How To Choose a Reliable And Suitable Freight Forwarding Company For Foreign Trade Novice?

In the face of many freight forwarding companies, how to choose a reliable and suitable freight forwarding company for foreign trade novice? Here, TJ China Freight will introduce how to choose a reliable and suitable freight forwarding company from four aspects.

  1. Service and price. Whether it is the first or second generation, as long as the price is within a reasonable range and the service can keep up, it can be used as an alternative. Just compare and shop around, choose a freight forwarding company with the right price, and leave some profit for the freight forwarding company, otherwise, the price will drop and the service will not be able to keep up, and the result will be unhappy cooperation between the two parties. In the international freight forwarding circle, it can be said that big or small can be small. After all, there are only a few big villages in a generation. When you ask the price of some freight forwarding companies with a list, the next generation may be the same, and the price and service you get after that are definitely not good, there is no way, who made you famous in this freight forwarding circle. So only win-win cooperation can last.
  2.  Freight forwarding company level. Freight forwarding companies are generally divided into first-level,second-level,third-level, and fourth-level. Generally, shipping companies will mainly issue route freight rates and shipping space to first-class freight forwarding companies(non-vessel operating carriers). The company maintains a good relationship with the freight forwarding company(similar to a first-class NVOCC). After the first-level shipping company agent gets the route price,it will be distributed to some subordinate second-level freight forwarding companies in the form of small profits but quick turnover.

Therefore, sometimes when the cargo owner directly asks the shipping company to apply for the price and space, it will be much higher than the price released by some freight forwarding companies.However choosing a freight forwarding company is also prone to problems. For example, when a fourth-level freight forwarding company is found once there is a problem the efficiency of the solution will be quite slow and it is easy to complicate things. Therefore when choosing a freight forwarding company,it is best to choose credibility. Higher first-class freight forwarding company (NVOCC).

  1. Choose the appropriate freight forwarder according to your own volume. If there are only a few parties per ticket and the delivery time is not very fast, then a freight forwarding company that specializes in LCL will be more appropriate. If each ticket is dozens of KG, then international express will be suitable for you. Before looking for a freight forwarding company to quote, you need to organize the cargo information, so that the price quoted by the freight forwarding company is accurate. The cargo information to be prepared includes product name, quantity, gross weight, volume, delivery time and destination, etc.
  2. Choose the appropriate freight forwarder according to the required service. If you need a freight forwarding company to provide one-stop services such as warehousing, receiving, loading, customs declaration, inspection, shipping, etc., overseas double-clearance door-to-door service, and agency tax refund service, then a reliable and suitable freight forwarding company is able to provide personalized services Service freight forwarding company.

TJ China Freight focuses on logistics, involving international express, air freight, ocean freight, China-Europe rail freight lines, and many other cross-border logistics channels covering Europe, the United States, Canada, and Japan. With over 20 years of experienced employees carry out the mission of “we deliver faster, safer and easier” which leads us to provide high-quality, professional, fast logistical solutions to our clients.

2023 | Freight Forwarding FAQ Ultimate Guide

International trade is a large and complex trade, it is different from domestic trade, more contact with a number of countries, and then have different import and export standards of different countries and related matters, in order to help trade parties, the introduction of freight forwarding services. The following will provide authoritative answers to common questions related to China freight forwarder.

See below for the main services that China freight forwarding can provide respectively.

  • Customs clearance.
  • Packaging.
  • Insurance.
  • Import and export paperwork.
  • Storage.
  • Inventory management.

This list is not exhaustive; other operations can be performed by freight forwarding entities.

As these services are grouped under freight forwarding, the whole process of importing and exporting products becomes less stressful.

TJ China freight forwarder

Why is it profitable to use freight forwarding services?

We can see 5 key factors that make freight forwarding services helpful.

Flexibility. With freight forwarding services, you can easily change your choice of transport company or mode of transport without any hassle.

Versatility. A good freight forwarder knows how to react quickly and solve problems as they arise (such as rerouting to sea or air delays).

Cost-effective. Freight forwarding services can help you save a lot of money. Shipping companies handle bulk cargo, which makes it possible to reduce freight costs.

No customs hassles. Customs rules and regulations can make your deliveries confusing and complicated. A freight forwarder will ensure that you can avoid all these hassles.

Additional services. Such options include purchase tracking, packaging and on-demand reporting. When choosing a freight forwarder, it is a good idea to choose a company that offers helpful additional services.

If you need to export a shipment from China, TJ china freight has the best service for you, get a free quote for your cargo shipping now!

What are the main duties and responsibilities of a freight forwarder?

The freight forwarder uses the best routes and methods to deliver large shipments to their destination.

The freight forwarder must ensure that the goods reach the buyer in the shortest possible time.

Therefore, freight forwarders must make the most efficient use of multiple modes of transport.

The freight forwarder must carry out research while planning the route.

 

He needs to take into account

  • The type of product to be transported.
  • The distance to the final destination.
  • Any specific customer requirements regarding the final delivery time?

The freight forwarder is also responsible for the

  • The packing process.
  • Insurance procedures.
  • Customs documentation and other regulatory requirements.

A good freight forwarder must have a high level of organization.

She/he keeps a close eye on controlled shipments using satellite technology and software applications.

Finally, such a person (company) must communicate with her/his clients and make payments on their behalf.

What is freight forwarding insurance?

The freight forwarding process assumes a cash flow of billions of dollars, so insurance is an obvious choice.

  • Good insurance coverage for freight forwarder liability includes
  • Bill of Lading Liability.
  • Errors and Omissions (E&O).
  • Bailiff’s liability for warehouse and trucking operations.
  • Packing and container filling liability.
  • Container and transport equipment cover.
  • Customs liability.
  • Third party liability (mainly for 3PL companies).
  • Rail cargo

How does the freight forwarder deal with lost cargo?

In this matter, it all depends on the contract you have with the freight forwarder.

Freight forwarders also have similar liability contracts with shipping companies and carriers.

Generally, such agreements set out the course of action in the event of loss or damage to the goods.

Once the freight forwarder has entered into a contract, he will endeavour to ensure that no such trouble arises.

If it still occurs, the freight forwarder will take care of such damage himself or with the help of an insurance company.

How much does freight forwarding cost? What are freight forwarding surcharges?

The freight forwarding process entails various costs and fees.

They can be divided into two groups: ordinary costs and non-standard costs.

In any case, there are 3 general charges that must be paid in practice.

Air/land/sea freight charges. This is the most obvious one. It depends on the size of your shipment, the country of origin and the distance of delivery.

Some freight forwarders may include additional charges here.

Cargo inspection fees.

Airline security fees.

Fuel surcharge.

Pick-up fees. These are the fees associated with picking up the goods from the warehouse.

Freight forwarding handling fees. These are fees associated with different paperwork, including copying documents and preparing bills of lading. This fee may range from US$35 to US$75.

 

Non-standard (additional) fees may refer to

Certificate of origin. In some countries, you may need this document to verify the manufacturer of the product.

Hazardous substances. There are always additional costs and fees for handling hazardous substances.

Legalization procedures. In most countries, the legalization process is linked to the verification of the document by the consulate or embassy.

Please bear in mind that each country/region charges additional fees.

For example, the US government assumes additional export fees, such as TSA security and AES fees.

 

What are the common problems with the freight forwarding process?

The freight forwarding process faces many challenges.

The following are the most common problems.

Unclear rules of the game

Freight forwarding depends on the economic conditions of each country, as well as international regulatory rules.

It makes the process quite complex and unbalanced due to different rates, fees and charges.

Customs clearance complications

Following on from the previous topic, here is another problem with the freight forwarding process: uneven global customs regulation.

This limits the scope for freight forwarders to operate. This means that most freight forwarders will take their chances in local markets.

Learn Some Basic Tips About Shipping Cargo

Different goods often use different shipment matters are also different freight way, together with learning all of those!

Bulk and project cargo freight terminals

In contrast to the specific requirements of container and intermodal terminals, bulk cargo is characterised by non-standard nature and size variations, requiring high levels of resources at the terminal and transport end, open or closed storage, vessel services and terminal transfers, as well as specialized handling equipment requiring heavy lift capacity where necessary.

These can include temporary or permanent ship offloading facilities (MOLF) for nuclear power stations, temporary heavy lift terminals for offloading turbines for new conventional power stations in remote areas, fabrication, assembly, foundation loading, turbine and offshore substation fabrication, and offshore substations for offshore wind.

Using a full container is often the most cost-effective way if you have the volume of cargo to accommodate a full container. We support FCL ocean freight and help you save a lot of cost.

Container terminals

In the international container shipping industry it is vital to remain competitive and regularly upgrade facilities to maximize storage capacity and reduce container handling costs.  Multimodal transport is the new way of moving freight in recent years.

Intermodal Cargo Terminals

Intermodal freight transport involves multiple modes of transport, including rail, ship and truck, in the course of container transport, without the need to unpack containers. By reducing the volume of cargo handled, we reduce the potential risk of damage and loss of cargo, while also increasing safety and speeding up the movement of cargo. More and more shippers are accepting this mode of transport for their goods.

Increasingly, however, the challenge is that port facility developers need efficient and scalable terminal layouts, while intermodal transport developers need sophisticated logistics and operational improvements to accommodate the seamless and rapid transfer of cargo between different modes of transport. The logistics of liquids often involve further considerations see.

Dry and liquid bulk terminals

Dry and liquid bulk materials have specific handling requirements and pre-determining the transport and storage of potential cargoes is part of the scope of the solution. These types of transport remain important as fuels, petrochemicals, aggregates, grains and other commodities require terminal pipelines or conveyors to and from ships.

At the same time, land-based transport and storage equipment for ship handling varies considerably and may even require highly customised solutions for specific cargoes. This includes the customized electromechanical services often required for individual types of bulk berth configuration, as well as handling incoming bulk cargo from trains and trucks, port storage, reclamation and conveying systems for ship loading, port berths, quays, ship handling, and navigation.

If you have no idea about your shipping type, feel free to send an inquiry about details. The most professional China freight forwarder team of TJ  team will arrange your cargo better at a lower price.

Do You Know What Role H.S. CODE Plays in Freight Transport? | 2022

We all know that there are different regulations for different cargoes, that different countries have their own special customs regulations and different tariffs for different cargoes, so how can you identify these different cargoes quickly and efficiently?

The H.S.CODE system is very useful in shipping operations because it allows customs officials to identify goods faster and easier, thus speeding up the clearance of goods.

Also known as the Harmonised System Code (H.S.CODE), H.S.CODE is the primary tool used by customs officers and duty officials to classify imported goods. Developed by the World Customs Organisation (WCO), H.S.CODE is a multi-purpose international product nomenclature that describes the type of goods being transported. Each H.S.CODE is a six-digit number, and many goods have multiple H.S.CODEs associated with them – for each country of origin or destination, or for each brand or manufacturer, etc.

The H.S.CODE can also be used to provide a common identifier for import and export goods, to identify the category of goods, to manage the classification of goods, to review tariff rates, etc.

How many numbers are there in the H.S.CODE?

The Harmonised System (HS) code is used by border agencies to identify the international trade status of goods and consists of three parts: a 2-digit code, a 4-digit code and a 6-digit code.The first 6 digits of the HS code can be used in conjunction with a country’s local customs identification number to indicate the trade status of the goods.

Are the HS codes different for each country?

Each country can adapt the HTS code with a 2 or 4 digit code without changing the first 6 digits. In other words, the first 6 digits remain the same in each country. However, it is important that countries do not modify the first six digits when adding numbers to more accurately classify and define goods. Countries that are part of the Harmonised System codes must be content to define the basic commodity at the six-digit level, however they can also introduce more detailed descriptions in those six digits

To determine if an HS code is valid you must first find out what type of HS code it is. There are three types: commodity codes, statistical codes and auxiliary codes. Commodity codes are used for raw materials and intermediate products, statistical codes are used for customs only, and auxiliary codes are used for other types of data that do not fall into the other two categories.

After determining which type of HS code it is, you must then look at the first two digits to see if that HS code has a four-digit extension. If the first two digits are 00 to 21, then there is no four-digit extension. If the first two digits are 22 to 47, then it has a four-digit extension. If it has a four-digit extension, you will have to find out what it means by looking at an additional table showing all the possibilities. After you have determined what type of HS code it is, you will have to look at the first two digits to find out if that HS code has a four-digit extension. If the first two digits are 00 to 21, then there is no four-digit extension. If the first two digits are 22 to 47, then there is a four-digit extension. If there is a four-digit extension, you have to find out what it means by looking at the additional table showing all possible extensions.

For more detailed information, please head to the official website. And you can contact us if you are looking for a China freight forwarder to help ship your cargo from or to China for your business. Our professional team is committed to providing the best service with expertise. Sea, Air and rail freight, FCL & LCL, DDP & DDU, Door to Door, Port to Port, just let us know your requirements, and we will provide you with excellent forwarding service at a reasonable price.

What Will Be the Trend of China’s Freight Forwarding Industry

Since the reform and opening up, China freight forwarding industry has developed rapidly and played an important role in expanding foreign trade, attracting foreign investment, expanding employment, and promoting the development of third-party logistics. At present, with the implementation of the “One Belt, One Road” strategy and the vigorous development of cross-border e-commerce, the development of international freight forwarding is expected to enter a new chapter.

Before the reform and opening up, cargo agent in China was strictly controlled and lagged behind in development. After the reform and opening up, the Chinese government gradually liberalized the management of international freight forwarding, international freight forwarding industry has ushered in rapid development. China’s international freight forwarding industry employs about 2.5 million people, the development momentum is strong. At the same time, the “Belt and Road” strategy and the continuous development of cross-border e-commerce provide sufficient growth momentum for the international freight forwarding industry, with a bright future. However, the international freight forwarding industry itself also has certain limitations. On the one hand, the international freight forwarding industry is a pure service industry, closely related to the quality of service, geographical location, interpersonal relationships, past history, etc., resulting in a small number of small and medium-sized freight forwarding companies and large freight forwarding companies, which is not conducive to the further development of the industry.

On the other hand, international freight forwarding is an industry where competition and cooperation coexist. For international freight forwarding enterprises, to achieve complementary business between different countries, regions and enterprises, information sharing and freight network sharing to enhance their own strength. In the above context, China’s international freight forwarding industry will show the following four major trends.

First, large-scale application of Internet information technology to improve the scope and efficiency of sharing and cooperation. Through the use of modern information technology, the integration of physical logistics networks and invisible information networks can be achieved.

Second, continue to extend the industry chain. A strong freight forwarder will certainly expand its business to logistics and supply chain management consulting services to improve its competitiveness.

Third, specialization, refinement and specialization continue to strengthen. With the increasingly fierce competition in the market, how to stand out has become the primary consideration of many small and medium-sized international freight forwarding enterprises. Therefore, strengthening specialization, refinement and specialization is inevitable. Finally, the speed of integration is accelerating. Since the development of the international freight industry, the trend of integration has gradually unfolded, especially for enterprises with similar geographical ties, regional concepts and social relations. With accelerated integration, the international freight industry can develop better.

Black Friday 2022 is Just Around the Corner and You Need Professional Freight Forwarders!

You may say, why should I call you professionals when I can contact the logistics myself?

  1. Going it alone

For most shipments, it is simply not possible to arrange international shipping online with a sea or ocean freight forwarder.

It can be done even without a freight forwarder, but for the layman it is a dangerous game. When it comes to freight, there are many things that can go wrong, and often do. You need to cover your bases with freight insurance.

  1. Your supplier arranges for the shipment to be located furthest away within the United States

This is a classic trap that often sees inexperienced importers fall into. Many suppliers offer to arrange shipments as far as the US ports. This may seem like a good deal if you only add in the cost of local trucking. But there are other costs involved.

Such shipping arrangements often use one of the “C” Incoterms, particularly the CIF Incoterms. These Incoterms have several disadvantages for the importer, including the common situation where the importer is held hostage by inflated costs.

  1. Your supplier arranges the entire shipping process

Your supplier may be an expert in manufacturing or trading, but they will not be an expert in shipping.

If they have an arrangement with a local freight forwarder that can manage the entire shipping process, it is unlikely to be any better than what you have arranged. At the end of the day, the supplier will be looking to recover their costs.

If they cost account for freight costs, they have no incentive to secure a good price. This means you could be paying inflated shipping costs.

If they offer a sales/freight package, they are likely to jack up the price.

This will result in you walking out the door with high logistics costs and no insurance. We all know that reaching the exporter’s warehouse requires customs clearance, tax payment and customs brokerage……. Anything that goes wrong at any point in the process will not guarantee the timeliness of your shipment.

Let TJ China Freight help you reach another peak in your career with this upcoming biggest promotion of 2022!

What is the Main Difference Between NVOCC and Freight Forwarder?

There is nothing more important than choosing a proper shipping agent whether you are importing or exporting.  In order to help you to choose the right partner, we are here to give you the difference between NVOCC and freight forwarder. Continue to read.

What Is NVOCC?

An NVOCC may be defined as an entity that provides ocean freight services as a “carrier,” albeit with or without own or operated vessels.

The NVOCC accomplishes this by buying slots or space from a VOCC (Vessel Operating Common Carrier) and reselling the same to their customers, who can be exporters or forwarders.

NVOCC issues its own House Bill of Lading as a “carrier” and, in doing so, undertakes the responsibilities of a carrier subject to, of course, the terms, conditions, and liabilities of their bill of lading.

Apart from obtaining a license from the FMC, NVOCC operators also have to file a tariff before operation in the USA.

A tariff contains actual freight rates, charges, surcharges, freight classifications, rules, regulations, and practices of a common carrier (VOCC or NVOCC).

Who is a freight forwarder?

A freight forwarder is a supply chain expert who arranges for the seamless movement of cargo. And they do that by arranging and facilitating the transportation of your goods via different modes: ocean, rail, air, or road. The only golden rule about freight forwarders is that they are not the ones moving your cargo, only arranging for it.

Exporting goods is not easy with way too many steps, documents, and certificates to clear. It’s almost impossible for novice exporters to know all about these. So when you’re hiring a freight forwarder, you’re basically paying them to get all of these in order. As a result, in many instances, freight forwarders are referred to as ‘shippers’ in relation to ocean carriers.

What is the difference between NVOCC and Freight Forwarder? Check the following chart

Looking for China freight forwarder, TJ China freight is always the most trusted partner who will handle everything for your cargo. We offer sea freight, air freight, and rail freight and more. Better service and competitive price.

2022 Top 50 Global Shipping and Air Freight Forwarders!

Dexun, Sinotrans, and DHL are among the top three global ocean freight forwarders.

A few days ago, Transport Topics, an authoritative magazine in the logistics industry, announced the list of the top 50 global ocean and air freight forwarders in 2022/2023.

Compared with the previous year, the ranking of the top 5 global ocean freight forwarders in 2022 has not changed, followed by: Kuehne+Nagel ranked first with an annual cargo volume of 4.613 million TEU; Sinotrans ranked second with an annual cargo volume 3.75 million TEU; DHL ranked third with an annual cargo volume of 3.142 million TEU; DSV ranked fourth with an annual cargo volume of 2.9 million TEU; DB Schenker ranked fifth with an annual cargo volume of 2.215 million TEU.

In addition to Sinotrans, there are 9 Chinese companies on the list, including:

Kerry Logistics ranked 9th with an annual cargo volume of 1.23 million TEU;
CTS International Logistics ranked 11th with an annual cargo volume of 1.02 million TEU;
Worldwide Logistics Group ranked 15th with an annual cargo volume of 840,000 TEU;
OOCL Logistics ranked 17th with an annual cargo volume of 750,000 TEU;
Cargo Services Far East ranked 25th with an annual cargo volume of 600,000 TEU;
Honour Lane Shipping ranked 28th with an annual cargo volume of 510,000 TEU;
Long Sail International Logistics ranked 31st with an annual cargo volume of 360,000 TEU;
AWOT Global Logistics Group ranked 37th with an annual cargo volume of 250,000 TEU;
Dimerco Express Group ranked 39th with an annual cargo volume of 240,000 TEU.

2022/2023 Top 50 Global Ocean Freight Forwarders List

2022 Top 50 Global Ocean Freight Forwarders List
2022 Top 50 Global Ocean Freight Forwarders List

2022 Top 50 Global Ocean Freight Forwarders List
2022 Top 50 Global Ocean Freight Forwarders List

In the list of air freight forwarders, Dexun surpassed DHL to rank first with an annual cargo volume of 2.22 million tons; DHL ranked second with an annual cargo volume of 2.1 million tons; DSV ranked third with an annual cargo volume of 1.6 million tons. The volume of the three companies has increased significantly over the previous year.

In addition, Chinese companies on the list include:

Sinotrans ranked 11th with an annual cargo volume of 530,000 tons;
Kerry Logistics ranked 12th with an annual cargo volume of 520,000 tons;
Ouhua International ranked 13th with an annual cargo volume of 480,000 tons;
Huamao Logistics ranked 15th with an annual cargo volume of 400,000 tons;
China-Philippines Bank ranked 24th with an annual cargo volume of 250,000 tons;
WWL ranked 34th with an annual cargo volume of 130,000 tons;
Beijing Harmony Shipping & Forwarding Agent ranked 38th with an annual cargo volume of 100,000 tons.

If you need a professional freight forwarder to help you handle the shipping from or to China, please feel free to send an inquiry here, and we will offer a you a cost-effective solution.

Request a better shipping rate!

 

2022 Top 50 Global Air Freight Forwarders List

2022 Top 50 Global Air Freight Forwarders List
2022 Top 50 Global Air Freight Forwarders List

 

2022 Top 50 Global Air Freight Forwarders List
2022 Top 50 Global Air Freight Forwarders List

How to properly prepare a LCL shipment

How to properly prepare a LCL shipment
How to properly prepare a LCL shipment

When we send LCL (Less than Container Load) shipments, the merchandise needs to be prepared carefully. When you are preparing an LCL shipment from an FCL (full container load) shipment, it is important to keep the differences in mind. More specifically, since LCL shipping requires container sharing, you should be extra careful.

The most common cause of LCL shipment damage is insufficient packaging. It is important to note that some insurance companies do not provide coverage in this situation. That said, the right packaging and finding the right material is almost a science in itself. This is not a risk you should take. The difference between using the best and most adequate material and using material that may be a little too big or too small is huge.

If you are a frequent exporter/shipper, you should already know the specifications for preparing LCL shipments. However, if you're just starting out in the export world, here's a tip: Before you start looking for container shipping rates, it's recommended that you read what to expect and how to properly prepare a LCL shipment.

This problem is best broken down into the various factors that ensure the safe transportation of goods. This includes whether your item contains fragile items and the total number of boxes. Once we have these answers, we need to reflect that as clearly and accurately as possible on packaging and labels.

Some aspects to consider include:

1. Box and Packaging

Pack all items in boxes. Not in a suitcase, nor in a bag or any other type of container. Certain companies sell boxes designed for export. If you are shipping delicate items, it is recommended to first fill the box with plastic wrapping bubbles to protect your item. Additionally, each box must be properly sealed. Keep in mind that these boxes may be susceptible to strenuous exercise during sea travel.

2. Labels

Clearly identify each box: shipper name, consignee name, destination country, freight forwarder name and booking number.

If possible, mark these details on each side of the box. This ensures visibility of cargo as it is palletized and stacked in containers. As containers are consolidated, your cargo may go through various stages of loading and unloading.

3. Counting

Mark each box with a number that indicates its position relative to the total number of boxes. For example, if your shipment consists of 30 boxes, you should label your boxes as follows: 1 of 30 boxes, 2 of 30 boxes, 3 of 30 boxes, So on and so forth.

You can include this number on the main label of the box or write it separately.

4. Fragile labels

If shipping fragile items, be sure to label them clearly and visibly on each box that contains fragile items.

Just like the number of the box, you can note it on the main box label. But we recommend that you put a special "fragile" label on the box. Place it on all four sides of the box to ensure visibility as your box may move around in transit.

5. Palletizing and shipments

To get a LCL shipment quote, you need to provide the total amount of the item. If you are not sure how to calculate it, the following video will explain how.

6. Labeling of non-stackable pallets

As mentioned before, you should properly palletize the cargo inside the container. It is not uncommon for trays to be stacked together. However, you may not always want your cargo to be stacked, especially if they contain fragile items. If you want your pallets not to be stacked, you should explain this to your forwarder when booking. We also recommend putting this label on the box - on the four sides of each box.

7. Automatic palletizing

Palletizing of goods usually takes place when the goods arrive at the warehouse. If you prefer to DIY this part of the shipping process, be sure to use plastic pallets or fumigated wood. This prevents the risk of your shipment being rejected by customs authorities at your destination port for non-compliance.

8. Uniform packaging

Arrange your items evenly and uniformly. Avoid a section protruding too high or having an unbalanced weight. Shipping charges are calculated based on the cubic volume of the item. Uneven distribution can increase your numbers and lead to higher costs.

Why your NVOCC should be FMC licensed

Why your NVOCC should be FMC licensed
Why your NVOCC should be FMC licensed

Choose NVOCC: Make sure it is FMC licensed

Given the number of NVOCCs in the world, choosing the right NVOCC for you can be a daunting task. How do you know which one is best for you? The first and most important step in this process is to ensure that your NVOCC is licensed by the Federal Maritime Commission (FMC).

What is NVOCC?

Let's start with the basics. N VOCC stands for Non-Vessel Operating Common Carrier. Its role includes contracting sea freight and shipping companies to move cargo from one point to another. It has agreements with carriers to provide its ships with a fixed number of slots each year in exchange for low rates.

NVOCCs are the largest traders in the container shipping industry. It issues bills of lading, takes responsibility and liability for the goods, and can also own and operate its own or leased containers.

NVOCCs and Freight Forwarders

NVOCC and freight forwarders are OTIs (Ocean Transportation Intermediaries). But they are not synonyms. NVOCCs can issue their own bills of lading, freight forwarders cannot; they can only work against carrier (or NVO) bills of lading.

Perhaps the most important difference is that, in some cases, NVOCC accepts all responsibility and liability for the goods. On the other hand, freight forwarders are not responsible for this. In addition, freight forwarders can act as agents or partners of NVOCC, but the reverse is not possible.

What does FMC do?

The Federal Maritime Commission is the U.S. federal agency responsible for regulating international shipping by U.S. ocean freight. FMC was established in 1961 to take over the responsibilities of the Federal Maritime Commission and has since been responsible for administering the regulatory provisions of shipping law. Today, it has more than 6,250 NVOCC registrations in its database.

What does it mean for NVOCC to have an FMC license?

With the FMC license, NVOCC can negotiate contracts with steamship companies. It also allows them to confirm their own House Bill of Lading as a Carrier Bill of Lading. For customers and suppliers, this is proof that the NVOCC is legally conducting business within the regulations set forth in the United States.

What happens if you work with a non-FMC licensed NVOCC?

This is the equivalent of hiring an unlicensed and uninsured contractor to work on your property. If something goes wrong, you have nowhere to go for help and support. In a more drastic way, basically, the only rules unlicensed NVOCCs have to worry about is getting paid and doing minimal work for the carrier/customs to accept your cargo as they are not subject to the regulations set by the FMC and obligations.