The two most important changes I foresee in the neutral NVO business during 2017 are the consolidation of companies offering this service and the expansion of the services offered by the NVO to the freight forwarder and customs broker.
The barrier to entry to become a licensed NVO remains low, yet I expect we will see more consolidation during 2017. Clients are looking to streamline their number of vendors. By working with few vendors, there are multiple advantages for the client. A couple that I believe are becoming even more important are the need to be electronically connected to the vendor (most commonly via EDI, yet increasingly via API) and having an easy way to have full visibility of the full end-to-end rate being charged. Consolidation within the LCL segment of the NVO business will create the ability to offer more direct services. These direct services should be more cost-efficient, offer faster transit, and reduce the opportunity for damage to the cargo as it will be handled fewer times.
Consistent with the concept that companies will be more efficient if they work with fewer vendors, I expect to see an expansion of the services offered by the neutral NVO to the forwarder and customs broker. In the past, the neutral NVO focused on port-to-port ocean business and the forwarder worked with other vendors for the door moves as well as air freight. I believe that as long as the forwarder can remain confident, the neutral NVO is their vendor as opposed to their competitor, we will see an increase in the utilization of the neutral NVO to handle the door moves (both import and export) as well as for the movement of air cargo.