Logistics chains involve many different parties. Between the shipper, who sells the goods, and the consignee, who buys them, there is a swarm of brokers, agents, intermediaries, and other services’ providers who want a piece of the pie. All of them have different functions, and a single stage of shipping may require several parties to get involved.
cases, those functions somewhat intersect, and two parties are viewed as
something similar, although they are not. Non-Vessel Operating Common Carriers
(NVOCC) are often confused with freight forwarders, and in this post we discuss
their differences in detail so that you could easily distinguish between them.
these differences can save you money and trouble. It also allows you to be
well-informed when choosing between the two and, thus, get better results. This
article covers what a NVOCC and a freight forwarder are, and everything you
need to know to make the right choice.
already seen above, NVOCC is an abbreviation for Non-Vessel Operating Common
Carrier. It pretty much tells everything you need to know: these companies help
you carry your cargo while not having any ships. How does it happen? NVOCC buys
space on a carrier’s vessel and then sells it to shippers, thus gaining profit.
For the shipper, these enterprises act as carriers but for carriers, they are
represented by agents. You contact them when you need to organize the shipping of
your products. They provide you with freight quotations, packing requirements,
and other shipping info, and book space for your shipment on a vessel.
shippers interact with carriers directly? The reason is similar to why you do
not contact a manufacturing company when you have a headache and go to a
pharmacy instead. NVOCCs are available and attentive, and they will likely
provide you with a simple and cost-effective solution while considering your
Freight forwarder: brief overview
forwarder is a supply chain adept that can arrange a seamless transportation of
your cargo. They are multidisciplinary agents that will:
handle all the contracts, documents, and certificates for you;
- store your goods;
- book the carrier;
- deal with custom clearances, etc.
In other words, a freight forwarder is capable of organizing trouble-free shipping of your products whether by ocean, rail, road, or air.
For any arrangements, you can count on them. This is why working with a freight forwarder is the best choice for a newcomer in the international trade: it is impossible to know everything at once, so relying on an expert is a wise thing to do.
forwarder vs NVOCC: what they have in common
So, why do
many exporters consider these two types of enterprises the same thing? Because
they do have some similarities:
- Both help the shipper with cargo transportation;
- Both need an Ocean Transportation Intermediary (OTI) license to operate;
- Both issue their own bill of lading;
- Both are perceived as shippers by carrier companies.