What’s the Difference Between a Freight Forwarder and NVOCC?

Both freight forwarders and non-vessel operating common carriers (NVOCCs) are third-party service providers that help businesses move goods. While there are some limitations to using both of these companies, depending on your needs. One major difference is the level of visibility you have into the process. If you’re using an NVOCC then you will likely only get a barebones overview of how your shipment was processed, from origin to destination. With a freight forwarder, you have more control over the details of your shipment and transport process including who has access to it, when they can access it and where they go once they’re delivered. This means that while a Freight Forwarder doesn’t necessarily guarantee higher security or confidentiality with their services compared to an NVOCC, it might be worth looking into if you need greater control over sensitive details along the shipping process.

What is a Freight Forwarder?

A freight forwarder is essentially a shipping agent that takes care of all the details involved in moving your goods from origin to destination. They will likely handle quite a few shipments both domestically and internationally throughout the year, meaning that they have great connections to both carriers and customs authorities around the world. This means they will be able to get you the best rates and service available. They are 100% focused on shipping your goods to their customers and collecting their commission. So you can expect that they provide you with the same service which is why you see so many of them using the same carriers and handling the same routes. They are not responsible for the security of your goods, so you should contact any third-party carriers that work with a Freight Forwarder to ensure that your shipment is as safe as possible.

What is a NVOCC?

Like a freight forwarder, a non-vessel operating common carrier (NVOCC) is a third-party transportation company that moves goods for other businesses. Unlike a freight forwarder though, an NVOCC does not own or operate any ships. Instead, they contract with a shipping company to provide transportation service. An advantage of using an NVOCC is that the company doesn’t have the overhead cost associated with owning their own fleet. This means that they can often offer better rates on shipping items at a lower volume than a freight forwarder who has to maintain a fleet of their own. Unlike a freight forwarder, an NVOCC is legally required to operate all over the world. So they can handle domestic and international shipments. In some cases, they may be able to offer customs bonded services.

Differences Between Freight Forwarders and NVOCCs

Visibility:

While both freight forwarders and NVOCCs will often provide a barebones overview of the shipping process, a freight forwarder gives you a lot more visibility into how your shipment was processed. You will be able to see who has access to your shipment, when they can access it, and where it goes once it’s delivered.

Costs:

The cost difference between using a freight forwarder or an NVOCC is often not dramatic. The major difference between the two is how a freight forwarder (and therefore you as the shipper) is connected to the process. A freight forwarder will likely handle your shipment with a variety of carriers, and you may need to work with a freight forwarder to ensure that they get your shipment to its destination. On the other hand, an NVOCC is often only responsible for the cost of the fuel, regardless of the number of shipments they handle.

Third-party Risk:

A freight forwarder has some control over the transportation process by choosing who has access to your shipment and where it goes. This means that you may have a higher level of risk compared to an NVOCC. For example, if you choose to have your shipment handled by a freight forwarder and they are involved in a wreck, you may be at risk of your items getting damaged.

Worldwide visibility:

If you’re only shipping within the United States, then using a freight forwarder will likely be sufficient. However, most companies will want to use an NVOCC if they ship internationally. This is because it’s so much easier to see your goods all over the world. A freight forwarder can do this, but you may not have the same level of visibility.

Why Should You Use a Freight Forwarder?

Cost Savings:

Many companies will only choose to use a freight forwarder if they ship internationally, so that they can get the best rates and get their goods delivered around the world. This is because it’s so much easier for a freight forwarder to see your goods all over the world and negotiate the best rates for your shipment compared to an NVOCC.

Visibility:

A freight forwarder will likely handle your shipment with a variety of carriers and you may need to work with a freight forwarder to ensure that they get your shipment to its destination. This means that you will have better control over the details of your shipment and transport process.

Third-party Risk:

There may be some risk involved with choosing a freight forwarder. For example, if they don’t have the capacity to handle the volume of your shipment, they could abandon it somewhere or damage it during transportation. This is why it’s important not to choose a freight forwarder based solely on price, but to also look at the degree of third-party risk that they might bring with the goods.

Why Should You Use an NVOCC?

Worldwide visibility:

An advantage of using an NVOCC is that you get the same service which is why you see so many of them using the same carriers and handling the same routes. This means that you don’t have to worry about switching carriers as much because you know that you’re getting the same quality service.

Cost Savings:

The major difference between using a freight forwarder or an NVOCC is how a freight forwarder (and therefore you as the shipper) is connected to the process. A freight forwarder will likely handle your shipment with a variety of carriers, and you may need to work with a freight forwarder to ensure that they get your shipment to its destination.

Visibility:

The other major advantage of using an NVOCC is that they don’t have the overhead cost associated with running their own fleet. This means that they can often offer better rates on shipping items at a lower volume than a freight forwarder who has to maintain a fleet of their own.

Third-party Risk:

The other major advantage of using an NVOCC is that they don’t have the overhead cost associated with running their own fleet. This means that they can often offer better rates on shipping items at a lower volume than a freight forwarder who has to maintain a fleet of their own.

Worldwide visibility:

The main disadvantage of using an NVOCC is that they are required to operate all over the world. So they can handle domestic and international shipments. In some cases, they may be able to offer customs bonded services.

Final Words

Shipping goods is a complicated task, especially if you’re sending something fragile or classified as sensitive information. For these reasons, it’s important to use a freight forwarder or an NVOCC for your shipping needs. Doing so will help you know where your goods are at all times, and it will also give you more control over the transportation process.

ProConnect Integrated Logistics – Your 3PL Partner

Wide reach, a vast network of agents, and years of industry experience – leave your shipping worries to ProConnect Integrated Logistics, a trusted freight forwarder in the region.

Be it large volumes of cargo, or just a few kilos; be it air, sea or road freight – businesses across the world have entrusted their freight shipping to us. Our expertise over the years has helped many businesses grow across boundaries. In addition to shipping, we also undertake custom clearance, import and export trade help that you may have along with offering you value-added services.

If you are looking for a partner to take care of all your logistics hassles, talk to us

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