The international transportation industry is no different than the economy; prices are subject to tons of fluctuation and volatility and this is, unfortunately, the way steamship lines and carriers can stay in business. But as an importer or exporter, watching your rates rise and fall at such inconsistent levels can cause you to miss out on huge potential earnings and perhaps prove to be a detriment to your company’s bottom line. Although working directly with an SSL (Steamship Line) can cause for seriously unpredictable rates, working with an NVOCC (Non-Vessel Operated Common Carrier) may be the best bet for your company.
Why Do My Rates Fluctuate? NVOCC vs. SSL
There are a myriad of benefits that come from working with an NVOCC. Let’s discuss a few differences between working directly with an SSL and working with an NVOCC in relation to their effect on price.
Diversified Carrier Mix
Committing to a contract with a carrier can be a bummer for many reasons, including higher risk. If you miss the sailing period with your carrier, you’ll have to wait a week for the sailing period to roll around again. However, with an NVOCC, you often have a wide variety of carrier options. Not only is this helpful in times of emergency, but the additional choices can help you mitigate your risk while maintaining competitive prices.
In opposition to direct carrier contracts, whereby you sign a contract to receive fixed rates for 30 days to twelve months, with NVOCCs, you can receive fixed rates without a contract. Generally speaking, NVOCCs are able to receive fixed rates from SSLs due to the large amount of space they book on various steamships in advance. This can help you to streamline your money management for the fiscal year and optimize on the best costs in the market.
Supply Chain Insight
Attempting to analyze and measure various inconsistent reports of industry trends, fuel price volatility, uncertain capacity forecasts, and many other topics that may impact your international transportation costs and risk is a lot of work. However, NVOCCs are in the business of reading, internalizing, and translating these trends into interpretable and useful information. Working with an accredited and proactive NVOCC will allow you to navigate the transportation industry and find price solutions that fit your company’s needs.
Locking into carrier contracts that inhibit you from exploring competitive pricing options, subjecting yourself to rising fuel costs, hip-firing when faced with conflicting industry news, and having limited carrier options are all reasons you’re losing money. Working with an experienced NVOCC to create custom-tailored intuitive shipping solutions for your transportation needs could just be the best thing you’ve done for your company’s financial stability and risk management.