Why Do Freight Forwarders and NVOCCs Need OTI Bonds?
Posted by cbicustombond on May 19th, 2020
Ocean Freight Forwarders or OFFs and Non-Vessel Operating Common Carriers or NVOCCs are essential contributors in international trading, responsible for making the process quick and safe. These terms are coined very often in ocean freight and cargo shipping business. These become the best source for both importers and exporters in their distribution needs.
But there is a certain difference between OFFs and NVOCCs. A freight forwarding company usually gives consultation and advice to its clients while NVOCCs provide services that include carriage, consolidation, storage, handling, packing, and distribution of goods. Both require obtaining OTI Bonds CA for respective reasons.
Because freight forwarding mostly entails processing goods from part of the world to another, they have the onus to ensure cargo departs safely and arrives at the right location at the right time. They require proper experience, training, knowledge, and skills to make this work feasible. Purchasing customs surety bond is a crucial part of making sure they comply with customs and federal laws and regulations.
NVOCCs as the name suggests, are carriers of shipment and provide service under their own bill of landing (BOL). They are also shipment consolidators and when having a proper license they can offer a variety of shipping services to a wide range of customers worldwide. To ensure they adhere to local laws and do the job without defaults, they also require a customs surety bond to protect the rights of clients.
OTI bonds can be obtained by filling Form FMC-48 or FMC-69 as per the requirement of the Federal Maritime Commission (FMC). These are necessary for licensed ocean intermediaries operating in the United States.
The reason why OFFs and NVOCCs require buying OTI Bonds is simple and apparent, to ensure compliance with FMC regulations and the Ocean Shipping Reform Act. As part of this NVOCC certification and licensing process, companies are assessed on their experience and ability to successfully provide OTI services that are in compliance with principles based on the Shipping Act and Federal Maritime Commission.
The OTI bond amount is normally ,000 for OFFs and ,000 for NVOCCs based in the US. You may contact our insurance professionals to know the exact amount of OTI bonds. We can give you quick assistance and provide you service at the best rates in the market.Also See: Oti Bonds, Freight Forwarders, Surety Bond, Ocean Freight, Oti, Nvoccs, Freight
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