International regulation of liability for multimodal transport
International transportation of goods is increasingly carried out on a door-to-door basis, involving more than one mode of transportation. While there is little information on the overall proportion of cargo transported by multiple modes, data on the development of containerized traffic provide some highly significant indications, as containers are designed for door-to-door transportation by different modes.
Since the mid-1960s, there has been an exponential increase in containerized transport, which is forecast to continue well into the future: world port container throughput, i.e. the number of movements taking place in ports, grew from zero in 1965 to 225.3 million moves in 2000. Container traffic is forecast to more than double until 2010 to almost 500 million moves; this represents an annual growth rate of 9 percent. While globally the major container flows are between Asia, Europe and North America, there are significant flows within all regions. It is estimated that world seaborne trade in containerized cargo will more than double from 1997 to 2006 to around 1 billion tons. Most of this containerized cargo will be transported by more than one mode before reaching its final destination. In 1999, the value of manufactured goods exported globally (f.o.b.) had risen to more than US$ 4.2 trillion out of a total of US$ 5.5 trillion for all goods exported. The majority of these high value goods will be transported in containers and involve multimodal transportation.
The growth of containerized transportation, together with technological developments improving the systems for transferring cargo between different modes, has considerably affected modern transport patterns and practices. Shippers and consignees are often interested in dealing with one party (Multimodal Transport Operator, MTO), who arranges for the transportation of goods from door to door and assumes contractual responsibility throughout, irrespective of whether this is also the party who actually carries out the different stages of the transport. Frequently, goods are carried in (sealed) containers, designed for transportation by different modes from door to door. As a result, it is often difficult to identify the stage/mode of transport where a loss, damage or delay in delivery occurs. Under the present regulatory framework, however, both the incidence and the extent of a carrier's liability may depend crucially (a) on whether a loss can be localized and (b) on which of a considerable number of potentially applicable rules and/or regulations is considered to be relevant by a court in a given forum.
The current liability framework does not reflect developments that have taken place in terms of transport patterns, technology and markets. No international uniform regime is in force to govern liability for loss, damage or delay arising from multimodal transport. Instead, the present legal framework consists of a complex array of international conventions designed to regulate unimodal carriage, diverse regional agreements, national laws and standard term contracts. As a result, both the applicable liability rules and the degree and extent of a carrier's liability vary greatly from case to case and are unpredictable.1
Over the years, there have been several attempts at drafting a set of rules to regulate liability arising from multimodal transportation, but none of these has brought about international uniformity. In 1980, the United Nations Convention on the Multimodal Transportation of Goods (the MT Convention) was adopted, but it did not attract the necessary number of ratifications and has not entered into force. In 1992, a set of standard contractual terms was prepared for incorporation into commercial contracts (UNCTAD/ICC Rules for Multimodal Transport Documents). However, as these Rules are contractual in nature, they are by definition subject to any applicable mandatory law and are thus not an effective means of achieving international uniformity.
More than 20 years have passed since the adoption of the MT Convention. During this time, globalization, together with significant developments in technology and communication and resulting changes in demand, has led to increased emphasis on multimodal transportation. In response to these developments, and in view of the absence of international uniform regulation of liability, there has been at the same time, a proliferation of diverse national, regional and subregional laws, often based to some extent on the MT Convention or the UNCTAD/ICC Rules, but creating a trend of further "disunification" at the international level. Recently, an UNCITRAL Working Group started consideration of a "Draft Instrument on Transport Law"2 and of whether the Draft Instrument, primarily designed to govern sea-carriage, should also apply to all multimodal contracts, that include a sea-leg.
Against this background and particularly in view of the continuing growth of international multimodal transportation, fresh consideration of the need for an effective international instrument to govern multimodal transportation may be appropriate.
1 See UNCTAD, Implementation of Multimodal Transport Rules (UNCTAD/SDTE/TLB/2 and Add.1), available on the www.unctad.org website.
2 UNCITRAL documents A/C.9/WG.III/WP.21 and Add.1, available on the www.uncitral.org website
You may also be interested in:
The Electronic Trade Documents Bill
We are living in a digital age where information can be transmitted instantaneously and yet progress towards a fully digitalised international trade remains slow
Congratulations to UK Club board member Nikolaus H Schües, who has been named the 46th President of BIMCO.
Green Shipping - Transitional Fuels
It's safe to say that the maritime industry's choice of fuel will be one of the most significant drivers in its efforts to decarbonise shipping
In Part 1 of this article, Introduction and background, we provided an overview of the international Conventions applicable to the multimodal trade. This was followed by Part 2, in which we looked at the legal issues under the current unimodal Conventions system.