Non-Vessel Operating Common Carrier

Summary of Non-Vessel Operating Common Carrier

A common carrier providing point-to-point international transport of goods. This type of carrier, commonly known as NVOCC, may not actually operate any transport equipment, acting instead as a coordinator among actual carriers. For example, an NVOCC might issue a bill of lading from Saint Louis to Munich, contracting with motor carriers to take the goods to the U.S. pier and from the European pier, as well as with the steamship carrier to move goods across the ocean. The NVOCC will issue its own bill of lading from origin to destination, assessing one charge for the entire movement. The principal value of the NVOCC is in providing through transportation services, especially to smaller firms or those with a limited knowledge of transportation services.

As a practical matter, NVOCCs are not regulated and instances of poor management or unethical behavior are not unknown. The principal criticism of NVOCCs derives from the fact the NVOCC does not actually perform any transportation services, subcontracting them to conventional common carriers and thereby deriving profits without the substantial capital investments customarily associated with transport operations.

(Main Author: William J. Miller)