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01-05-2020

How to Apply for an NVOCC License?

Do you want to find out how to apply for an NVOCC license? Or maybe you’re simply wondering what an NVOCC license actually is? If so, you’ve come to the right place. This article will teach you everything you need to know about NVOCC.

What Is an NVOCC License and Who Needs It?

NVOCC stands for Non-Vessel Operating Common Carrier. It is an ocean carrier that transports goods under its own House Bill of Lading without operating ocean vessels. An NVOCC may also operate as a freight forwarder in certain situations.

US-based forwarding companies or sole proprietors acting as freight forwarders or NVOCCs must obtain an Ocean Transportation Intermediary (OTI) license from the Federal Maritime Commission (FMC). Non-US-based NVOCCs are not required to obtain a license but can simply register with the FMC.

Applying for an NVOCC license can be confusing, but we are here to clear things up and summarize the process for your ease of reference. Before proceeding to the steps, we will answer some commonly asked questions.

What Are the Requirements and Costs for an NVOCC license?

Depending on your role, first, you will need to decide which of the three OTI licenses listed below best applies to you.

1. OTI – NVOCC License

Operators who obtain this type of license are authorized to perform the following activities:

  • Issue their own bills of lading
  • Set their own selling rates for shipments
  • Purchase transportation services from carriers

2. OTI – Ocean Freight Forwarder (OFF) License

Although operators with OFF licenses aren’t allowed to do any of the three activities above, they can collect commissions from carriers after they facilitate the shipping process and documentation.

3. OTI – NVOCC and Forwarder LicenseHolders of this type of license can act as both NVOCC and freight forwarder; however, it is important to note that no one can act as both freight forwarder and NVOCC in one shipment under FMC regulations.

How Much Does an OTI License Cost?

According to FMC, there are two types of application fees for an electronic version and paper version. Electronic costs $250 while the paper one is $1962.

Aside from the application fee, NVOCCs and freight forwarders must submit acceptable proof of financial responsibility in the form of surety bonds, which will be discussed below.

Do I Need to Renew My License?

The FMC requires the licensees to renew their licenses every three years. Licensees will receive an email with a username, password, and a link to the renewal website three months before the deadline.

Now we have answered the most frequently asked questions about NVOCC, we will list the steps to apply for your license whether you’re a US-based or non-US-based OTI.

Steps to Apply for an OTI License

Step 1. Appoint a qualifying individual (QI)

Whether you are applying for the license as a sole proprietor, partner, or corporation, you must appoint a qualifying individual (QI). This QI must have three years of verifiable OTI experience, as well as, three references provided for the individual. The FMC will contact these three people and confirm that they have firsthand experience with this QI to verify his or her credentials. Additionally, this experience must have been acquired within the United States for US-based NVOCCs.

To summarize you need:

  • A qualified individual with 3 years of demonstrable OTI experience in the U.S.
  • 3 references to verify the QI’s credibility

Step 2. Fill out the FMC-18 form

After preparing all the information, you must fill out Form FMC-18. This can be done electronically or through paper format.

Step 3. Submit the form and pay the application fee

Once all the required information is filled, you can submit the form and pay the fee. The application fee is $250 for the electronic application and $1962 for the paper one.

Step 4. Establish a presence in the U.S (for non-US-based applicants only)

If you are a non-US-based NVOCC, you must establish a presence in the U.S. For example, this can be done in the form of an unincorporated branch office.

Step 5. Submit proof of financial responsibility

All types of OTI require proof of financial responsibility with a different minimum amount:

  1. US-based NVOCCs, License: $75,000
  2. US-based OFFs, License: $50,000
  3. Non-US-based NVOCCs, License: $75,000
  4. Non-US-based NVOCCs without an OTI license: $150,000

For each unincorporated branch office of US-based NVOCCs and OFFs licensees, applicants must provide the addresses to the FMC. Additionally, the agent of a non-US-based NVOCC must be licensed by FMC.

How Can GoFreight Help You?

After you obtain your license, consider using GoFreight as your freight forwarder or NVOCC software to secure an edge over your competition. Check out why freight forwarders and NVOCCs chose GoFreight as their NVOCC software.

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