What is the role of NVOCC in export?


The role of NVOCC in exporting is to cater to the growing demands of shippers and offer seamless and legal international trade. Shippers across the globe face challenges such as failure to comply with regulatory norms, risk management, documentation, customs clearances, and keeping track of market fluctuations. NVOCC is a logistics service provider that offers services such as containerization, documentation, cargo consolidation, and vessel space reservation for global shippers. It helps in offering greater flexibility and cost-effective international shipping. Let us learn more about the role of NVOCC in export. 

Define NVOCC 

A non-vessel operating common carrier (NVOCC) is a logistics service provider that extends its services in the maritime industry. It acts as an intermediary between small or medium businesses and ocean carriers to facilitate shipping activities, including import and export. Shippers must transport goods across borders, but not all containers can hire an NVOCC to assist in containerization and transportation. NVOCC agencies do not own or operate their vessels but partner with other ocean carriers to book vessel spaces based on the desired shipping schedule and route. 
For example- If you own a small or medium business and want to ship goods across international waters, instead of going through the entire process of containerization, documentation, booking intermodal transport, and ensuring customs clearance, it is better to book an NVOCC. These logistics service providers are experts in maritime shipping and have a vast network of resources and partnerships with various ocean carriers to streamline shipping operations. NVOCC can also offer customized shipping services and help offer cost-effective and flexible shipping services. 

Challenges in international shipping 

Shippers hire NVOCC for international shipping because they face several challenges in shipping. A few of them are- 
  1. Compliance and regulations- International shipping to various countries requires compliance with regulatory standards that change based on the nature of goods and the importing country. Shippers face challenges in adhering to every rule and regulation while container packing. Failure to comply with regulations can lead to economic losses. 

  2. Tracking market conditions- Shipping rates in the global market fluctuate, and it's difficult for shippers to manage them since they lack expert knowledge of market or industry demands. In such cases, shippers end up paying more than usual or do not get to trade on their desired terms. 

  3. Cargo risks- There are various risks associated with shipping, such as cargo theft and shipping accidents that may cause cargo damage, leading to significant economic losses. Choosing between various types of cargo insurance can be challenging, especially selecting the one that offers maximum coverage. 

  4. Documentation and clearances- Shippers struggle the most with arranging all the required documents, such as bills of lading, and getting customs clearances on time. Failure to reach the port on time can lead to container rollover in shipping, which causes economic losses. 

Role of NVOCC in shipping 

To overcome the challenges of international shipping, shippers can hire NVOCC to import and export their products. The functions of NVOCC in shipping are as follows- 
  1. Issues bill of lading- The primary role of NVOCC is to issue the bill of lading after the shipper has applied for it. These agencies help handle all other documentation and customs clearances to ensure timely container gate out in shipping. Shippers do not need to struggle to manage all the paperwork and ensure its legality. 

  2. Cargo consolidation- Shippers that do not require the entire shipping container to load the shipments find it challenging to arrange cost-effective transportation. NVOCC offers cargo consolidation services for less-than-container load (LCL) shipments and combines multiple shipments to place them inside a single container for cost-adequate international transportation. 

  3. Booking vessel space- NVOCC partners with relevant ocean carriers to reserve vessel space based on the required shipping schedule and routes by the shipper. NVOCC is an expert in maritime shipping and evaluates the market conditions and shipping routes to offer the best ocean carriers.  

  4. Regulatory compliance-NVOCCs are well-informed about regulatory norms in various parts of the world and have experience complying with different standards. By adhering to regulatory standards, they ensure that there are no cases of non-compliance in shipping. 

  5. Negotiating freight rates- NVOCCs adhere to the shipper's budget and offer the best routes and ocean carriers to keep the shippers from paying trade tariffs or incurring any extra costs during transportation. It helps offer cost-effective international shipping for import and export trade. 
 
The role of NVOCC is to streamline and optimize the shipping process for shippers, enabling flexible, cost-effective, and seamless international shipping. 
 
LOTUS Containers is a shipping container service provider that offers container leasing and selling by partnering with 300+ container depots worldwide. 

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