Standing Committee on Developing Services Sectors:
Fostering Competitive Services Sectors in Developing Countries: [Shipping],
3rd session (6-12 June 1995)
Item 3: Fostering competitive multimodal transport services

This document has been prepared as an aid to delegates to summarize what multimodal transport is, what the role of UNCTAD is in this field, and what have been its achievements. It also makes some reference to coming challenges and what can possibly be done to face such challenges.

A. What is multimodal transport?

1. 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.

2. The emergence of the container technology and of the multimodal transport concept came from and facilitated growing international trade. Trade and transport are inextricably linked: efficient transport services are a prerequisite to successful trading.

3. International transport generally implies the use of various transport links (interfaces and modes), each link corresponding to a transfer, storage or transport operation either in the country of origin, in a transit country, or in the country of final destination.

4. This situation has created a number of problems over the years, as more and more shippers are realizing that this new concept is involving the effective participation of various transport mode operators but does not always make clear who is responsible for delivering cargo at destination in safe conditions, according to agreed schedules.

5. Considering the variety of cultures, languages and commercial practices at both ends of a trade, and the resulting complexity of assembling such an international transport operation, it would appear reasonable to a trader to let one qualified operator organize and be responsible and accountable for the entire transport chain.

6. Beginning from the present unimodal transport conditions and legal environment, transport operators have developed transport systems to fulfil customers' requirements, offering competitive services and thereby making trade more efficient by offering multimodal transport services to their clients. Since the introduction of containerization and the later development of EDI, international trade has increasingly demanded efficient commercial transactions. To take advantage of the potential offered by the new technologies, the international trading community updated its uniform commercial practices regarding trading terms [1], letters of credit [2], and multimodal transport documents [3].

7. Multimodal transport implies the safe and efficient movement of goods, where the MTO accepts the corresponding responsibility from door-to-door. With technological development of transport means and operations, as well as in communications, coupled with liberalization in the provision of services, more and more transport operators are able to provide such safe and efficient transport. These services are increasingly market-segment oriented rather than transport mode oriented.

8. The absence of international rules governing the successive carriage of goods resulted in peculiar problems in the matter of carriers' responsibility and the liability for loss of or damage to the goods occuring in the course of a multimodal transport operation.

9. In 1973, commercial forces created a set of rules under the ICC banner, while governments had initiated consultations on an international convention in the UNCTAD. In 1980, the MT convention was signed but it has so far received little support. In 1990, this situation forced commercial parties jointly with UNCTAD to replace the 1973 Rules by the UNCTAD/ICC Rules for Multimodal Transport Documents. These new rules have become commercial practices (new FIATA FBL, new BIMCO COMBIDOC). In Latin America, some governments have recently agreed on a regional legislation for multimodal transport, taking basic elements from the MT Convention and from the UNCTAD/ICC Rules. Other governments (e.g. India) have designed their own law on MT.

   B. What is UNCTAD's mandate?

10. The United Nations Conference on Trade and Development (UNCTAD) is a permanent organ of the General Assembly of the United Nations, established by General Assembly resolution 1995 (XIX). 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 concern to 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 [4].

11. In its Resolution 2098(LXIII) on Programming and Co-ordination in the United Nations system, ECOSOC endorsed the conclusions and recommendations of the Committee for Programme and Co-ordination [5]. Among other recommendations, it assigned to UNCTAD the responsibility, at the global level, for trade and development and related aspects of shipping. The Committee also recommended that the primary responsibility with respect to multimodal transport and containerization be given to UNCTAD as the focal point within the United Nations system.

    C. What has UNCTAD done in the field of Multimodal Transport?

12. In pursuing its mandate, UNCTAD has achieved a number of recognized results in the field of multimodal 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 (some 100 seminars and conferences all over the world).

    D. What are the challenges ahead?

13. The challenges ahead are two-fold: (1) with the globalization of production and the liberalization of services, developing countries and countries in transition, more than ever, need more than ever to increase their capabilities in offering reliable and cost-effective transport and logistics services, taking advantage of technological development through appropriate "leap-froging" into modern technologies and commercial practices; and (2) there is a world-wide need for harmonization of the legal environment for multimodal transport, in particular considering the development of new forms of international transport (combined road/rail transport and short-sea shipping in Europe, for example).

Footnotes:

1. *INCOTERMS 1990, ICC publication No. 460 (ICC, Paris, 1990).

2. *Uniform Customs and Practice for Documentary Credits, ICC publication No. 500 (ICC, Paris, 1993).

3. *UNCTAD/ICC Rules for Multimodal Transport Documents, ICC publication No. 481 (ICC, Paris, 1992).

4. *"Comprehensive analysis of the activities of the United Nations system in the field of transport", report of the Secretary-General (E/5947), Economic and Social Council, 2 May 1997, para 34.

5. *Official Records of the General Assembly, Thirty-second Session, Supplement No. 38 (A/32/38), chap. I.