Today, the competitive market seeks optimised costs for higher profits and better growth. Companies that are able to offer high-quality services at minimum cots in international shipping are thriving over others. A survey has concluded that one solution for cost-cutting is to partner with an NVOCC agency for imports and exports. This blog helps you understand the cost advantages of working with an NVOCC agency.
What is an NVOCC Agency?
A Non-Vessel Operating Common Carrier (NVOCC) agency works as a middleman between shippers and ocean carriers. They are not the original owners of the vessels but purchase cargo space from shipping lines and resell it to individual shippers. As this buying and selling of cargo space happens in bulk, it is done professionally while following all legal documentation. These smaller spaces in the cargo benefit small and medium-sized businesses by helping them save costs, as they only pay for the space their goods occupy.
Bulk Purchasing Power
The major cost advantage of working with an NVOCC agency comes from their bulk purchasing power. These agencies professionally operate in an arrangement where they consolidate shipments from individual customers and contract with various shipping lines. As these agencies buy in bulk, they negotiate better prices than individual customers ever can. Ocean carriers offer special discounts on large volume commitments and better business terms compared to individual shippers. No matter the volume of your shipment, this cost benefit is passed on to you when you partner with an NVOCC agency.
For instance, if you are a small business shipping only a few containers per month, you would need to pay more if you deal directly with shipping lines. However, if you partner with an NVOCC agency, you save significantly because they ship your cargo along with many other shipments. This practice is economical and helps you reduce costs.
Reduced Container Costs Through Consolidation
Consolidated shipment of goods is another major factor in offering cost advantages. If you are a small or medium-sized business transporting cargo that does not fill an entire container, then you need an NVOCC agency. Consolidated goods shipment is another major factor in offering cost advantage. If you are a small- or medium-sized business transporting cargo that doesn't fill an entire container, then you need an NVOCC agency. They help you pay only for the space your cargo occupies, which is cheaper than the whole container. An NVOCC agency consolidates multiple shipments into one container to save cost. This is called Less than Container Load (LCL), which reduces shipping costs surprisingly by 40-60% compared to a full container with minimal cargo.
Lower Administrative and Documentation Expenses
Documentation is complex and a hassle in managing international shipments; therefore, businesses partner with an NVOCC agency to handle all that. The agency handles every documentation and administrative task, ensuring an efficient process. NVOCC agency offers comprehensive services, so you don't need a dedicated team for the administrative tasks, significantly reducing the costs.
Flexible Routing Options
The best routing options rest on the backs of NVOCC agency professionals, as they have an extensive and strong network of shipping lines. The flexibility of multiple routing options gives the freedom to choose the most cost-effective route for your cargo. There are times when some routes get really busy and crowded, causing unnecessary delays; an NVOCC agency helps you redirect the routes during peak seasons.
Access to Better Equipment and Services
An NVOCC agency is your medium to get special containers and equipment that might be very difficult to arrange independently due to their restrictions and affordable cost. Different products need different containers or specialized equipment; an NVOCC agency ensures you get the perfect containers and equipment for your products with competitive rates. All this happens due to the agency's strong chain of networks.
Elimination of Minimum Volume Requirements
Shipping lines have fixed minimum volume requirements or else charge premium rates for low-volume shippers. With an NVOCC agency, you eliminate this hurdle and enjoy the cost savings by pooling shipments from various clients. You can ship as much or as little as you want, as you only pay for the space your cargo takes up. Only a professional NVOCC agency can facilitate this flexibility, especially during peak season.
Reduced Demurrage and Detention Charges
When the containers stay at the port for longer than allowed for free, it starts imposing demurrage and detention charges, increasing the shipping costs. An experienced NVOCC agency has an efficient system of processes and local partnerships that expedite cargo handling and customs clearance. The agency ensures that the containers don't stay for long at the ports to save unnecessary charges; they also leverage their relations to bargain for more free time for the containers.
Streamlined Multi-Destination Shipping
Some shipments stop at multiple destinations, making the journey long and expensive. An NVOCC agency anticipates the routes and stoppages well in advance and plans to simplify logistics and reduce costs. With an agency, you have to deal with only one, as they offer comprehensive services, reducing the need to collaborate with various carriers.
Currency and Payment Flexibility
A well-established NVOCC agency works internationally, so it accepts multiple currencies with flexible payment modes. This advantage helps businesses manage cash flow more effectively. Businesses save additional charges or bank fees imposed on international transactions.
Long-Term Partnership Benefits
A stronger relationship with an NVOCC agency brings greater cost advantages. Typically, agencies prioritize their shipments, give their devoted clients exclusive deals, and provide tailored solutions for improved outcomes.
Conclusion
In short, working with an NVOCC agency delivers substantial cost advantages through effective strategic planning. Mostly small and medium-sized businesses benefit from these cost advantages. Reportedly, businesses are able to enhance their competitiveness in the international markets by strategically utilizing the experience of a reputable NVOCC agency.
