NVOCC and Freight Forwarder: know what are the responsibilities of each

Getting a good boat charter contract tends to be a challenge for foreign trade, don’t you agree? In some situations, there are many professionals involved and it can be difficult to understand the responsibilities of each.

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This context can be exemplified by functions such as NVOCC and Freight Forwarder. After all, what are the main duties these players occupy? What are the convergences and differences between them? How can they help?

Thinking about these and other questions on the subject, we interviewed Alexandre Witkowski — who works as a Global Accounts Manager at Allink Brasil — and prepared this text. Follow it through to the end to learn more!

The NVOCC and their responsibilities

According to the expert, “a non-vessel operating common carrier (NVOCC) is, in a nutshell, a shipowner that does not have a ship of his or her own, whose main function is to group small loads within a single container”. He or she is also responsible for contracting shipowners’ sea freight and consolidating smaller container loads, generally charging for the space occupied.

A NVOCC is always in contact with other shipowners and shipping agencies. Since this is a busy routine, which depends on contact with different people and companies, it is essential to have attention and precision in daily tasks.

That said, such organizations may be treated as carriers, which provide maritime transport to the general public but do not operate the vessels. Because of this performance, they assume the responsibilities with the shipping companies. These include the payment of port and freight charges, as well as the cost of demurrage and the like.

It’s worth reminding you that a NVOCC can issue on his or her own a bill of lading, which is one of the most important documentation for the industry.

The assignments of a Freight Forwarder

“The Freight Forwarder is the one who provides logistics solutions for importers and exporters, according to the needs presented”, reports Witkowski. The demands are quite varied, such as:

• sea ​​shipments (FCL – Full Loaded Container – and LCL – Less Container Load);
• air shipments;
• road transport;
• customs clearance;
• order management;
• exchange closing;
• among others.

According to the expert, “the Freight Forwarder is theoretically a customer of the NVOCC in the business involving consolidated cargo transportation, because that is the specialty of the NVOCC. Nevertheless, there are Freight Forwarders who make their own consolidation”.

Thus, it would be no exaggeration to say that freight forwarders are essential at various times and processes of cargo transportation. This is because they fulfill the function of negotiating freight and arranging space reserves with companies, representing exporters or importers.

Coordination of boarding is also an activity performed by this very relevant figure. Such practice encompasses the following actions:

• remove empty containers;
• draft the bill of lading;
• plan the stuffing plan: in other words, “assemble the puzzle” of the consolidation by arranging the loads by weight and size within the container;
• meet deadlines between companies, shipping or unloading terminals and exporters and/or importers;
• prepare the documentation required for loading or unloading goods.

NVOCC and Freight Forwarder: differences, similarities, and legislation

Here are the biggest similarities and differences between these two elements. In addition, we will comment on the legislation behind these activities.

Similarities

When asked about the similarities between the NVOCC and the Freight Forwarder, Witkowski says that “both are part of very competitive markets”. According to him, there are hundreds of cargo agents and dozens of NVOCCs in Brazil.

Therefore, to create competitive advantage over other players, those in this area need to invest in employee specialization, compliance policies, and IT (Information Technology) development.

Such resources are essential for the activity in question to be performed with maximum productivity and efficiency, generating resource savings and process optimization as major consequences. Intelligence in port logistics also emerges as a field that can contribute in various ways in the pursuit of these goals.

“When these two players work together and are electronically integrated into their operations, the importer and/or exporter has much to gain, as the business transaction will be secure. The services of a good shipping agency can tighten and further enhance this bond, for example, “explains the expert.

When the Freight Forwarder and the NVOCC work together, the freight forwarder often hires a NVOCC service to handle the transport of an LCL batch.

Differences

“Because there are Freight Forwarders that have their own consolidation services,” Witkowski says, “they don’t always need a NVOCC. Some NVOCCs that provide additional services, such as customs clearance, road transportation, etc., act as Freight Forwarders”.

According to the expert, in this market, NVOCCs that perform these activities are treated as non-neutral, because they serve end customers and fulfill a similar function as cargo agents.

Most of the time, those who work in foreign trade need the services of the forwarder type to manage the shipment and take care of documentation and requirements for transportation. While contract negotiation is also part of your routine, payment of port and freight charges is often attributed to the NVOCC.

Legislation

The laws governing both activities are the current customs legislation and the Brazilian Civil Code. For those who want to make sure of the quality of service provided before hiring, it is worth keeping an eye on both company compliance policies and OAS Certification. “These two points have made a difference when the industry must choose its logistics partners,” recommends Witkowski. Attentive companies, such as Allink, are already in the early stages of OAS certification.

It should be noted that although they provide services for different parties, both have objective responsibility — regardless of whether it is their fault or another subcontractor. That is, they can answer civilly for various problems such as loss, fault, damage, documentary errors, etc.

NVOCC and Freight ForwarGetting a good boat charter contract tends to be a challenge for foreign trade, don’t you agree? In some situations, there are many professionals involved and it can be difficult to understand the responsibilities of each.

This context can be exemplified by functions such as NVOCC and Freight Forwarder. After all, what are the main duties these players occupy? What are the convergences and differences between them? How can they help?

Thinking about these and other questions on the subject, we interviewed Alexandre Witkowski — who works as a Global Accounts Manager at Allink Brasil — and prepared this text. Follow it through to the end to learn more!

The NVOCC and their responsibilities

According to the expert, “a non-vessel operating common carrier (NVOCC) is, in a nutshell, a shipowner that does not have a ship of his or her own, whose main function is to group small loads within a single container”. He or she is also responsible for contracting shipowners’ sea freight and consolidating smaller container loads, generally charging for the space occupied.

A NVOCC is always in contact with other shipowners and shipping agencies. Since this is a busy routine, which depends on contact with different people and companies, it is essential to have attention and precision in daily tasks.

That said, such organizations may be treated as carriers, which provide maritime transport to the general public but do not operate the vessels. Because of this performance, they assume the responsibilities with the shipping companies. These include the payment of port and freight charges, as well as the cost of demurrage and the like.

It’s worth reminding you that a NVOCC can issue on his or her own a bill of lading, which is one of the most important documentation for the industry.

The assignments of a Freight Forwarder

“The Freight Forwarder is the one who provides logistics solutions for importers and exporters, according to the needs presented”, reports Witkowski. The demands are quite varied, such as:

• sea ​​shipments (FCL – Full Loaded Container – and LCL – Less Container Load);
• air shipments;
• road transport;
• customs clearance;
• order management;
• exchange closing;
• among others.

According to the expert, “the Freight Forwarder is theoretically a customer of the NVOCC in the business involving consolidated cargo transportation, because that is the specialty of the NVOCC. Nevertheless, there are Freight Forwarders who make their own consolidation”.

Thus, it would be no exaggeration to say that freight forwarders are essential at various times and processes of cargo transportation. This is because they fulfill the function of negotiating freight and arranging space reserves with companies, representing exporters or importers.

Coordination of boarding is also an activity performed by this very relevant figure. Such practice encompasses the following actions:

• remove empty containers;
• draft the bill of lading;
• plan the stuffing plan: in other words, “assemble the puzzle” of the consolidation by arranging the loads by weight and size within the container;
• meet deadlines between companies, shipping or unloading terminals and exporters and / or importers;
• prepare the documentation required for loading or unloading goods.

NVOCC and Freight Forwarder: differences, similarities, and legislation

Here are the biggest similarities and differences between these two elements. In addition, we will comment on the legislation behind these activities.

Similarities

When asked about the similarities between the NVOCC and the Freight Forwarder, Witkowski says that “both are part of very competitive markets”. According to him, there are hundreds of cargo agents and dozens of NVOCCs in Brazil.

Therefore, to create competitive advantage over other players, those in this area need to invest in employee specialization, compliance policies, and IT (Information Technology) development.

Such resources are essential for the activity in question to be performed with maximum productivity and efficiency, generating resource savings and process optimization as major consequences. Intelligence in port logistics also emerges as a field that can contribute in various ways in the pursuit of these goals.

“When these two players work together and are electronically integrated into their operations, the importer and/or exporter has much to gain, as the business transaction will be secure. The services of a good shipping agency can tighten and further enhance this bond, for example, “explains the expert.

When the Freight Forwarder and the NVOCC work together, the freight forwarder often hires a NVOCC service to handle the transport of an LCL batch.

Differences

“Because there are Freight Forwarders that have their own consolidation services,” Witkowski says, “they don’t always need a NVOCC. Some NVOCCs that provide additional services, such as customs clearance, road transportation, etc., act as Freight Forwarders”.

According to the expert, in this market, NVOCCs that perform these activities are treated as non-neutral, because they serve end customers and fulfill a similar function as cargo agents.

Most of the time, those who work in foreign trade need the services of the forwarder type to manage the shipment and take care of documentation and requirements for transportation. While contract negotiation is also part of your routine, payment of port and freight charges is often attributed to the NVOCC.

Legislation

The laws governing both activities are the current customs legislation and the Brazilian Civil Code. For those who want to make sure of the quality of service provided before hiring, it is worth keeping an eye on both company compliance policies and OAS Certification. “These two points have made a difference when the industry must choose its logistics partners,” recommends Witkowski. Attentive companies, such as Allink, are already in the early stages of OAS certification.

It should be noted that although they provide services for different parties, both have objective responsibility — regardless of whether it is their fault or another subcontractor. That is, they can answer civilly for various problems such as loss, fault, damage, documentary errors, etc.

NVOCC and Freight Forwarder share some similarities, but they are different players in a very broad and indispensable process for the logic of import or export.

If you liked the article, take the time to also understand what are the biggest differences between cargo agent and shipping agent!