A Non-Vessel Operating Common Carrier (NVOCC) is an ocean freight carrier that does not operate its own vessels. It provides ocean transport services by contracting with shipping lines and paying to use their vessels and containers.

NVOCCs act as transport intermediaries, leasing space from vessel operators and making it available to sellers. Their services enable sellers to streamline their logistics operations and ensure regulatory adherence, with proper documentation and billings.

Let’s explore what is NVOCC, its core functions, and its key role in supply chain logistics.

Functions of NVOCC  

Freight consolidation

NVOCCs often use less than container load (LCL) shipping for optimal use of container space and to provide shippers with cost-effective solutions for international transport. They consolidate goods from multiple shippers into a single container, allowing each to pay only for the space they occupy.

Issuing bills of lading (BoLs)

NVOCCs issue their own BoLs to shippers, which serves as a legal contract for transporting goods. They undertake liability for the cargo from the origin port to the destination.

Booking cargo space

By collaborating with shipping lines, NVOCCs can secure favorable rates and terms for their clients. They handle the entire booking process and ensure efficient shipment routing.

Documentation handling

NVOCCs take care of all necessary documentation to ensure that transport and containerization comply with maritime laws and shipping regulations. This includes BoLs, customs paperwork, packing lists, and commercial invoices.

Primary point of contact

NVOCCs act as the main communication channel between all parties involved in the shipping process. Sellers and buyers may refer to them directly for any queries instead of contacting each service provider individually.

Door-to-door services

Most NVOCCs offer door-to-door services where they assume responsibility for the entire shipping process, from the seller’s location to the final delivery point. This includes transit, customs clearance, and cargo insurance.

NVOCC vs freight forwarder

NVOCCs and freight forwarders perform similar operations — facilitating the logistics process by transporting goods from one point to another. However, there are a few key differences in their roles and scope of services:

• NVOCCs issue their own BoLs and take legal responsibility for the cargo, while freight forwarders typically arrange transportation without assuming liability.

• Freight forwarders offer transport services for land, air, and sea cargo, while most NVOCCs only offer services for maritime transport.

• NVOCCs must register and obtain licenses to operate, with the requirement to publish tariffs and adhere to common carrier obligations. Freight forwarders require licensing but are not required to publish tariffs. 

• Freight forwarders may also provide more comprehensive logistics services, including warehousing and inventory management, while NVOCCs only cover documentation and transport.

Regulations surrounding NVOCC

NVOCCs are regulated by various maritime laws and authorities. For example, in the US, they must register with the Federal Maritime Commission (FMC) and obtain an Ocean Transport Intermediary (OTI) license. They are also required to provide proof of financial responsibility, often through a surety bond, and to publish their tariffs to protect shippers against potential losses and ensure transparency.

Advantages

• Cost-effective shipping: Offer competitive rates through cargo consolidation, making shipping more affordable for businesses with smaller volumes of goods to export.

• Simplified logistics: Handle all aspects of transport, including documentation and customs clearance, reducing the burden on shippers.

• Flexibility: Provide a range of tailored services, such as door-to-door delivery, enabling businesses to effectively navigate multimodal transport and meet their unique shipping needs.

Disadvantages

• Schedule control: Rely on vessel operators for transport, limiting their control over transport schedules.

• Potential delays: Consolidated shipments may lead to longer transit times, as they often require additional handling and coordination.

• Scope of services: Since most NVOCCs only offer maritime transport services, they may limit the flexibility and options available to businesses that require comprehensive logistics solutions.

When to use NVOCC

Businesses should consider using an NVOCC when they need to ship smaller volumes of goods internationally and benefit from tailored shipping services. NVOCCs are particularly advantageous for companies that lack the logistics infrastructure to handle transport and customs processes independently. Sellers may also benefit from cost savings associated with freight consolidation.

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