/ By TJ China Freight / Cargo • China Freight News • International • Shipping

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.

/ By tjchinafreight ivy / Shipping

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.