NVOCC: Definition and Federal Maritime Commission License
NVOCC refers to a Non-Vessel Operating Common Carrier. It is one type of ocean transportation intermediary that requires a federal license to operate in the United States.
An ocean transportation intermediary is either an NVOCC or an ocean freight forwarder. In essence, it is a company that makes arrangements for or handles services related to the services of a vessel-operating common carrier (cargo shipper).
The Code of Federal Regulations lays out the definition of a common carrier and an NVOCC. Generally, a common carrier is a company that offers either passenger or cargo water transportation (for profit) who also operates the vessels (ships or boats) between the U.S. and a foreign country.
Conversely, an NVOCC company does not actually own the vessel (ship or boat) used to provide the transportation services. Also, the Code says that NVOCC services apply only to cargo. Passengers are not included in the definition of NVOCC services.
The Federal Maritime Commission also includes several examples of what constitute the services of an NVOCC. These include such things as buying the services and then reselling them to the shipping customers, arranging inland transportation of the cargo in relation to international shipping, and even leasing containers.
Essentially, just about any provider of services who directly takes money from customers for services ancillary to international freight shipping probably needs to get an NVOCC license from the Federal Maritime Commission. When in doubt, contact the FMC and explain your entire business model to see if you need a license. Contact information is included below.
Exceptions: Businesses dealing only with ferry boats, ocean tramps, or chemical parcel-tankers are not considered to be ocean common carriers. Thus, if an NVOCC only deals with such transportation companies, it would not necessarily need a license. Nonetheless, if qualified, an individual should get a license to increase the profit potential of the NVOCC company.
License requirements dictate that at least one person in the company must have 3 years of experience as an ocean transportation intermediary. That person must also have the "necessary character" to get an NVOCC license. This essentially means someone who has shown financial responsibility in the past and does not have a criminal or other legal record which the Commission believes makes the person unfit for NVOCC services.
All applicants for an NVOCC license also need to provide a bond, insurance, or other surety. In the case of a U.S. NVOCC, the general amount of responsibility required is $75,000. For foreign NVOCC companies, it is $150,000. Depending on the situation, this amount could be higher. Use the contact information below to get an NVOCC license application form.
Federal Maritime Commission
Bureau of Tariffs, Certification and Licensing
800 North Capitol Street, NW
Washington, DC 20573
(202) 523-5843
Resources:
Federal Maritime Commission Rules in the Code of Federal Regulations
