Difference between slot charterer and NVOCC operator

The shipping and logistics industry involves many different confusing terms that need to be explained to shippers and people involved in the shipping industry so that they will make the right decisions. Slot charterer and NVOCC operator (Non-Vessel Operating Common Carrier) are two terms related to the shipping industry, which consists of leasing or buying space on a ship for cargo. Both terms have the same context of dealing with the vessel space but have different roles and responsibilities in the shipping industry. 

This article is a valuable resource that will help you understand the difference between a slot charterer and an NVOCC operator. We will explore their roles, responsibilities, and exact meaning in the shipping and logistics industry, providing you with essential knowledge for your shipping endeavors. 

What is a slot charterer? 

Slot chartering is a deal where some slots are rented for shipping cargo. A slot can hold a 20-foot container. These types of slot charter agreements are used mainly by groups of individuals or companies so that they can merge their consignments to save space and money and optimize their global trade routes simultaneously. 

A slot charter is the one whole delas that will lease the space on a ship for a specific period. In easy words, it is a sharing agreement between the dealers and the slot charterers. The leased slots are not permanent for a voyage; they will change with the journey, so the individuals or companies will share them. 

What is an NVOCC operator? 

An NVOCC operator manages the cargo logistics by buying space from the owner or vessel operator and then leasing or selling the space to the shippers on their bill of lading to deal with the customers. They function like carriers only, but the only difference is that they do not possess any vessels. Unlike freight forwarders, they are the intermediary that deals directly with the shippers for the space. With this, they generate their tariff from the shippers to use their space on the shipping lines. They take all the responsibilities and risks of the journey, like the carrier. 

Now we have explored what slot charterers and NVOCC operator are, we will explore their roles and responsibilities in the shipping industry one by one. 

What are the roles of a slot charterer?

Slot charterers are crucial for the shipping industry as they perform certain functions by managing the space on the container for the shippers. Let's discuss their roles in detail: 

1. Purchasing slots: A  slot charterer’s primary responsibility is to buy the slots on every ship on time for the shippers. These spaces are termed slots, and mainly, two or more consignments of the exact nature are merged so that their goods can easily survive on the ships. Also, slots don't need to be available for the whole voyage or the whole time; they can change, too. 
2. Manage logistics and operations: As slot charter is similar to the carrier, it is also responsible for managing the logistics network and operations. It must manage the shipping documentation, delivery, loading, and customs clearance. 
3. Functions as a maritime carrier: They work as a shipping line for shippers, basically owned by a shipping alliance or group of companies. They manage freight booking, customer service, pricing, and journey coordination. 
4. Maximizing the cargo space: The slot charter is responsible for adequately stacking the containers on the ship so that the place is appropriately optimized and the customers are satisfied. 
5. Communication with vessel operators: The slot charterer is responsible for maintaining communication with vessel operators and reporting all information about their ships to ensure smooth transportation. 

What are the responsibilities of an NVOCC operator?

NVOCC operators are responsible for various functions in the shipping and logistics process. Their function is mainly to make the process cost-efficient and easy to handle. Now, we will explore what NVOCC operators are responsible for: 

1. Collecting cargo for ships: The primary responsibility of the NVOCC operator is to consolidate the cargo from different shippers to fill the whole ship. At the assigned container port, the goods are given to the buyer. Collecting and distributing the cargo makes shipping cost-efficient for those needing more cargo to fill the entire ship. 
2. Value-added services: The operators also provide value-added services to attract shippers to their shipping lines. These include warehousing, cargo insurance, customs clearance, and tracing facilities. 
3. Negotiating freight costs and securing rates: NVOCC operators know market trends and prevalent rates well. As they frequently travel, they can negotiate the prices better than other shippers. This mainly aids small shippers who are just starting their business in getting competitive rates. 
4. To fulfill the documentation requirement: The container shipping industry has many documents to fill out and many shipping regulations to manage. When you work with the NVOCC operators, they arrange everything, whether a bill of lading, certificate of list, or packaging list. 
5. Handling the claims: The NVOCC operator is responsible for handling claims related to the cargo, such as any loss or damage caused during transit. 

How does a slot charterer differ from an NVOCC?

The slot charterer and NVOCC operator perform different functions and responsibilities in the same context. Therefore, operators need to be aware of their differences to avoid confusion or the selection of the wrong operators. Now, we are going to explore their difference. 

1. Possession and functioning: Slot charterers may or may not possess vessels but rent space on the ships. At the same time, NVOCC does not have vessels but provides space for transportation. 
2. Responsibilities: Both the slot charterer and NVOCC operator are responsible for transportation, but there are some differences. A slot charter is responsible for cargo, while the NVOCC operator manages the carrier's risks and liabilities. 
3. Business model: Slot charterers mainly lease slots for their use, while the NVOCC operators lease space to offer various services to different shippers. 
4. Role in the shipping industry: A slot charter and NVOCC operator are both essential for the shipping industry but have different roles. A slot charterer purchases slots from leading ship operators, while an NVOCC operator buys them from the vessel and then sells them to the shippers. 

Slot charter and NVOCC operators are the two options that can be used to buy or lease spaces on the vessels. It's crucial to understand their nature, functions, roles, and responsibilities in the journey and then analyze your requirements. Armed with this knowledge, you can make responsible and informed decisions for your shipping purposes. 

We hope this article has helped you understand the roles and responsibilities of slot charterers and NVOCC operators in the shipping industry. If you have any questions or would like to share your experiences, we encourage you to do so in the comments below. LOTUS Containers is a trusted container supplier company that deals with container trading and provides the best shipping containers for sale and lease that can be easily stacked and stored on ships.