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Multimodal Transport Information Platforms: A Breakthrough in Logistics Industry Rejuvenation

Dec 15,2010

By Li Guoqiang, Enterprise Research Institute of the DRC

Research Report No 171, 2010

Both the Plan for the Rejuvenation of the Logistics Industry and the 2010~2015 Plan for the Development of Logistic Information Technology have focused on the socialization of logistics business, the specialization of business operation, the informatization of operational technology and the standardization of industrial parameters. Of the nine priority projects, the first deals with multimodal transport and transit facilities and the seventh with logistics public information platforms. The construction of logistics public information platforms for multimodal transport is an important component part of rejuvenating the logistics industry and developing the Internet of Things and the geographic information industry. It is also an important tool to vigorously develop and elevate multimodal transport in China and the addressing of some of the prominent issues facing China's modern logistics industry, especially the low overall level and the high overall cost, is of demonstration significance, which will make a breakthrough in logistics industry rejuvenation.

I. Accelerate Development of China's Multimodal Container Transport

Recent years have witnessed a rapid development of China's container transport. China has preliminarily formed a modern railway network for container transport. With the completion and put into operation of 17,000 kilometers of double-deck container passages (which can be extended to 20,000 kilometers), 18 railway container central stations, and many container handling stations, China has made big strides in improving technologies and equipment for railway logistics. The China Railway Container Transport Co., Ltd. (CRCT) has built 18 container central stations across the country, which have the facilities and functions for train transport, loading, unloading, moving, warehousing, distribution, one-stop double inspection, and information service, and could provide warehousing, loading, unloading, packing, distribution, information and other logistics services. They are both regional logistics centers and the major nodes of the national container transport network. The annual container handing by China's ports has been rising sharply year after year. It reached 100 million TEU (twentyfoot equivalent unit) in 2007 and 121 million TEU in 2009. Out of that, coastal ports handled 109 million TEU and inland ports handled 12 million TEU. They have played growing roles in multimodal transport and modern logistics. Container transport equipment has become increasingly standardized and specialized according to international standards, and capacities have been increased to meet the demand of multimodal transport. Development of multimodal container transport and especially sea-railway transport has become a key link to demonstrate the advantage of the container transport system.

Multimodal transport is a transport process, in which two or more means of transport link with each other and jointly complete transit. It is also called compound transport. But in China, it is commonly called multimodal transport. Multimodal transport is an organizational form of transport, designed to maximize the efficiency of overall cargo transport. In general, multimodal transport takes container as transport units and integrates different modes of transport to form continuous and integrated cargo transport. Multimodal transport requires one-time consignment, one-time charging, one-time billing, and one-time insurance, and is jointly completed by carriers in different transport sections. People describe it like this: with one ticket for the whole process, the connection is well integrated.

Multimodal international transport was first introduced in North America, Europe and Far East in the 1960s. Currently, it has become a new and important mode for international container transport and has received universal attention of the international logistics industry. The United Nations Convention on International Multimodal Transport held a conference in May 1980, at which the United Nations Convention on International Multimodal Transport of Goods was signed. In 1992, China Maritime Law made provisions on multimodal transport contract. In 1997, the Ministry of Railways and the Ministry of Communications jointly promulgated the Regulations on the Management of International Multimodal Transport of Containers.

In order to tap the potentials and increase the efficiency of multimodal container transport, developed countries have supported multimodal container transport in many ways. The U.S. government has played a major role in building container transport and multimodal transport systems. In 1991, it enacted the Intermodal Surface Transportation Efficiency Act (1991, ISTEA) to promote the development of multimodal transport. In 1998, it enacted the Transportation Equity Act for the 21st Century (TEA-21) to promote and coordinate multimodal transport in terms of mechanism, rules and infrastructure. It also set up an office for multimodal transport to coordinate various transport institutions. These policies and acts provided guarantee for establishing a world leadership for American logistics. The EU Common Transport Policy (1992), the British White Paper on Transport (1998) and the Japanese Integrated Plan for Logistics Policies (1997) all provided vast development space to fully tap the overall efficiency of multimodal container transport and general logistics and integrate the supply chains.

Multimodal container transport represents a re-innovation of container transport technology. From the mid-1990s to the beginning of this century, the efficiency of contain transport was low. The monotonous mode of container transport could not meet the demand of industrial chain management and development. As a result, creating a highly-efficient organizational form for multimodal container transport won widespread recognition and application across the world. Multimodal transport requires various types of transport enterprises to cooperate and provide cargo transport and service. Its efficiency depends on the close dovetailing and "seamless connection" between individual modes of transport.

Multimodal container transport represents the direction of logistics transport development. It has the following advantages. 1. It can simplify the procedures of cargo declaration, inspection, taxation, exchange settlement, tax rebate, account settlement, and claim settlement as much as possible and can provide flexible services. Multimodal container transport is both a mode of transport organization and also a mode of service. the Spanish Virtual Transport Enterprise (CAVE Logistics), made up of 55 small and medium-sized transport enterprises, increased its productivity by 30% and its new consumers by 80% and reduced transport cost by 25% after the mode of virtual integration was adopted. 2. It can improve credit information management and effectively reduce information asymmetry. 3. It can shorten the time of container stopover, reduce inventory, reduce cargo damage and other accidents, and enhance freight quality. It is more economical, safe, reliable, convenient and environment-friendly and can provide transport solutions with high performance-price ratios for remote inland places. Meanwhile, it can play a tangible role in elevating the position of inland places in international logistics systems. 4. It can help government strengthen supervision and administration over the entire cargo transport chains and provide truthful evidences for macroeconomic policy evaluations. 5. International multimodal transport can ensure local country to receive a fairly high ratio of transport earnings from the whole process of cargo transport and can help introduce new and advanced transport technologies.

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