Understanding the role of NVOCCs in global shipping 

Exploring the Role of NVOCCs in Global Shipping

The role of NVOCC in global shipping ranges from reserving vessel spaces, looking for the best shipping rates, consolidating cargo, and issuing documents such as bills of lading. Shippers across the globe facing challenges in containerisation and logistics for international transportation of goods are reaping multiple benefits by booking non-vessel operating common carrier (NVOCC) agencies. Although NVOCC does not operate their vessels, they are experts in the shipping industry and help their clients streamline and optimize their shipping activities such as cargo packing, intermodal transportation, documentation, customs clearances, collaborating with ocean carriers and offering door-to-door service for hassle-free worldwide shipping. Let us learn more about the role of NVOCC in global shipping.  

What is NVOCC in maritime? 

NVOCC is an acronym for non-vessel operating common carrier, a popular logistics service provider for maritime shipping. NVOCCs are logistics service providers that act as intermediaries between the shipper and the vessel operators. International shipping is often challenging due to the multiple regulatory policies, documentation, negotiations and billings involved. Shippers may face challenges, while international shipping and NVOCC help businesses overcome such logistics challenges. These agencies or service provider companies assist shippers in sending their less-than-container load (LCL) shipments across borders by ensuring proper compliance, documentation and container space on ships.  

In simple words, if you own a small or medium-sized business that involves international shipping, NVOCC will help in the process of containerisation and initiating transportation. Less than container load shipments require cargo consolidation, which further increases the complexities of shipping. NVOCC streamlines shipping and documentation for shippers and ensures cost efficiency during transportation. NVOCC does not own or operate its vessels but acts as a bridge between shipping companies that own vessels and shippers. They offer their expertise and services to make global shipping easier.  

Role of NVOCC in global shipping 

NVOCCs offer logistics services across the globe to cater to multiple business needs for international shipping. Let us learn more about the purpose of NVOCC in global shipping.  

  1. Cargo consolation – NVOCC is mainly concerned with helping shippers get their container spaces with LCL shipments. These agencies book container spaces on vessels and consolidate goods from multiple shippers to optimize container space utilization and assist shippers in cost-effective international shipping.  
  2. Issuing a bill of lading—NVOCC issues a bill of lading by assigning itself responsibility for the shipment from the point of origin to the point of destination. They also offer door-to-door services, allowing shippers to avoid the complexities of intermodal transportation. They ensure that the containerisation and transportation are carried out legally by examining the entire documentation process.  
  3. Reserving vessel spaces—Booking and reserving vessel spaces is the primary function of NVOCC in shipping. By collaborating with ocean carriers, NVOCC agencies can negotiate better shipping rates and reserve the required vessel space to obtain desired shipping schedules. This ensures seamless transportation of LCL shipments.  
  4. Point of contact – As logistics service providers, NVOCC is a communication channel between shipping companies, transport carriers or any other agent involved and the shipper. So, instead of going to every service provider individually, shippers can directly contact NVOCC for any queries related to their shipment while it is in transit.  
  5. Managing freight rates – The primary role of NVOCC in global shipping is negotiation and management of freight rates. NVOCCs are global service providers, they have a network with various vessel operators and carry out shipping rate negotiations on behalf of the shipper. They can help get the best shipping rates in the competitive market, especially in the case of international shipping. By partnering with various organizations, they can help shippers avoid routes that extract high trade tariffs during geopolitical events in shipping

Benefits of NVOCC shipping 

The advantages of NVOCC in global shipping are- 

  1. Cost-effective shipping – For small or medium-sized businesses that do not require an entire shipping container for shipping goods, NVOCC arranges for cargo consolidation, where multiple shipments are loaded in a single container and shipped off. This helps shippers save transportation and documentation costs that would have otherwise been significant if an entire container had been booked for LCL shipments.  
  2. Flexible shipping – By hiring an NVOCC, shippers can get the best shipping rates, access to the shortest shipping routes, and easy intermodal transportation. This is because NVOCC has a vast global network with ocean carriers and expert knowledge about the shipping industry. NVOCC can customize logistics solutions and deliver personalized services to shippers.  
  3. Risk assessment and management—Shippers do not need to struggle with managing international shipments and dealing with the risks involved in maritime shipping. NVOCC prioritizes the safety of goods during shipping and offers shippers a range of cargo insurance options. Depending on the type of goods, perishable, fragile or hazardous, they offer flexible containerisation to ensure cargo integrity. They also analyze market conditions to offer safer transportation routes and ocean carriers.  
  4. Door-to-door service – NVOCC offers an extensive service that picks up your shipment from the designated location and brings it to the port of origin. Upon reaching the destination port, NVOCC ensures that the consignment reaches its destination through a truck or train. This streamlined logistic process helps save time and resources and reduces the cost of investment in booking different service providers.  

How are NVOCC charges calculated? 

NVOCC charges can differ between ports, especially major or minor ports. It also depends on the shipping line you use. Various factors influence shipping rates including market fluctuations, seasonal demand, and geopolitical events. It is necessary to look out for such changes before booking for international shipping. NVOCC charges cover a range of services, so here is a breakdown of what they cover.  

  1. Bill of lading charges—Since NVOCC is responsible for issuing a house bill of lading, it charges for creating and processing the bill of lading. This charge is an essential part of the overall NVOCC cost that shippers must pay.  
  2. THC – Terminal handling charges are charged by the port or terminal for the temporary storage and stowage of containers onto ships until its schedule. In most cases, the THC, also known as container service charge, is paid by the shipping line on behalf of the shipper. The terminals are utilized both during container loading and unloading.  
  3. Seal charges – Container seals are fixed to container locks to secure the cargo containers and prevent tampering or unauthorized access. The container seal number is noted in the bill of lading issued by the NVOCC for container identification.  
  4. Transportation charges – NVOCCs book vessel spaces and arrange intermodal transportation where the goods are brought and taken from ports to their final destination through trucks or trains. NVOCC are skilled at finding the most suitable charges in the competitive shipping market.  

Are NVOCC and freight forwarders the same? 

                     NVOCC          Freight forwarders 
Role Act as intermediaries between shippers and ocean carriers. Act as intermediaries between shippers and any mode of transportation providers. 
Functions Responsible for booking vessel spaces, issuing the bill of lading, cargo insurances and cargo consolidation. Responsible for transportation of goods, warehousing, and customs clearances. 
Scope of services Limited to ocean shipping but are experts in allocating resources and risk management. Ensures multimodal logistics by covering all sorts of shipping through rail, road, and air. 

Shippers must acknowledge the role of NVOCC in global shipping and use it to benefit international shipping, obtaining better services and shipping rates.  

LOTUS Containers is a global provider of shipping container services by partnering with 300+ container depots. We lease new and old shipping containers in all types and sizes.

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