NVOCC stands for Non-Vessel Operating Common Carrier, which is a type of Ocean Transportation Intermediary, or OTI. An OTI operates much like the freight forwarders who serve as middlemen between shippers and trucking companies, who accept cargo on behalf of a shipper and arrange for its transportation.
NVOCCs do not own or operate their own ships; they book space on ships owned by other companies and use it to consolidate shipments from their customers who aren’t shipping a large enough quantity to fill up a container on their own. They fill a container with goods from multiple shippers and contract with a carrier to accept the container for shipment under a single bill of lading. The NVOCC can be held financially responsible for any damage to or loss of the cargo that occurs as a result of the NVOCC’s negligence or unlawful or unethical actions.
NVOCCs are licensed by the Federal Maritime Commission (FMC), which requires proof of their financial responsibility in the form of a surety bond. So NVOCC bonds are classified as a form of license and permit bond. An NVOCC bond is, in effect, the NVOCC’s pledge to operate in accordance with the Ocean Shipping Reform Act and all applicable FMC regulations. It ensures that funds will be available to compensate shippers and carriers for damages and to pay any fines levied against the NVOCC by the FMC for violations, such as negligence in the handling of cargo or misrepresentation of cargo weight or classification.