The difference between a Freight Forwarder and NVOCC
The freight forwarder and NVOCC are two common terms that are used interchangeably in the freight and shipping industry. According to the FMC (Federal Maritime Commission), both freight forwarders and NVOCC are classified as Ocean Transportation Intermediaries. But they are different in nature of documentation and regulations.
First,2 let's understand the basic meaning of both terms.
NVOCC Non-Vessel Operating Common Carrier. They don’t own or operate the ships but they are licensed ocean carriers. They issue their own house bill of lading or an equivalent document.
There is no global regulatory authority to control, regulate and register NVOCCs around the world. So, it is very difficult to record NVOCCs present in the operation of sea transport around the globe.
A freight Forwarder is an organization or agent that encompasses a variety of international shipping roles. The freight forwarder roles include arranging the ship, preparing documentation, customs clearance, warehousing, and at last delivery. The forwarder plays a crucial part in offering third-party logistics and supply chain services on behalf of the customers.
The pointers below will help you understand the clear difference between NVOCC and Freight Forwarders.
Association with regularities
The freight forwarders are associated with the International Federation of Freight Forwarders Association which is observed as a global regulatory in the field of freight logistics. The NVOCC does not have any international association.
The freight forwarder follows documentation process design by FIATA standards and NVOCC does not follow any specific and standard document formats.
The Freight forwarder plays the role of agent to the shippers. The NVOCC acts as a carrier to the shippers and shippers to the carriers as well.
The freight forwarder performs various shipping roles like arranging ships, preparing all kinds of documentation, custom clearance procedures, warehousing facilities, and other freight-related activities. The NVOCC purchase slots or the space from the vessel-operating common carrier and then re-selling the same slots to their customers (exporters or forwarders).
Possession of containers
The Freight forwarder mostly uses the shipping lines containers. The freight forwarder does own the containers. The big NVOCCs sometimes own and operate their own fleet of containers, but generally, they do not own and operate their own containers.
The freight forwarders have a great network around the world. The network partners help to handle cargoes all over the world. On the other hand, NVOCC appoints agents at different ports to handle all kinds of requirements.
The main difference between a freight forwarder and NVOCC is the activities and responsibilities. If have any more doubts, you can email us and get a clear understanding of NVOCC and freight forwarding