RECOMMENDATIONS TO INCREASE EFFECTIVENESS OF IMPORTSEA FREIGHT FORWARDING OPERATIONAT SAFI COMPANY

TON DUC THANG UNIVERSITY DEPARTMENT OF BUSINESS ADMINISTRATION SUMMARY RECOMMENDATIONS TO INCREASE EFFECTIVENESS OF IMPORT SEA FREIGHT FORWARDING OPERATION AT SAFI COMPANY Supervisor: MBA Pham Thi Ngoc Bich Student: Vo Thy Kieu Student ID: 082698Q Intake: 2012 HO CHI MINH CITY, 07 Aug 2012 ACKNOWLEDGEMENT I would like to thank the Lectures in Business Administration Faculty of Ton Duc Thang University has created best condition to help me complete this essay I sincerely thank to MBA Pham Thi Ngoc Bich who has guided me on finishing this essay with the dedicated care I truthfully thanks to the leaders and staffs who instructed me during time I interned at SAFI Company I also wanna say “thanks” to all teachers and friends who helped and supported me through the study period Although I tried my best to complete this essay, some mistakes still occurred I hope you could conpathyze and make suggestion to help me perfect it Thanks! HCMC, 07/08/2012 Student: Vo Thy Kieu COMMENTS OF INSTRUCTOR Student: Vo Thy Kieu Class : 08QQ2D Student ID: 082698Q Intake : 12 HCMC, COMMENTS OF EXAMINER Student: Vo Thy Kieu Class : 08QQ2D Student ID: 082698Q Intake : 12 HCMC, TABLE OF CONTENT Acknowledgement List of abbreviations List of tables and figures List of attached appendixes Chapter 1: Introduction 1.1 Introduction 1.2 Research objectives 1.3 Research scope 1.4 Research methodology 1.5 Data sources 1.6 Research structure Chapter 2: Literature review 2.1 Concept of Freight Forwarding 2.1.1 Definition of Freight Forwarding 2.1.2 Definition of Freight Forwarder 2.2 Range of Freight Forwarding Activities 2.2.1 As Representative of Exporter 2.2.2 As Representative of Importer 2.2.3 Transferring specific commodities 2.2.4 Providing other services 2.3 Roles and liabilities of Forwarder 2.3.1 Roles of Forwarder 2.3.2 Liabilities of Forwarder 10 2.4 The Legal foundation of Freight Forwarding 11 2.4.1 Legal relationship with other organizations 11 2.4.2 Legal documents relating to Freight Forwarding 12 2.5 The benefits of using Freight Forwarding Services 13 2.5.1 For Exporter 13 2.5.2 For Importer 13 2.5.3 For the national economy 14 2.6 The factors influent to Freight Forwarding 15 2.6.1 Internal factors 15 2.6.1.1 The human resources 15 2.6.1.2 The management system 15 2.6.1.3 The business network 15 2.6.1.4 The company Infrastructure 16 2.6.1.4 Marketing Strategy 16 2.6.1.4 Service Quality 16 2.6.1.4 Financial situation 16 2.6.2 External factors 16 2.6.2.1 Economic environment 16 2.6.2.2 Political environment 18 2.6.2.3 Social environment 18 2.6.2.4 Technology 18 2.6.2.5 The natural resources and geography 19 2.7 Performance of Freight Forwarding 20 Chapter 3: Current operation and business result of SAFI Company 21 3.1 History and development of SAFI Company 21 3.2 Mission and function of SAFI Company 22 3.3 Culture of SAFI Company 22 3.4 Organizational structure of SAFI Company 23 3.4.1 Organizational chart 23 3.4.2 Function of Departments 25 3.5 Infrastructure of SAFI Company 28 3.6 Business areas of SAFI Company 30 3.6.1 Multi-modal transportation 30 3.6.2 Shipping agents 31 3.6.3 Customs registration and Freight Forwarding 32 3.7 Human resources 32 3.7.1 Labor structure by age level 32 3.7.2 Labor structure by qualification level 34 3.7.3 Human resources policies 35 3.8 Business performance of SAFI Company 37 3.8.1 Business results of SAFI Company from 2009 to 2011 37 3.8.2 Turnover structure of SAFI Company in 2011 39 3.8.2.1 Turnover structure by operation fields 39 3.8.2.2 Turnover structure by kinds of commodities of Freight Forwarding Operation 40 3.8.2.3 Turnover structure by Freight Forwarding services 43 Chapter 4: Import Sea Freight Forwarding Process at SAFI Company 46 4.1 Signing the Forwarding contract 47 4.2 Contacting the Shipping Line to make booking Ship 47 4.3 Receiving and checking the documents from customers 48 4.3.1 Documents required for Customs clearance 48 4.3.2 Checking the documents 52 4.4 Getting the Delivery Order – D/O 54 4.5 Making procedures for customs clearance 55 4.5.1 Electronic Customs clearance 55 4.5.1.1 Putting the data into computer system 55 4.5.1.2 Receiving feedback from Customs Department 59 4.5.2 Inspecting the commodity 60 4.5.3 Paying Tax 61 4.6 Completing Receiving procedure 61 4.6.1 For Full Container Load - FLC 61 4.6.2 For Less Container Load - LCL 62 4.7 Delivering commodity to customers 63 4.8 Liquidating the contract 64 Chapter 5: Recommendations to increase effectiveness of Import Sea Freight Forwarding Operation at SAFI Company 66 5.1 The objectives and business development strategies of SAFI Company 66 5.1.1 The objectives in 2012 66 5.1.2 Business development strategies 66 5.2 The SWOT analysis on Forwarding operation of SAFI Company 66 5.2.1 Strengths 68 5.2.2 Weaknesses 70 5.2.3 Opportunities 71 5.2.4 Threats 72 5.3 Recommendations to improve Forwarding Operation at SAFI Company 74 5.3.1 Solutions for Human Resources 74 5.3.2 Solutions for Marketing Strategies 75 5.3.3 Solutions for Service Quality 76 5.4 Recommendations for the Government 77 5.4.1 Upgrading the infrastructure of Logistics Industry 77 5.4.2 Increasing the national competitiveness in the international Forwarding market 77 5.4.3 Giving strategic policies to develop Human Resources 78 5.4.4 Completing Legal System and improving administrative procedures 78 5.4.5 Giving solutions to limit impacts of inflation 78 Conclusion 79 References Appendixes LIST OF ABBREVIATIONS APEC : Asia Pacific Economic Cooperation ASEAN : Association of Southeast Asian Nations FIATA : International Federation of Freight Forwarders Association SDR : Special Drawing Rights B/L : Bill of lading C/I : Commercial Invoice C/O : Certificate of Origin CEPT : Common Effective Preferential Tarrift CIR : Cargo Interchange Receipt Co Ltd : Company Limitted D/O : Delivery Order EIR : Equipment Interchange Receipt EU : European Union FCL : Full Container Load FIATA : Viet Nam Freight Forwarders Association GATT : General Agreement on Tariffs and Trade GDP : Gross Domestic Product GPS : Generalized System of Preferences TP.HCM : Ho Chi Minh City HS : Harmonized System ICD : Inland Container Depot L/C : Letter of Credit LCL : Less than a Container Load No : Number MTO : Multimodal Transport Operator NOA : Notice of Arrival ODA : Official Development Assistance List SAFI : Sea and Air Freight International TEU THC VAT TTR VIFFAS WTO SWOT : Twenty-foot Equivalent units : Terminal Handling Charge : Value Added Tax : Telegraphic Transfer Reimbursement : Vietnam Freight Forwarders Association : World Trade Organization : Strengths Weaknesses Opportunities Threats LIST OF TABLES Table 3.1: SAFI’s Labor Structure by age level from 2009 to 2011 32 Table 3.2: SAFI’s Labor Structure by qualification level in 2011 34 Table 3.3: SAFI’s result of business operation from 2009 to 2011 37 Table 3.4: SAFI’s Turnover Structure by operation fields in 2011 40 Table 3.5: SAFI’s Turnover Structure by kinds of commodities in 2011 42 Table 3.6: SAFI’s Turnover Structure by Freight Forwarding Services in 2011 43 LIST OF FIGURES Figure 1.1: Structure of Research methodology Figure 1.2: SWOT matrix Figure 2.1: General basic steps of Import Sea Freight Forwarding Operation 20 Figure 3.1: SAFI’s organizational structure 24 Figure 3.2: SAFI’s labor structure by qualification level 25 Figure 3.3: Result of business operation of SAFI from 2009 to 2011 38 Figure 3.4: SAFI’s Turnover Structure by operation fields in 2011 39 Figure 3.5: SAFI’s Turnover Structure by kinds of commodities in 2011 40 Figure 3.6: SAFI’s Turnover Structure by Freight Forwarding Services 2011 44 Figure 4.1: Import Sea Freight Forwarding process 46 STRENGTHS Lack of appropriate training and job promotion Long-run operation and experience Marketing of company because Professional staffs with high Department education Lack of service quality assessment Favorable location standard and employee performance Modern infrastructure evaluation in each stage of service Wide distribution network activities of lacking are limited Marketing implementation Stable financial situation WEAKNESSES Opportunities The obstacles on development of Logistics Industry Potentialities to develop Sea Impacts of inflation Freight Forwarding activities Problems in current Legal System International economic integration Acute competition in the market The oriented development for Lacking of professional human Logistics Industry of Government resources Favorable geographical location of Viet Nam THREATS 69 5.2.1 Strengths Strengths are capabilities and resources that allow company to engage in activities to generate economic value and competitive advantages Strengths of SAFI Company are based on the cooperation culture, the long-run brand, favorable location or wide distribution network… They are useful factors that help SAFI to develop business operation S1 Advantages due to long-run operation and experience of SAFI SAFI Company was established early in 1992 So, it had an opportunity to build up experience and development of its brand after 20 years The existence and the long development of Logistics Industry helped the company get a lot of experience and build up the reputation in forwarding market The brand of SAFI has been confirmed through many honors and awards in Viet Nam In 2010 and 2011, SAFI has won two awards: “The Vietnamese Strong Brands Award” (by Trade Promotion Department and VnEconomy Newspaper) and “The Excellence for Trade in Services Award” (by Ministry of Trade – Trading Newspaper) These are two important awards which help to confirm the reputation of Vietnamese businesses (only more than 100 enterprises are awarded per year) Specially, in 2011, SAFI was classified 18th in Top 20 Strong Brands in Viet Nam Logistics Industry This showed that SAFI got a strong position and prestige in this field S2 The professional staffs with high education The professional staff with many year experience and wide relationship is an important factor to increase efficiency of forwarding performance The dynamic, enthusiastic, friendly and creative employees of SAFI could help complete the shipment and deliver goods on location in the shortest time and safety They are trained to handle solving problems quickly This makes most of customers at SAFI feel satisfied with company’s services Moreover, SAFI has a huge number of laborers with high education, including 45.68% employees with Postgraduate Diploma and University Degree, 33.45% employees with the College Degree and 5.57% employees with Intermediate Degree The staffs master professional skills and are trained regularly help SAFI get the customer’s trust and develop forwarding activities S3 Favorable location is one of facilities to develop Logistics activities 70 SAFI’s headquarters is nearly located in central location of Ho Chi Minh City This position closes to related organizations such as Ports (Khanh Hoi Port, Saigon Port, New Port, Nha Rong Habor…), Shipping Companies (Wanhai Lines Ltd, VINATRANS, COSCO, SOTRANS…), the Banking System (Orient Commercial Bank, Agribank, Sacombank ), the Insurance Companies (Bao Minh, Prudential…), the Quatest III center, City Customs Department… Due to the favorable location, SAFI could save travel cost and implement the transactions (make customs clearance, administrative procedures or deliver goods…) quickly S4 Infrastructure is equipped by modern system of machineries and equipment The offices and warehouses are equipped by an adequate system of modern machineries (stackers and gantry crane, tractors, trucks…) and equipment (copiers, printers, fax machines, copiers…) Especially it has a modern computer system which is connected to the Internet to access information quickly and easily Large storage systems which include two bonded warehouses (1st warehouse in Phu Thuan, Ho Chi Minh City and 2nd warehouse in Phu Thi, Ha Noi) facilitate the resolution for the storage of goods and contribute to complete the Logistics Supply Chain S5 SAFI has a wide distribution network in both domestic and over the world The head office, branches and representative office of SAFI Company locate at many large cities and provinces in Viet Nam, such as Ho Chi Minh, Ha Noi, Hai Phong, Vung Tau, Da Nang In addition, SAFI has agents in more than 30 countries around the world, such as USA, Australia, Europe and Southeast Asia The international distribution network helps SAFI develop forwarding activities in both domestic and foreign market In the current SAFI provides delivery services in the South of Viet Nam, include Ho Chi Minh City, Can Tho, Binh Duong, Dong Nai and Vung Tau Most of SAFI’s customers are the businesses in the provinces who lack of ability and experience in delivery services They usually require SAFI, as a forwarding agent, perform the necessary procedures in the field of logistics, customs clearance and delivery goods for import and export activities mainly located in Ho Chi Minh City In addition, SAFI has begun to expand strategic logistics market in the North and Central area by opening branches in Ha Noi, Hai Phong, Da Nang… The extensive network of domestic and foreign transportation with a wide range of diversified services has created a private strength of SAFI Company S6 Stable capital maintains stable business operation 71 Capital is the important factor for business operation and foundation of all activities in each company Based on Financial Report, we could appraise current business situation of an enterprise Through the result of operation of SAFI Company from 2009 to 2011, we could recognize that the revenue of SAFI increase continuously although the negative impacts of inflation Since SAFI has established in 1992 until now, it already has a strong finance to maintain stable operation SAFI is a joint stock company Its main capital sources are stock trading, capital contribution of shareholders, financial activities (such as investments, arbitrage or loans)… The primary objective of SAFI’s capital management is ensuring healthy capital ratios in order to maintain stable business operation and maximize shareholder value Besides, the negative impact of recent economic crisis has effected to the revenue and profit of many companies, includes SAFI However, due to the suitable policies and flexible changing, such as keeping stable price, improve the quality of services, commit liability for insurance…, SAFI still maintain a strong position in Logistics market while many enterprises get the bankruptcy This confirmed the capacity operation as well as the efforts for development of SAFI Company 5.2.2 Weaknesses Weaknesses are limitations that exist in executing and managing process of company Besides the advantages mentioned above, SAFI must face with unexpected difficulties and hard challenges They may be the problems about human resources, marketing strategies or services quality… W1 Lack of appropriate training and job promotion The young labor lack of experience could make mistakes in process negotiating and signing contract or let out the confusion in solving problem Although they are trained regularly, they still have trouble with applying their acknowledgment into practice Moreover, using training courses on a large scale could is not suitable with all employees because they are not on the same level at all This creates the limitation of training policy Besides there are not many promotion chances for employees worked at SAFI for a long time Working at a stable position could make the perennial employees lack of progressive spirit Or even, it’s so boring that they want to quit their job suddenly SAFI may have trouble with this problem if they don’t give suitable solutions W2 Marketing activities are limited because of lacking Marketing Department 72 Currently Sales Department’s staffs of SAFI undertake both sale and promoting activities The pressure caused by overload intensity lead to the decrease of their working performance SAFI could implement the Marketing strategies without professional Marketing staffs In addition, although SAFI is one of the businesses which were founded early, many customers still lack information or even not know about SAFI This is a great limitation in current marketing activities That causes disadvantages in expanding market share, keeping loyalty of customers and attracting new customers W3 Lacking of service quality assessment standard and employee performance evaluation at each stage of service implementation In the current, SAFI does not have Customer Service Section to consult the services and clear up queries for customers The problems are solved by related Departments In some cases, it is difficult to lay the blame on responsible department to solve problems right time because the mistake is not determined at any specific stage This could lead to the disunity in internal company SAFI also does not pay attention on assessing satisfy level of customers with company’s services This causes the instability of the number of customers 5.2.3 Opportunities Opportunities provide the organization the chances to improve its performance and its competitive advantage These factors bring advantages to develop operation of company They could be the potential development of Industry, the changes from economic integration, increase foreign investment or advantages due to the attention of Government O1 Viet Nam has potentialities to develop Sea Freight Forwarding Activities In recent years, Vietnamese shipping has taken a significant step beyond development The statistic data in 2011 said that 90% export and import are transported by sea The total volume of goods which was transferred through Vietnamese ports is nearly 140 million tons / year (2010) The annual growth rate in next 10 years is predicted about 20-25% The high demand of transportation commodity is the first facility to develop Logistics Industry Follow the forecast of experts, in the future, the Logistics Industry will contribute 15% GDP of Viet Nam Specially, in next 10 years, the import and export turnover of our country can get nearly $ 200 billion per year Due to the development of port system, the experts also predict that the volume of commodity 73 which is transported by containers through Vietnamese ports in 2020 will be 7.7 million TEU It is nearly double the volume in 2010 (3.6 - 4.2 million TEU) It shows the large potential development of Vietnamese Logistics Industry O2 International economic integration leads to the suitable changes of Government’s policies and attracts the foreign investment Viet Nam joined in WTO in 2007 The international economic integration will lead Viet Nam become an opening trading country The barter of goods, providing services and investment between countries will become more and more easily The reform of policies, administrative procedures and law system of the Government which consists with international routine will create facilities to develop forwarding operation both in domestic and international market In addition, increase of foreign investment could help to expand relationship and develop national economy Flow of FDI and funs from non-governmental organizations into Viet Nam is increasing Due to these supports, we can complete the infrastructure, develop the economy and improve the investment policy Nowadays, many foreigner investors appreciate the stability and safety of investment in Viet Nam It seems that Viet Nam is regarded an attractive investment destination O3 The oriented development for Logistics Industry of Government The governmental officers are paying attention to forwarding operation They try their best to improve Logistics trading system perfectly For example, we started to test the e-customs clearance in 2005 Until now, we applied it in over our country broadly This created favorable condition to complete the delivery process quickly, save time and save cost O4 Favorable geographical location helps to implement trading transactions conveniently Viet Nam is located in strategic area in Southeast Asia This geographical location is very convenient for international transportation The coast stretches over 2.000 km, many deep-water ports, international air-port, rail system and road traffic systems are facilities to develop Logistics Industry 5.2.4 Threats: Threats are disadvantages outside the company that aims to reduce the level of the SAFI's performance These factors are obstacles limit development of Industry, impacts of inflation, problems in current Legal System or competition in the market 74 T1 The obstacles on development of Logistics Industry In general view, current Vietnamese Logistics infrastructure gets small scale and unreasonable lay-out This is a major obstacle which impact to Logistics Industry negatively These also hinder our efforts in promoting the inherent advantages as well as hinder the development of import and export operation In fact, we have about 266 ports but just 20 ports can serve international shipping effectively The others could only receive small fleet and weren’t been equipped by full of modern container handling tools In addition, it’s difficult to transport the containers from port to delivery locations safety The road system is narrow and not designed to transport the heavy and bulky things like containers The traffic jam is common and the accidents happen frequently The old railway system is not used effectively The waterway is not the best choice because of the recent accidents, such as the shipping crash between Truong Hai Star Ship (Viet Nam) and a Thailand Ship in 04/11/2012 T2 The inflation impacts to operation of enterprises The cost of transportation is one of the current important problems Because of the impact of inflation, the cost of commodity, the fuel price, the labor cost increase rapidly So, the revenue and profit of many companies downed without controling Many businesses must keep operation in non-profit status or become bankrupt T3 The problems in current Legal System cause disadvantages for enterprises The current Legal System is not logic totally The complicated administrative procedures take a lot of time to finish delivery process The guidance of administrative procedures is not clear This makes enterprises meet difficulties in making procedure process Besides the change of some rules in Commercial Law make companies confuse in giving suitable adjustments for their strategies T4 Acute competition creates the challenges to companies Following the WTO commitments, Viet Nam will permit the foreign companies got the equal economical right when they operate in Vietnam This make the acute competition become increase continuously in Vietnamese market Because of the international integration, continuous growth of the market as well as the increasing demands from customers, competitive pressure also creates the challenge for companies, includes Logistics enterprises Almost the current Vietnamese businesses are small and lack of competitiveness while the large foreign corporations, such as APL, Mitsui OSK, Maerk Logistics, NYK Logistics…are gradually dominate the domestic market 75 T5 Lacking professional human resources could be a trouble for forwarding activities In addition, one of the challenges of Logistics Industry is the lacking of professional human resources According to statistics of current workforce, there are 8.000-9.000 people who are working for forwarding companies However, the number of workers who are considered as real professional staff just be 50% Young labor is lack of reality experience Besides, the knowledge and ability to dominate the market of Vietnamese forwarding enterprises are weak It seems that they don’t really concern about international trading regulations or training high level workforce So it’s difficult to improve the quality of Logistics services 5.3 Recommendations to improve Forwarding Operation at SAFI Company According above appraisement, SAFI should give suitable solutions to solve those problems as well as promote the advantages to improve competitions of the company 5.3.1 Solutions for Human Resource: The recruitment policy to supplement new employees of SAFI is useful to expand the scale and enhance ability to satisfy the demand of forwarding market However, because of lacking experience, new employees could have problems when they work in new environment So it is necessary to strengthen organizing the short-term training courses to young labor This helps them to increase individual professional and share the practical experience In addition, SAFI should consider about qualification test program to check the progress of employees Training without inspecting is not effective approach The measurements of this program are ability to serve customers, job encourage creativity, friendly level in relationship with customers and coworkers The employees could be required to finish the individual examination tests on documents These are the multi-choice exercises or small essay to check current ability of each staff Company also could use Software Qualification Testing (licensed) to appraise the performance of employees By that way, the company could assess individual ability of each employee and control the qualification of training program to give suitable adjustment SAFI should adjust the career and development policies in accordance with current human resources situation The number of experienced employees should be maintained due to contribution they devoted to company They have experience in solving problems and bringing the contract based on their relationships They keep a 76 very important role for operation of company SAFI should give them a suitable wage and treatment policy Moreover, understanding the expectation of employees is very important Everyone has an individual occupational orientation Some people work hardly to earn a lot of money for their living Some ones strive to get the promotion or they have passion for their job They may be interested to work in a stable environment without acute competition but the others want to express themselves in a creative environment… So company should recognize the strengths, weaknesses and expectations of employees to have plan divide tasks or assign working position reasonably SAFI also should pay attention on adjusting the human policies The current remuneration, reward, working hour policies of SAFI are appraised well Most of employees feel satisfied with the current working environment at company However, company also should show their interest in living of employees by giving preferential treatment to pregnant woman, visiting the sick or building the bureau of public health at the office… These could make employees feel that SAFI looks like their “second family” where everybody really love and care the others 5.3.2 Solutions for Marketing Strategy Currently the establishment of Marketing Department is really necessary The duties of this department are: promoting the image of SAFI Company, researching market and recognizing the changes of customers’ demand to propose the suitable strategies To enhance promoting the image of company, SAFI should sponsor or organize the seminar about Logistics topic This helps SAFI attract the attention of both domestic and foreign organization Creating good relationship with the organizations (VIFFAS, FIATA…) or the journals (Vietnamese Supply Chain Insight…) is also important This brings new opportunities, enhances position of SAFI on forwarding market and is a good way to approach In addition, besides awards SAFI got (“The Vietnamese Strong Brands Award” and “The Excellence for Trade in Services Award”), they also should strive to get the another important awards, such as Gold Star Award organized by Vietnamese Young Entrepreneurs Organization to affirm the own brand as well as maintain the current position Besides market research is also an important tool of marketing strategy Through understanding current demand of customers, trend of consuming market or changes in Logistics Industry… SAFI could give the suitable strategies about prices, quality of 77 services, business operation… to satisfy customers effectively Moreover, market research helps company identify customer segments to give effective marketing approaches The customers should be divided into strategic customers, regular customers, spot buy customers and potential customers With the strategic customers and regular customers who use SAFI’s services regularly for a long time with big value transactions, SAFI could offer the suitable discount for the value of service fee for them With the spot buy customers and potential customers, SAFI could attract their attention by offering discount for service fee accompany with committing on-time delivery, minimizing defective goods during transport process and after-sales services (such as giving gifts for customers in Tet holiday…) Maintaining the loyalty of customer is very important Customer’s loyalty is the target of company’s strategy So knowing the requirements and setting up the strategies to get the customer’s trust are key factors to build their loyalty There are many factors that attract customers, such as the suitable price, service quality, employee attitude or company’s location… Based on what customers need, SAFI Company gives suitable strategies to satisfy each kind of customer in the best way SAFI should identify the most important factors in order So they could give effective marketing solutions to customers For example, the large companies would rather concern about service quality than the price of services They could accept the high price as long as the commodities are transported right time and safety On the contrary, the small companies usually interested in the low price accompany with good after-sales services If customers are impressed with SAFI’s operation, there is a big opportunity from them to use SAFI’s services continuously In addition, SAFI also should give more emphasis to contract management as a way to show SAFI’s attention to customers Through controlling volume of transported commodities, SAFI could forecast level of frequency using services regularly of customers Marketing department should give suitable promotion to attract spot buy customers into strategic customers It is moreover important to have long-term contract to keep customers For example, in 2011, Mitsuba (one of regular customer of SAFI) authorized to SAFI completing import procedures for - containers every month However, in the first months of 2012, they just order – containers per month In this case, SAFI should try to find out the reasons why the number of transported container decreased Mitsuba may have troubles about orders with foreign partners or 78 even they are collaborating with another Logistics Company Due to understanding business operation of customer as well as the problems they met, SAFI could propose special treatments for Mitsuba (such as preferential price…) This makes customer feel that SAFI always focuses on not only providing services but also on contracting mutual business partnerships 5.3.3 Solutions for Service Quality The establishment of Customer Service Section is really necessary The function of this section are answering queries of customers, consulting services and contacting other departments to find out solutions for problems quickly The members of Customer Service Section often contact to customer directly through communication means (by email, phone or meeting…) To make sure that these employees recognize the true value of each customer and have a thoughtful attitude with customer, SAFI should enhance giving short training courses about communication skills (such as sound behaviors in treating customers, how to keep calm before anger of customers or ways to assess customer’s emotion…) for whole staffs of company The behaviors of this section effect to level of using services of customers directly In addition SAFI should set up standard job requirement on which they base to evaluate service performance of employees A timeline which specify time to complete customs declaration, time to receive goods and time to deliver goods to customers… could help SAFI manage performance of forwarding process It is not only useful to avoid getting behindhand in work but also easy to recognize stage that face problems to give solutions timely It is also the measurement to reward the efforts or give punishment for the late working settlement of employees Besides, SAFI should arrange small surveys about satisfy level of customers with services of company This not only helps SAFI to adjust the shortcomings but also makes customers feel that they are given thoughtful care SAFI could send the questionnaires to office of current customers or potential customers The results of surveys show things customers need (such as quality of services, time to finish transport process or level of service’s fees…), things make them feel uncomfortable (such as messy office of company or no near parking place…) or their expectations… Due to opinions of customers, SAFI could complete their business operation SAFI should focus on increasing quality of services, promoting warehousing systems and consulting the packing services 79 5.4 Recommendations for the Government These urgent issues should be concerned and solve thoroughly The Government need try their best to find out the suitable solutions 5.4.1 Upgrading the infrastructure of Logistics Industry Before the current situation of our Logistics Industry, the Government should give solutions to upgrade the infrastructure, such as: repair and innovate the transportation system (road, rail, seaway, airway…), build the specialized container wharfs, develop maritime operation or mechanize the loading and unloading equipments… The improvement of infrastructure could ensure the safety in transporting process as well as increase clearance ability of ports 5.4.2 Increasing the national competitiveness in the international Forwarding market A complete Logistics System should be studied and set up by the experts The Government also should establish an official Central Committee led by Governmental authorities to manage the forwarding operation, unify the unconnected activities and assist the Logistics companies This is also the place where Logistics Enterprises can meet and discuss about Logistics problem to give feedback to Government An identify Logistics Service Chain and corporation of enterprises will enhance competitive ability of our country in over the world 5.4.3 Giving strategic policies to develop Human Resources The Government should give suitable policies to develop the human resources To meet the current demand of transportation, the labor forces must be professional, trained and have practical experience The Government could encourage the companies to create promotion and creative working environment to enhance the enthusiasm of the employees With the trained students have knowledge but lack of experience, the Government could affect on the education method, such as require increasing the practical courses of time of internship for students… Besides, organizing the seminars to exchange views on Logistics field between countries to enhance the cooperation and trading transactions could be considered 5.4.4 Completing the Legal System and improving the administrative procedures The Government should try their best to complete the legal system by adjusting the rules on investment law, trading law or the regulations about insurance, tax, transportation… This creates premises to promote international Logistics activities 80 Besides, improving the administrative procedure is also important The procedures which are not necessary should be rejected The process to complete delivery procedure should be instructed clearly to avoid the mistakes as well as save cost and time for enterprises In addition, The Government also considers setting up Customs Inspection Institute that supervises the operation of Customs Department to oppose the bureaucracy or corrupt behavior… 5.4.5 Giving solutions to limit the impacts of inflation In 2011, the ration of inflation in Viet Nam is 18.58%, increased 6.83% in comparing with 2010 (11.75%) Inflation caused negative impacts to operation of companies Many enterprises operate without benefit, or even became bankrupt The Government need try their best to solve this problem The first thing they must is cutting down the spending of national budget and implementing the tight monetary policy Besides the efforts to ensure balance between supply and demand of goods, between volume of imports and exports, develop production in industry and agriculture as well as keep price under the control of Government are necessary 81 CONCLUSION Nowadays, Viet Nam is developing in the process of integration into international economy This is a great opportunity to develop all out industries, including Logistics Industry The enterprises are supported to promote their ability by the favorable policies of the Government Besides, the forwarding services market is growing quickly, specially the Sea Freight Forwarding is assessed as a potential area and keeps an important role in trade activities It not only promotes the international economy but also creates long-term relationships between countries through enhancing barter transactions However, the current inadequacies in the management system, the problems in infrastructure conditions and negative impacts of inflation has limited the potential development of this industry In addition, the acute competition and weakness of serving ability has made enterprises, include SAFI must face with many difficulties and challenges SAFI Company had long-term operation and gained many advantages about reputation, financial situation, infrastructure and experience in forwarding activities… However, the limitations in human resources policies, marketing strategies and customer services still exist in the company It is necessary to make essential adjustment in restructuring organization, increasing quality of services to satisfy the customers and carrying out the important marketing strategy efficiently to promote SAFI’s image to the potential customers With the continuous efforts, SAFI is hoped to become one of top companies not only in Viet Nam but also in the world I would like to acknowledge the advices of all SAFI’ staffs and the whole-hearted instruction of Miss Pham Thi Ngoc Bich, my lecturer Due to their help, I could finish my Thesis completely However, because of the limitation in individual knowledge as well as the limited time, some mistakes could occur in the Thesis I hope to get your opinions to make this Thesis perfect Thank you 82 REFERENCES Duong Huu Hanh - Practical Guide to import-export business – Statistic Publisher Pham Manh Hien – Forwarding and Insurance services in foreign trade - Statistic Publisher Andersson, D (1997) Third Party Logistics - Outsourcing Logistics in Partnership Ph.D Thesis, Linkoping Studies in Management and Economics, Disertation No 34, Linkoping University Online resources:  Logistics and opportunities to develop Logistics Industry in Viet Nam, available at: http://www1.vinamarine.gov.vn/MT/Detail.aspx?id=898d679b-b9e2-4efd-a053c0aa879b8c68&CatID=127&NextTime=02/02/2012%2010:54&PubID=125  Advantages of using Freight Forwarding, available at: http://www.helium.com/items/1757403-advantages-of-using-freight-forwarders  Brussels Protocol 1979 (SDR Amendments), available at: http://www.oecd.org/document/0/0,3746,en_2649_34367_1866246_1_1_1_1,00.html  General information about SAFI Company, available at: http://www.safi.com.vn/  Hague-Visby Rules, available at: http://en.wikipedia.org/wiki/Hague-Visby_Rules  Incoterms, available at: http://logistics.about.com/od/legalandgovernment/a/Incoterms.htm  Shareholders' General Meeting, available at: http://www.edp.pt/en/aedp/governosocietario/orgaosgovernosocietario/AssembleiaGeral /Pages/AssembleiaGeral.aspx  Supervisory Board, available at: http://www.eurofound.europa.eu/emire/NETHERLANDS/SUPERVISORYBOARD-NL.htm  Uniform Customs and Practice for Documentary Credits, available at: http://en.wikipedia.org/wiki/Uniform_Customs_and_Practice_for_Documentary_Credits ... Performance of Freight Forwarding 20 Chapter 3: Current operation and business result of SAFI Company 21 3.1 History and development of SAFI Company 21 3.2 Mission and function of SAFI Company. .. to increase the effectiveness of Import Sea Freight Forwarding Operation 1.3 Research scope The scope of this research is to review existing situation of Freight Forwarding services at SAFI Company. .. weaknesses of the process to assess the forwarding performance at SAFI Company Chapter 5: Recommendations to increase effectiveness of Import Sea Freight Forwarding Operation at SAFI Company From SWOT