The Hindu Business Line : Course correction

THE DECISION OF the Directorate-General of Shipping to amend the Multimodal Transportation of Goods Act, 1993 is in line with the widening options that shippers have today and the increased level of outsourcing of the logistics function. The amendments are also proposed to ensure coverage of all operators in the shipment chain, including freight forwarders, shipping agents and Customs agents; in the 10 years the Act has been around, barely a third of the multimodal transport operators have registered under it. It is essential that registration is "universally visible" as it will serve greatly shippers, bankers and custodians who depend on the authenticity of a transport operator as recognised by law.

To provide a uniform regulation not only for contracts for the carriage of goods by sea but also general transport, a Draft Instrument on Transport of Law was prepared in April 2002. But this did not find universal acceptance. Even as a significant number of shipments are door-to-door, executed as a single transport contract and under one document, they are generally not regulated and supported by an international convention or national legislation on carriage of goods. Sans a universal legal framework on the subject, individual governments and regional and sub-regional inter-governmental bodies are enacting legislation to overcome the problems. Concerns have been expressed over the proliferation of laws which would only add to the confusion and the uncertainties over the legal regime of multimodal transport. The lack of a uniform liability regime, and the diverse national laws and regulations with varying approaches to such crucial issues as the liability system, limits of liability, and time-bar make it difficult for the parties to assess the risks involved. Now, Unctad is working on the feasibility of creating an international legal instrument.

The amendments to the Multimodal Transportation of Goods Act, as contemplated by the DG Shipping, are to address such issues as the need for compulsory registration of multimodal operators, widen the law's scope to include imports, broaden the definition of custodians, and introduce changes to the Customs regulation for smooth movement of goods. Laudable, no doubt, but an efficient multimodal system also presupposes a proper transport infrastructure, simplified streamlined documentation system, liability regimes, industry standards and well-defined legal status of intermediaries such as freight forwarders. All these have assumed new dimensions in the context of such recent developments as the use of electronic communication system in the place of traditional documents, the renewed global effort at long-term harmonisation of intermodal transport of dangerous goods and serious attempts to combat the threat of terrorists who use all modes of transport. The apprehension is that the global efforts are often compromised by the under-funded initiative.

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