If you are looking for a third-party logistics provider in UAE, you may have come across these two terms: NVOCC and freight forwarders.
You're not alone if you struggle to differentiate between NVOCC and freight forwarding and figure out which is best for your business needs. Typically, there is much confusion surrounding these two types of operation –even within the shipping industry itself. To help you understand the difference between the two, we have made an explicit article for you; read the following to learn more.
What is an NVOCC?
Non-Vessel-Operating Common Carrier (NVOCC) provides all the same ocean transportation services as a carrier without operating the vessel being used.
Instead, they enter into volume-based ocean freight managements with various shipping lines that run on the desired trade lanes and set their tariffs for selling space on these liner services. NVOCCs issue their bill lading, which serves as a contract of carriage between the shipper and the consignee. In other words, Trailer Bridge provides ocean services throughout the Caribbean on its assets. Beyond the Caribbean, Trailer Bridge utilizes and coordinates with its trusted international partnerships to ensure seamless shipments for customers.
NVOCC also deals with stuffing and sales of cargo. They sign contracts with the prime shipping lines to procure and transport specific cargo units for them in a financial year. The NVOCC is the most major trade maker for the container shipment business. The NVOCC does all functions and services of an ocean carrier. However, they do not operate the physical vessels that transport goods.
What are freight forwarding services?
In logistics, freight forwarders are individuals or organizations that work as agents for importers and exporters by helping them establish relationships with carriers such as trucking companies, ocean liners, and air freighters.
Not only do they take responsibility for the entire process of shipping and storing the goods, which includes handling and processing cargo documents, they also bargain with the cost of the transport while choosing an established trade route that best optimizes speed, price, and reliability.
Freight forwarders in Dubai work with travel agents but with cargo instead of people. The forwarding agents implement their knowledge in international freight rates to evaluate them to develop a good package deal that benefits both freight forwarders in Dubai and their clients. They also manage import and export documentation and clearance activities.
What is the difference between freight forwarding services and NVOCC?
There are differences that people do not recognize when it comes to responsibilities and documentation. To differentiate, one can take the help of the Bill of Lading. If you have an NVOCC as your service provider, then the master bill of lading won't be direct with the shipment bearer. They are considered to be carriers though of a different type, yet they do have their bill of lading and other crucial documents.
Since clients are not familiar with the international and global connections, the freight forwarders in Dubai offer their services as intermediaries in separate negotiations to other countries. It makes sure that the arrival of goods is punctual and procedures are going on as scheduled. However, both NVOCC and freight forwarders in Dubai have been seen to apply and administer e-commerce and advanced technology in their activities.