A Freight Forwarder and A NVOCC: Which are the major differences?
Freight Forwarder, logistics directory, and NVOCC are two of the many interchangeably use in the shipping and freight business. It could be because many people are unaware of the distinction between these two entities, particularly when it comes to documentation and liabilities. The FMC’s consideration of NVOCC and freight forwarder as maritime Directory Intermediaries may have influenced this (OTI). Although both are classified as Otis, there are some practical and legal distinctions between them.
If you look closely, much of the difference between the two may be seen in their definitions and scope of operations. As a result, we’ll explain the fundamental differences between these two organizations in this post.
First, Their Definition:
The logistics process involves several different parties—carrier, Freight Directory, customs broker, 3PL, NVOCC, ETC, EMC. And so on—and multiple of them can be involve in a single transaction! Non-Vessel Operating Common Carriers and Freight forwarders are two of the most similar parties (NVOCC).
Shipments are organized for individuals or corporations by a non-vessel operating common carrier (NVOCC). Which is also known as a freight forwarder, to move products from one location to another.
In order to ensure a particular number of containers per year, NVOCCs enter into contracts with shipping companies. In return, NVOCCs get preferential rates from shipping companies. Sales, staffing, and container transportation to certain ports are their primary duties. A custom Bill of Lading can also be generated by the user.
Freight Forwarders Directory
A Freight Forwarders Directory, on the other hand, is an organization hire by an importer or exporter to undertake a variety of operations relate to their shipments. For example, they organize freight transit from point A to point B utilizing a variety of modes of transportation, including sea, rail, and road. They also assist in Processing the required shipping paperwork such as customs and port documentation, bills of lading, associated shipping/negotiating documentation, and Booking cargo with carriers using their own freight/service contract or utilizing the client’s freight/service contract.
Apart from the functions above, a freight forwarding directory may also provide expert advice and consultancy services to customers. The use of the correct Incoterms, letter of credit, licenses, permissions, and information relevant to the safe movement of cargo; accept and arrange storage of cargo, whether it is before shipment from the port of loading or after receipt of cargo at the port of discharge before distribution to other areas; accept and arrange storage of cargo. Whether it is before shipment from loading or after receipt of cargo at the port.
What are the key differences?
Most well-known and global Shipping Directory and freight forwarders are members of FIATA (International Federation of Freight Forwarders Associations). Which is widely regard as the global voice of freight logistics. They develop their bills of lading and other shipping paperwork, often based on FIATA-created standardized documentation. Despite the fact that there may be specific localize groupings in different nations, there are no global associations for NVOCCs. Some of the larger NVOCCs own and run their own fleet of containers.
As a value-added service to their other logistics directory, some of the larger freight forwarders own and run their own warehouses. While most NCOCCs do not own and run their own warehouses, there are a few large NVOCCs that also act as freight forwarders (Expeditors International, for example)
Several freight forwarder networks exist worldwide that work together as network partners to handle cargo on an exclusive or non-exclusive basis. Some of the larger NVOCCs, particularly those that own and operate containers, appoint agents at multiple ports, similar to how shipping lines appoint agents at various ports to meet their commercial and operational needs. Freight Directory may function as agents for NVOCCs. But it is scarce to find an NVOCC working as a freight forwarder’s agent. NVOCCs act as carriers to the shippers and shippers to the carriers, while freight forwarders act as agents to/for the shippers.
In Conclusion:
To be an NVOCC, you must be a Freight Forwarders Directory; however, not all freight forwarders are NVOCCs. Both an NVOCC and a Freight Forwarder have a position in the industry; they take care of clients in their own right, rely on each other to be successful, and, most importantly. Serve crucial functions to keep the propellers of global trade spinning. We hope that this post clarified the distinction between an NVOCC and a freight forwarder.
