NVOCC And Freight Forwarding – Which Is Best For You?

If you are considering using the services of a Non-Vessel Operating Common Carrier (NVOCC) or one of the top freight forwarding companies, there are a number of important elements that you will need to assess. In many ways, these two operations will perform similar functions. They will be responsible for ensuring that the shipment is safely and efficiently transported. They will be assisting with important and relevant advice and information to assist you with the arrangements. They will be covering the often time consuming and potentially confusing administrative elements. They will be assisting with the paperwork that needs to be completed as part of the exercise. They will be assisting with cross-border movements and the associated customs and regulatory environments associated with this. However, there are some differences in the way that these two service providers will go about their business.

Differences between a NVOCC and a freight forwarder

One of the most obvious is that there are two quite different business perspectives being offered by a NVOCC and a freight forwarder. Fundamentally the difference is that the NVOCC will be acting in effect like a shipping company, even though it does not own the ships. This means that they are the carrier who will be transporting the shipment. As part of the services they offer in this role, they are able to be listed as the shipper on the original bill of lading that is used for the goods. One of the methods that are used for the provision of services by the NVOCC is for them to rent space from the carriers, such as shipping companies, and then sell this space to businesses, which will sometimes include freight forwarders. This means that a primary focus for their actions will be on making sure that they sell the space for shipments.

The freight forwarder, on the other hand, is acting as an agent for the business that is shipping the goods and so has a primary focus on the interests of the cargo that is being shipped. They are not the carrier of the goods. They will be negotiating with suitable carriers for the goods to be transported on behalf of the owner of the goods.

This means that the NVOCC will be fully responsible for providing the freight services for the shipment as a carrier. The advantage of using the NVOCC instead of a large carrier is that it adaptable to when market conditions change. A large shipping company is often tied into larger long-term contracts that impact on its ability to adapt to changes in market conditions. If there are any variations in the marketplace, then the NVOCC is not tied to any specific shipping operation, so they should have the flexibility to shop around in the market to remove pricing and delivery risks and provide the most competitive pricing available. This is valuable for a business that has the flexibility to be able to utilise this type of arrangement for their shipping.

Effective methods for transporting goods

The top freight forwarding companies will be responsible for finding the most effective method for transporting goods from the pickup point to the delivery point. This could include:

• Organising multiple modes of transport – air, sea, and land

• Negotiating contract arrangements and making bookings with carriers

• Handling shipping documentation

• Providing advice relevant to the movement of the cargo

• Arranging storage of the cargo

• Forwarding the cargo under client instructions

• Arranging cargo haulage

• Advising on cross-border movement of cargo

• Arranging custom clearances

Freight forwarders will also be part of established industry bodies that provide direction and assistance to ensure that suitable processes are being applied in the industry.

Finding a suitable logistics service provider

The selection of a suitable logistics service provider will come down to several factors. Firstly, it will be about the experience of the service provider. Whether they be a NVOCC or a freight forwarder, they need to have relevant industry experience as well as experience relevant to your area of activity. Depending on the type of goods being transported there may be special considerations and it is important that the service provider understands this.

The second is contacts. It is important that the service provider has suitable industry contacts in the regions where you are transporting items. There may be a difference here between the two as NVOCCs could be leasing shipping space from their contacts and the freight forwarder will be negotiating arrangements with the shippers. Understanding that the provider understands the environment and has suitable reliable contacts is important.

Thirdly, there is the price. If you are looking at regular shipments or a one-off, there may be some variations here. A NVOCC may be able to offer you a solid contract that will provide you with ongoing confidence, while a freight forwarder may have more flexibility around what arrangements are made and which modes of transport are utilised. Part of looking at the price is also understanding what safeguards are in place to protect your shipment and to prevent delays.

Fourthly, there is the level of customer service. Both groups of organisations should have a focus on providing good customer service as their reputation is at stake. However, there is a slightly different focus for each group. The freight forwarders will generally be very highly committed to individualising their solution for their client. The NVOCC will have options that it recommends to clients which fit within its business model.

Finding the best solutions for your company

NVOCCs and top freight forwarding companies offer some very similar services, but there are obvious differences in the types of responsibilities they have when it comes to the actual shipping of the goods. This will influence how they approach the contact with customers around negotiations and arrangements when it comes to shipping and storage.

At Stockwells, we have been focused on finding the best solutions for our clients for over 40 years. We understand the volatility of the market and we are able to adapt and move quickly to ensure that our clients get the best possible deal. We are not tied to deals with carriers, although we have very good relationships with many. We have a total focus on ensuring our customers get the best possible result. As part of this, we allocate an individual to be the primary point of contact in our organisation. You are able to seek advice and information through other channels if you wish on a 24-hour basis. We are committed to making sure you feel every confidence that your shipment is being looked after and if there are any issues these will be resolved quickly and efficiently.

Contact us today

Stockwells offer a wide range of services as we have built up a very detailed understanding of what is needed for the most efficient shipping of goods. If you would like to know more about the services we offer, and how we are able to support you through making arrangements for your shipment, then please contact one of our skilled advisors by calling 1300 786 468. We are more than happy to provide you with any details you require.

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