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Containerisation and multimodal transportation

In India

Submitted by:

Attri Borgohain (06)

Manish Bhadauriya (17)MBA PSM SEM III

CONTAINERISATION

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Containerization

Containerization (or containerisation) is a system of intermodal freight transport using

standard intermodal containers as prescribed by the International Organization for

Standardization (ISO). These can be loaded and sealed intact onto container ships, railroad

cars, cargo planes, and semi-trailer trucks.

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The concept of international multimodal transport covers the door-to-door movement of

goods under the responsibility of a single transport operator. Although the concept might not

be new, it developed with the container revolution initiated in the late 50's by Malcom

McLean and his trucking operations.

Multimodal Transportation

Air

Truck

Rail

WaterPipeline

Intermodal

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The emergence of the container technology and of the multimodal transport concept camefrom and facilitated growing international trade. Trade and transport are inextricably

linked: efficient transport services are a prerequisite to successful trading.

Containerisation helps in unitisation of cargo, safety and security of cargo and avoidance

of cargo.

Multimodal transport system facilitates to develop a system of carriage of these

containers in in the international trade a uniform manner.

With the advent of multimodal transportation, however, shipping line owners can finalise

a single contract for affreightment with multimodal transport operators. In such cases,

these operators take care of the entire transportation from origin to destination.

The integration of these two processes of containerisation and multimodal/intermodal

transportation reduces time and cost


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UNCTAD and Multimodal Transportation

The general aim of UNCTAD is to promote international trade and economic

development, especially those of developing countries.

Hence, the economic, commercial and related legal aspects of maritime transport

including ports and connected inland transport are necessarily subjects of direct concernto UNCTAD.

Subsequent decisions of various United Nations bodies have considerably expanded the

scope of competence of UNCTAD to embrace the entire spectrum of the transport sectors

involved in multimodal transport operations and in the standardization of containers.

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UNCTAD and Multimodal Transportation

In pursuing its mandate, UNCTAD has achieved a number of recognized results in the field ofmultimodal transport:

The elaboration of the Multimodal Transport Convention (1980),

The elaboration of model multimodal container tariff rules

A constructive participation with the private sector towards the elaboration of new rules on

multimodal transport documents,

The monitoring -on behalf of developing countries- of technological development in

containerization,

The organization of groups of experts to discuss issues on multimodal transport,

The implementation of technical assistance activities as well as the creation of awareness

on the subject through the organization of workshops and seminars

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Multimodal Transportation in India

In the 90s India began an ambitious program aimed at the transformation of itseconomy towards a market driven export oriented system. Since then the economic

growth of the country has been spectacular.

This places on the infrastructure sector significant challenges because in order to sustain

such a rapid growth, the provision of a seamless, cost effective, fully integrated

multimodal transport system seems to be the only feasible possibility.

The Multimodal Transportation of Goods Act (MTGA) was enacted in 1993 by the

Government of India with an objective to facilitate the movement of goods from any

location within the country to any place outside India.

It allows the road, rail, inland waterways, deep sea and non vessel owning containercarriers (NVOCC) to register as Multimodal Transport Operators (MTO) with the

Director General of Shipping and can issue a multimodal transport document

(MTD) which replaced the earlier combined transport document (CTD) as a basic

document which would be treated as a negotiable instrument for documentary credit by

the Banks.

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Containerization and the Multimodal Transportation in India

Containerization was introduced for the first time in Indian domestic market way back

in 1966 by the Indian railways to provide door to door service to their customers and attract

cargo from roadways. They used containers with a 5 ton payload.

The necessary infrastructure required for multi modal transport took a longer time then

expected to develop. It was only in 1987 that the Government of India realized the

importance of containerization and started constructing a satellite port at Bombay which

commenced operations in 1988 and was christened The Jawaharlal Nehru Port (JNP) after

the first Prime Minister of India.

Subsequently a Corporation was created by the Indian railways for inland haulage of

containers by rail called CONCOR which constructed the first ICD at Tughlakabad in New

Delhi. CONCOR connects and operates these ICDs to the gateway port by rail in India

to enable smooth and seamless movement of containers.

ICDs are interfaces between connecting modes of transportation and offer a total package of

activities to handle export and import containers and general cargo flows between

road, rail and waterways in a cost effective manner with intermediate storage thrown in,

along with some value addition services like consolidation of cargo, grading, sorting,

packaging, custom examination etc.

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Container traffic outperformed in FY2010

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Rail Road Transportation

Inland transportation of containers is the biggest challenge faced by multi modal

operators in India. Presently about 40% of the containers are moved by railwayswith the remaining percentage by roadways with no usage of inland waterways.

The development of road and rail networks took place at a time when containerization

and globalization were at their starts hence it is not surprising that they are unable

now to cope up with the strain deriving from containerized global cargo.

Today Indian Railways have excellent coverage in with almost all parts of the country.

It carries both passengers and freight in a cost effective manner.

Though economically priced the Railways have not been able to attract freight from

the road network mainly due to insufficient connectivity and its failure to maintain

scheduled transit times apart from insufficient supply of container wagons and poor

customer service.

Presently in spite of several shortcomings and bottlenecks the roadway system

continues to carry over 57% of the total container traffic and continues to grow

at a rate of 11.4%

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YEAR BY RAIL BY ROAD

1994

1995

1996

1997

1998

1999

2000

2001

2002

20032004

2005

0.36

0.45

0.53

0.64

0.73

0.77

0.88

1.16

1.04

1.641.37

1.72

0.68

0.8

0.9

1.04

1.13

1.16

1.29

1.71

1.43

2.261.98

2.21

BREAK UP OFMULTIMODAL CONTAINER TRANSPORTATION

(In Million TEUs)

(Source: Ministry of Surface Transport)

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Maritime transportation

Maritime transportation, similar to land and air modes, operates on its own space, which is at

the same time geographical by its physical attributes, strategic by its control and commercial

by its usage.

The physiography of maritime transportation is composed of two major elements, which are

rivers and oceans.

Unlike Europe, India does not enjoy an efficient inland waterway system or anextensive coastal short sea transport so almost the entire domestic transportation is

conducted by rail and road networks.

The Inland Waterways Authority of India (IWAI) was set up in 1984 to develop,

maintain and administer the waterways while The Central Inland Water Transport

Corporation (CIWTC) was set up to undertake freight transport. However, less than 1% ofthe domestic cargo is moved via this mode.

A major plan (NMDP) is underway to revamp and develop the ports. Port Blair has been has

been identified as the 13th major port. Draught restriction is a major constraint that does not

accommodate bigger vessels.

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For the smooth functioning of the multimodal transportation all the above mentioned

modes of transportation has to be developed to cater to the rising export and import

demands of the country.

Both infrastructure and the superstructure supporting the different modes of

transportation need to be given due importance and concern.

Participation of private players has to be encouraged and facilitated by the government

by implementing favourable policies or amending the existing one wherever it is

required and justified


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THANKYOU

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