How to Choose Between Nvocc and Freight Forwarder?

Many companies find it difficult to distinguish between NVOCC and freight forwarder, leading to confusion about which service best suits their needs. With the fluctuation of freight rates and the increase in competition, companies often find it difficult to obtain cost-effective transportation solutions. It is crucial to understand who is responsible for the goods during transportation, especially in the event of loss or damage.

NVOCC (Non-Vessel Operating Common Carrier) and freight forwarder are two indispensable roles, but how are they different? What are their respective business scopes and responsibilities? These issues are directly related to the logistics cost, efficiency and risk control of enterprises. In order to help B2B enterprises better understand the role of these two in the international logistics process, this article will explore the difference between NVOCC and freight forwarder in detail and reveal what NVOCC can do that freight forwarders cannot do.

Basic Definition of NVOCC and Freight Forwarder

NVOCC (Non-Vessel Operating Common Carrier)

Refers to organizations that do not own or operate ships, but establish relationships with actual shippers through contracts or agreements, issue their own bills of lading or other transport documents, and assume carrier responsibilities. They sign a transportation contract with an ocean common carrier (such as a shipping company), accept the shipper's cargo as a carrier, issue their own bills of lading or other transport documents, and assume responsibility for the entire transportation of the goods.

Freight Forwarder

Agents for the transportation of goods, trading on behalf of customers. They accept the entrustment of the shipper to complete a certain link or related links of the transportation of goods, such as customs declaration, booking, packaging, warehousing, customs clearance and delivery.

The essential difference between NVOCC and freight forwarder

Business scope

NVOCC: The business scope of NVOCC includes issuing shipping documents (bill of lading, waybill), organizing the entire transportation of goods, formulating the entire transportation plan, negotiating with the actual carrier on means of transportation (booking), handling cargo storage and outbound business, etc. Some NVOCCs also handle cargo declaration, cargo handover, short-distance haulage, cargo transshipment and distribution, etc.

Freight forwarding: Freight forwarding has a wider business scope, covering foreign customs declaration, booking, foreign pickup, packaging, domestic warehousing, domestic customs clearance, domestic delivery and other links. They can engage in international freight forwarding business as agents or independent operators.

Basic responsibilities

NVOCC: As a carrier, NVOCC enters into a transportation contract with the cargo shipper, issues shipping documents, and is responsible for the transportation from the place where the goods are accepted to the place where the goods are delivered at the destination. They organize the entire transportation of goods, formulate transportation plans, and assume the responsibilities of the carrier.

Freight forwarding: The basic responsibility of a freight forwarder is to trade with the carrier on behalf of the cargo owner and complete one or more links of the transportation of goods. They can be a carrier (issue their own shipping documents and assume responsibility) or an agent of the shipper (not directly responsible).

Operational Structure

NVOCCs lease container space from vessel operators and issue their own bills of lading (HBL), while freight forwarders act as intermediaries and arrange transportation with multiple carriers but do not issue their own bills of lading.

Legal Status and Liabilities

NVOCCs act as carriers and assume the carrier's responsibilities and obligations as defined in the bill of lading, while freight forwarders act as agents for shippers and coordinate logistics but have limited liability.

Services

NVOCCs specialize in ocean freight services and provide additional services such as warehousing and insurance, while freight forwarders provide a full range of services including air freight, ocean freight, land freight, customs clearance, warehousing and insurance.

Cost Impact

NVOCCs can usually offer competitive prices due to their bulk leasing agreements with vessel operators, but ancillary services may incur additional charges. Freight forwarders may have higher overall costs due to intermediary fees, but offer a comprehensive service package that can optimize overall logistics expenditures.

Advantages of NVOCC

Non-vessel operating common carriers (NVOCCs) have advantages that freight forwarders cannot match in some aspects:

Bill of lading issuance: NVOCCs can issue their own bills of lading, which means they can sign transportation contracts directly with customers and assume transportation responsibilities.

Flexibility: NVOCCs can flexibly adjust the leasing of ship space according to market demand and provide more competitive freight rates and services.

Comprehensive services: NVOCCs usually provide door-to-door comprehensive logistics services, including warehousing, customs declaration, distribution, etc., to meet the diverse needs of customers.

Advantages of freight forwarders

Extensive cooperation network: Freight forwarders usually cooperate with multiple transportation service providers, which can provide customers with more choices and more flexible transportation solutions.

Professional logistics solutions: Freight forwarders have rich logistics experience and expertise and can tailor the best logistics solutions for customers.

Cost control: By cooperating with multiple suppliers, freight forwarders can help customers effectively control logistics costs.

Differences between NVOCC and VOCC

VOCC (Vessel Operating Common Carrier), that is, ship operating common carriers, refers to companies that own and operate ships. VOCCs are directly responsible for the transportation of goods and the operation of ships, while NVOCCs provide transportation services by renting space on VOCC vessels.

What NVOCCs can do that freight forwarders cannot

Issuing bills of lading

NVOCCs have the right to issue their own bills of lading or other similar transportation documents, which freight forwarders cannot do and are usually issued by shipping companies. The bill of lading is proof of the transportation contract between the carrier and the shipper, and is also a certificate of ownership of the goods.

Full-course transportation responsibility

NVOCCs, as carriers, are responsible for the entire transportation of goods, including all links from the place where the goods are accepted to the place where the goods are delivered at the destination. Freight forwarders are usually only responsible for the specific links they represent.

Signing service contracts with shipping companies

NVOCCs can sign service contracts with shipping companies to determine freight rates, transportation methods, and transportation routes. This is something that freight forwarders usually cannot do directly because freight forwarders mainly act as intermediaries or agents and do not directly sign transportation contracts with actual carriers.

Choosing an NVOCC or a freight forwarder depends on your specific needs. If you mainly need ocean freight services and additional services, NVOCC may be an ideal choice, it has more power and capabilities. If your goods require multimodal transport, or you need a one-stop solution to meet all logistics needs, and want more flexible and diverse services, freight forwarding may be more suitable for you.

For B2B companies, when choosing NVOCC or freight forwarding, they should weigh their own needs and actual conditions. If the company wants to obtain full-process transportation guarantees and more professional services, it can choose NVOCC; if the company only needs to complete a certain link of cargo transportation or related links, freight forwarding is a more economical and flexible choice.

No matter which method you choose, Chinadivision is willing to provide you with professional logistics solutions and high-quality services. We have rich international logistics experience and resources, and can tailor the most suitable logistics solutions for you according to your specific needs. Welcome to get in touch with us and start an efficient, safe and reliable international logistics journey together!