You might have encountered the term NVOCC carrier if you’re involved in international shipping. So, what exactly is an NVOCC, and how does it differ from other logistics providers?
Here’s a comprehensive breakdown.
NVOCC meaning in shipping
NVOCC stands for “non-vessel operating common carrier.” Unlike VOCCs or ocean carriers, which own and operate their vessels, an NVOCC helps shippers arrange shipments and logistics but does not possess ships.
Instead, an NVOCC leases space and pays steamship lines for the use of their vessels and containers then offers these assets to shippers needing to transport cargo. Each NVOCC carrier can typically establish its own rates for shippers.
Essentially, Non Vessel Operating Common Carriers act as intermediaries between carriers and shippers, simplifying freight transportation.
Pricing structures and legal responsibilities
When pricing ocean transit, you can think of NVOCCs as bulk buyers at a wholesale club, snagging large amounts of space on ocean carriers and reselling them to shippers.
Typically, it secures favorable rates by purchasing capacity in bulk from carriers—similar to discounted season passes versus single-day lift tickets at a ski resort.
Now, let’s discuss legal responsibilities. NVOCC carriers assume full responsibility for your cargo, including direct legal liability for shipping from port A to B.
NVOCC license requirements
NVOCC vs. freight forwarder: Points of difference
- To be an NVOCC, you must also be a freight forwarder, but not all freight forwarders are NVOCCs.
- NVOCCs take on responsibility for ocean cargo, whereas freight forwarders do not assume liability for goods.
- NVOCCs exclusively handlesea freight, while freight forwarders may arrange shipment by ocean, air, or inland transport, up to a specific port or location based on the agreed Incoterms.
- Freight forwarders often charge for their services by negotiating each aspect of the logistics process separately. In contrast, NVOCCs may add a profit percentage to the rates they’ve already secured from contracted carriers.
- An NVOCC serves as an intermediary between the shipper and the ship operator, issuing bills of lading. Conversely, a freight forwarder is an authorized agent for the shipper from customs clearance to delivery.
When to choose an NVOCC carrier
How do you decide whether to work with an NVOCC or a freight forwarder for your global trade needs? It primarily depends on the level of service you require.
If you’re experienced and simply need to book space on an ocean vessel, collaborating directly with an NVOCC might be more cost-effective. You can search online to find a reputable NVOCC shipping partner. Or join the Airsupply group to simplify the process.
Airsupply, a leading China shipping agent, has combined these two services to offer customized solutions based on your freight needs. We have the latest NVOCC license and are well-versed in import and export regulations for various countries.
Whether you need air, sea, or rail freight, we can provide it at a competitive price with no hidden costs.
FAQs about NVOCC in shipping
Can an NVOCC also be a freight forwarder?
Yes. An NVOCC can double as a freight forwarder, managing ocean freight and needed logistics services like trucking, customs clearance, and warehousing for a door-to-door solution.
However, freight forwarders cannot perform some prime functions that NVOCCs can, such as entering into direct contracts with shipping lines and issuing their bills of lading.
Can an NVOCC issue an ocean bill of lading?
A Non-Vessel-Operating Common Carrier presents itself to the public as a provider of ocean transportation services and issues its house bill of lading or equivalent document.
