The Law Governing Multimodal Transportation Operators In India

Authored by: Lakshmi Narasimhan


Multimodal transportation of goods is the transportation of goods (under a single contract between a consignor and a carrier) from one place to another through at least two (2) modes of transportation. Carriers engaged in the business of freight forwarding may employ a combination of the various means of transportation available (including by way of roadways, waterways, airways, transport by rail etc.) to ensure that goods which are sought to be transported by a consignor to a consignee involve minimal costs and reach at faster speeds. MTOs may also act as clearing agents (licensed under the Customs Act, 1962) who also assist in the import and export of goods across jurisdictions after obtaining due qualifications, approvals and licenses (as applicable) under the Customs Act, 1962 and the rules and regulations thereunder.

This article seeks to give an overview of certain fundamental legal aspects governing multimodal carriage of goods, registration of multimodal transport operators, other laws governing the carriage of goods and a peek into prospective regulatory evolution.



In India, Multimodal Transport Operators are governed by the Multimodal Transportation of Goods Act, 1993 (“MMTG Act”)[1] and the Registration of Multimodal Transport Operators Rules, 1992 (“MTO Rules”)[2]. Additionally, the Directorate General of Shipping (“DGS”) has issued the “MTO Branch Circular No. 1 of 2010” which prescribes the procedure for issuance of Registration/ Renewal as Multimodal Operator License under the MMTG Act (“Procedure Circular”).


Who/ What are “multimodal transport operators” (“MTOs”) and what goods can be transported by an MTO?

MTOs are persons/ entities who assume responsibility for the performance of consignment of goods transported under a ‘multimodal transport contract’ and are registered as MTOs under the MMTG Act. A registered MTO can transport any “good” including live animals, containers, pallets or other items or packaging supplied by a consignor.

What is a Multimodal Transport Document (“MTD”)?

An MTD is a document executed by an MTO and a consignor evidencing a contract for the transportation of goods by the MTO against payment of freight charges. While “bills of lading” are consignment documents issued by carriers of goods (generally in the field of export and import), an MTD is a specific type of a bill of lading issued by MTOs when goods are transported through at least two modes of transport and are distinct from individual bills of lading that MTOs may obtain from other carriage operators (if such carriage is outsourced).


Operators who are engaged for the transportation/ carriage of goods by the public are accountable under the law and are required to be identifiable and liable for any breach of services provided by them.

a) Authority: The DGS is the supervising authority for the purpose of the MMTG Act.

b) Mandatory Registration: Under the MMTG Act and the MTO Rules all MTOs are to be mandatorily registered with the DGS to commence operations.

c) Eligibility: Applicants are required to have a minimum annual turnover of Rs. 50 Lakhs (as certified by a practicing Chartered Accountant) and if an applicant is a corporate entity, a minimum share capital of Rs. 50 Lakhs is required. Applicants are also required to have personnel/ officers/ employees in not less than 2 countries. Additionally, the DGS may prescribe any other conditions for eligibility of applicants from time to time.

d) How to Apply: The Procedure Circular prescribes the manner in which an application for registration as an MTO is to be made to the DGS. Additionally, the DGS has also published SOPs to be followed at the time of applying for registration.

e) Application Fee: An application fee of Rs. 10,000/- (Rupees Ten Thousand Only) is to be paid along with the application.

f) Failure to comply with the Act: No penalty or liability is prescribed against non-registered MTOs.


a. Resolution of Disputes: All disputes concerning the carriage of goods are “commercial disputes” and therefore disputes between MTOs and consignors are dealt with under the Commercial Courts Act, 2015 before the commercial court of appropriate jurisdiction. MTOs and consignors have the option to opt for arbitration as a means of dispute resolution under the MTD.

b. Carriage by Road: Transportation of goods only by road is governed by the Carriage by Road Act, 2007 (“Road Act”). The Road Act provides for the regulation of “Common Carriers” who are to be mandatorily registered with the State/ Regional Transport Authority (as applicable) under the Motor Vehicles Act, 1988.

c. Carriage by Sea: The carriage of goods by sea is governed by the Carriage by Sea Act, 1925. Though no registration is required under the said Act, ship owners are required to register their ships for the carriage of cargo under the Merchant Shipping Act, 1958.

d. Carriage by Air: Transportation of goods by air carriage is governed by the Carriage by Air Act, 1972 which deals with the responsibilities and liabilities or air carriers.

e. Carriage by Rail: Consignors also have the option of transporting goods through the extensive network of railways in India which is governed by the Railways Act, 1989.


A committee constituted by the DGS has noted that the MMTG Act does not prescribe any penalty for non-registration of MTOs nor are there any incentives to promote such registrations and has therefore recommended that the law needed updation to move towards effective self-regulation.

In July 2020, the Special Secretary to the Ministry of Commerce announced that the Government was considering replacing the MMTG Act with a full-fledged, comprehensive national logistics law (tentatively named as the National Logistics Efficiency Advancement Predictability and Safety Act (“NLEAPS”)) to promote the growth of the logistics sector and to thereby promote trade and exports and increase the competitiveness of Indian products in international markets.

[1] Act No. 28 of 1993

[2] Rules framed in exercise of the powers conferred by Section 30 of the Multimodal Transportation of Goods Ordinance, 1992 (Ordinance No. 18 of 1992).