Tuesday, January 25, 2011

Types of Multimodal Transport Operators (MTO)

There are two types of MTOs which are as follows:

Vessel Operating MTOs (VO-MTOs)

Mainly because of containerization many shipowners have now extended their to services to also include carriage over land and even carriage by air. They used not to own or operate the transport of goods by road, rail or air but arrange for these types of transport by sub-contracting.

They would usually sub-contract inland stevedoring and warehouse services.

Non-Vessel Operating MTOs (NVO-MTOs)

Other transport operators (than ocean carriers) may sub-contract the ocean voyage. They are known as "Non-Vessel Operating MTOs" or "Non-Vessel Operating Common Carriers" (NVOCCs).

These types of MTO often own only one type of transport means e.g. trucks or in rarer case, airplanes and railways.

Those who do not own any means of transport may include:
  • Freight Forwarders
  • Customs Brokers
  • Warehouse Operator
  • Stevedoring Companies
These types of MTOs will have to sub-contract for all modes of transport. These types of MTOs may in future become:

a) The only type able to challenge the dominant position of VO-MTOs.
b) May be the type which will offer developing nations the best scope for participation in multimodal transport.
c) By avoiding investment in various types of transport means (expect perhaps for short haulage).
d) They can at any moment choose the type of transport or combination of different modes of transport which is economic and efficient thus, meeting the needs of the customers.
e) This type of NVO-MTOs could thus avoid to favour its own investment and commitments and could therefore focus on the needs of their customers.

Its activity, however, would require an efficient organization and reliable partners with whom he could cooperate within the field of its activities.

It would have to control a sufficient volume of cargo to be able to sub-contract on competitive terms for sea, road, rail or air transport as well as stevedoring and warehousing services.

Without sufficient volume of cargo, it would not be able to as certain regular transport on competitive terms. But with sufficient volume of cargo it would in most cases be able to reach this aim better than the other types of NVO-MTOs.