Legal Definitions - non-vessel-operating common carrier

A Non-Vessel-Operating Common Carrier (NVOCC) is a company that acts as a carrier for shippers but does not own or operate the vessels (ships) used for transportation. Essentially, an NVOCC functions as an intermediary, issuing its own bills of lading (contracts of carriage) to its customers, taking responsibility for the cargo, and arranging for its shipment using the services of actual vessel-operating common carriers (like major shipping lines).

In simpler terms, an NVOCC is like a travel agent for cargo. They book space on ships owned by others, consolidate shipments from multiple customers, handle all the necessary documentation, and manage the logistics, all while presenting themselves as the primary carrier to their clients.

Here are some examples to illustrate the role of an NVOCC:

• Example 1: Small Business Importing Goods

  A small online retailer in the United States wants to import a container of custom-designed apparel from a factory in Vietnam. Instead of directly contacting a large ocean shipping line, which might require a minimum volume or complex booking procedures, the retailer hires an NVOCC. The NVOCC issues a bill of lading to the retailer, arranges for the apparel to be picked up from the factory, books space on a container ship operated by a major shipping company, and handles all customs documentation. The retailer deals solely with the NVOCC, which takes responsibility for the safe and timely delivery of the goods, even though it doesn't own the ship.

  This illustrates an NVOCC because the retailer contracts with a company (the NVOCC) that promises to carry their goods, issues its own shipping documents, but ultimately uses another company's vessel to transport the cargo across the ocean.

• Example 2: Consolidating Multiple Shipments for Export

  A furniture manufacturer in North Carolina needs to export several smaller batches of custom-made furniture to different customers in Europe. Rather than booking separate, less-than-container-load (LCL) shipments with multiple vessel operators, the manufacturer uses an NVOCC. The NVOCC collects the various furniture shipments, consolidates them into full containers at its warehouse, and then books these containers on a vessel-operating carrier's ship heading to Europe. The NVOCC provides the manufacturer with a single bill of lading covering all the consolidated shipments.

  This demonstrates an NVOCC's function as it consolidates cargo from multiple shippers into larger units, issues its own documentation to the original shippers, and then contracts with an actual vessel owner for the physical transportation, simplifying the process for the manufacturer.

• Example 3: International Relocation of Personal Effects

  A family is moving from Canada to Australia and needs to ship their household goods, including furniture, appliances, and personal belongings. They contact an international moving company that specializes in door-to-door service. This moving company, acting as an NVOCC, arranges for their goods to be packed, picked up, loaded into a shipping container, and transported by a major ocean carrier. The moving company issues the family a contract for carriage and manages all the logistics, customs clearance, and delivery at the destination, even though they don't own the ship that carries the container across the Pacific.

  Here, the moving company functions as an NVOCC because it takes on the legal responsibility for the family's goods, provides the shipping contract, and manages the entire logistical chain, but relies on a third-party vessel operator for the actual ocean transit.