Industry expert pushes multimodal transport in ASEAN for cost savings

Photo of chairman Somsak Wisetruangrot
Association of Southeast Asian Nations (ASEAN) Federation of Freight Forwarders Associations (AFFA) Logistics Institute chairman Somsak Wisetruangrot
  • Multimodal transportation offers reduced costs, saves time and improves shipment monitoring during transit
  • Dealing with customs transit/transshipment procedures of countries a multimodal transport challenge
Association of Southeast Asian Nations Federation of Freight Forwarders Associations Logistics Institute chairman Somsak Wisetruangrot during the UNESCAP and PMTLAI webinar

Multimodal transportation’s value proposition of reduced cost and time savings was stressed by an industry expert at a recent webinar hosted by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Philippine Multimodal Transport and Logistics Association, Inc. (PMTLAI).

Association of Southeast Asian Nations (ASEAN) Federation of Freight Forwarders Associations (AFFA) Logistics Institute chairman Somsak Wisetruangrot said multimodal transport offers cost advantages since only one operator is in charge of all stages of transportation, allowing increased monitoring of shipments at each stage.

Under the ASEAN Framework Agreement on Multimodal Transport (AFAMT), international multimodal transport means the carriage of goods by at least two different modes of transport, on the basis of a multimodal transport contract, from a place in one country at which the goods are taken by the multimodal transport operator in charge, to a place designated for delivery situated in a different country.

“There is only one company in charge of meeting the shipment deadline; therefore, there is better control on management and less risk of merchandise theft or loss while responsibility lies with just one entity,” Somsak said.

Scheduling routes, costs, staff, and logistics is also easier, he added.

Edge of ASEAN MTOs

Somsak said multimodal transport operators (MTO) operating under AFAMT are required to register with their respective competent national bodies and comply with minimum asset requirements, offering greater assurance to clients that they are dealing with reputable entities capable of compensating claims.

He pointed out that ASEAN MTOs’ liability is clearly defined in AFAMT, which means operators use the same rules, while MTOs in other regions can select any of the international conventions for their operation.

AFAMT, signed in 2005, aims to facilitate the movement of goods using different modes of transport to encourage international trade among ASEAN member states and with third-party countries. In November last year, ASEAN transport ministers adopted the implementation framework of AFAMT.

Multimodal transport issues

But engaging in multimodal transport still comes with challenges, particularly when it comes to customs transit/transshipment procedures of countries that could cause delays in deliveries.

He recommended that MTOs request the Customs Procedures and Trade Facilitation Working Group to consider harmonizing and simplifying customs procedures for transit/transshipment to facilitate multimodal transport.

The issue of customs transit was recently addressed with the launch on Nov 30 of the ASEAN Customs Transit System (ACTS), an online system that allows businesses to lodge e-transit declarations directly with ASEAN Customs authorities.

READ: ASEAN launches customs transit system for simplified goods movement

Under ACTS, the private sector can make a single Customs transit declaration that covers transport of goods across multiple ASEAN countries.

Special arrangements allow reliable traders to load their goods at their own premises in the country of departure and to deliver goods to their own premises at destination.

ACTS has been pilot-tested in Cambodia, Laos, Malaysia, Singapore, Thailand, and Vietnam, and will soon be available in Myanmar, and may later be expanded to Brunei, Indonesia and the Philippines.

Somsak said once customs procedures in all ASEAN member states are harmonized, the duration of transit/transshipment procedure within ASEAN member states will be standard, enabling MTOs to predict the time of end-to-end transportation.

This, in turn, will allow MTOs to assure traders consistency and efficiency in the process.

Another challenge is dealing with regulations and restrictions imposed by countries to prevent the spread of COVID-19. Somsak noted, for example, that cross-border transportation by road may have to be operated in controlled areas, limiting options for a suitable place to do transit/transshipment.

Unforeseen risks during the operations such as port strikes or congestion may also obstruct the operation of MTOs.

Last October, Thailand and Vietnam joined the pilot implementation of AFAMT. AFAMT pilot teams have been established in both countries. The teams consist of government transport officials, MTOs and the freight forwarder associations Thai International Freight Forwarders Association and Vietnam Logistics Business Association. – Roumina Pablo