What is VOCC?

When it comes to shipping goods around the world, there are a few key players you need to know about. One of these is the Vessel Operating Common Carrier, or VOCC. So, what exactly is a VOCC? Simply put, it’s a type of shipping company that owns and operates its fleet of ships. Unlike other players in the shipping world, VOCCs are hands-on with the entire process of moving cargo—from loading it onto their vessels to delivering it to its final destination.

In this blog, we’ll break down what a VOCC does, why it’s important for global trade, and how it differs from a Non-Vessel Operating Common Carrier (NVOCC). By the end, you’ll have a clear understanding of how VOCCs fit into the larger picture of international shipping.

Key Characteristics of a VOCC:

1. Fleet Ownership and Operation

VOCCs own, lease, or operate a fleet of ships. This direct ownership allows them to have complete control over the vessels, including maintenance, scheduling, and operation. They are responsible for the entire shipping process, from loading the cargo onto their ships to delivering it to the designated port.

2. Direct Shipping Services

VOCCs provide direct shipping services without intermediaries. They handle the cargo logistics on their vessels, which means they have full control over the transport route, vessel schedule, and operational procedures.

3. Freight Rate Setting

VOCCs are responsible for setting freight rates based on various factors such as cargo type, shipping route, and current market conditions. This gives them the flexibility to adjust rates according to demand and operational costs.

4. Regulatory Compliance

Operating their vessels means that VOCCs must adhere to international maritime regulations, including safety standards, environmental laws, and shipping protocols. This ensures that they meet the required legal and safety standards for transporting goods.

5. Operational Control

With direct control over their ships, VOCCs can optimize shipping schedules, manage vessel capacity, and implement efficient operational procedures. This allows them to provide reliable and timely shipping services.

6. Cargo Handling

VOCCs are involved in the handling of cargo, including loading, unloading, and stowing. They ensure that cargo is secured properly to prevent damage during transit and comply with international shipping standards.

The Role of VOCCs in the Shipping Industry

VOCCs are integral to the global shipping and logistics landscape. Their role encompasses several key areas:

1. Global Trade Facilitation

VOCCs are essential for keeping global trade moving. They operate fleets of ships that travel major maritime routes, connecting ports around the world. This means they help transport goods from one continent to another, making it possible for products to reach markets far from where they were produced. By providing regular shipping services on these key routes, VOCCs help keep the flow of international trade smooth and efficient. Their role in linking different parts of the world is a cornerstone of global supply chains, making sure that products and materials can get to where they’re needed.

2. Logistics and Supply Chain Management

When it comes to logistics and supply chain management, VOCCs handle a lot of important tasks. They are in charge of scheduling their vessels and making sure ships leave and arrive on time. They also manage the loading and unloading of cargo, ensuring everything is handled properly so goods don’t get damaged. Plus, they work closely with port authorities to streamline operations and keep everything moving smoothly through the ports. All of this coordination helps ensure that cargo travels efficiently from its origin to its destination, which is crucial for keeping global supply chains running smoothly.

3. Reliability and Efficiency

VOCCs are known for their reliability and efficiency. Since they own and operate their ships, they have full control over scheduling and routing. This control means they can quickly address any issues that come up and adjust their plans as needed, which helps minimize delays. They also work to make sure their vessels are used efficiently, which helps keep costs down and performance up. For businesses relying on timely deliveries, this level of reliability and efficiency is crucial. It ensures that goods arrive when they’re supposed to, which is vital for maintaining smooth operations and meeting customer expectations.

4. Market Adaptation

VOCCs are pretty good at rolling with the punches when the market changes. Whether it’s a shift in cargo demand or changes in shipping routes due to economic or political reasons, VOCCs have to adapt quickly. They might adjust their shipping routes, tweak schedules, or change how they operate to stay competitive. This flexibility helps them meet new market demands and handle any disruptions that come up. By staying adaptable, VOCCs can continue to offer valuable services and support to their customers, no matter how the shipping landscape evolves.

5. Economic Impact

VOCCs have a big impact on the economies of the places they operate in. They create jobs not just for their staff but also for people working in ports and related industries. Their activities support local economies by driving trade and supporting various port operations. Beyond just job creation, VOCCs contribute to economic growth by keeping global trade flowing smoothly. Their work helps boost local economies and supports the broader shipping and logistics sectors, which are vital for economic development.

Differences Between VOCC and NVOCC

Understanding the differences between VOCC and NVOCC helps clarify their distinct roles in the shipping industry.

A Vessel Operating Common Carrier (VOCC) owns or leases its fleet of ships and directly manages the entire transportation process. This means they have control over shipping schedules, routes, and vessel operations, and they set their freight rates based on various factors. VOCCs are responsible for adhering to maritime regulations and ensuring compliance with international standards.

In contrast, a Non-Vessel Operating Common Carrier (NVOCC) does not own any vessels; instead, it relies on VOCCs for ship capacity. NVOCCs act as intermediaries, negotiating and setting their rates, and issuing bills of lading. They manage documentation, customs clearance, and other logistics services, but they do not handle the actual shipping operations. NVOCCs are focused on consolidating shipments, arranging cargo space, and managing relationships with clients, bridging the gap between cargo owners and VOCCs.

Summing Up

In the world of shipping, Vessel Operating Common Carriers (VOCCs) are key players who own and operate their fleets of ships. They handle everything from loading cargo to delivering it to its destination, with direct control over shipping schedules, routes, and rates. Their role is crucial for global trade, logistics, and supply chain risk management, providing reliable and efficient shipping services and adapting to market changes.

On the other hand, Non-Vessel Operating Common Carriers (NVOCCs) don’t own ships but act as intermediaries between cargo owners and VOCCs. They manage logistics, documentation, and customs clearance, while VOCCs handle the actual shipping. NVOCCs are vital for consolidating shipments and managing client relationships, bridging the gap in the shipping process.