Does your business need to send products overseas? If you have to deal with maritime logistics, that’s no easy task.
Fortunately, certain operations exist to make the process easier and more streamlined for businesses. NVOCCs (non-vessel operating common carriers) are one such type of operation. Here’s your quick guide to understanding NVOCC in shipping.
What NVOCC means
As we mentioned, NVOCC stands for non-vessel operating common carrier, a term that may seem perplexing at first glance. As the name implies, an NVOCC does not operate its own ships. Instead, it acts as an intermediary between shippers and ocean freight carriers.
An NVOCC consolidates cargo from multiple shippers, books shipping space, and issues bills of lading under its own name.
The purpose and benefits of NVOCC
The primary purpose of NVOCCs is to simplify the shipping process for businesses. They negotiate space with larger vessel-operating carriers to secure competitive rates for bulk bookings. This advantage is passed on to business owners in the form of cost-effective solutions for shipping goods.
NVOCCs also offer greater flexibility in scheduling and routing, adapting to the demands of the businesses they work with. They often provide value-added services, such as customs documentation and cargo insurance.
Basically, NVOCCs help businesses get goods to their destinations efficiently, safely, and legally.
Common Confusions Concerning NVOCC
The biggest confusion regarding NVOCCs is that they’re no different from freight forwarders. Although both operations share similarities, there are important differences between them. For example, NVOCCs issue their own bills of lading and assume carrier responsibilities, whereas freight forwarders primarily act as agents arranging transportation services.
Another source of confusion is their operational scope—NVOCCs play a significant role in international shipping, but they do not own any vessels. They operate by leasing cargo space from shipping lines.
Understanding the role of NVOCCs in the shipping industry is helpful if you need to send your products overseas and optimize your logistics. Now that you have learned the importance, benefits, and common myths surrounding NVOCC operations, you can decide if this service is right for your business.
