Nowadays, small and medium-sized companies are turning to maritime transportation to move their goods across the world.

All of them are accustomed to working with NVOCC, an intermediary that plays a crucial role in the maritime trade industry.

In the following lines, we will dive into this concept and provide you with a comprehensive understanding of NVOCC meaning in shipping, and its logistics.

As well as, highlight the differences between NVOCC and freight forwarders, discuss the significance of obtaining an NVOCC license, and identify the top NVOCC companies.

If you have an SME and are considering the possibility of utilizing maritime transportation to move your goods, read till the end.

What is a NVOCC

An NVOCC, or Non-Vessel Operating Common Carrier, is an entity that offers maritime transportation services without operating its own vessels.

The role of an NVOCC is to purchase space in containers from large carriers and resell it to smaller shippers.

This arrangement allows companies that don’t require a full container to utilize the available space in other shippers’ containers.

NVOCCs also handle all aspects of importing or exporting cargo, including issuing the House Bill of Lading (HBL), a legal document that outlines the details of the transaction with the NVOCC, such as the goods being shipped, their destination, and the information of the shipper and buyer, among other important details.

In summary, an NVOCC acts as an intermediary between the shipper and the carrier, facilitating the logistics process and enabling small and medium-sized companies to participate in international trade more efficiently and cost-effectively.

Difference between NVOCC and freight forwarder

Although the terms NVOCC and freight forwarder are often used interchangeably, there are some significant distinctions between NVOCC vs freight forwarder in terms of their roles and responsibilities.

  • A freight forwarder is a logistics expert that primarily focuses on the physical transportation of cargo. They work with various carriers involved in international transportation, utilizing trucks, ships, planes, or a combination of these modes.
  • On the other hand, an NVOCC purchases container space from large carriers and resells it to smaller shippers. Additionally, NVOCCs handle all aspects of importing or exporting cargo.

In essence, while a freight forwarder manages logistics and the physical transportation of goods, an NVOCC specializes in buying and selling container space from carriers and ensuring the necessary preparations for timely and efficient shipment.

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The role of NVOCC in the maritime transportation sector

NVOCCs play a vital role in facilitating the logistics process in the maritime transportation sector.
They serve as the central point of contact between customers and shipping companies, handling all aspects related to importing or exporting cargo.

This includes activities such as securing space on cargo vessels and preparing all the required legal documentation for the shipment, tailored to the specific needs of the sender and receiver.

Advantages of using NVOCC

Utilizing an NVOCC in logistics brings several significant benefits, including a comprehensive understanding of the NVOCC meaning in logistics and access to customized services, lower rates, ease of documentation and legal uses, an extensive network, vision of future trends, and effective risk mitigation.

Customized services

NVOCCs can tailor their services to meet the specific needs of their customers. 

This includes providing consultation, processing and preparing various shipping documents, as well as managing storage and transportation activities.

Lower rates

Due to their ability to purchase container space in large quantities, NVOCCs can offer lower rates to their customers. 

By signing contracts with shipping lines to commit to a certain number of units each year, NVOCCs can secure favorable rates that benefit small and medium-sized enterprises.

Ease of documentation and legal uses of NVOCC

NVOCCs possess in-depth knowledge of the necessary documentation for successful shipments and ensure timely compliance with relevant laws and regulations. 

They stay updated on changes in international trade regulations and are well-versed in effective methods and practices to expedite the process accurately

Extensive network

NVOCCs have an extensive network of contacts, including trucking unions, carriers, and trade organizations. 

A reliable NVOCC has developed a personalized network capable of connecting businesses with suitable options based on their unique needs and requirements.

Vision of future trends

With their vast and diverse networks, NVOCCs have access to data and information that can help predict future trends, volatility, and market changes. 

Companies working with NVOCCs are better prepared to handle these changes and adapt accordingly.

Minimisation of risks

NVOCCs can assist companies in minimizing the risks associated with maritime transportation. 

By assuming commitments with major carriers and offering businesses the flexibility to respond to industry fluctuations, NVOCCs absorb a significant portion of the associated risk.

NVOCC vs. freight forwarder: how to choose?

The choice between an NVOCC and a freight forwarder largely depends on the specific needs of your company.

If your company requires a comprehensive service that encompasses logistics management and physical transportation, a freight forwarder may be the preferred option.

However, if your company only needs to book container space and can handle the remaining shipping process independently, an NVOCC may be a more suitable choice.

How do I know if an NVOCC is reliable?

To ascertain the reliability of an NVOCC, it is ideal to conduct a small investigation to confirm their trustworthiness:

  1. Search for references and testimonials from previous customers. Top NVOCC companies will have a list of satisfied customers who can testify to their service.
  2. Verify if the NVOCC is registered and holds the necessary license from the Federal Maritime Commission. If so, you will know that the NVOCC complies with all relevant laws and regulations, so be sure to confirm this.
  3. Lastly, ensure that the NVOCC is transparent about their rates. A reliable NVOCC will not have hidden charges and will be clear about the costs from the beginning.

Choosing the right logistics partner for your company’s needs is crucial for the success of your business.

Whether you decide to work with an NVOCC or a freight forwarder, conducting minimal research allows you to ensure not only their reliability, but also that they are equipped to handle your shipping needs.

Remember: Making the right choice will help your company save time and money, and perhaps most importantly, avoid potential headaches in the future.