International Freight Forwarding Group Advocates for Logisics Industry Input in UN Goals

The International Federation of Freight Forwarders Associations (FIATA) has advised the United Nations (UN) to seek more input from the logistics sector in the creation of their post 2015 Sustainable Development Goals (SDG). Noting that the emphasis on the logistics industry in the current plan is insufficient, FIATA asserts that the expertise of those in the International Freight Forwarding logistics industry is central to boosting the global economy and achieving sustainable growth.

The UN's Rio+20 Conference, held in Brazil in June 2012, resulted in an agreement to launch a process to develop a set of (SDGs), building upon the UN's eight Millennium Development Goals. (The Millennium Development Goals address extreme poverty, HIV/AIDS, gender equality, maternal health, childhood mortality rates, education, environmental sustainability, and global partnerships.)

FIATA's position is based on the imitation lag hypothesis and the life cycle (product cycle) theory. Simply put, imitation lags--delays--occur when one country does not have the technology to adopt and diffuse the imported technology of another country. The life- or product cycle theory describes the trajectory of a new product or technology. It is created in Country 1, matures and is shared with economically similar countries. Production standardizes and is outsourced to developing countries. FIATA asserts that the logistics sector is central to international trade and drives global economic prosperity.

In a position paper published by FIATA, the organization states that their global go-between position affords them unique insight into national policies and the limitations of those policies to have impact on local international communities. FIATA says the relationship between national policies and local economies--and their impact on multiple sectors--needs further analysis before appropriate SDGs can be achieved.

In addition to increased input of the international freight forwarding logistics industry, FIATA has urged the UN to involve many civil societies and relevant stakeholders in their discussions. 

Important Differences Between NVOCC (Non Vessel Owned Common Carriers) and Freight Forwarders

There are a number of interchangeable functions between NVOCCs (Non Vessel Owned Common Carrier) and freight forwarders.  However, in certain situations they have important differences which affect transportation protocols.  Knowing the differences can save time and unnecessary paperwork.

• NVOCCs often both own and operate their shipping containers.  At times, they also lease containers for their use or on behalf of others.  This capability allows them to cutout the middle man and makes the shipping process more efficient.  Freight Forwarders cannot operate this way.
• The United States and certain other countries require NVOCC operators to report their tariff to the proper government branch, thus creating a public tariff. There is a range country specific rules, including who is the designated point of contact and when contact is to occur.  Freight forwarders are not required to operate this way.
• Based on where they are operating, NVOCCs may have to assume the status of a virtual carrier.Depending on the jurisdiction, the NVOCC may be required to accept all the liabilities of the carrier.  Although this adds risk and responsibility to the NVOCC, it is considered to be worthwhile.
• Freight forwarding companies may act as either an agent or partner for a NVOCC.  The NVOCC does not need to be the agent or partner of a freight forwarding company.  This provides more flexibilty and allows NVOCCs to adjust based on the situation.

NVOCCs are frequently termed ship less shipping lines, acting similar to a common carrier, except that an NVOCC does not operate the vessel transporting the container.  The NVOCC brokers space on ships for the aggregate volume of its clients.  Volume garners lower rates which they then pass on to their shippers.  Shippers might choose the services of an NVOCC to avoid damage liability.  The NVOCC can be deemed a carrier who works for shippers and also a shipper to the carriers.

The services provided by a freight forwarder can also be undertaken by the NVOCC.  This includes having personnel available to handle the inland shipping when it reaches its destination, arranging for insurance on behalf of clients and clearing customs (end to end logistics).