Non fixed day shipping schedule in tan cang shipping afects to customers satisfaction

Hai My Duong - January, 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Hai My Duong (NON FIXED-DAY SHIPPING SCHEDULE IN TAN CANG SHIPPING AFFECTS TO CUSTOMERS SATISFACTION) MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Hai My Duong (NON FIXED-DAY SHIPPING SCHEDULE IN TAN CANG SHIPPING AFFECTS TO CUSTOMERS SATISFACTION) MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Trần Hà Minh Quân Ho Chi Minh City – Year 2018 Table of Content Executive Summary Background information Methodology Problem Identification .7 Situation Analysis .7 Symptoms Central problem 12 Initial cause-effected map 16 Potential root cause 17 Cause-effected map 21 Problem solving 22 In short time: Providing a weekly fixed-day shipping schedule .22 In long time: Establishing the research and develop shipping schedule team 24 Action plan 25 Supported information .26 References .27 Appendix 01: Interviewees Information 28 Interview 1: Customers using TCS’s reefer service 28 Interview 2: Vice Director of TCS’s Customers 28 Appendix 02: Interview guides 29 Interview Guide 01: Customers using referred container service 29 Interview Guide 02: Regular customers 29 Appendix 4: Frequency of TCS’s shipping schedule 42 Appendix 5: Estimated output/ month for 40RH of TCS’s dry container customers 45 Hai My Duong - January, 2018 Professional terminology and abbreviation: No Professional terminology Meaning and abbreviation 20GP 20 feet general dry container 40HQ 40 feet high cube dry container 40RH 40 feet high cube reefer container TEU Depot The production of liner shipping and slot on vessel 20GP = TUES, 40HQ=40RH=2 Tues The yard contains empty container The truck goes to nearby the vessel to receive Shipside container directly does not drop container on terminal yard Closing Time Freight Plugging Fee The time which vessel will stop loading container to prepare for departing Price for transporting container by vessel Fee charge for plugging electronic of reefer container on terminal, on vessel 10 OPS Operation Service in Terminal 12 TCS Tan Cang Shipping Joint Stock Company Executive Summary This thesis aims to identifiy the reason why TCS new reefer service could not attract customers Basing on in-dept interview in TCS’s current customers, market information and report from marketing department, thesis find out there are potential problems: - Low customer satisfaction of regular customers Competitors are stronger than TCS show on issues: Marketing strategy to attract new customers does not implement Using theories and analysis, identified central problem is: low customer satisfaction of regular customers To giving exactly problem solving, the thesis draws cause-effected map to find out root cause Thesis uses groups of factors affect to customers satisfaction to conduct an interview on regular customers, the result show that many customer unsatisfied with TCS’s shipping schedule, to change un-fixed day shipping schedule, the broad director should change their intension that having fixed-day shipping schedule is more important than full fill each trip Background information Tan Cang Shipping Joint Stock Company (or Tan Cang Shipping – TCS) is a transport service company, was established in 2013 under the decision of the Board of Director of Sai Gon New Port Corporation The beginning mission of Tan Cang Shipping is developing the transport services of Sai Gon New Port Corporation while their vision is "Leading in quality of service, customer oriented; Advanced management, professional and high quality in human resources; Military discipline, corporate culture, community responsibility " After almost years of operation, Tan Cang Shipping now works on three areas like Sea Transport Services, Logistics and Shipping Agent Despite its short time of operation, they work quite well, complete all the missions and develop Tan Cang Shipping becomes a prestige brand, having a strong position in the shipping industry in Vietnam nowadays With the criterion "Coming to Saigon New Port, coming to one of the top quality services", Tan Cang Shipping always tries to provide their customers best quality shipping service To the Sea Transport Service, Tan Cang Shipping provides customers with domestic transport services by sea line including main routes: Ho Chi Minh - Da Nang - Hai Phong and opposite or Ho Chi Minh - Hai Phong and opposite To Logistics, they provides a full range of professional logistics services such as freight forwarding, customs clearance services, warehousing services, And to Shipping Agent, we now are acting as an agent for vessels to import and export in domestic ports as well as international port in Vietnam In addition, we are ready to provide ancillary services such as customs clearance, fresh water supply, fuel, crewmembers supplying and other support services when the customer needs Besides developing shipping service, Tan Cang Shipping also focus on hiring and training their employees With the core value: "Satisfaction, Trust and Long-term commitment of our customers", all the employees of Tan Cang Shipping are always enthusiastic, hardworking, having responsibility with work and more experience to solve customers’ requirements quickly in all situations happened during transportation Moreover, Tan Cang Shipping usually has the policies of supporting and consultation so that they can make their customers feel satisfaction when they choosing their service and want to build a long-term stable cooperation The organizational structure of Tan Cang Shipping consists of departments: Methodology This thesis was developed and supported by both primary and secondary data with particular following methods and resources: Business reports: TCS's business performance report for dry service and reefer service in 2017 checked in order to analyze how TCS achieve the target revenue as well as how each trip follows the golden structure The report on reefer container’s revenue in 2017 be classified by customer’s name and trip Interview: From the results of data analysis in business report, classify the customer using TCS services into focus-groups, build an interview guide and in-depth interview for each group and TCS’s Vice Director Market Research: Online research in Viet Nam shipping line market as well as interview TCS’s customers to understand refer container market size Theory: Customer satisfaction and Service Quality in liner shipping industry Problem Identification Situation Analysis The domestic shipping market has types of good: dry container and reefer container Dry container included: 20GP (20feet) and 40HQ (40 feet) Reefer container in domestics market only has 45RH In liner shipping industry, the quality of good the vessel carried is calculated by TEU Each vessel has limited TEU to carried, all good have to be packaged in to container and 1x40HQ=1x45RH=2x20GP=2TEUS The domestic shipping is the core business of TCS TCS operates vessels with routes SouthNorth and opposite a week Domestic shipping industry in Viet Nam has liners: Hai An, TCS, Vinafco, Vietsun, Germadept, Bien Dong, GLS…TCS and Hai An are liners have more vessels and routes than the others From the beginning, TCS only transported dry container base on the relationship of broad director in the market to attract customers After years, TCS gain their trust and loyal, and the Broad of Director realized that reefer container market is a potential field to develop TCS has launched Reefer container’s service with objectives: Diversified TCS’s service: Most TCS customers are freight forwarders who have goods in both dry and reefer container TCS want to provide full of choice to customer who already has used TCS’s service in dry container filed Opportunity Costs: Receiving a reefer container is economically more cost-effective than a dry container of the same size Specifically, the empty dry containers are owned by TCS and incur costs repair, cleaning, stock in yard… while empty reefer containers are owned by the customer (domestic liner does not own empty reefer containers), so that customers will pay all of these fees Regarding the freight, reefer container cost 10 million VND while the dry one is million VND We can calculate the opportunity profit of transport a reefer container, TCS will gain million VND from difference freight while 40HQ and 40RH are covered similar slot (2 TUES), TCS will not pay the clean (200.000 VND) and storage fee (100.000 VND/ day) because 40RH are customer’s owner In order proceed reefer service, TCS's leaders were based on the actual situation of TCS customers, TCS infrastructure conditions and freight rates to calculate a golden structure for each ship to ensure the feasibility and maximize profit in the beginning At present, there are 20 customers using TCS’s dry service have reefer container need to transport (see Appendix 05, Source: Marketing Department Report, December, 2016) TCS expects to attract 20-30% of these qualities About the facilities of TCS, vessels of TCS have different capactity, Tan Cang Foundation (TCFD) – 370 TEUS, Tan Cang Victory (TCVR) – 325 TEUS, Tan Cang Pioneer (TCPN) – 395TEUS and Tan Cang Glory (TCGR) – 425 TEUS and different freight of 20GP (3 million VND), 40HQ (7 million VND), 40RH (10 million VND) TCS calculated the effective structure to ensure the feasibility, maritime safety and maximize profit called “golden structure” Table 2: Golden Structure of TCS’vessels Target Quantity 40RH 20GP 40HQ TCFD 15 120 110 TCVR 20 125 80 TCPN 20 125 115 TCGR 20 135 125 10.000.000 3.000.000 7.000.000 Freight (VND) Symptoms After months operated reefer service, the result could not be as expected Show on: Under-expected quantity: For detail, basing on the revenue report from Jan to July, 2017, it is figured out that 95% of the transfer below the expected level, only 5% achieved as equal or more than expected 5% achieved the expected is on March, after Lunar New Year, when the market in in the peak But only 5/ 16 routes on March achieved, while the market is in the peak on March Chart 1: Revenue and target revenues by vessel in the beginning of 2017 For detailed analysis, for 20GP and 40HQ dry container, it is easy to see that dry sales nearly achieve the expected level, especially some trips are more remarkable Chart 2: Revenue and target revenues by Dry container in the beginning of 2017 For revenue of reefer container, the output was completely below expected and unstable on each ship So that, the operation of reefer service is lower expected Chart 3: Revenue and target revenues by Reefer container in the beginning of 2017 Attracting dry’s customers is not effective: Only 15/20 dry’s customers used TCS’reefer service and of them have signed the fixed-slot contract with TCS, become key account in TCS’s reefer field Table 3: TCS’reefer customer Type of customer Key account Regular Customer Customer’s name Number of 40RH in month (79 routes) HNC VINACONNECT HAI DANG PHAT TCRF 11 Quantity in month/ total quantity 233 143 46,88% 28,77% 22 4,43% 22 4,43% How would you I not intend T have no comment I not change the evaluate your reefer changing schedule about this issue schedule Your current goods at If my company has Currently, the company I have not thought TCS is not high, you more goods is using the service of about this yet Our intend to increase slot in Hai An, the cooperation current cooperation the near future? is very convenient, good is well container goods in the near future and you plan to distribute your company's structure on shipping filed again? How many lines of your company are using? freight, good support, TCS has no outstanding advantages, so there is no plan to switch to Interview 02: Regular customers Hai My Duong - January, 2018 Question PROMPT Reliability • Consistency Do you feel of customer that TCS service provide reliable transportation service? • Error-free documentation Thanh Tung Dang In the peak season, it is difficult to book a slot on TCS’s vessel, but when I book slot through Vinaconnect was accepted Manh Chien Nguyen I hear that we have paid more than other for reefer container be loaded on TCS’s vessel It is not important because our TEU are not too much Domestic liner does not have more documentation so that error is rarely Domestic good have not through customs so that any error can be revised, modified easily It is not serious 34 Huu Vi Bui We have not signed the contract with TCS, so that in the peak season, the signedcontract customer are priority to book slot on vessel Some error because of liner’s mistake, some of customer’s mistake, but it can be edited immediately and usually no charge Thi Huong Thao Nguyen TCS give equal right to customer, we will be free DEM fee, in the peak season, TCS could not receive more slot but they will leave 12 slot for us We have some problem with invoice when paid freight but the TCS’s accountants are flexible to solve problem Hung Cuong Do I not care about the consistency of customer service of liner shipping, because they will special for their key account who gave large slot on their vessel A liner just provide om-time and weekly shipping schedule is enough I never have documentation when using TCS’s service • On-time pick- Because TCS’s up and delivery vessel use Tan of cargo Cang’s port, TCS can be flexible to assist customers to print EIR before vessel arrival or arrange shipside to shorten delivery times Speed Do you feel that TCS has faster transportation service than other liners? • Transit time of transportation service Vessel sometimes delay so that it take more time to transport containers • Frequency of transportation service TCS has trips/ week, similar with Hai An and has the most trip in domestics shipping market But while Hai An has fixed shipping schedule, TCS has changed schedule As you know, TCS’s schedule sometimes run on Route South – North takes 2-3 days to complete so that the ontime pick-up and delivery is not important Some urgent container must be delivery on time, we will remark with TCS TCS’s vessel run faster than other liners but it often delay from 2-3 hours, but it does not affect too much to the speed trips/ week, it is the most trips in the market (equal to Hai An), more trip than other line will help TCS gather goods and customers because they have multiple choice and they believe their Ports which TCS used usually have traffic jam or switch off lead to lately delivery TCS’s vessel departure usually delay from 3-4 hours, even 5-6 hours, we will pay more electronic fee in the port and lately delivery Sometimes TCS’s vessel change schedule, depart lately Vessel’s speed is 2.5 days from Ho Chi Minh to Hai Phong and opposite, while other liners take 3-3.5 days Speed is good but sometimes it delays Vessel run fast, less damage or broken when operating TCS has more route than other liners, but TCS’s schedule is not fixed For example, in a week, TCS’s vessel run on Tuesday, Wednesday, Saturday, but the next week schedule is It is dense, TCS gives more choice to customers but the choice is too flexible I book a slot today but a not know what happen in next week, which day vessel with depart next time? Does it change? trips/ week, it is very impressive No more liner can like that This is showing that TCS have stronger financial, it made me believe on TCS than other, but, TCS should make shipping schedule fixed I know TCS • Accuracy of cargo tracking systems Monday, Wednesday, Saturday, but the next week is Sunday, Thursday, Friday…Hai An line they has fixed schedule on Tuesday and trip on Sunday It is easily for forwarder companies like us arrange schedule good will be transport on-time even the container missed one trip, it will be loaded to another trip next changed It is difficult for customers to follow and plan to receive the goods It is difficult to manage have to delay ship to wait “the big customer” drop container off as a support for royal customers but it affected to other customers We also paid the same freight I hear that the Domestics Shipping Association in Viet Nam has this system, but I never used, only days transported, it is not necessary I not concern about this Sometimes I use Domestics Shipping Association in Viet Nam system to find out where does vessel is but it is take more time than asking TCS’s staff It is not useful, I will ask liner’s staff about it It is not popular in domestics shipping, all customer know each other so that it is difficult to lose a container • Idle time of shipments and availability of empty containers contribute to the speed of a Domestics liner not own reefer container, we lease from foreign liner like MAERSK, TS.Line… Empty container are owned by shipper, liner have not reefer container Reefer container are own We will rent empty reefer container TCS and other domestic liners not own reefer container shipment Responsiveness • Speed of How you claims evaluate the performance of supporting activities when using TCS's reefer service? Effective All of claim, unexpected problem will be solve 24/7 Because container usually drop off at night, problem in port is inconvenient but TCS’ staff will support TCS’s staff is enthusiastic but they have not more knowledge about reefer container and good be packed on it Some of problem are small and does not affected to goods but they also request customer to confirm to loading on board Staff is active But they need to improve knowledge about reefer filed, they will become more profession From dry service to reefer service only the same team support customer, they may not be familiar with new service so that they take more time to solve claims or problem, but they try their best to They want to trainee more than Supported team are enthusiastic • Effective of sale team Through vice director, we use TCS’s dry service and switch to reefer to support TCS, I could not evaluate the effective of sales team Using TCS’s service, I only work with vice director and customer service staff, Vice director is sale man, isn’t she? • Promptness of customer service TCS has more vessels, so that schedule is flexible, we can choose different day to depart, but on the peak season, it is difficult to call TCS’s staff It is not popular in our business In the low season is fast but in the peak is low • Exhibition of socially responsible behavior I not care about it In the peak season, I could not book slot in our familiar liner and through market information fond out TCS I have not worked with any sales man, only interacted with Cs team Speed of vessel, It is competitive advantage of TCS I know TCS through information from other friend in transportation filed I even not know who sales man is Our director is TCS’s vice director’s friend, so that our company use TCS in the first time establish After that we work with Cs team Speed of vessel, problem solving are well It is difficult to book TCS’s slot on the peak season I think it is suitable for developed country, not in Viet Nam Is it important? My company does not pay more attention on it, It does not affect to our business Value Are you satisfied with all cost you have paid for TCS's reefer service? • Involvement in green shipping practices No companies have done the green shipping yet Domestic liner and transportation not pay attention on this I not care about it It seem stranger with domestic liner I have not any comment about it • Availability of large selection of service offerings port, vessel, trips/ week, TCS provides multiple choice to customers trips/ week, I hear that TCS will buy the 5h vessel It is attractive Many trips a week, we can manage schedule to avoid delaying delivery TCS has variety choice of departure day, port of loading, shipside… TCS has vessels, it is large selection comparing with other competitors • The pricing of shipping service Domestic shipping transportation has floor price, so that we paid similar with other liners, but I know when sign the contract, we can gain competitive freight It is rule of transportation I have not any complain about freight We have paid more than some companies because we have not signed the contract In the peak season, we will pay more than in the low season and contractedcustomers The freight is similar between liners • Total logistics cost When TCS’s schedule delay, we have paid the electronic fee in the pork, sometime, if we could not deliver goods on time, we will indemnify for the lately delivery • Condition of ships equipment It is good Safety and security of shipment I assurance about the safety TCS has vessel, pork in Ho Chi Minh and pork in Hai Phong, TCFD and TCVR drop at VOP, TCGR and TCPN drop at VICT, the schedule sometimes change but our drivers made mistake, so that we have to pay trucking fee I have no complain Shipping only a stage on the logistics chain, transport by sea is the cheapest way, but it takes more times than other ways Logistics cost in this stage is not take too much Logistics cost not distribute on the shipping stage, the cost will incurred when the good are damaged, late delivery… It does not affected to our total logistics cost Vessel runs fast, it rarely damage It is good when comparing with others It is acceptable I believe on the safety of TCS TCS has Legal safeguard to solve all problem about marine It is trust I never get any damage when using TCS service 41 Which factors strongly affect to TCS has your decision when using reefer’s enthusiastic staff, service in TCS? many vessel but their shipping schedule does not reasonable, they not have a weekly schedule while Hai An can that Although Tan Cang’s brand is famous, in domestic shipping market, they are the new, it is difficult to gain belief from traditional customers who are familiar with Hai An, Vinafco, Vinalines… TCS does not have competitive advantage, the facilities are same with Hai An, but while Hai An has fixed trip on a week, TCS’s schedule is floated With fixed schedule, we can giving packing plan actively and guarantee the prestige to our customers TCS has introduced the reefer service for months, to gain customer loyalty, TCS should prove that they are outstanding, unique, differential… when comparing with other liners The product of liner company is shipping schedule, and the product of TCS could not make us satisfy I could not give more slot on TCS because of they did not support our company on peak season, and their shipping schedule is not fixed, it is difficult to set up a long-term packing plan I know every liner with priority receive contracted customers, but with the shipping schedule like that, it is difficult to us to increase quantity TCS has not facilitated our company increase our slot They only receive booking in low season and ignored us in the peak They want us give more slot and sign the contract with fixed TEU while their shipping schedule is not fixed Hai My Duong - January, 2018 Appendix 4: Frequency of TCS’s shipping schedule Week of 2017 02 Monday Saturday Sunday 03 Wednesday Sunday 07 Monday Tuesday Friday 08 Wednesday Saturday 09 Monday Tuesday Thursday Sunday 10 Friday Sunday 11 Friday Saturday Sunday 12 Tuesday Saturday Sunday 13 Tuesday Thursday Sunday 14 Tuesday Thursday 15 Monday Wednesday Number of Trip 1 1 1 1 1 1 3 1 1 1 1 1 44 Sunday 16 Monday Friday 17 Thursday Saturday 18 Thursday Saturday Sunday 19 Monday Thursday Friday 20 Thursday Friday Saturday Sunday 21 Monday Thursday Saturday Sunday 22 Wednesday Friday Sunday 23 Wednesday Thursday Friday Sunday 24 Monday Wednesday Friday Sunday 25 Wednesday Friday Sunday 26 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Wednesday Thursday Friday Sunday 27 Monday Wednesday Friday Sunday 28 Wednesday Friday Sunday 29 Wednesday Thursday Sunday Grand Total77 1 1 1 1 1 1 Appendix 5: Estimated output/ month for 40RH of TCS’s dry container customers No Customer's name Estimated output/ month for 40RH Expected to attract 80 70 100 50 HNC VINACONNECT HAI DANG PHAT TCRF COLLYER VINALINES 50 VIET SAC SCL HAMITRANS TNN GLOTRANS 80 GREEN LOG DELTA GMD 20 KIM THANH4SINH CARIMEX HP CYPRESS LAM LOG TAN THANH TAN20 BIEN TEXHONG TBM VSICO YUSEN 15 TRACO 10 40 10 10 50 11 20 12 13 14 15 10 16 20 17 18 19 20 40 21 20 22 30 23 24 25 26 60 35 50 20 20 40 5 15 25 0 0 20 15 ... Monday Tuesday Friday 08 Wednesday Saturday 09 Monday Tuesday Thursday Sunday 10 Friday Sunday 11 Friday Saturday Sunday 12 Tuesday Saturday Sunday 13 Tuesday Thursday Sunday 14 Tuesday Thursday... CHI MINH CITY International School of Business Hai My Duong (NON FIXED- DAY SHIPPING SCHEDULE IN TAN CANG SHIPPING AFFECTS TO CUSTOMERS SATISFACTION) MASTER OF BUSINESS ADMINISTRATION... Monday Thursday Saturday Sunday 22 Wednesday Friday Sunday 23 Wednesday Thursday Friday Sunday 24 Monday Wednesday Friday Sunday 25 Wednesday Friday Sunday 26 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Wednesday