The NVOCC Industry
Non-Vessel Operating Common Carriers (NVOCC) act as ocean transport intermediaries. They work autonomously in a worldwide environment, and their professional responsibility is the same as that of maritime agents in charge of transport. They guarantee payment, and can retain the goods if necessary to recover what is due.
NVOCCs typically have bulk purchasing power, which allows them to negotiate discounted rates with shipping lines. This allows them to pass the savings on to their customers. Additionally, they offer a wide range of shipping options and services that can be customized to fit the unique needs of each customer.
As a result, NVOCCs can help businesses manage their international trade more efficiently. This can save valuable time and resources that would otherwise be spent on handling multiple shipments individually. Additionally, NVOCCs often handle documentation and customs clearance. This can significantly reduce the risk of errors and delays in the shipment process.
However, NVOCCs do have their downsides. One of the biggest is that they are highly reliant on shipping lines to provide transportation services. This can lead to long wait times and higher costs for customers during peak demand. Additionally, NVOCCs do not have access to the same level of information about vessel schedules and availability that shipping lines do.
NVOCCs also do not own or operate their own warehouses, which can increase logistical challenges. Moreover, they are not required to follow standard procedures as freight forwarders are. As nvonews , they may not be as efficient or effective in managing their shipments.
Despite these challenges, NVOCCs can still be an excellent choice for small and medium-sized companies. Freight forwarders and NVOCCs often go hand in hand, but it is important to understand the differences between the two before choosing the right one for your business. For example, freight forwarders may not be able to issue an official house bill of lading (HBL) in addition to the master bill of lading from the steamship line. This is because NVOCCs must be an HBL issuer to qualify for this status. To address this, freight forwarders can use online platforms like xChange to lease or buy containers for their clients.
NVOCC Demurrage
NVOCCs are a key part of the ocean shipping business, bringing their own expertise to the process of moving cargo from point A to point B. Their role is not unlike that of a Freight Forwarder, but they also offer additional services such as consulting and expert advice relating to Incoterms and shipping documentation. In addition, NVOCCs also have a unique advantage in their own container fleet which allows them to provide value-added logistics such as warehousing and transport between ports.
The NVOCC industry has seen recent volatility with the recurrent port disruptions and the bankruptcy of Hanjin. These factors have brought a renewed focus on the issue of D&D, which is a charge that comes from a terminal operator when a loaded export or import container stays inside the terminal longer than the contracted free time (FIATA 2018). The charges come from a combination of varying tariffs per day and the length of the delay.
This complexity makes it challenging to understand, communicate, and bill for D&D. In addition, the lack of standardization in D&D fees has created organizational challenges for shippers and carriers. For example, the early closing dates of physical documentation and Verified Gross Mass (VGM) compared to the shorter demurrage free times can make it difficult for exporters to deliver their containers on time to meet the carrier’s departure deadlines.
The result is a growing number of disputes, delays, and re-invoicing due to the lack of clear communication between parties. In the end, it is important for all stakeholders to take a proactive approach and ensure that their documents are accurate and up-to-date.
NVOCCs and Customs Brokers, which often advance funds for their customers to facilitate the movement of freight, are especially vulnerable to this problem. Without a clear and structured data structure for capturing the Container Availability Date, they may be forced to re-bill customers if their invoices do not accurately reflect the D&D charges. This can have a profound impact on cash flow. It’s a critical issue that will need to be resolved if the NVOCC industry is to move forward and thrive.
NVOCC Charges
In the logistics industry, there are many players that offer services that can help in the shipment of goods. These include NVOCC, freight forwarders, and other similar service providers. These are all different from one another, but they share some similarities as well. One of these is the fact that they can help ship goods to other countries. They can also issue a House Bill of Lading (HBL). This makes it easier to track the status of the cargo.
In addition, NVOCCs can offer other services such as warehouse management and distribution. Moreover, they may also provide consultation services to clients on matters relating to Incoterms, port procedures, and other related issues. They can even handle customs clearance. Most NVOCCs maintain a network of contacts with local trucking associations, trade unions, and port officials to reduce the risk of problems during transportation.
However, there are several drawbacks to using an NVOCC. For example, they don’t generally own any ocean carriers or containers. As such, they can have limited authority over last-minute modifications to sailing schedules and routes. Additionally, they might not be able to pass on important information about the condition of your cargo.
As a result, you might be subject to demurrage charges or other penalties. These charges are levied when container-owned cargo (COC) remains in the possession of an ocean carrier for more than the number of free days allowed by the steamship line. They can be quite high, especially during times of crisis.
Ventura denied any wrongdoing and claimed that his use of NVOCCs in the rock crusher and appliance shipments was a normal business practice that was not illegal. However, the government presented evidence that he violated his fiduciary duty to Foster Wheeler and World Bank.
Moreover, he failed to disclose that the NVOCCs he used for these shipments were unnecessary and that his sole purpose in employing them was to artificially inflate the freight charges AID had to pay. Further, he did not disclose that he would receive payment for his participation in the scheme, either as a commission or a brokerage fee.
NVOCC Compliance
NVOCCs (Non-Vessel Operating Common Carriers) are freight transportation intermediaries that purchase shipping container capacity from ocean carrier vessel operators, and then offer full and less than container load (LCL) transport services to their customers. NVOCC companies support the international freight shipment needs of small and mid-sized businesses, as well as some larger organizations.
NVOs are able to obtain discounted rates from shipping lines by giving them bulk business, and they pass those savings onto their clients. This makes NVOCCs a valuable asset to small business owners, who may not have the capacity or resources to negotiate directly with shipping lines.
While the services of NVOCCs are essential to the global trade economy, they do come with a few regulatory headaches. Specifically, the Federal Maritime Commission (FMC) requires that NVOCCs display their FMC license number on letterhead, invoices, and shipping documents, and they may not “co-load” into space under contract by another NVOCC without certain tariff provisions and limitations.
The FMC also requires that NVOCCs keep the Commission apprised of changes to their organization structure, legal name, trading names, related entities, shareholders / directors / officers, and branch offices. These updates must be made within 30 days of the change occurring.
Aside from these regulatory headaches, a NVOCC must also comply with the varying rules and regulations of individual countries in which they operate. This can include adherence to local laws regarding cargo inspections, the requirement to provide documents for the proper handling of dangerous goods and a host of other issues that vary by region.
For these reasons, it’s vital that NVOCCs rely on advanced logistics software to help streamline their processes. Magaya CRM, for example, allows users to create quick FCL and LCL quoting on top ocean carriers, and provides built-in business intelligence to enable NVOCCs to better serve their customers. This time-saving solution also eliminates redundancies across teams and fosters customer-centric collaboration. Ultimately, it helps reduce risk and cost. As the pace of global trade continues to accelerate, leveraging technology like this is more important than ever. The real costs of not upgrading to modern software solutions go far deeper than lost time or wasted revenue.