Is shipping with nvocc beneficial for exporters?

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NVOCC

NVOCC stands for Non-Vessel Operating Common Carrier. In exports nvocc’s play an important role to get best freight rates for medium and small sized entrepreneurs. A Non-Vessel Operating Common Carrier (NVOCC) performs the functions of an ocean carrier but does not operate the ships. Instead, an NVOCC buys space from ocean carriers in bulk and sells this space to shippers.

The US market has probably the largest number of NVOCC operator in the world and the US Federal Maritime Commission (FMC) regulates their operation in the sector.

This agency defines the NVOCC as a common carrier that provides ocean transportation, issues its own bills of lading or required documentation, and does not operate ocean-going vessels

An NVOCC is a third-party company which enter into a contract with operating shipping lines, providing flexibility to trade across multiple international trade routes. At basic level an NVOCC buys bulk space from one ocean carrier (vessel operating common carrier) and sells that space to multiple shippers at a better rate on the same vessel/route.

An NVOCC acts as a middleman between the shipper and the vessel operators

what is the role of nvocc in exports?

Depending on certain jurisdictions and markets, the activities of an NVOCC may include-

1. entering into contracts for the international transportation of goods with shippers such as shipping lines;

2. receive and deliver cargo like a shipping line;

3. Issue HBL or other transport documents;

4. collect freight and other service charges;

5. reserve space and organize transport with the main lines-;

6. pay port-to-port transportation freight or other transportation expenses;

7. container consolidation and deconsolidation, either with your own CFS or with that of a third party.

Why Should You Ship with an NVOCC?

When you’re shipping cargo, you’ll have three options:

Book directly with a VOCC
Work with a freight forwarder
Choose an NVOCC

vocc- Vessel operating common carriers

VOCC– Vessel operating common carriers are the ocean carriers that actually own the shipping vessel.

1. Book directly with a VOCC

Large businesses that ship a considerable amount of cargo can benefit from booking directly with a VOCC. Since they ship significant volumes, they’ve got good bargaining power with the steamship lines.

2. Work with a freight forwarder

A freight forwarder is a supply chain expert who arranges for the seamless movement of cargo. As freight forwarders are essentially acting as an agent for their shippers, they are less likely to secure lower rates with the steamship lines. More often, they’re simply passing on the costs from the steamship lines, with some additional added on top to cover their operational costs.

3. why Choose an NVOCC

offer best freight rates according to need

Small and mid-sized businesses, working with an NVOCC has several advantages. Because of the volume of the business they do, NVOCCs are often able to negotiate special rates with ocean carrier. As a result, customers who ship with an NVOCC get to take advantage of these rates and ship for less than if they tried to book direct with a VOCC.

Better customer satisfaction and service

NVOCCs are often set up to cater to smaller to mid-sized businesses—and to offer them more personalized service. This can mean more frequent communication so you can better understand the status of your cargo. It might also mean that it’s easier to get someone on the phone if you have a question or a problem.

operational flexibility with sail dates and sail routes

An NVOCC might have access to three different sail dates through three different VOCCs.

overall, NVOCCs are often in a position to deliver more customer-friendly service than large steamship lines.

NVOCC vs freight forwarder: whom to choose?

it’s time to figure out whose service fits you the best. Frankly, it all boils down to two parameters:

Level of service
Cost

The first thing you need to decide on is what level of service you’ll be needing.

1. If you know what you’re doing and only need a passage on a vessel, then NVOCC will save you a lot of money.

2. It’ll be worth the money to appoint a freight forwarder if you have no to less awareness about shipping processes.

A freight forwarder will listen to your requirements and assist you in finding the best route for shipping your goods, arrange the containers and transportation, find best freight rates, and provide other services at higher expense.

3. But if money is a constraint, then rest assured that NVOCC will save you money. By going directly to NVOCC, you’ll save the middleman fee of a forwarder at the cost of losing out on extra additional services.