What is NVOCC and why it is important in Logistics Management?

International shipping is a complicated maze of rules and regulations, with mountains of paperwork, hidden costs, and logistical challenges at every turn. Because of the high level of complexity, some businesses may be forced to forego a potentially lucrative international venture. This is where non-vessel-owning common carriers (NVOCCs) come in. Hiring an NVOCC can make international shipping as simple as domestic shipping.

What is NVOCC?

NVOCC is an abbreviation for Non-Vessel Owning Common Carrier, which is a special agency or entity that steps in for business owners who do not need the entire container provided by freight forwarders to ship their material, but only a portion of it. NVOCC services include stuffing and transporting multiple containers to various ports of call.

NVOCC shipping is accomplished by these agencies making arrangements or signing contracts with ship owners or freight forwarders under their own Bill of Lading known as the House Bill of Lading and can act as a single point of contact for those small and medium-sized businesses that do not require the entire container for their shipment.

Functions of Non-Vessel-Operating Common Carrier

A Non-Vessel-Operating Common Carrier's primary function is to establish contacts with both shippers and carriers. Once these are in place, the Non-Vessel-Operating Common Carrier will communicate to ensure that their end of the bargain is met. There are several options. Tracking systems provided by NVOCC shipping software can be used at sea to ensure that all shipments arrive at their destinations on time.

You can create simple air, ocean, and ground shipment consolidations, exchange shipping instructions (from freight to ocean to air, and back again), and quickly generate the Bill of Lading and other required documents with an expert NVOCC software.

Advantages of Using a Non-Vessel-Operating Common Carrier

The main advantage of using an NVOCC is that they are not responsible for what happens during transportation. This means they don't have to go onboard their ships to see what cargo is being carried or to ensure that safety standards are being met. Rather, they are only obligated to their clients. When using a Non-Vessel-Operating Common Carrier, there may be additional costs, but those costs will be directed toward things like insurance and providing workers' compensation for employees. These costs may be offset by savings made elsewhere, such as in fuel consumption, as a result of economies of scale.

Read More: Advantages of Having Freight Management Software to Your Logistics Company

Why Do I Need an NVOCC?

NVOCCs use their expertise in these types of shipments to ensure that regulations are strictly followed throughout the entire process, keeping your company out of trouble with costly fines and fees. They not only save you from having to fill out confusing paperwork and then worry about whether you've done it correctly, but they also ensure that the process is carried out correctly and efficiently.

They can also offer "dock-to-door" service, which simplifies a process that can be difficult for small and medium-sized businesses. A simpler process will not only save a company time but will also allow them to expand to an international market.

The Importance of NVOCC

Globalization has opened up the global market to a variety of businesses, both large and small. However, logistics can be difficult, especially for newcomers. This is where NVOCC comes in to help them by streamlining the process.

NVOCC has aided these businesses in a variety of ways, including providing the best shipment services and ensuring proper documentation. Here are some of the reasons why NVOCC is an important part of global trade for a variety of businesses:

Perfect Partner for Small-Scale Companies

Small-scale businesses may struggle to find a viable shipping option in their early years. NVOCCs meet their shipping requirements and give them the option of partnering with a smaller organization rather than a large shipping line.

Furthermore, small-scale businesses may be inefficient when bargaining with these large shipping lines. By acting as a middleman, NVOCCs facilitate better rates, provide better services without unnecessary bureaucracy, and simplify the entire process for small to medium-sized businesses.

Better Shipping Rates

NVOCCs are frequently in a better position to offer you a lower rate than a traditional shipping company. NVOCCs negotiate and obtain lower rates from shipping lines in exchange for bulk business. Some of these savings may be passed on to the customer in the form of lower rates. Small business owners would not be able to obtain this reduced rate if they contacted a shipping line directly.

Personal Touch

Unlike a large shipping company with a large customer base, NVOCCs provide seamless and personalized service to their clients. Because they work with various ocean transport carriers, they can advise on a variety of shipping options. NVOCCs now offer online tracking services to help businesses know where their cargo is during transit.

Better Connectivity

NVOCCs typically have a strong network of contacts with local trucking associations, trade unions, port customs, and so on. Such a diverse and effective network aids in completing tasks efficiently and with minimal disruption. An NVOCC with good contacts and standing in the industry can thus help mitigate the risks associated with trucking problems, labor unions – particularly at ports – and other such situations that large shippers and freight forwarders regard as normal collateral.

Simplified Documentation Process

The Bill of Lading is issued by the NVOCC. When issued by an NVOCC, it is referred to as a House Bill of Lading or HBL. This simplifies the documentation process for the customer. Logistics Management Software allows freight forwarders to manage their business end-to-end while delivering sound business benefits.

Read More: Why You Need a Single platform Logistics Solution?

Conclusion

Several stakeholders are involved in the business of transporting containers from point A to point B. An NVOCC is a key stakeholder in this business, and in some cases, they serve as a bridge between carriers and shippers.