Clampdown sees rush for NVOCC license

The high-profile crackdown by the Chinese authorities on Schenker over allegations that the German logistics giant was operating with a fake non-vessel operating common carrier (NVOCC) license appears to have spooked the industry.

The wait time after applying for the license has shot up from three weeks to more than three months as companies operating without the correct paperwork race to register their operations.

The Shanghai-based director of a logistics operation told Cargonews Asia it was “common knowledge” that many smaller companies operated without the license. This led to Beijing’s crackdown that began three months ago.

Any firm that is involved in negotiating freight rates with and buying slots from shipping lines, selling slots and issuing bills of lading to shippers needs an NVOCC license.

“But it costs RMB800,000 (about USD 106,000) in cash for the license, and that is a non-interest bearing loan that is held by the Chinese government until your company ceases to do business on the mainland,” he said.

Schenker has shifted all mainland business to its two Hong Kong subsidiaries, neither of which – Schenker Logistics (Shanghai) Co and Schenker International (HK) – is involved in the investigation being conducted by the mainland’s Ministry of Communications.