Friday, October 18, 2013

Freight Forwarders & NVOCs – What is the difference?

Freight Forwarders act as agents of merchants/shippers. Many forwarders act as consolidators too, ie, combining small lots of cargo into big parcels/full container loads. Generally they issue forwarder B/Ls (House B/Ls) to each shipper. Under this B/L they accept responsibility as the agent of the shipper only. Incase of an issue, the holder of the B/L will have to take it up with the actual carrier.
 
NVOCCs (Non Vessel Operating Common/Container Carrier) –  When a forwarder acts as a carrier he is termed as a NVOCC. Though NVOCC is not the actual ship operator, his role is same as that of a principal and accepts the carrier’s responsibilities.
 
Both freight forwarders and NVOCCs are important customers of the lines. Their profit is the difference of freight rate received from shipping line and that charged to the shipper, plus the margins from pre/on carriage, documentation and other value added services.

Through Bill of Lading & Combined Transport Bill of Lading – Are they same ??

No, there is a significant difference between the Through B/L and Combined Transport B/L.

Through B/L -  Under a Through B/L the ocean carrier acts only as an agent for the shipper in arranging the pre and on carriage. The pre/ on carrier may be a feeder vessel or land transport (road/rail). The  ocean carrier will arrange the pre/on carriage and will charge merchant for the service. But, will not have any direct liability for any loss or damage to the cargo during those part (pre/on carriage) of the journey. The responsibility of the carrier is limited.  

Combined Transport B/L – Here the carrier accepts liability from beginning to end. This B/L is the requirement of container trade to facilitate door-to-door movement. In the case of a door-to-door movement of containers  there is carrier haulage at both ends, which combines various modes of transport, and it is logical that the carrier accepts liability from the shipper’s premises to the consignees’ premises.