What does a NVOCC do?
NVOCC (= non-vessel operating common carrier) is a company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution.
NVOCCs sign contracts with shipping lines to guarantee the shipment of a certain number of containers each year. In return, shipping lines offer favorable rates to NVOCCs.
Their main tasks compromises sales, staffing and transport of the containers to the specific ports. In addition to that, NVOCCs can issue their own Bill of Lading.
How does freight forwarding work?
Experts in logistics, freight forwarders are individuals or organizations that act as agents for importer/exporters by helping them to establish relationships with carriers such as trucking companies, ocean liners, and air freighters.
Not only do they take responsibility for the entire process of shipping and storing the goods, which includes handling and processing cargo documents, they also negotiate the cost of the transport while choosing an established trade route that best optimizes speed, price, and reliability.
The list of activities controlled and managed by NVOCC includes:
Concluding international goods carrier contracts as carriers with the shippers.
Delivering and receiving cargo in the form of carriers.
Issuing of various transport documents along with house bill of landing.
Handling booking space as well as the mainline carrier shipping.
Arranging payments for transportation between port to port along with other essential charges.
Consolidation as well as deconsolidation of containers using 3rd party services or through CFS.
The list of activities controlled and managed by Freight Forwarder:
They arrange cargo movements for international destinations.
Take responsibility to dispatch shipments via common carriers from the United States; may also arrange necessary space for the shipments via shippers. A responsibility that makes a forwarder’s liability insurance vital.
They process and prepare documentation related to all shipment activities.
However, freight forwarders also work in different ways. We’ve seen a rise in digital freight forwarders in the past years, changing how freight forwarding is done.
Why use a freight forwarder?
As freight forwarders handle every detail of the movement of goods, from shipping to storage and even the documentation, they are a great option for individuals and companies who are not all that familiar with the rules and requirements of shipping.
Unlike many NVOCCs, they can arrange for intermodal transportation for both international and domestic movement of goods. In this way, they can make the import/export process a lot simpler.
An added bonus of working with a freight forwarder is that, contrary to most situations, in this instance, having a middle man is likely to net you the best price.
Freight forwarders establish close relationships with a multitude of carriers and even use NVOCCs themselves sometimes. This often means that they get access to exclusive prices that their clients can then benefit from. This is especially the case for individuals and small companies who would otherwise be required to pay premium rates for their few containers.
