DPI's knowledge center 

Ocean Freight Forwarder (OFF)

What is an OFF?

In the U.S. ocean trade lanes an Ocean Freight Forwarder (OFF):

- dispatches export shipments from the US via a Vessel-Operating Common Carrier (VOCC) or Non-Vessel-Operating Common Carrier (NVOCC)

- books or otherwise arranges space for export shipments on behalf of shippers, and

 - processes the documentation or performs related activities incident to export shipments.

OFFs may bill shippers for their services and may also receive forwarder commissions or brokerage from VOCCs and NVOCCs.
 
While the U.S. Shipping Act does not define Ocean Freight Forwarder activities, U.S. Federal Maritime Commission regulations include the below examples.: 
Write your awesome label here.
 Quick Law Links :  
U.S. Shipping Act: 46 U.S.C § 40102(18) 
  •    
    DOCK RECEIPTS
    - Preparing or processing delivery orders or dock receipts

  •    EXPORT DOCUMENTS
    - Preparing and / or processing export documents

  •    BOOKING
    - Booking, arranging for, or confirming cargo space
  •    ORIGIN ORDERING 
    - Ordering cargo to port of loading in time for vessel departure
  •    EXPORT CLEARENCE
    - Assisting with clearing shipments in accordance with U.S. export regulations

  •  
      SHIPPING DOCUMENTS
    - Preparing and / or processing bills of lading or other shipping documents

  •    SHIPMENT COORDINATION
    - Coordinating the movement of shipments from origin to vessel
  •    STORAGE
    - Arranging for warehouse storage
  •   CONSULAR DOCUMENTS
    - Preparing or processing consular documents or arranging for their certification

  •  
     NOTIFYING
    - Preparing and / or sending advance notifications of shipments or other documents to banks, shippers, or consignees, as required

  •    PAYMENT HANDLING
    - Handling freight payments or other monies advanced by shippers, or remitting or advancing freight payments or other monies or credit in connection with the dispatching of shipments 

  •    EXPERT ADVISING
    - Giving expert advice to exporters concerning letters of credit, other documents, licenses or inspections, or on problems germane to cargo dispatch
  •   CARGO INSURANCE
    - Arranging for cargo insurance
Ocean Freight Forwarders (OFFs) are often confused with Non-Vessel-Operating Common Carriers  (NVOCCs) in the U.S. ocean trade lanes. The two entities have very different responsibilities and obligations.  Read on to learn more about OFF Key Points and Obligations. 

  Ocean Freight Forwarder (OFF) Key Points

OFF or NVOCC? Know the difference with these Ocean Freight Forwarder Key Points.:

     RECEIPT FOR CARGO
OFFs may only issue receipts for cargo in their own name, not bills of lading. Each receipt for cargo must be clearly identified as a “Receipt for Cargo” and be readily distinguishable from a bill of lading.

    SHIPPER DISCLOSURE
OFFs must disclose the identity of the shipper on bills of lading. The OFF's name may appear with the name of the shipper, but the OFF must be identified as the shipper's agent.

    NOT A TRANSPORTATION PROVIDER
Unlike NVOCCs, OFFs may not hold themselves out to the public as ocean transportation providers and do not assume responsibility for transportation.

    FREIGHT FORWARDING COMMISSIONS
OFFs may collect freight forwarding commissions or brokerage from NVOCCs and VOCCs that offer them. 

 OFF Obligation 

OFFs must comply with the U.S. Shipping Act and U.S. Federal Maritime Commission (FMC) regulations. Here are a few key regulatory obligations to keep in mind.:

   FMC LICENSE
OFFs based in the US must maintain an FMC license.

   OFF BOND
OFFs must maintain an OFF Bond in the amount of US$ 50,000.

  BROKERAGE & COMISSIONS
OFFs must not accept brokerage or commissions from NVOCCs or VOCCs that is different than the amounts published in the NVOCC or VOCC's FMC Tariff.

   CERTIFICATION
OFFs must certify that they have performed forwarding services prior to receiving commissions from VOCCs and NVOCCs.

   CHARGE BREAKOUT
OFFs must provide shippers with a detailed breakout of all charges and underlying bills. The below notice is required on all OFF invoices.:

"Upon request, we shall provide a detailed breakout of the components of all charges 
assessed and a true copy of each pertinent document relating to these charges."

   NO COMMISSIONS ON RELATED ENTITY CARGO
OFFs may not collect freight forwarding commissions or brokerage for freight when the shipment is also moved by an NVOCC related to the OFF. 

  NO COMMISSIONS ON BENEFICIAL INTEREST CARGO
OFFs may not collect commissions or brokerage for freight for any shipment in which the OFF has a beneficial interest or for any shipment in which any holding company, subsidiary, affiliate, officer, director, agent, or executive of such OFF has a beneficial interest.

  NOTICE OF SHIPPER AFFILIATION
If an OFF is a shipper or seller of goods in international commerce or affiliated with such an entity, the OFF must either:  1) Identify itself as such and / or where applicable, list its affiliates on its office stationery and billing forms, or  2) Include the following notice on its office stationary and billing forms - 

"This company is a shipper or seller of goods in international commerce or is affiliated with such an entity. Upon request, a general statement of its business activities and those of its affiliates, along with a written list of the names of such affiliates, will be provided."

   Why become an OFF?

Many companies obtain an Ocean Freight Forwarding (OFF) license in order to:

 - offer ocean freight forwarding services to shipper customers that have their own Service Contract with a Vessel-Operating Common Carrier (VOCC), 

 - obtain forwarder brokerage or commissions form VOCCs and NVOCCs, and

 - signify to clients and vendors that their company is a certified Ocean Freight Forwarder recognized by the U.S. Federal Maritime Commission and listed on the FMC's official list of OFFs.

The ability to offer ocean freight forwarding services to shipper customers when it is not possible to act as an NVOCC because the shipper customer already has their own Service Contract or the NVOCC lacks a destination agent are often driving factors for companies to obtain the FMC's OFF license.   
Write your awesome label here.

How can DPI help?

Since 1975, DPI has helped Ocean Freight Forwarders (OFFs) comply with U.S. Federal Maritime Commission (FMC) regulations. 

Our expert staff is ready to assist companies seeking to offer freight forwarding services as OFFs. We offer members the following OFF-specific services: 

- FMC License Application Handling and
- OFF Bond Assistance.

Read on for more info. 
What we offer

   FMC License Application Handling

DPI has assisted hundreds of companies successfully apply for and obtain Ocean Freight Forwarder (OFF) licenses from the U.S. Federal Maritime Commission (FMC). 

The application process includes detailed reporting of your company's organizational structure and management. Our experts are familiar with all aspects of the required reporting. and will assist you in preparing the needed documentation.

Once your application is prepared, we will handle submission and follow through with the FMC's Licensing Bureau. Most applications handled by DPI are approved by FMC within 60 days.

For this service, we bill an hourly rate of US $60. Most applications require 12 hours of staff time. Please be advised that an application fee of US $250 must be submitted to the FMC with each new application.
Write your awesome label here.

   OFF Bond

U.S. Federal Maritime Commission (FMC) regulations require that all Ocean Freight Forwarders (OFF) maintain an OFF Bond. OFFs must provide the FMC with proof of their OFF bond before they may commence OFF operations. 

Licensed OFFs must maintain a bond in the amount of US$ 50,000. 

DPI is happy to recommend insurance agents and sureties qualified to handle your OFF bonding requirements.

Our staff will work with you and your bond agent to expedite all paperwork required to obtain speedy approval, so that you may begin operating as an OFF as soon as possible. 
Write your awesome label here.

The annual fee for NRAMS is US$ 396 – this provides unlimited use for one User ID, with no transaction fees. DPI Members who qualify can begin using NRAMS very quickly. If your company's tariff is maintained at www.dpiusa.com you qualify. DPI already provides public access to your FMC tariff rules free of charge – this has been a standard part of our FMC tariff publishing services since May 1999. You will only need to add the NRA rule to your existing tariff, and agree to the terms and fees for NRAMS. Click on the button below or contact your DPI Account Representative to request the authorization agreement for NRAMS. We will send it to you promptly along with additional details that explain how NRAMS will provide you with a paperless solution for NRA management.

The FMC provides a web page that summarizes the NRA requirements and the steps an NVOCC must take in order to use NRAs. See our NRA Management System Information Sheet for a summary of NRAs and NRAMS.

Created with