NVOCC leases an existing space in a container and rent or sell it out to their own customers and they are popularly called as ‘carriers’. They do not own any warehouse but could own a fleet of containers. It is also said that NVOCC agency sometimes can act as a freight forwarder for the customers too.
What is Non Vessel Operating Common Carrier (NVOCC)?
NVOCC is the short form of Non-Vessel Owning Common Carrier, which is a special agency or an entity that steps in for business owners who do not require the entire container provided by the freight forwarders to ship their material but just a small portion of it. NVOCC provides services like stuffing and transporting multiple containers to various desired ports.
NVOCC shipping is done in a way that these agencies make arrangements or sign contracts with ship owners or freight forwarders under their own Bill of Lading known as the House Bill of Lading and can act as a single point of contact of those small and medium-sized companies who do not require the entire container for their shipment.
Now, if you are wondering what is the role of NVOCC then we have listed them down for you in detail for better understanding.
Role of Non Vessel Operating Common Carrier (NVOCC) in Shipping
Let’s look at the role of NVOCC shipping :
Cost-Effective :The essential and most important role of NVOCC is the fact that it is cost-effective. With choosing NVOCC shipping, importer or exporter has to only bear the cost of the container that their product acquires. One of the reasons why NVOCC shipping is cost-effective is also because the agencies are happy to provide their loyal customers with various benefits.
Options for transportation :One of the reasons why NVOCC shipping is trending or is advised by people is because these agencies provide various options for transportation as the agencies have tied up with various shipping lines so that gives the customer options to pick the one they think is the best.
Precise Instructions :NVOCC shipping has one advantage that the communication till the product reaches the required destination, is kept clear and precise to make the process simplified. The Non-Vessel Owning Common Carrier acts as a single point of communication for both parties with the paperwork ready.
Types of Non Vessel Operating Common Carrier (NVOCC)
There are three types of Non-Vessel Owning Common Carrier (NVOCC) :
On-carrier type Non Vessel Owing Common Carrier :In this NVOCC shipping, the agencies have special agents and the offices at major transit and this engages in trans-shipment. The agents and the branches are expected to receive the material or products from inland or road carriers and issue the bill of lading. This NVOCC shipping does not have any restrictions when it comes to routes.
Carrier Non Vessel Owing Common Carrier :In this NVOCC shipping, the agency accepts the shipment, liability for the consignment, and offers a bill of lading. The carrier non-vessel owning common carrier is not expected to complete the transportation process themselves but deliver the shipment to an actual carrier and receive it once the goods get to their location to deliver.
Broker Non Vessel Owing Common Carrier :In this NVOCC shipping, the agency gets the shipment from various importers and helps them find a carrier for the materials. The Broker NVOCC shipping engages in the organization of transportation, distribution, and options of modes of transportation. This shipping is focused on determining the best route and services that would be perfect for the individual who opts for this NVOCC shipping.
Process of Non Vessel Operating Common Carrier (NVOCC) Shipping :
Non-Vessel Owning Common Carrier transports the materials from point A to point B and is considered a one-stop-shop for shippers. The NVOCC shipping uses multiple methods of transportation such as rail, ocean, and road. Sometimes the shipping agency outsources the warehouse to optimize the asset and issues their own House Bill of Lading. During the shipping process, the agents make sure that the NVOCC shipping documents are prepared and processed properly.
NVOCC shipping often offers seamless and personalized services to their clients, which is one of the advantages that come along with the shipping. The agency usually keeps a good contact and communication with the locals, which helps them in getting work done faster, and with minimum interruption. a
For the charges required for Non-Vessel Owning Common Carrier, they tend to vary from port to port and shipping lines. The distance is also another element that determines the cost of NVOCC shipping.
What is the difference between an NVOCC and a Freight Forwarder?
Even though both NVOCC shipping and freight forwarding are quite similar, there are some basic differences that one needs to understand before taking any decision. Let’s take a look at them:
For NVOCC shipping, a House Bill of Lading is issued, and are the agencies are permitted to add their profit margins if required. The NVOCC shipping agency owners have an agreement with shipping lines and the shipper or freight forwarders and might act as a mediator among the two. There are no NVOCC acting as an agent for freight forwarder.
For Freight forwarders, the House Bill of Lading is issued according to the International Federation of Freight Forwarders Association documents and are not allowed to add any profit margin to their bill. Although a freight forwarder can add the handling fees and if any other surcharges are required. The freight forwarders represent shippers while dealing with shipping lines. A freight forwarder can act as an agent for NVOCC shipping.