ANALYZE THE PROCEDURE OF IMPORTING SHIPMENTS BY AIR TRANSPORTATION IN INDOTRANS

VIETNAM GENERAL CONFEDERATION OF LABOUR TON ĐUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION INTERNSHIP’S REPORT 2021 ANALYZE THE PROCEDURE OF IMPORTING SHIPMENTS BY AIR TRANSPORTATION IN INDOTRANS Student Name: TRAN DINH NGHIEM Class: 18H70606 Academic Year Code BA RIA – VUNG TAU, July, 28th i : K22 (2018-2022) EVALUATION OF INSTRUCTING LECTURER Student’s name: TRAN DINH NGHIEM Student’s ID:718H1955 Class:18H70606 Academic Year Code: - Ba Ria Vung Tau July 28th 2021 Instructing Lecturer (Full name ands signature) ii EVALUATION OF COMPANY FOR INTERNSHIP Student’s name: TRAN DINH NGHIEM Class:18H70606 Student’s ID:718H1955 Academic Year Code: K22 - Ba Ria Vung Tau, July 28th 2021 Management Executive Officer (Full name, Signed and Sealed iii FOREWORD First of all, I would like to express my sincere thanks to the Board of Directors of Ton Duc Thang University in general and the Faculty of Business Administration - Majoring in International Business in particular for giving me the opportunity to study as well such as gaining more practical knowledge about the working environment of International Business The biggest regret is that I did not have the opportunity to experience in the business because of the serious situation of Covid-19 For the successful completion of my completion of internship report, I would like to thank Ms Pham Thi Ngan, Ms Trinh Thi Ha Huyen, Ms Tran Thi Van Trang, and all the staff at VILAS Everyone has used their experience, knowledge, and sense of responsibility to support and guide me throughout the alternative vocational training course I also would like to delicate this thankful to Mrs Le Thi Thu Du, a staff in Indotrans, have given me such a precious documentary and information for this report Finally, I would like to wish all teachers good health and success in their noble career Wishing the Board of Directors of Indotrans Co., Ltd good health, more success in the near future Sincerely! iv ACKNOWLEDGEMENT I hereby declare that this report is my own work and under guidance of my mentors The content in this topic is exclusive and does not publish in any form prior The data in the tables for analysis, comments and evaluation are collected by myself from different sources, clearly cited in the reference section In addition, the report also uses some comments, assessments as well as data of other authors, other agencies and organizations, all with citations and source annotations If frauds are found, I will take full responsibility for the content of my report Ton Duc Thang University is not related to copyright and copyright violations caused by me during the implementation process (if any) v CONTENTS ACKNOWLEDGEMENT V LIST OF FIGURES VII LIST OF TABLE VIII ACRONYMS IX INTRODUCTION 10 CHAPTER OVERVIEW OF FORWARDING BY AIR 11 1.1 GENERAL INFORMATION ABOUT FORWARDING BY AIR TRANSPORTATION 11 1.2 ABOUT WORLDTRANS 12 1.2.1 General information 12 1.2.2 The process of formation and development: Error! Bookmark not defined 1.2.3 Functions and position of the company Error! Bookmark not defined CHAPTER ANALYZE PROCEDURE AND CALCULATING RELATED BUSINESS EXPENSES AT THE COMPANY 23 CHAPTER RECOMMENDATION AND SOLUTIONERROR! BOOKMARK NOT DEFINED vi LIST OF FIGURES FIGURE 1-1 ITL’S SUBSADIARIES 15 FIGURE 1-2 ITL ASSOCIATE COMPANIES 16 FIGURE 1-3 COPAMY'S STRUCTURE 17 FIGURE 1-4 ITL INCOME STATEMENT 20 FIGURE 1-5 ITL'S REVENUE STRUCTURE 21 FIGURE 2-1 THE IMPORTING PROCEDURE DIAGRAM 24 IMAGE MASTER AIRWAY BILL (MAWB) 37 IMAGE HOUSE AIRWAY BILL (HAWB) 38 IMAGE AIR CARGO MANIFEST 39 IMAGE COMMERCIAL INVOICE 40 IMAGE ARRIVAL NOTE 41 IMAGE SALE CONTRACT (BLURRED OUT ON THE GROUND OF CONFIDENTIAL) 42 IMAGE ELECTRONIC CUSTOMS DECLARATION SOFTWARE INTERFACE ECUSVNACCS 43 vii LIST OF TABLES TABLE 1-1 ITL CORP'S COMMODITY EXPLOITATION IN YEARS 2018 2020 (UNIT: THOUSAND TONS) 22 viii ACRONYMS LSP Logistics Service Provider CEO Chief executive officer DEPT Department DOC Documentation EBIT Earing before interest and taxes DG Dangerous goods A/N Arrival note SCSC TSC VCIS Vietnam Customs Intelligence Information System ix INTRODUCTION Airlines transport over 52 million metric tons of goods a year, representing more than 35% of global trade by value but less than 1% of world trade by volume That is equivalent to $6.8 trillion worth of goods annually, or $18.6 billion worth of goods every day Countries with 1% better air cargo connectivity engage in 6% more trade By implementing policies that promote the efficient movement of air cargo governments have tremendous potential to improve their trade competitiveness on a global level At the same time, more services related to this field were born, which creates more profits and help transportation from a country to another faster than ever Since 1986, with the Doi Moi policy, Vietnam Logistics services thrives and positively contribute to Vietnam’s economy Import and export activities are increasingly taking place strongly and developing, contributing to improving people's lives, and at the same time combining with the State's policy system to contribute to the development of society However, with a multitude number of enterprises join in the game, both domestic and international conglomerates, mean that competition rate are higher On the ground of that reason getting the hang of how Import-Export are handle and deeply understand the procedure of forwarding in general is the most crucial thing study in international business should take into account With all the reasons above I have decide to choose “ANALYZE THE PROCEDURE OF IMPORTING SHIPMENTS BY AIR TRANSPORTATION IN INDOTRANS” to know step by step of procedure in order to give myself a detail picture to somewhat, find myself a lucrative job in near future In this report I would like to illustrates the detail procedures step by step of how to import a shipment to foreign country, then gives my opinion about it, along with have some proposal of improvement if any 10 Step 5.2 Customs clearance procedures Step 5.2.1 After paying the service fee, forwarding agents goes to the customs supervision department of the import warehouse to submit the declaration + a barcode sheet + an ex-warehousing note and a HAWB for the customs to import the declaration Customs will pay forwarding agents of ITL company two exwarehousing notes (one pink and one white) and one HAWB Step 5.2.2 Next, forwarding agents submits a HAWB and a blank release slip to the customs to time the goods leaving the SCSC/TCS warehouse, while the FORWARDING AGENTS contact is retained to register the truck Step 5.2.3 Forwarding agents prepared the customs clearance declaration and two barcode sheets, one HAWB signed by the sales staff and brought to the Customs supervision department After inspection, Customs supervision will stamp the civil servant on the bar code, and a HAWB sheet will stamp the goods exempted from inspection and the date of stamp Step 5.2.4 forwarding agents takes the order number to the warehouse to receive the goods and then wait for the goods to come out Step 5.2.5 Forwarding agents through the custom supervisor portal to liquidate declarations and documents including: one MAWB, one HAWB, one customs clearance declaration and one bar code sheet stamped with the official seal of the warehouse custom supervisor Custom supervisor enters the machine and then returns all that was previously submitted to forwarding agents of ITL company After the goods are out, forwarding agents gives the order number and ID card for the warehouse staff to verify, then sign the SCSC/TCS delivery note Goods exiting 30 the gate must present the red warehouse release slip to the gate custom supervisor to transport the goods to the warehouse of the importing enterprise 2.2 Calculating relevant costs in importing activity ❖ Air freight fee = Chargeable weight x Rate charge = EUR 2343.47 ❖ D/O fee = USD 35 / a set *2 = EUR 50 ❖ Handling fee = 30/ SHIP *3 = EUR 90 ❖ Breakbulk fee = EUR 100 ❖ Terminal custom surcharge – TCS = EUR6.25 ❖ Trucking fee = 0.05 x 443 = EUR 22.15 TOTAL COST = EUR 2611.87= VND 71 063 920 2.3 Assessing relevant risks associated with ITL and solutions 2.3.1 Possible risk - Competitor and the war of price The number of import-export businesses is increasing day by day, so the price competition also makes businesses consider how to make the offered price competitive to attract more customers while still ensuring profits for the business Karma Moreover, the logistics industry in Vietnam is increasingly developing, and the competition is becoming more and more fierce not only from domestic enterprises but also foreign enterprises that are and will be participating in the Vietnamese forwarding market - Carelessness: The fact that there is an error in the verification of goods documents sent from a foreign agent significantly affects the shipment processing time and work efficiency, as well as generates unnecessary editing costs Besides, it also causes a lot of damage to the 31 company's reputation as well as service quality and customer satisfaction in experiencing the company's services 2.3.2 Solution First, the company should pay attention to improving the professional capacity and sense of responsibility of CS employees in the working process Because the problem of time zone difference between countries makes communication difficult, each employee must always know the information about the customer for which he is responsible such as: name and business registration address, business field, tax code, etc., to be able to promptly detect errors and notify the leading foreign agent to correct the information on the original document before the document is transported with the goods to the final destination If incorrect documents are detected, employees should give priority to making an official document to correct information, send it to the TSC/SCSC warehouse for timely processing and continue to complete the next steps in the process For this reason ITL must regularly check the efficiency and working quality of each employee in the forwarding department as well as promptly supplement, cultivate and update knowledge for employees in checking goods documents Consider setting up a team of staff whose main task is to test, train and train the company's document checking staff as well as young employees who are lacking in knowledge and experience In airfreight import and export activities in our country, mainly goods are imported at DDP and DDU prices, and exported goods are exported at FOB prices, so domestic enterprises not win the right to transport but only enjoy on commission as agreed upon as an agent If we win the right to transport in foreign trade, we will be more proactive in organizing and planning the delivery of goods and higher revenue 32 Chapter DISCUSSION 3.1 Discussing the importance of the selected topic to the global and Vietnamese trade Similar to above statement liberalization of transportation and other regulations has enabled global trade to proliferate Vietnam's economy is increasingly integrating with the world, multilateral and bilateral agreements are signed to promote trade between countries around the world, creating favorable conditions for the forwarding market to develop geographical position, located in international air routes The system of ports connected to roads is being completed to serve the process of transporting goods Airlines transport over 52 million metric tons of goods a year, representing more than 35% of global trade by value but less than 1% of world trade by volume That is equivalent to $6.8 trillion worth of goods annually, or $18.6 billion worth of goods every day Countries with 1% better air cargo connectivity engage in 6% more trade By implementing policies that promote the efficient movement of air cargo governments have tremendous potential to improve their trade competitiveness on a global level Vietnam's import and export is increasing, especially the import and export of goods by air, proving that this is a potential activity that forwarders need to focus on to expand their market share The development of information technology contributes to faster and more time-saving delivery activities such as implementing electronic customs procedures, helping to track aircraft and cargo schedules more accurately On the ground of that reason getting the hang of how Import-Export are handle and deeply understand the procedure of forwarding in general is the most crucial thing study in international business should take into account 3.2 Explaining the importance of properly following the process selected in the Report to the overall business performance of the Company The process of Forwarding of imported goods by air at the company follows a certain order, in accordance with the requirements and regulations on import and export, and customs procedures The jobs in each stage are specifically assigned to each department and individual to help the process go smoothly Throughout the process, there is always an 33 interaction between the company and the customer to ensure work efficiency So doing the procedure properly does not just help the staff easy to follow, it is also a SOP to those how can look backwards and find out what step they did wrong in order to fixate on the problem come to the result the easier to solve the problem 34 CONCLUSION Air freight forwarding is growing and making an important contribution to the development of the forwarding service industry in Vietnam, and at the same time contributes to bringing foreign trade activities to a new height, bringing many benefits to customers country Therefore, it is extremely necessary to focus on and improve the efficiency of this field of activity Air freight forwarding also plays an increasingly important role in the company's business Therefore, the company needs to have clear orientations and plans in taking advantage of its resources so that it can maximize its strengths and overcome its limitations, and improve its competitiveness and continue to achieve growth in the future Through the process of researching, collecting information and analyzing, the student's report has shown the specific process of the actual delivery of imported goods by air at the Logistics Joint Stock Company and Indo Tran Shipping At the same time, analyze the current status of air freight forwarding activities at the company through advantages and limitations From there, some recommendations are proposed to improve this segment of forwarding activities at the company However, due to the limited internship time at the company and students' knowledge, the report only stops at the level of information synthesis, analysis and preliminary comments based on personal views, so it cannot be avoided from errors and limitations in identifying problems Therefore, I look forward to receiving comments to improve my report Thank you sincerely./ 35 REFERENCE https://www.iata.org/en/programs/cargo/ https://vnexpress.net/itl-duy-tri-muc-tang-truong-trong-covid-19-4213440.html HTTPS://CUSTOMS.GOV.VN/HOME.ASPX?LANGUAGE=EN-US Wikipedia And other sources internal of the company 36 APPENDIXES Appendix 1:Importing procedure images related Image Master Airway Bill (MAWB) 37 Image House Airway Bill (HAWB) 38 Image Air cargo manifest 39 Image Commercial invoice 40 Image Arrival note 41 Image Sale contract (blurred out on the ground of confidential) 42 Appendix 2: ECUSS images related Image Electronic customs declaration software interface ECUSVNACCS 43 44 ... OF IMPORTING SHIPMENTS BY AIR TRANSPORTATION IN INDOTRANS? ?? to know step by step of procedure in order to give myself a detail picture to somewhat, find myself a lucrative job in near future In. .. understand the procedure of forwarding in general is the most crucial thing study in international business should take into account 3.2 Explaining the importance of properly following the process... selected in the Report to the overall business performance of the Company The process of Forwarding of imported goods by air at the company follows a certain order, in accordance with the requirements