Non-Vessel Owning Common Carrier (NVOCC)

What is a Non-Vessel Owning Common Carrier (NVOCC)?

A Non-Vessel Owning Common Carrier (NVOCC) is a company that provides ocean freight services without owning, operating, or chartering any vessels.

They provide international shipment and cargo transportation services between two points using the vessels of other carriers and utilizing their own bills of lading, booking systems, and rates to perform these services on behalf of importers, exporters, manufacturers, distributors, and shippers.

The NVOCC acts as an intermediary in the transport process. It serves multiple functions, such as:

  • Providing shipping documents such as commercial invoices and packing lists to customs authorities;
  • Preparing contracts with vessel operators;
  • Handling claims against carriers when goods are damaged or lost at sea;
  • Negotiating freight rates;
  • Overseeing the movement of cargo.
  • They are responsible for providing efficient, reliable, and cost-effective service to their customers.

Frequently Asked Questions

The following is a list of frequently asked questions about Non-Vessel Operating Common Carriers and their role in international shipping.

What are the Main Differences Between NVOCCs and Freight Forwarders? 

Non-Vessel Operating Common Carriers (NVOCCs) and freight forwarders are key players in the international shipping industry. NVOCCs operate as carriers, focusing primarily on ocean freight. They do not own or operate vessels; instead, they purchase space from ocean carriers and resell it to shippers, often consolidating shipments from multiple clients to secure better rates. NVOCCs issue their own bills of lading and assume a level of liability for the cargo they transport. Freight forwarders, on the other hand, act as intermediaries between shippers and carriers, arranging transportation across various modes, including ocean, air, rail, and road. They assist with documentation and customs clearance and provide a wider range of logistics services on behalf of their clients. 

Why Consider an NVOCC for International Shipping?

Choosing to work with a Non-Vessel Owning Common Carrier (NVOCC) can be particularly advantageous for businesses that prioritize consistent, straightforward shipping arrangements with specific shipping lines. NVOCCs often establish strong partnerships with these lines, providing them with a steady, reliable framework that might be more suitable for businesses with regular, high-volume shipping needs. This direct focus allows NVOCCs to negotiate rates effectively, allowing them to offer a level of stability and predictability that can be valuable for companies looking for streamlined shipping solutions without the need for additional logistics services.

However, when a business’s shipping requirements extend beyond the straightforward transportation of goods, the comprehensive services offered by freight forwarders become increasingly significant. Freight forwarders excel not just in securing transportation but in orchestrating the full spectrum of logistics, from customs clearance and cargo insurance to pre-shipment inspections and multimodal transport solutions. Their expertise in managing complex international logistics networks provides businesses with end-to-end shipping solutions, enabling seamless, hassle-free delivery from the point of origin to the final destination. Furthermore, in many cases, forwarders have a broader network of carriers, which allows them to offer competitive rates and facilitate freight delivery via various modes of transport in addition to maritime transportation.

For companies seeking to minimize their logistical burdens and focus on their core operations, freight forwarders represent the ideal partner, offering a level of service and flexibility that adapts to the full range of their shipping and logistical needs.

How Do NVOCCs Ensure the Security and Safety of Shipments? 

Non-Vessel Owning Common Carriers (NVOCCs) ensure the security and safety of shipments by collaborating with reputable carriers and implementing strict internal processes. NVOCCs carefully select shipping partners known for their reliability and adherence to high safety standards, significantly reducing the risk of incidents during transit. This selection process involves rigorous vetting procedures that assess each carrier’s historical performance and security protocols.

Furthermore, NVOCCs are committed to compliance with international regulations that govern shipping and transportation security. This includes adherence to standards and procedures established by the International Maritime Organization (IMO), as well as local and international laws designed to enhance the safety and security of maritime transport. This compliance ensures that all operations are conducted in a manner that meets the highest standards of security and safety, further safeguarding the shipments under their care.

While NVOCCs do not have direct control over the physical security measures on the vessels they use, they focus on maintaining the integrity and security of shipments within their scope of responsibility. This includes training their employees to follow best practices in document verification, cargo handling, and information security. NVOCCs also leverage advanced tracking technologies and management systems to monitor shipments, enhancing visibility and allowing for swift action in the face of potential issues.

By combining strategic partnerships with reliable carriers, adhering to international security regulations, and implementing robust internal processes, NVOCCs demonstrate their commitment to maintaining the security and safety of the cargo entrusted to them.

Do NVOCCs Offer Air Freight Services?

NVOCCs primarily focus on ocean freight transportation, as their core business revolves around their role as carriers, arranging shipments via sea. However, some larger NVOCC companies may offer additional services that extend beyond traditional ocean freight.

These expanded services can also include air freight transportation, allowing NVOCCs to cater to clients with more diverse shipping needs. By providing air freight options, these NVOCCs can offer a more comprehensive range of logistics solutions that are similar to those provided by freight forwarders.

While this overlap with freight forwarders’ services can blur the lines between the two types of providers, it’s important to note that NVOCCs’ primary expertise lies in ocean freight. Nonetheless, the availability of air freight services through some NVOCCs can provide shippers with additional options and flexibility in managing their supply chain.

What is the Role of NVOCCs in International Shipping?

Non-Vessel Operating Common Carriers (NVOCCs) play a crucial role in the international shipping industry by providing a valuable service to businesses that require ocean freight transportation. NVOCCs operate as carriers, arranging the shipment of goods from one point to another despite not owning or operating the vessels themselves.

As carriers, NVOCCs assume responsibility for the safe and timely delivery of the cargo they handle. They issue their own bills of lading, which serve as contracts of carriage between the NVOCC and the shipper. This means that NVOCCs are legally responsible for the cargo from the point of origin until it reaches its destination, providing shippers with a level of assurance and peace of mind.

While the core focus of NVOCCs is on providing reliable and cost-effective ocean freight transportation, some may offer additional services that overlap with those provided by freight forwarders. These services can include customs clearance, documentation, and inland transportation. However, the extent of these additional services varies among NVOCCs and is not their primary function.

In summary, NVOCCs are an essential component of the international shipping landscape, serving as carriers that specialize in the consolidation and transportation of ocean freight. By offering cost-effective solutions and assuming responsibility for the cargo they handle, NVOCCs enable businesses of all sizes to participate in global trade and expand their reach in international markets.

Can NVOCCs Help Me Ship Less Than a Container Load?

Similar to freight forwarders, NVOCCs can help shippers secure less-than-container load (LCL) shipping. By consolidating cargo from multiple shippers, NVOCCs can offer cost-effective transportation options for businesses with smaller shipping volumes.

However, it’s important to note that NVOCCs often have strong relationships with certain ocean carriers, which can provide benefits such as more consistent rates and schedules. Freight forwarders, on the other hand, typically have a wider reach to various carriers around the world and can offer services across different modes of transportation, including air and land.

Establishing a working relationship with a freight forwarder can be more beneficial in the long run, as they can act as your logistics partner in various scenarios. Their extensive networks and expertise in handling diverse shipping requirements make them a versatile choice for businesses looking for a comprehensive logistics solution that can adapt to their changing needs over time.

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