Freight Forwarders vs. NVOCCs

Mar 28, 2022Blog, International Logistics, Ocean Cargo

The logistics industry is jam packed with acronyms, jargon, and—our favorite—terms that seem to be incredibly similar and yet somehow different. That’s the case with Non-Vessel-Operating Common Carriers (NVOCCs) and Freight Forwarders (FF); while many supply chain professionals know the difference between the two, deciding which type of partner is most beneficial for your organization can occasionally be tricky.

That’s why we’re here to help with an intro to NVOCCs and FFs, along with tips on when to seek out which.

Freight Forwarder (FF)

Freight Forwarders work with exporters to arrange cargo transportation and organize international shipments. Essentially, FFs organize cargo all the way from origin to destination. Exporters will still be responsible for making sure their shipment complies with customs, but FFs can also offer advice about what those requirements might be.

While NVOCCs have to work with ocean carriers, FFs are able to arrange land, air, and ocean exports. That gives them a bit of flexibility and means they can recommend the most suiting mode for a customer.

A licensed Freight Forwarder is also registered with the FMC. Remember: all NVOCCs must be Freight Forwarders, but all Freight Forwarders don’t have to be NVOCCs.

Benefits of working with a Freight Forwarder include:

  • Convenience – Freight Forwarders manage all the logistics to get a shipment from point A to point B. That means shipping teams can focus on other matters in the meantime.
  • Export Assistance – Although Freight Forwarders are not required to be licensed customs brokers, they can often offer advice about common documentation required for completing an export.
  • Mode Options – Freight Forwarders can secure air, land, and ocean shipments for customers, which means they can choose whichever mode will work best for that specific cargo.

 Non-Vessel-Operating Common Carrier (NVOCC)

A Non-Vessel Operating Common Carrier is—you guessed it—an ocean carrier that performs all operations associated with carrying ocean cargo without operating the vessels themselves. That’s right. For once, something in the logistics industry has a name that actually explains itself.

Essentially, an NVOCC buys space from carriers and then sells this space to shippers. However, in order to be a licensed NVOCC, US-based organizations must register with the Federal Maritime Commission and earn an Ocean Transport Intermediary (OTI) license. NVOCCs need that license so they can legally form deals with ocean liners and therefore sell space to shippers.

Benefits of working with a licensed NVOCC include:

  • Relationships – A licensed NVOCC already has existing relationships with carrier companies. That means they can often secure space on carriers that may otherwise be unavailable or difficult for shippers to secure themselves.
  • Cost-savings – Speaking of relationships, close ties with ocean carriers enable NVOCCs often negotiate better prices than many shippers could secure without that existing rapport.
  • Safety – Since licensed NVOCCs are backed by the FMC, shippers can enjoy a level of security that otherwise might not be there. Since NVOCCs are businesses in and of themselves, they are prone to all the typical obstacles that any organization could face. By being licensed, NVOCC and the FMC provide reassurance that shippers will not feel negative impacts if something happens to the NVOCC itself.

 

TOC Logistics: NVOCC, FF, and Customs Broker

TOC Logistics is an FMC Licensed NVOCC and Freight Forwarder. On top of that, 50% of our customs brokerage team are licensed customs brokers. That means we’re uniquely suited to assist with exports of any mode, all while offering expert customs assistance.

Want to learn more? Reach out to our team. We’d love to learn about your export needs.

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