The logistics industry has a language all its own—and keeping your terms straight could help you secure better rates when shipping cargo.

 

We’ll show you how by breaking down exactly what it means to work with an NVOCC (non-vessel operating common carrier). Although working with an NVOCC might seem similar to working with a freight forwarder, there are a few key differences that can have a big impact on your bottom line.

 

We’ll also explain why working with an NVOCC can mean better customer service, more options for moving cargo, and more ease in your future freight projects rather than shipping direct with a VOCC.

 

First, let’s start with a few definitions.

 

What Is the Role of an NVOCC in Shipping?

In short, an NVOCC works with VOCCs by buying a certain volume of space within certain shipping lanes. Then, the NVOCC sells that space to its customers.

 

Here’s an example of how that arrangement might work: In the Hawaii lanes in which Approved operates frequently, we, as an NVOCC, might establish a relationship with the steamship line Pasha Hawaii (a VOCC) to ship a certain number of containers each week. We purchase that space directly from Pasha. Then, we turn to our clients who want to ship items to Hawaii, and we sell them some of the space we’ve purchased.

 

Because NVOCCs essentially guarantee a VOCC a certain volume of cargo, they’re able to negotiate more favorable rates. Based on those rates, they create tariffs that ultimately determine the price a customer will pay to move cargo.

 

Tariff

A publication containing the actual rates, charges, classifications, rules, regulations, and practices of a common carrier or a conference of common carriers. (46 CFR § 520.2)

What’s the Difference Between an NVOCC and a Freight Forwarder?

In contrast to NVOCCs, freight forwarders do not buy space on ocean vessels for themselves. Rather, they book the freight on behalf of their customers.

Because of this key difference, the relationships between the different parties are different when shipping with a freight forwarder vs. an NVOCC vs. booking directly with a VOCC:

When Shipping Cargo Using an NVOCC

The NVOCC is acting as the carrier for its customer—the person who needs to move cargo. In this arrangement, the NVOCC is considered the shipper
When Shipping Cargo Using a Freight Forwarder

The freight forwarder is acting as an agent on behalf of their customer, the person moving cargo. In this arrangement, the customer working with the freight forwarder is considered the shipper
When Shipping Cargo Directly with a VOCC

There’s no agent, and the VOCC acts as the carrier. The customer booking the cargo is the shipper

Why do these terms matter? Carriers and freight forwarders are subject to different liability. In other words, if something happens to your cargo in transit, these terms will become important when you’re sorting out who’s responsible.

 

And while we’re on this topic, if you’re not already familiar with marine cargo insurance, it might be time for a brush-up! Check out our article to learn more about protecting your cargo in transit: A Simple Guide to Understanding Marine Cargo Insurance.

Why Should You Ship with an NVOCC?

When you’re shipping cargo, you’ll have three options:

  1. Book directly with a VOCC
  2. Work with a freight forwarder
  3. Choose an NVOCC

Large businesses that ship a considerable amount of cargo (think: Costco, Walmart, etc.) can benefit from booking directly with a VOCC. Since they ship significant volumes, they’ve got good bargaining power with the steamship lines.

 

However, for small and mid-sized businesses, working with an NVOCC has several advantages.

Better Rates

Because of the volume of the business they do, NVOCCs are often able to negotiate special rates with VOCCs. As a result, customers who ship with an NVOCC get to take advantage of these rates and ship for less than if they tried to book direct with a VOCC.

 

Because they’re essentially acting as an agent for their customers, freight forwarders are less likely to secure lower rates with the steamship lines. More often, they’re simply passing along the costs from the steamship lines, with some additional added on top to cover their operational costs.

Better Customer Service & Communication

Your mileage may vary from VOCC to VOCC, but, overall, NVOCCs are often in a position to deliver more customer-friendly service than large steamship lines.

Steamship lines are in the business of running massive operations with a huge list of customers. In situations like this, the biggest customers (like the big box stores we mentioned earlier) often get the lion’s share of attention and smaller businesses may feel lost in the shuffle.

 

In contrast, NVOCCs are often set up to cater to smaller to mid-sized businesses—and to offer them more personalized service. This can mean more frequent communication so you can better understand the status of your cargo. It might also mean that it’s easier to get someone on the phone if you have a question or a problem.

More Options

Since NVOCCs work with a number of steamship lines, they can offer customers more options than if they went directly to a single VOCC. For example, one VOCC might only have a single weekly sail date to a particular destination. However, an NVOCC might have access to three different sail dates through three different VOCCs. By working with an NVOCC, you’ll give yourself the opportunity to keep your cargo moving faster.

Choosing the Right Provider for Your Cargo

At the end of the day, understanding what an NVOCC is—and why there are a few advantages to working with one—can give you a leg up for your next shipment. Now that you understand all the options available, you’ll know exactly how to select the right one for your business and your bottom line.

 

Looking for an NVOCC for your next shipment? Approved is a licensed NVOCC (license number 026739), and we’d be happy to help you with ocean, air, and over-the-road service for global markets. Just reach out to discuss your next project with one of our freight experts. We’ll be happy to show you the difference an NVOCC can make.

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