Friday, August 25, 2023
Foreign trade management involves as series of processes, requirements and bureaucracy. Therefore, to build an efficient import and export strategy, it’s necessary to know the main concepts and logistical possibilities.
Technical mastery can help define the best strategy. By the way, here are some questions: do you know when to use each modal? Are you familiar with intermodal and multimodal transportation?
They might seem synonymous, but they’re not. They refer to logistical operations that explore more than one modal, combining sea and air transportation, for example. Thus, it’s possible to have greater control over the process, reducing costs and enhancing gains.
Do you want to know more about the concepts of intermodal and multimodal transportation? Keep reading the article and discover the main differences between them!
From origin to destination, multimodal cargo transportation is guided by a single contract, combining two or more means of transportation. In practice, trucks, trains, ships, planes or other equipment can be used to carry out deliveries.
This modal was instituted in Brazil by Law #9.611/98, which points out the guidelines related to the operation of multimodal cargo transportation, as well as indicates the attributions of everyone involved in the process.
According to the legislation, the Multimodal Transportation Operator (OTM) is responsible for the execution of the logistical operation and for issuing the cargo tax document.
For Every multimodal transportation operation, it’s necessary to present only the Multimodal Cargo Transportation Bill of Landing (CTMC).
That’s because the CTMC emphasizes the multimodal transportation contract and guides the entire process: from receiving the cargo to its arrival at the final destination. The document can be negotiable or non-negotiable. This choice is at the shipper’s discretion.
In Brazil, multimodal transportation is used, mostly, for the logistics of commodities, that is, products of primary origin, such as coffee, rice and soy.
Following a logistical operation proposal very similar to the model we’ve seen above, intermodal transportation uses two or more means of transportation to take merchandise from origin to destination.
In practice, the difference is that in intermodal transportation there isn’t a single tax document. For reach operation, different transportation records are issued. In addition, the responsibility for handling the cargo is shared between the carriers.
That means that if the cargo is transferred from a ship to a truck, for example, a new contract must be drawn up. That’s the only difference! The traction mode and handling of merchandise follow the standard flow of the operation.
For companies, this type of strategy can be interesting because it reduces costs of each operation. So, intermodal transportation has the potential to be more economical.
So far, we’ve seen that intermodal and multimodal transportation fulfill the same objective: they enable logistical operations using two or more means of transportation.
Besides, in the presentation of the concepts, did you manage to identify some differences between them?
To make things easier, let’s go ahead and detail the aspects that differentiate the two modes. Check them out!
Multimodal transportation links the entire operation to a single document, Multimodal Cargo Transportation Bill of Landing (CTMC), issued by the Operator of Multimodal Transportation (OTM).
Regardless of modal combinations, the entire process will be guided by the CTMC. That is, the logistical operation requires only one transportation tax document that also serves as the contract of provision of services.
On the other hand, in intermodal transportation, whenever the cargo is transferred to another vehicle, a new Bill of Landing must be issued, representing a new contract.
Types of contracts
In multimodal operation, the only contract is signed between the OTM and the client. Aspects related to bureaucracy, such as registration and contracting of mandatory insurance, are negotiated between these two parties.
Intermodal transportation has a wide range of contracts. After all, for each journey the client creates an individual contract with the carriers responsible for the rout.
In this case, it’s necessary to consider that contractors have different requirements, deadlines and values. That is, it’s necessary to invest more energy in the negotiation.
In multimodal transportation, the OTM is solely responsible for the entire performance of the service. It’s up to them to plan and organize the exchange of modals. Therefore, usually, they require the verification of merchandise in each cargo transfer.
To conduct the process, the OTM must meet several requirements, such as having adequate spaces for storage and transshipment, in addition, of course, to having the assets that allow multimodal transportation. Trucks, trains, ships and warehouses are essential for this type of logistical operation.
Also, the operator needs to be licensed and registered with the National Land Transportation Agency (ANTT) to issue the CTMC.
In multimodal transportation, the responsibility is shared between the carriers of each modal in its journey. That is, they’re responsible for the transportation they carry out.
As we’ve seen, the differences between the two models are mostly concentrated in the bureaucratic sphere. The operation flow of logistics and handling of merchandise don’t suffer many changes but require the usual precautions.
Now that you know the concepts, you can make more assertive choices when creating the logistical strategy for your company. Did you like the article and want to know more about the subject? Keep reading the ASIA SHIPPING blog!