Business

Difference between NVOCC and Freight Forwarder

Main difference

The main difference between NVOCC and Freight Forwarder is that NVOCC works as an OTI providing the carrier service under its bill of lading, while Freight Forwarder is also an OTI providing expert advisory and consulting services.

NVOCC vs. freight forwarder

NVOCC is an abbreviation for “Non-Vessel Operating Common Carrier.” It works as OTI (Maritime Transport Intermediaries), providing the carrier service under its bill of lading. A freight forwarder is also an OTI that provides expert advisory and consulting services. NVOCC does not accept an international or worldwide association; on the contrary, a freight forwarder is taking the International or World Federation of FIATA (Association of Freight Forwarders). NVOCC falls under the category of carriers to carriers. Freight forwarders are known to be the shippers’ agents.

NVOCC does not opt ​​for a standard documentation format. Freight forwarders work in accordance with FIATA standards. NVOCC maintains or manages shipping containers, but does not maintain or operate warehouses. A freight forwarder does not hold or operate the containers while he owns and operates the warehouses he uses for his cargo. NVOCC prefers to work independently at its own risk with the support of agents or third party companies. The carrier cooperates to reduce costs and improve delivery times around the world. It also sometimes acts as an NVOCC agent.

Some NVOCCs (especially those that own containers) appoint agents at different ports to handle their business and operational duties. Most freight forwarders cooperate worldwide as network partners on an exclusive or non-exclusive basis in import and export. It is occasional for the NVOCC to act as a partner/agent for a freight forwarder. But it is common for a freight forwarder to act as an agent/partner for the NVOCC.

Comparison chart

NVOCC freight forwarder
An OTI that provides the transportation service according to its bill of lading is NVOCC An ITO that provides expert advisory and consulting services is a freight forwarder
Decoding / abbreviation
Common Carrier Not Operating on Vessels FF
Associate with
no associations FIATA (International Federation of Freight Forwarders Associations)
link to each other
Rarely acts as an agent for a freight forwarder May act as NVOCC agent
shipping documentation
Does not follow a standard documentation format Works according to FIATA standards
Sending Carrier Link
It acts as a carrier for the shippers and as a shipper for the carriers. Acts as agent for the shippers.
warehouses
Does not own/operate its warehouses Own and operate your warehouses
containers
Own and operate your containers Does not own or operate containers

What is NVOCC?

NVOCC (non-vessel operating public transportation) is an OTI classified by the Federal Maritime Commission (FMC). It works as the carrier that transports the cargo from one point to another. It has no pots. It is called ‘carrier to shipper’ and ‘shipper to carrier’. It means that an NVOCC enters into volume-based ocean freight deals along with so many shipping lines operating through the trade lanes. An NVOCC provides your agent at the port of loading and unloading. This agent handles the requirements for the dispatch of merchandise and containers to various clients.

NVOCC is a freight consolidator that legally acts as a carrier. There are so many NVOCCs, but the US has the most significant number of NVOCCs in the entire world. NVOCC clients are BCO (beneficial cargo owner), freight forwarder, clearing agent and freight broker. The definition of NVOCC is different from the government of various countries. An NVOCC may occasionally own and operate its own tanks and containers. It has the status of a virtual “carrier” in some contracts.

NVOCC Activities

  • Concludes contracts for international freight transport.
  • Manage cargo movement from one point to another
  • Receive cargo and delivery as a carrier
  • Issue bills of lading
  • Collect freight and other service charges
  • Arrange shipments with major carriers
  • Pay the port to transport costs
  • Use your CFS or a third party for container consolidation and deconsolidation

What is Freight Forwarder?

A FREIGHT FORWARDER (FF) is an OTI and they are known to be the shippers’ agents. It is part of the International Federation of Freight Forwarders Associations (FIATA). Manage goods for an importer or exporter providing expert advisory and consulting services. The responsibility of a freight forwarder is to move freight or cargo between seaports, airports, and warehouses. His duty is to organize the transfer of cargo to international destinations or from one point to another.

A suitable freight forwarder must have experience in all modes of transportation. These modes of transport can be road, sea, rail and naval. It has the capacity to provide reliable and efficient freight forwarding solutions. You must know the ways to organize and store cargo. A freight forwarder can arrange distribution or “forwarding” according to their client’s requirement.

Freight Forwarder Activities

  • Represents the interests of clients in the negotiation of transportation contracts.
  • Assumes responsibility for handling and processing all cargo documents
  • Use one or more modes of transportation
  • Represents the interests of clients in the negotiation of transportation contracts.
  • Provides information on Incoterms, letters of credit and bank settlement.
  • Informs the importer or exporter about the safest and most economical way to move cargo from point A to point B
  • Use your warehouses or third-party warehouses to store customers’ cargo

Key differences

  1. NVOCC works as an OTI providing transportation service based on your bill of lading; on the contrary, the freight forwarder is also an OTI that offers expert advisory and consulting services.
  2. NVOCC does not necessarily require an agent or partner of the freight forwarding company. On the other hand, a freight forwarding company sometimes acts as an agent or partner of the NVOCC.
  3. Some NVOCCs appoint agents at different ports to handle their commercial and operational requirements, while most freight forwarders cooperate worldwide as network partners on an exclusive or non-exclusive basis in cargo handling.
  4. NVOCC does not belong to an international association; on the other hand, a freight forwarder is part of the International Federation of Freight Forwarders Associations (FIATA).
  5. NVOCC maintains or manages cargo containers. Still, it does not maintain or operate warehouses, on the contrary, the freight forwarder does not retain or operate the containers. At the same time, it owns and operates the warehouses that it uses for its cargo.
  6. It is rare for the NVOCC to act as a partner or agent for a freight forwarder; on the other hand, it is typical for a freight forwarder to act as an agent for the NVOCC.
  7. The documentation used by the NVOCC does not follow a standard documentation format, on the contrary, freight forwarders work in accordance with FIATA standards.
  8. NVOCC prefers to work independently under its responsibility with the support of agents or third party companies in reverse; freight forwarder cooperates in its operations to reduce costs and improve delivery time around the world.
  9. NVOCC falls under the category of carriers to carriers and carriers to carriers; rather, freight forwarders are known to be the shippers’ agents.

Final Thought

NVOCC and Freight Forwarders are the shipping brokers classified by the Federal Maritime Commission (FMC). Both are similar in most of their transportation procedures, but both are different from each other.

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