What is NVOCC (Non-Vessel Operating Common Carrier)?

NVOCC stands for Non-Vessel Operating Common Carrier. An NVOCC is an ocean carrier that performs all services of an ocean carrier except operating any vessels. The NVOCC issues its own bill of lading (typically referred to as a House Bill of Lading, hereafter HBL) that contains virtually the same data fields as the corresponding Master Bill of Lading issued by the vessel operator, each serving as a contract of carriage, but for different parties. The Master Bill of Lading is a contract issued by the ocean carrier that is between the NVOCC and their agent (at origin or destination), while the HBL is the contract of carriage issued by the NVOCC between the actual shipper and actual consignee. Licensed by the Federal Maritime Commission, NVOCC’s buy services from ocean carriers, and though issuance of their HBL with appropriate rate filings, are able to mark-up freight costs as they resell these services to their clients.

Key takeaways:

NVOCC operation comprises of sales, stuffing and transport of the containers to gateway ports. The bill of lading issue and overseas distribution is taken care by the agents of NVOCC.

An NVOCC signs contracts with shipping lines to guarantee the shipment of certain number of units each year. In return the shipping line offers favorable rates to the NVOCC. Thus, NVOCC ends to be the largest trade maker for the container shipment.

NVOCCs are required to follow certain protocols：

Securing a licence from the FMC ;

Submit proof of financial responsibility for the payment of any claims that may occur and ;

Publish a tariff of charges that will be applied to their clients

The difference between freight forwarder and NVOCC：

An NVOCC is an intermediary between the shipper and the vessel operator and issues their own bills of lading. A freight forwarder is an authorized agent acting on behalf of the shipper.

You must be a freight forwarder to be an NVOCC, but not all freight forwarders are NVOCCs.

NVOCCs always arrange ocean transportation; freight forwarders may arrange ocean, air or inland transportation up to a specified point in the journey where the importer’s (or buyer’s) agent takes control of the movement of goods based on the Incoterms 2020 rule agreed upon by the seller and the buyer.

NVOCCs are permitted to add a profit percentage onto their rates. Freight forwarders are only allowed to add operational fees.

An NVOCC is an intermediary between the shipper and the vessel operator and issues their own bills of lading. A freight forwarder is an authorized agent acting on behalf of the shipper. For an additional fee, the freight forwarder will generate the required documents, file your electronic export information through the Automated Export System (AES) and provide other services.

While both ocean freight forwarders and NVOCCs must obtain an Ocean Transportation Intermediary (OTI) license from the Federal Maritime Commission (FMC), the requirements for obtaining one are different for freight forwarders and NVOCCs.