NVOCC and its importance in global trade

July 26 , 2021 | CATEGORY : SERVICES

You may have come across the term, 'NVOCC' and wondered what it meant. NVOCC or Non-Vessel Owning Common Carrier, as its name suggests is a cargo consolidator that does not own or operate shipment vessels. However, NVOCC operation extensively consists of sales, loading, and transport of the containers to gateway ports.

An NVOCC operator serves as an intermediate or middle-man for shipping companies and their customers. This way, the process becomes much easier for the customers and several challenges are overcome. Simply put, it is just like when you are looking for housing, you can connect through a broker or realtor, instead of communicating with the owner directly.

What are some of the functions performed by NVOCC:

  • Issue of Bill of Lading
  • Publishing tariffs
  • Works as a trade-maker for container shipment
  • Handling booking and booking space for cargo
  • Organizing cargo movement
  • Negotiating contract rates with several carriers
  • Conducting consultation, preparation, and processing work for various shipment documents 

The Importance of NVOCC

Globalization has opened up the global market for several businesses, small-scale and large-scale alike. However, logistics can be a little complex, especially for the newcomers. This is where NVOCC comes in and streamlines the process for them.

From bringing them the best shipment services to ensuring proper documentation, NVOCC has offered a helping hand to these businesses. Here's why NVOCC is an integral part of global trade for various companies:

  • Perfect Partner for Small-Scale Companies
  • Better Shipping Rates
  • Personal Touch
  • Better Connectivity
  • Simplified Documentation Process
  • Perfect Partner for Small-Scale Companies

It can be difficult for small-scale companies to find a viable shipping option during their initial years. NVOCCs cater to their shipping needs and provide them with the flexibility of partnering with a smaller organization rather than a large shipping line.

Moreover, small-scale businesses may not be efficient when it comes to bargaining with these large shipping lines. By acting as a middle-man, the NVOCCs facilitate better rates, provide better services without any unnecessary bureaucracy, making the entire process simpler for small to mid-size companies.

Better Shipping Rates

Businesses are often able to receive better shipping prices by partnering with NVOCCs. The reason? The NVOCCs negotiate with larger shipping lines by bringing them business and booking a considerable amount of space for them. This helps them receive a deal with these shipping lines, in turn providing cheaper shipping prices to their customers.

It won't be possible for smaller businesses to receive such reduced rates if they tried to directly negotiate with the shipping line.

Personal Touch

As they receive a large part of their business from these customers, NVOCCs provide personalized services to them. Whereas a large shipping line, due to its large number of clients, may not be able to offer this personal touch to the needs of their clients.

This personalized service allows the customer to entrust the NVOCC provider with all their logistics functions. They offer their customers a variety of shipping routes and the best rates possible. Alongside, they also offer online tracking services for their customers to help them trace where their cargo is during transit.

Better Connectivity

Usually, NVOCCs maintain a healthy relationship with local associations consisting of local transportation service providers, trade unions, the Port Customs, etc. This enhanced local network helps the work to get done seamlessly without any disruptions.

NVOCCs maintain connectivity with good contacts, global and local alike. Therefore, they are unlikely to face problems associated with transportation or trade unions, thus eliminating risks faced by large shippers usually.

Simplified Documentation Process

NVOCCs can issue the Bill of Lading themselves. This issue of the bill by an NVOCC is called a House Bill of Lading or HBL. This enables the NVOCC to provide the customers with necessary documents themselves, thus making the process of documentation much easier and streamlined.

NVOCCs, as a middleman, certainly simplifies logistics for its customers and provides them with several benefits. However, there are some things you should consider before opting for NVOCC services. NVOCCs do not own the ocean carriers or containers, which means they are bound to coordinate with the service providers.

In case of miscommunication regarding the schedule or any shipping related information, there is always a possibility of unnecessary delay. Moreover, this can damage your business when it comes to urgent delivery of goods.

Which is why it is of utmost importance that you partner with an NVOCC that can handle your shipping needs responsibly and efficiently. With the right NVOCC partner who has the right contacts and efficient management, your shipping needs can be resolved with ease.

What are your thoughts on NVOCC services? Allcargo Logistics is a global logistics leader with a presence in over 180+ countries. We offer one-stop supply chain management solutions and help you with your logistics requirements.

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