OTI: An Overview of Ocean Transportation Intermediaries

An ocean transportation intermediary (OTI) is a federally licensed individual or entity that provides services associated with foreign commerce. An OTI must be a resident of or incorporated in the United States.

The Categorizations of the OTI

There are two primary categorizations of an OTI license:

• Ocean freight forwarder – A person or company operating within the United States and overseeing a number of activities related to the shipping and freight industry. Primary operations consist of coordinating and dispatching carriers or arranging for shipment space on a shipping company’s behalf. This professional also handles the preparation and processing of associated documentation and other clerical activities.
• Non-vessel-operating common carrier (NVOCC) – A shipping professional with connections to an involved ocean common carrier but who does not directly operate said vessels.

It is possible for an OTI to be considered both an ocean freight forwarder and a non-vessel-operating common carrier.

What services does an OTI license holder provide?

Services provided by an OTI license holder may include:

• export declarations;
• securing warehouse space to accommodate new cargo shipments;
• arranging for cargo space aboard common carriers;
• providing advice to those in the export business;
• arranging for transportation of cargo from the point of origin to the cargo vessel;
• the resale of transportation services from common carriers;
• establishing agreements between shippers and freight providers;
• securing inland transportation for “through” movements;
• securing containers through lease;
• making arrangements for insurance to cover cargo/freight;
• notifying relevant parties (banks, shippers, etc.) of the status and shipment of freight;
• ordering cargo to port; and
• more.

Activities and duties will depend on the classification of the OTI license.

Steps to Securing an OTI License

An OTI license is required when a person or company performs duties or services “in the foreign commerce of the United States” on behalf of another entity. This is applicable only to those who are residents of or incorporated within the United States.

The steps to apply for an OTI license are as follows:

• appoint a qualified individual (the person must have three or more years of experience in activities related to OTI and must have earned the experience while in the United States);
• submit an electronic or paper copy of Form FMC-18: Application for a License as an Ocean Transportation Intermediary; and
• pay the license application fee ($125 to $825).

Your application will be made to the Federal Maritime Commission (FMC). The FMC is responsible for issuing all OTI licenses. You do not require an OTI to move freight within the United States or to move your own freight outside of the United States. Licenses may not be shared among other individuals or companies.

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