A conversation with Troy Container Line’s CEO Michael Troy II.
Four decades ago, Troy Container Line was launched in Brooklyn, New York, as a neutral Non-Vessel-Owning-Common Carrier, more commonly referred to as an NVO.
In 1984, at the time of the company’s launching, the NVO business was just taking off in the United States. It’s a unique segment of the maritime industry and despite the NVOs’ service of providing a daily stream of container freight on-and-off containerships in US ports, it is still a misunderstood segment of ocean carriage. For Troy and other neutral NVOs their role is that of an intermediary, buying slots from the steamship lines and selling space to shippers and freight forwarders. Thus, the NVO’s primary customer-base came through the freight forwarder side of the business. So, part of the balance of being in the middle was avoiding poaching the freight forwarders’ clients. And for their part steamship sales were for the most part directed at FCL (full container loads), and that left the LCL (less container loads) business open for the NVOs to sell.
NVOs in Disruptive Times
But the role of the neutral NVO — an NVO that isn’t part of another entity such as a forwarder, ocean carrier, transportation intermediary or even a shipper — is perhaps more important in this era of disruptions. Take the recent ILA strike as an example, “…the phones have been non-stop for the last 10 days when everybody realized that we’re going to be running up against what we’re running up against in this [ILA] strike, and the NVOs, and more so probably the neutral NVOs, really give that flexibility from that LCL to FCL option and vice versa,” Troy noted.
But disruptions have been a regular feature of the business in recent years and neutral NVOs like Troy Container provide a flexible alternative, as Troy pointed out, “It used to be either cargo was LCL and it kind of stayed that way, or FCL. Now you need to be able to flex between those two options pretty quickly and know those break-evens pretty quickly…”
Now with the disruptions popping up with maddening regularity, shippers need to “have routing options more than just your standard routing option is the amount of disruption that we’ve faced through COVID times, through different strikes, through geopolitical concerns. There’s a lot of flexibility that needs to be in the supply chains.”
As Troy said of this new world of freight, “When cargo moves smoothly, it’s easy to rely on your steady options, but when there’s any type of disruption, you need those [alternative] options, and that’s where we [neutral NVOs] fill in, especially during those [disruptive] times.”
Tech and the NVO
While you never think of an NVO being a “Tech” company, there is an argument to be made that they are as the role of being a “communicator” is now as valuable as that of securing the transportation component of the transportation transaction.
As Troy said of the process, “I mean we’re [NVOs] a conduit of that communication. You have all those parties from origin through destination, every regulatory body, every drayage provider, vessel operators, CFS locations. We’re that middle person sitting between all of that and making that communication happen to the end client — and how we do that is important.”
For a neutral NVO the ability to facilitate the communication is more than just a feature of the business, it is in many ways a differentiator. It is much the reason a forwarder or BCO would choose an NVO as is the shipping schedule offerings or the company’s array of offices. As Troy explains, “…if you look at our systems for the NVO industry, what our client sees is this nice, front-end branded stream, but underneath that is all those moving parts, and how we connect to those, whether it’s the vessel carriers, the CFSs, everything underneath that. There’s a lot that flows underneath that, to make that webpage, and tracking and make all that happen underneath.”
And making the entire process visible and executable to all the parties involved in the shipment is where tech is key — as Troy says, “Taking those 30 entities, 40 entities that are involved in a shipment, absorbing all that data and all that communication, and making it available in a streamlined manner to the client is what we’re doing at the end of the day. So, tech plays a big part in that.”
And as Troy outlined in the interview, a great deal of the tech was developed in-house. “And we’re lucky we’ve done a lot in-house, so it’s finding that happy balance between good products on the market from a technology standpoint, and seeing where we should invest, as well as what we can develop in-house…”
The People Factor
With AI on the horizon and closing fast, sometimes the “people factor” gets lost in the industry chatter about the future. Troy’s take on the balance between people and tech, is interesting as he has been strong vested in tech throughout his career. Michael Troy II’s view is “…And from the technology standpoint, for us, it’s necessary to have, it’s necessary to invest in, but I think from the NVO business standpoint, our value we bring as well is the personnel, right? Being a US owned and operated company, which is, I guess fewer these days than ever, from an NVO standpoint, being close to client is important. The calls that we’re getting this week to reroute cargo and throwing ideas around and advice to clients. The tech works great when everything’s moving smooth, but when you need to have those exceptions and those outliers, the personnel is what the company [Troy Container Line] drives the value of the company forward.”
And the ultimate takeaway is that for all the changes, being a neutral NVO remains’ a people first business in an increasingly tech business environment.
