Difference between a NVO and NVOCC Operator

Is there a difference between a NVO and NVOCC Operator..?? This is a very good question asked by one of the readers (Jane).. image for article on NVO/NVOCC

If you read my previous article regarding NVOCC, I have mentioned that NVOCC is a Non-Vessel Operating Common Carrier and that the NVOCC can and sometimes do own and operate their own or leased containers..

A Common Carrier is one that takes on the role of a “virtual carrier” and thereby the responsibilities and liabilities of a regular carrier..

You might find some definitions of NVO = Non-Vessel Operator, but as far as I know and have heard, all NVOs are designated as Common Carriers, therefore my contention is that an NVO = NVOCC and vice versa..

I have however heard that in some countries the NVOCC who does NOT own and operate containers, are referred to as NVO and those who own and operate containers are referred to as NVOCC.. Has anyone else come across this..?? Could this be true..??

In the strictest of terms however, there should be NO difference between the two terms.. They are one and the same and it just people’s interpretation of the term and there is no evidence to prove otherwise..

If someone does have such evidence that clearly differentiates these two terms, please do share with all..

Hariesh Manaadiar

Hey all, this is me Hariesh Manaadiar - your friendly neighborhood shipping blogger.. After having been in the shipping industry for around quarter of a century, I thought it was time that I shared some of what I have learnt over the years.. There you go, now you know something about me.. :) You can get to know more about me and what I know by following my blog for free.. :)

10 thoughts on “Difference between a NVO and NVOCC Operator”..

Be part of the discussion and share your views about the article here..

  1. As is the concensus in the comments section there is difference between an NVO and and NVOCC. Surprisingly, a related term which has not been mentioned is VOCC which is more commonly referred to as an SSL or an actual carrier.

  2. With regard to the discussion about the terms “NVO,” “NVOCC,” and “Freight Forwarder” and their respective benefits, rights, duties and obligations:

    First: All Non-vessel Operating Common Carriers (NVOCC) are Freight Forwarders, but not all Freight Forwarders are NVOCCs.

    Second: To my knowledge, as a matter of law and governmental regulation, there is no such thing as an NVO, which appears merely to be a shorthand misnomer for NVOCC and which has no legitimate place in the shipping industry.

    Regarding Yusuf’s statement that the difference between an NVOCC and a Freight Forwarder is an “OBL” . . . I believe he has it backwards. and oversimplifies it. The difference is the ability of an NVOCC to issue a House Bill of Lading (HBL) – All shipments carry an OBL. I believe he knows this and merely misstated it.

    The reason an NVOCC can issue their own HBL, is because an NVOCC assumes the role of “carrier,” licensed by a governmental authority, taking full responsibility for the cargo on behalf of their shipper pursuant, whereas a Freight Forwarder without licensure as an NVOCC, does not assume the role of carrier and does not have the same benefits, burdens or potential for liabilities as does an NVOCC.

    Besides the issuance of a HBL, an NVOCC has other burdens and advantages over an unlicensed Freight Forwarder. In the USA, an NVOCC is required to post a higher bond amount than a Freight Forwarder, along with a myriad of other burdens and benefits specifically set forth in the NVOCC law.

    Pursuant to the laws of the USA at 46 USC 515(l), “Non-vessel operating common carrier” is defined as follows:
    (l) Non-vessel-operating common carrier services refers to the provision of
    transportation by water of cargo between the United States and a foreign country
    for compensation without operating the vessels by which the transportation is
    provided, and may include, but are not limited to, the following:
    (1) Purchasing transportation services from a VOCC and offering such
    services for resale to other persons;
    (2) Payment of port-to-port or multimodal transportation charges;
    (3) Entering into affreightment agreements with underlying shippers;
    (4) Issuing bills of lading or equivalent documents;
    (5) Arranging for inland transportation and paying for inland freight
    charges on through transportation movements;
    (6) Paying lawful compensation to ocean freight forwarders;
    (7) Leasing containers; or
    (8) Entering into arrangements with origin or destination agents.
    While certainly not rising to the level of statutory or regulatory authority, the Farlex Online Dictionary of Acronyms (http://acronyms.thefreedictionary.com/NVO) defines NVO as follows:

    NVO National Virtual Observatory
    NVO Non-Vessel-Operating Common Carrier
    NVO National Voluntary Organizations
    NVO Nevada Operations Office
    NVO Non-Visual Object (programming code)
    NVO Non-Vessel Operator
    NVO National Veterans Organization of America (also seen as NVOA)
    NVO Networked Virtual Organisation
    NVO Non-Variable Overhead

    And it defines NVOCC as (http://acronyms.thefreedictionary.com/NVOCC):

    NVOCC Non Vessel Operating Common Carriers (shipping industry)
    NVOCC Non-Vessel Operating Container Carrier

    I wonder, who in their right mind would want to use the term “NVO,” when they can just as easily, and more properly, call it NVOCC? At the end of the day, there appears to be absolutely no legal difference between a business entity referred to as an NVO and a business entity referred to as an NVOCC. However, the term NVOCC is statutorily defined and the preferred and most internationally recognized term for companies registered as non-vessel operated common carriers . . . . Why not just stick with it?

    Can anyone please provide a citation to an official law or statutory reference defining or referring to the term “NVO,” and tell us in which countries this occurs? Because if there is, or if there is not, I believe that will put this controversy to rest once and for all.

  3. So what is then the difference between an NVOCC and a Freight Forwarder?
    As far as i can tell – an OBL.
    OK, maybe a Freight Forwarder can carry certain additional tasks of warehousing, delivery, packing, etc, but I understand a Freight Forwarder can also be termed as an NVOCC.
    Is this correct?

  4. Who designates an “NVO”?. And in which countries are they designated? In the USA the Federal Maritime Commission designates an NVOCC after they pass rigid qualification procedures and post the appropriate bond.

    Logic would tell us that every Freight Forwarders is an NVO . . . but they are not all NVOCCs.

    Could it be that “NVO” is nothing more than a shorthand misnomer for NVOCC?

    1. Hi David, the NVO/NVOCC situation is similar to another article i wrote about “Can anyone become a freight forwarder”..

      As in the case of a Forwarder, as far as I know, there is no governing body that designates who can become a NVOCC.. It seems quite easy for anyone to term themselves a NVOCC, create a bill of lading and issue same..

      I know that in the USA, both the NVOCC operator and the bill of lading that they issue has to be registered before that bill of lading is accepted by Customs..

      Not sure which other countries have similar requirement that the NVOCC and the bill of lading they issue needs to be registered with customs..

      NVO could also be a shorthand misnomer for NVOCC..