The first question to address here is the difference between a freight forwarder and an NVOCC. NVOCC stands for a non-vessel operating common carrier. This refers to an individual or company that organizes shipments from the manufacturer/producer to the final market or customer. While a freight forwarder essentially carries out the same work, an NVOCC does not own ships for transportation purposes. Instead, an NVOCC organizes the transport by buying space on vessels and then selling this to their customers at a profit. Unlike a freight forwarder, an NVOCC can issue a bill of lading which is the contract between the NVOCC and the, along with shipping documents that make the NVOCC responsible for the shipment’s transport despite not owning the ships.
If you want to set up your own NVOCC in the United States, you need to apply for and acquire several licenses. You will have to go through multiple stages of the bureaucracy to get it. You need to apply to the Bureau of Certification and Licensing, which falls under the Federal Maritime Commission (FMC). It is the FMC that has the power to grant your license. Once you apply for the license, you need to show the body that you are deserving of the license. This means you have to have sufficient expertise in shipping and proof that you will be able to provide your customers with quality services. Additionally, your company should be by every guideline that is stated in the Shipping Act of 1984. An advantage of being an NVOCC over a freight forwarding company is setting your own prices and rates. Additionally, if you yourself are applying to be an NVOCC, you can tap into a market of specific clients who want shipping services but cannot afford to pay the high rates given by freight forwarders. In these situations, it will be fairly simple for you to combine two shipping consignments and charge your own tariff rates for them, thereby making more from one route than is possible by a freight forwarder.
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If you want to shift your services from using a freight forwarder to an NVOCC, there are simple steps to take. There are also several advantages to this. The NVOCC assumes responsibility for the shipment of the goods from one place to another and assumes the role of the carrier. Additionally, using an NVOCC allows you to directly track your goods from one point to the other and be aware of any delays or accidents that occur on the journey.
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