1.

Difference between a freight forwarder and NVOCC

A Freight Forwarder is someone who undertakes to handle the movement of goods from point
to point on behalf of the cargo owner.
A NVOCC which is the abbreviation for Non-Vessel Operating Common Carrier maybe defined
as a carrier to shippers and shipper to carriers.
Functionally the NVOCC is ALMOST the same as a Freight Forwarder in terms of the activities.
However there are some differences which separate these two entities.

The NVOCC can and sometimes do own and operate their own or leased containers
whereas a Freight Forwarder does not.

In certain countries like USA, the NVOCC operators are required to file their tariffs with
the government regulatory bodies and create a public tariff.

NVOCC is in certain areas accorded the status of a virtual carrier and in certain cases
accepts all liabilities of a carrier

A Freight Forwarding company can act as an agent/partner for a NVOCC.

Apart from the above major differences, all other activities between these two entities are similar
to each other.

2. What is the difference between a freight forwarder and

clearing agent?
Freight Forwarder: Essentially secures the business of various exporters and importers and has
the ability/facility to

storage the cargo belonging to the clients at their warehouse (usually all big forwarders
have their own warehouses)

arrange the distribution or forwarding of the cargo as per the instructions of their
client.. This could be a regular routing or various routings

negotiate freight rates with the shipping line to cover the interest of their clients

book the cargo with the shipping line as per the requirement of the client

prepare bills of lading and associated shipping/negotiating documentation (F178,

Certificate of Origin, etc)

issue their approved house bill of lading as applicable

MAY or MAY NOT also do Customs Clearance

may or may not be accredited to customs, port etc and cannot do customs clearance if not
accredited

almost viewed by clients as an alternative shipping line

Clearing Agent: Essentially takes care of the customs clearance aspect of the business.

is a company accredited with the local customs authorities, border agencies, port etc

arranges to pass the relevant documents at customs

arrange for customs inspections as required

check and process Duty and VAT payments as applicable

apply for refunds etc where applicable

cannot issue own bills of lading if not registered or acting as a freight forwarder

These are the major differences between a Freight Forwarder and Clearing Agent.
2.

What is a HS Code?
You would have seen this terminology across many documentation or
correspondences. What does this HS Code really mean, who uses it and what
is it used for..?

HS Code stands for Harmonized Commodity Description and Coding System.

This is the common standard worldwide for describing the type of commodity. Every commodity
that enters or crosses most international borders have to be declared to customs by means of this
code.. This helps in standardizing the codes worldwide.
Here is the definition according to WCO website,

The Harmonized Commodity Description and Coding System generally referred to

as Harmonized System or simply HS is a multipurpose international product
nomenclature developed by the World Customs Organization (WCO).

It comprises about 5,000 commodity groups; each identified by a six digit code, arranged in a
legal and logical structure and is supported by well-defined rules to achieve uniform
classification.
The system is used by more than 200 countries and economies as a basis for their Customs tariffs
and for the collection of international trade statistics. Over 98 % of the merchandise in
international trade is classified in terms of the HS.

Demurrage and detention are two words that often confuses

people.. Is there a difference..??
In the context of containerized cargo, in generic terms,

Demurrage relates to cargo (while the cargo is in the container)

Detention relates to equipment (while the container is empty after unpacking or before
packing)

Lets see how it works..

Imports A container is discharged off a ship on the 2nd July Consignee approaches the
shipping line to take delivery of the cargo around 12th July.. Working off a standard 7 free days
from date of discharge, the line free days (different to port free days) expires on the 8th July.. So,
the line will charge the consignee DEMURRAGE for 4 days from 9th to 12th July at the rate
fixed by the line..

After the full container has been picked up by the client, for example if they take another 7 days
to return the empty container, then it is known as DETENTION which again will be charged at
the rate fixed by the line..
So basically before the full container is picked up, Demurrage is charged (after expiry of free
days) and after the container has been picked up, till the time the empty is returned to the lines
nominated depot, Detention is charged..

Exports: In the case of exports, normally lines give about 5 free days within which the shipper
has to pick up the empty, pack it and return it full to the port.. In case of delays more than 5 days,
the line charges Detention (generally same tariff as import detention) for the days that the empty
is kept with the client as empty or full..
Once the container is packed and say for example the shipper is unable to ship the same due to
any reason, then the Demurrage will be charged at the rate fixed by the line till the full container
is shipped out..

What I have mentioned above is the generic and most common form of use of these two terms..
There however is a difference in the usage of these terms by various shipping lines in various
countries..
Some countries call it combined demurrage/detention in some countries, whereas in some
countries it is shown separately.. In yet some other countries like Saudi Arabia and Japan, the
term demurrage seems to be used to denote storage in the port/lines terminal..