Curious case of a forwarder not being an MTO

In my earlier article I wrote about the curious case of a CHA not being a forwarder. Now let’s go to the next level of organisational progression. Let’s assume that a traditional CHA company has now started offering forwarding services to their customers after reading my first article. The typical forwarding services will include domestic transportation, in-transit warehousing, DGFT- and EPC-related documentation apart from the Customs clearance work they have been traditionally doing.

Now this customer, whom we will call shipper hereon, has a typical requirement. His buyer based in Europe says that he does not have the time, staff and the initiative to do the import Customs clearance and transport from port to his warehouse the cargo upon arrival in Europe. He wants the cargo to be door-delivered. We have a situation, so what does the forwarder do? He now has two choices :

  1. He gets hold of a friendly forwarder/NVOCC/shipping line to arrange for door-delivery, depending on the carriage LCL/FCL, commodity, etc.
  2. He contacts his agent or finds a forwarder on the internet and gets a quote.

At the time of shipment execution, our dear local forwarder realises that he has to issue a Bill of Lading. So he sends a mail to his overseas agent: “Please send me your Bill of Lading for me to issue the same”. He gets a regret reply that as per company policy, they do not give their Bills of Lading to overseas agents for use. So what does our friend do now? He ships the cargo at a much higher rate with a third-party service provider.

This is where the Multimodal Transport Operator, MTO licence comes into the picture. If the local forwarder had an MTO licence, he could have easily executed the Multimodal Transport Document (MTD) and earned some money for himself. This is an excellent case of opportunity lost. No doubt the MTO liability insurance has to be taken, other stipulated criteria need to be met, and some paperwork needs to be submitted to DG Shipping before you are officially granted the licence. Once you are an approved MTO, you can issue your own Bill of Lading (MTD).

MTD can be used for all kinds of shipments, like regular LCL/FCL shipments, hazardous cargoes, SOC containers, oversize cargoes requiring special equipment and so on and so forth. Another benefit of becoming an MTO is that you instantly get recognition as a principle who can issue a Bill of Lading. You gain legitimacy among the international forwarding community that your company is recognised by the Indian government and approved to be a Multimodal Transport Operator.

So my dear forwarders, we appeal to you to get yourself registered with DG Shipping and become an approved MTO. Empower yourself to issue a Bill of Lading to add value to your forwarding work and increase the array of services you can offer to your customers. The Association of Multimodal Transport Operators of India (AMTOI) is available to assist the Indian transport industry to upgrade and change in order to face the challenges of the new business environment. AMTOI can be reached at info@amtoi.org.

Source : Vivek Kele, Invitee Member, AMTOI – Mumbai, Sept. 12th,2011

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