation.[64]<\/a> The change it has brought, regarding the career\u2019s liability, he will be held liable for loss or delay (not specifically mentioned in H-V Rules<\/em><\/strong>) which will be the amount not exceeding, the value of the goods, or the freight; whichever is the lesser.[65]<\/a> The particular compulsory regime will be applied, if it is satisfied that, while carrying the goods, the damages were done by certain transport mode and that the carriage is controlled by a compulsory unimodal (international or national) regime.[66]<\/a><\/p>\n

Though,
\nICC
\nRules<\/em><\/strong> applied to MULTIDOC<\/em><\/strong>,
\nthe modifications are there. Firstly, where the inland waterways or sea is the
\nplace of the damages, loss or delay, the exceptions in art. IV (2) of H-V Rules<\/em><\/strong>
\nwill be applied, except (q)\u2019s heading. Secondly, the maximum package limit is US
\n$500, when the US COGSA 1936<\/em><\/strong> is applied.[67]<\/a>
\nFinally, if the consignor declared in writing about interest in timely
\ndelivery, which was acceptance by MTO also in writing, only then the MTO can be
\nheld liable for the delay, otherwise not.[68]<\/a><\/p>\n

Hamburg
\nand Hague-Visby Rules: <\/strong>The Hamburg
\nRules apply to sea carriage and are less restrictive[69]<\/a> in nature and favors cargo owners.
\nOn the Other hand, HV rules protects third parties which is not a major factor
\nin new regime. However, Hamburg Rules require contract for carriage
\nmust by sea and must be between two different states,[70]<\/a> which is like HV Rules.[71]<\/a> Carrier will be responsible during, the charge of
\nthe goods at the port of loading, the carriage, at the port of discharge.[72]<\/a>
\nIn the MSC Amsterdam<\/em><\/strong>, container
\nterminal after discharge was included, which was held not part of The Hague
\nRules.[73]<\/a>
\nEven where it is actually performed by subsequent
\ncarriers, for the whole carriage, art. 10 of Hamburg Rules<\/em><\/strong> makes the
\ninitial carrier responsible, which is similar to the ICC recommended Uniform
\nRules and CMR for MTDocument.[74]<\/a> So, it makes the
\ncargo-owner free from the task of establishing the exact nature of the
\nrelationship between a series of carriers. The career\u2019s general liability is for the acts and
\nomissions of his agents or servants.[75]<\/a>
\nHowever, whether this
\nextends to the negligence of the carrier\u2019s independent contractors is not clear,
\nfor example, as was decided to be the case in Riverstone<\/em><\/strong>, <\/em>where refits were concerned.[76]<\/a> Under art. III (1) and (2) of Hague-Visby<\/em><\/strong>, there is no explicit
\nliability for delay, and no list of excepted perils,[77]<\/a>
\nyet defence is available for the career regarding live animals in art. 5(5)<\/em><\/strong>.[78]<\/a>
\nFor containers, the art. 6(2) of
\nHamburg Rules<\/em><\/strong> is similar to H-V
\nRules<\/em><\/strong>, where by agreement or usage of trade can cover deck cargo.
\nMoreover, the purpose of the both rules is to protect the actual carrier from
\ntort claims.[79]<\/a> Regarding a carrier’s liability for his servants or
\nagents intentional or reckless acts, art. 8 of Hamburg Rules<\/em><\/strong> is silent.
\nSo, it will depend on the national courts to determine when their acts can be
\nseen, as career\u2019s act, and in this situation, there is a high possibility that
\nthey might not limit career\u2019s action against them.[80]<\/a> Despite all these, the Hamburg
\nRules<\/em><\/strong> remains essentially a sea convention, although it can cover
\ncarriage contracts of MT.[81]<\/a><\/p>\n

The Rotterdam Rules: <\/strong>Itwas adopted by the General Assembly of
\nUnited Nations in 2008.[82]<\/a> It
\napplies not only to carriage of goods by sea,[83]<\/a> adopted
\nby UNCITRAL
\nConvention<\/em><\/strong> in 2009, extended towards \u2018door-to-door\u2019[84]<\/a>
\nmultimodal operations[85]<\/a>
\nbecause the place of delivery or port of discharge may involve carriage by
\nother modes in addition to sea carriage, and in different states.[86]<\/a> This
\nrequirement under art. 5 (1)<\/em><\/strong> emphasizes the Convention\u2019s \u201cmaritime plus\u201d
\ncharacteristic and may be helpful in avoiding conflict with other Conventions.[87]<\/a>  However, regarding the nature and context of
\nadditional carriage (whether it is for air or land or regarding pickup and
\ndelivery, or related to border crossing), no limitation criteria are mentioned.[88]<\/a> It
\nis worth mentioning that unlike H-V Rules<\/em><\/strong>, the application of the
\nConvention does not depend on the requirement of issuing B\/L, but on limited
\ndocumentary requirement.[89]<\/a>
\nThe regime will still apply to a consignee, controlling party or holder who is
\nnot a party to excluded agreement, even where an excluded contract is involved.[90]<\/a> In
\nthis situation, there is no guidance provided by the Convention on which party
\nis entitled to sue for damage or loss to goods.[91]<\/a> According
\nto art.
\n18 (a)<\/em><\/strong>, the career will be liable if any loss, damage or delay happens
\nfor the fault of any performing party.[92]<\/a>
\nResponsibility of the career lasts form the receipt of the goods by him to
\ndelivery,[93]<\/a>
\n but the port regulators may force the
\ncareer to take the goods from or deliver to port authorities before the final
\ndelivery. There remains a question whether damages under those authorities
\nshould reduce the responsibility of the career. It is apparent that the parties
\nare free to determine the point to takeover and delivery of goods, since the
\ncontractual scope of the contract is not controlled by the Convention.[94]<\/a>  When sued in contract or tort, the Convention
\nwill give the career and certain other persons the benefit of defences and
\nlimits,[95]<\/a>
\nwhich is also extended to the master, crew, the maritime performing career and
\nparty,[96]<\/a>
\nany other person performing services on board the ship and career\u2019s employee.[97]<\/a> One
\nof the most remarkable changes brought by the convention is introduction of
\nelectronic alternatives of B\/L, which will be functionally equivalent to their
\npaper counterparts.[98]<\/a>
\nMoreover, unlike Hamburg Rules<\/em><\/strong> and Hague rules<\/em><\/strong>, generally, no conversion
\nof \u2018shipped B\/L\u2019 from \u2018received for shipment\u2019 is needed.[99]<\/a> The
\nConvention goes further to protect consignee of a non-negotiable document which
\nneeds to surrender for delivery of the goods and the particulars are favors the
\nconsignee.[100]<\/a>
\nFurther, protection is also provided for the consignees or holder from the
\ncareer from ascertaining against them that the freight has not been met, where
\nthe contract particulars indicate \u201cfreight period\u201d.[101]<\/a> Even
\nmore radical, it is possible to transfer holder\u2019s or consignee\u2019s right of
\ncontrol by giving a notice to career, including electrical notice.[102]<\/a> <\/p>\n

There
\nare some other problems with multimodal transport system. In multimodal
\nliability regimes, it is difficult to know when damage has occurred and there
\nis no unified regime for different legs, but regimes existed for road and rail
\ncarriage. Rotterdam<\/em><\/strong> cares for them by leaving them place, nonetheless,
\nits efficacy is limited as a \u2018door-to-door\u2019 regime.[103]<\/a> A
\nuniform multimodal liability regime would have to take higher liability limits
\nthan road and rail liability limits, which are higher than H-V Rules<\/em><\/strong>, therefore,
\nhampering the competitiveness.[104]<\/a> Conflict
\nwith another convention may happen, as parties can entirely determine whether to
\nadd other modes of transport.[105]<\/a> \u2018Network\u2019
\nsolution adopted by Rotterdam<\/em><\/strong> resolves this problem by stating that different
\nregimes apply to each stage of the multimodal operation.[106]<\/a>
\nIn spite of all these, it is very difficult to assess the prospective success
\nof the Convention since by 1 July only three States[107]<\/a>
\nhave signed for ratification and still twenty more to ratify.[108]<\/a> <\/p>\n

Conclusion:<\/strong> <\/strong>It
\nis apparent from the above discussion that MT industry has been taking lots of
\ninitiatives to improve its services and overcome problems. Though, carriage of
\ngoods by MT is very sophisticated, the legal infrastructure is not that much.
\nTo any MT contract, lots of transport Conventions are possibly applicable which
\ncreate further confusion in using the appropriate Convention in resolving legal
\ndisputes between contracting parties, as a result waste of a huge amount of
\nmoney. Till now, no general acceptance has obtained through mandatory
\nconvention or private voluntary rules, or by any uniform or network proposals.
\nNonetheless, the best solution to this is to abolish individual Conventions by
\nintroducing a uniform one, which can be applied for all MT contracts. This may
\ntake a long time to introduce such one, but in the long run, costs and many
\ncurrent problems can be solved.<\/strong><\/p>\n

Table of Cases<\/h2>\n

UK cases:<\/h3>\n