Connection between Shipper and NVOCC :-
- Can a shipper negotiate directly with a NVO for slot rates?
- Who would handle the documentation in that case?
- Would the shipper/cnee have to hire a FF to complete the delivery? Or could they do it with an in-house staff member?
Thanks Jeff Carter for this multi part question..
If you read my previous article regarding NVOCC operator, I have mentioned that
“NVOCC is in certain areas accorded the status of a virtual “carrier” and in certain cases accepts all liabilities of a carrier”..
This should answer the first question.. Since the NVOCC operator takes on the role of the carrier, for sure the shipper can negotiate rates directly with the NVOCC operator and that is what the NVOCC also requires..
(For those of you who might be confused with the term NVO used by Jeff, please read https://www.shippingandfreightresource.com/is-there-a-difference-between-a-nvo-and-nvocc-operator/)..
There is no separate documentation involved in negotiating rates or dealing directly with the NVOCC.. You provide them with the information of the cargo that you want to ship, namely :
- Tonnage or Volume of shipment (say 25×20′ containers)
- Port pairs (Load Port/Discharge port)
- Special cargoes if any (hazardous, reefer, OOG etc)
- Period of shipment
- Any other information required by the NVOCC
and based on the information provided, the NVOCC will advise the rates and services that they are able to offer and if you accept this rate and service, then you have a contract..
One of the main differences in dealing with an NVOCC or a direct shipping line is that in the case of an NVOCC, they will issue their own bill of lading which in various circles is known as a House Bill of Lading, but this is a bill of lading that is acceptable to banks, chambers of commerce and other entities as a negotiable bill of lading when issued as such..
Whether you need to hire a Freight Forwarder to handle the shipment or not will depend totally on what activities you require to be performed.. If you search this blog for the term forwarder, you will come across several articles describing the activities of a forwarder..
One of these articles says :
A Freight Forwarder is someone who undertakes to handle the movement of goods from point to point on behalf of the cargo owner..
The essence of freight forwarding is to ensure that the cargo is picked up from the seller and delivered to the buyer at the required place, at the right price and in the same condition that it is picked up from origin..
A freight forwarder will have the below capabilities :
- experienced in all modes of transportation – road, rail, air and sea
- store the cargo belonging to the clients at their warehouse (usually all big forwarders have their own warehouses)
- arrange the distribution or “forwarding” of the cargo as per the instructions of their client
- negotiate freight rates with the shipping line
- book the cargo with the shipping line as per the requirement of the client
- prepare bills of lading and associated shipping/negotiating documentation (EUR1, Certificate of Origin, etc)
- issue approved house bill of lading (House bill of lading)
If you require all above activities to be done, then yes you need to employ the services of a freight forwarder, otherwise if you are capable enough to handle it on your own, it can be done on your own.. However I must warn you that it is NOT EASY..
Therefore, if in doubt, engage the services of a professional and reputable freight forwarding company.. Do this after due research and preparations especially if you are exporting for the first time so you are not taken to the cleaners straight afterwards..
Hi there Hariesh,
Love the blog- great tool. What value do shippers and forwarders attach to the concept of neutrality from a carrier / NVOCC?
Hello Nic, by neutrality do you mean that the NVOCC/Carrier doesn’t approach a forwarders or clearing agents shippers directly..?? If so, a lot of NVOCC/Carriers do value it, but there are those who would consider the issue to be subjective..