WHO ARE THE TRUE MTOs
In general, the term “multimodality” is used (perhaps improperly) as a synonym for “intermodality.” It is not widely used in purely operational and commercial contexts; it seems to be more prevalent in the descriptive contexts of transportation policies. The same applies to the subsequent designation of MTO operators.
One definition of MTO can be found from the Freight Leaders Council: “A Multimodal Transport Operator refers to a professional entity that organizes and manages, both nationally and internationally, a mass transport service either on its own entrepreneurial risk or through sharing with other MTOs. In the realm of combined transport, this operator can organize ‘company trains’ if the link is dedicated to a specific client, or more commonly, provide an ‘open access’ service. In this case, all MTOs can, through a combination of delivery terms, purchase train passages by contracting dedicated train space (loading slot) or through occasional bookings. In essence, in the market, the demand for combined or multimodal transport, in cases where there are more than 2 modes of transport, can turn to many professional entities based on specific service needs. These entities often have a certain depth and breadth of offerings.”
According to this definition, it appears that MTOs are primarily providers of intermodal rail services, with other MTOs (who are in turn providers of other rail services) interacting with them, purchasing certain slots and marketing them in a rather collaborative approach.
However, the FLC also adds that “the plethora of candidates for the role of multimodal transport operator is consistently on the rise. Shipping companies, driven by the growth of containerized techniques, have been joined by freight forwarders, shippers, railway carriers, and today, increasingly, transport operators and 3PL or 4PL logistics operators. The latter are renewing their fleets extensively, shifting investments from traction means to transport units (swap bodies and/or craneable semi-trailers).”
And it is this latter meaning that we intend to attribute to MTOs: operators who, on behalf of goods-producing enterprises (their clients), organize “door-to-door” transports from the point of origin to the final destination, utilizing intermodal transport.
All of the above informs us that the transport sector, especially following its intermodal interpretation, is increasingly composed of figures that are difficult to clearly define through unambiguous definitions. Often, their roles are partially overlapping. It’s our task to untangle this complexity as much as possible. Operationally, it may be useful to distinguish between two types of MTOs:
- Classic MTOs, who are “aware” of this designation and use it to describe their activity: these are mainly “providers” of rail services for intermodality (primarily container-related).
- “De facto” MTOs, who don’t commonly use this designation but have control and responsibility for the entire intermodal transport from the point of origin to the final destination; they are “buyers” of different modes of transport.
A natural question arises: how does an MTO in this latter sense differ from a traditional freight forwarder? Primarily, it’s the specific use of intermodality, but not only that; there’s also a difference in responsibility. As specified by CONFETRA (“Confederazione Generale Italiana dei Trasporti e della Logistica” – Italian trade association in transport and logistics), “the difference between the services provided by an MTO and those of a traditional freight forwarder lies primarily in the different legal responsibility towards the client. The obligation of the freight forwarder is to follow the client’s instructions, acting in the client’s best interest in selecting carriers. Only carriers, not the freight forwarder, are responsible for damages to the goods, and the client should seek compensation directly from them. With the expansion of traffic, the proliferation of delivery points, the intensification of demands for meeting scheduled times, and the multiplication of sub-carriers for each transport chain, goods owners increasingly demand a single responsible entity capable of meeting the mobility needs of their goods. This demand gives rise to the role of the MTO.”
At Gruber Logistics, we firmly believe in multimodal transportation. Intermodal rail transport now accounts for 32 % of the full loads taken over by the Company. In addition to the benefits the mode allows for shipments, such as the ability to load up to a weight of 44 tons instead of 40, the benefits for the environment are also considerable: CO2 emissions are estimated to decrease by up to 70%.