Difference between a freight forwarder and NVOCC

Difference between a freight forwarder and NVOCC

A Freight Forwarder is someone who undertakes to handle the movement of goods from point to point on behalf of the cargo owner..

A NVOCC which is the abbreviation for Non-Vessel Operating Common Carrier maybe defined as a “carrier to shippers” and “shipper to carriers”..

Most well established and experienced freight forwarders have below capabilities (either owned or outsourced)

  • experienced in all modes of transportation – road, rail, air and sea
  • able to provide cost effective and efficient cargo shipping solutions based on the customer’s requirement
  • able to arrange storage for the cargo (usually all big forwarders have their own warehouses)
  • able to arrange the distribution or “forwarding” of the cargo as per the instructions of their client
  • have the capability to negotiate freight rates with the shipping line
  • able to book cargo with the shipping line as per the requirement of the client or under their own contract
  • process all relevant shipping documents such as certificates of origin, customs and port documentation, bills of lading and associated shipping/negotiating documentation (Eur1, Certificate of Origin, etc)
  • issue their own approved house bill of lading (HBL)
  • arrange transportation of the cargo from/to the customers premises and port
  • have thorough knowledge of over border cargo movement
  • able to arrange customs clearance

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However there are some differences which separate these two entities..

  • Difference between Freight Forwarder and NVOCCThe NVOCC can and sometimes do own and operate their own or leased containers whereas a Freight Forwarder does not..
  • In certain countries like USA, the NVOCC operators are required to file their tariffs with the government regulatory bodies and create a public tariff..
  • NVOCC is in certain areas accorded the status of a virtual “carrier” and in certain cases accepts all liabilities of a carrier..
  • A Freight Forwarding company can act as an agent/partner for a NVOCC whereas it doesn’t happen the other way around..

A traditional NVOCC does not provide above services provided by a freight forwarder, but in some cases the line between a NVOCC providing above functions and a traditional freight forwarder maybe blurred..

You can read more about this in my previous post reg the back to back bill of lading (https://shippingandfreightresource.com/2009/11/23/what-is-a-back-to-back-shipment/)

Do you have any other points that highlights the difference between a freight forwarder and NVOCC..?? Do share if you have..

39 thoughts on “Difference between a freight forwarder and NVOCC

  1. I am interested as to why freight forwarders create separate NVOCC entities. K&N has Blue Anchor, Danzas when it existed had Danmar Lines, etc. Why create a different entity that can confuse customers?

  2. supply chain solutions Really interesting information. Thanks for sharing. It provides an easy explanation of difference between freight forwarder and clearing agent. Clearing agent has to deal with all legal documents of his client whereas a freight forwarder is responsible for storing and forwarding the cargoes securely.

  3. Hi Hariesh
    Not about this topic , I have a different requirement.
    do we have any sea containers that are explosion proof for moving highly hazardous chemicals , battries etc.,. If so are you aware of any liners


  4. Dear Sir,

    We are Custom Clearing agent in Delhi & wish to start our Freight forwarding. Most of customers are importers. Kindly let us know how we can start Freight forwarding. What type of licence we may required.

  5. I would like to start a Streamer Agent business (Moving containers from one country to another in India/Chennai). Will there be any handy feasibility project report available which contains all the details for a start-up in this field ? Please suggest me a few ! it is most urgent !!

  6. I need to understand when is a container considered as Over weight ? OW and will incur insto additional surcharge beacuse of this. As per standars info there are limits / max weight declare per each box type / size but I noticed for example that a 20GE hast a limit of 30,000 pound but carriers charged me for overweight over 27Tons. why is that and what are those limits for OVER weight?

  7. I will be starting as a Customer Service Representative for a local freight consolidator. I would like to learn as much as I can about the shipping industry. I’m very eager to learn.

  8. One of the readers of this blog Jeff pointed out that there is also a major legal difference between the two being :

    1. A freight forwarder acts as an agent of the shipper therefore represents the interests of the cargo itself.
    2. An NVOCC is a special legal entity that can issue bills of lading and acts like a shipping company – they will usually rent slots from a shipping line for which they become responsible for selling space and therefore would act on the other side of the table to a Freight forwarder.
  9. Can anyone tell me if L/C ask for Bill of Lading and exporter presents House bill of lading for negotiation is discrepancy?

    • Hi Bhubal, a lot of banks allow House Bill of Lading for negotiation.. It depends on the bank and the beneficiary if they will allow House bill to be used for negotiations.. Some beneficiaries specify in the L/C that HBL not allowed..

  10. I have a well establish clearing agency and keen on persuing the freight forwarding side of my business. Please advise which institute/s and governing body I need to contact to get started.

  11. In order to start a freight forwarding business you must either have, or appoint an officer who has, 3 years of OTI (Ocean Transportation Intermediary) experience. International Car Shipping is much different than Domestic Auto Shipping. There are less regulations when vehicle shipping within the United States as opposed to international auto shipping.

  12. i would like to start a freight forwarding business, is NVOCC a requirement for me to operate and how do I get this NVOCC.

    • Hi Brandyn, each bill of lading is subject to the terms and conditions under which it is registered or governed and this will be decided by the carrier that is issuing the bill of lading..

  13. telex release is a case where the shipper is not given the original bill of lading but are scanned to local agent.

  14. “…cases, an NVOCC operator might request for a telex release from the line so that they can issue their house bill of…”

    Sounds like someone is shipping with Maersk. In its most simpliest explanation it is basic an electronic message releaseing the cargo (like an E-mail)

  15. I’m doing some research and wanted to know what are the technology enablers to NVOCC businesses. Not just in terms of freight forwarding application suites but also in terms of hand held devices, RFID, etc. Is the industry in the developed countried truly technology-driven?

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