A Non-Vessel Operating Common Carrier (NVOCC) is an entity that provides ocean freight transportation services, whether or not it has its own vessels. NVOCCs purchase cargo space or slots from Vessel Operating Common Carriers (VOCCs) and then resell these slots to their clients, which may include exporters, importers, or freight forwarders. They offer similar services to those of full-fledged carriers, including the issuance of their own House Bills of Lading.
An NVOCC operates by securing transportation capacity from VOCCs and then acting as a carrier to ship goods across international waters. By issuing its own House Bills of Lading, the NVOCC takes on the legal responsibilities typically associated with a carrier, including liabilities and obligations under the terms and conditions stated in the bill of lading. This allows NVOCCs to control shipments and manage the entire transportation process, offering tailored services to their clients.
In the USA, NVOCCs are required to obtain a license from the Federal Maritime Commission (FMC) and must also register a tariff before commencing operations. The registered tariff must detail the freight prices, charges, surcharges, classifications, rules, regulations, and practices akin to those of a common carrier. This tariff transparency ensures that rates are openly declared and compliant with regulatory standards, avoiding the need for prefiling rates with the FMC when using Negotiated Rate Arrangements (NRAs).
Compliance with tariff declarations is crucial for NVOCCs because it ensures that all freight rates and service terms are transparent and adherent to FMC regulations. This compliance helps avoid legal complications and ensures fair trade practices. For NVOCCs that do not prefile their rates with the FMC, using NRAs to declare rates for specific lanes becomes essential for maintaining legality and ensuring accurate and competitive quoting. Regularly updating these rates and terms is vital to respond to market changes and customer needs effectively.
NVOCCs offer several benefits to shippers, including cost efficiency, flexibility, and customized logistics solutions. By consolidating shipments from multiple shippers into container loads, NVOCCs can offer competitive pricing. They also provide a wide range of services that can be tailored to specific shipping needs, such as managing complex logistics arrangements and offering extended geographic coverage beyond that of some VOCCs.
