Reason for choosing topic
In today's era of global economic integration, promoting foreign trade activities, including international transactions and the import and export of goods, is essential The logistics industry plays a crucial role in facilitating these import and export activities, driving the growth of freight forwarding and logistics companies These companies serve as vital links between import-export enterprises, enhancing competition among businesses and supporting the overall development of international trade.
Bach Viet Transport Company Limited, with 16 years of experience in sea freight forwarding, is establishing its reputation and service quality to meet customer needs effectively As a leading transportation company in Vietnam, it plays a vital role in enhancing the country's foreign trade However, the company faces challenges, including an unfavorable customs clearance process that results in delays and issues with lost or damaged goods To address these challenges, the thesis topic "Improving Sea Freight Service for Import and Export at Bach Viet Transport Co., Ltd" has been selected.
Purpose and tasks of the research topic
• Systematize the theoretical basis of freight forwarding services for import and export by sea
• Find out the business situation of freight forwarding by sea at Bach Viet Co., Ltd
• Evaluate the operation situation at the company, identify the areas that are achieved, the areas that are still limited
• Offering solutions to develop import and export freight forwarding services by sea at Bach Viet Co., Ltd h
Subjects and scope of the research
Vietnam's freight forwarding services for sea import and export face significant challenges, particularly at Bach Viet Transport Co., Ltd These issues hinder efficiency and customer satisfaction To enhance the company's forwarding services, it is essential to identify and implement effective solutions that address these problems, ultimately fostering growth and competitiveness in the market.
- About space: at Bach Viet Transport Co., Ltd
- About time: learn about import and export goods forwarding by sea at Bach Viet Co., Ltd in the period of 2018 - 2020.
Research Methods
- Data processing method: the thesis primarily employs statistical methods, analyzing data after it has been synthesized from information provided by company employees, as well as previous studies
- Qualitative method: case study (analyzing the current situation at a logistics service company), face-to-face meetings with employees from other departments to extract information relevant to the research content
- Comparative method: a method of comparing quantified economic indicators and phenomena with similar content and properties in order to identify trends and volatility levels of indicators.
Thesis structure
In addition to the introduction and conclusion, the main content of the graduation thesis is divided into 3 chapters:
Chapter 1: Theoretical basis of import and export goods forwarding activities
Chapter 2: Actual situation of freight forwarding by sea at Bach Viet Transport Co., Ltd in the period of 2018-2020 h
Chapter 3: Solutions to promote freight forwarding by sea at Bach Viet Transport Co., Ltd until 2030 h
THEORETICAL BASIS OF IMPORT AND EXPORT GOOD
Forwarding of import and export goods by sea
1.2.1 Legal basis of principles of import and export goods forwarding at seaports
The forwarding of import and export goods must adhere to legal frameworks established by both international and Vietnamese laws, including conventions on bills of lading and international sales contracts, such as the 1980 Vienna Convention on International Trade Additionally, compliance with Vietnamese legal documents regarding freight forwarding, as well as new contract types and letters of credit, is essential to protect the interests of importers and exporters.
13 export goods owners Example: Law, code, decree, ( Maritime Code 1990, Commercial Law 2005)
Current documents stipulate general principles in freight forwarding
The port manages the loading, unloading, delivery, and storage of import and export goods based on a contractual agreement with the goods owner or their appointed representative, typically a freight forwarder.
Goods not stored at the port can be directly delivered and received by the owner or entrusted party with the ship They simply need to coordinate with the port regarding the loading and unloading locations and cover the associated loading, unloading, and any additional incurred costs.
The loading and unloading of goods within the port shall be organized by the port
If the goods owner brings vehicles and workers into the port for loading and unloading, the goods owner must negotiate with the port and pay relevant fees, if any
When entrusted to receive goods from the ship, the receiving port by any method must deliver the goods by that method
A freight forwarder is required to provide valid documentation that verifies their entitlement to receive the goods, ensuring that the quantity of goods matches what is specified in the documents It is important to note that the port holds no liability for the goods once they have departed from the port.
The delivery is carried out on the basis of entrustment of the goods owner, that is, the goods owner entrusts the work to do it
In addition, there are basic rules such as delivery must ensure the loading and unloading norms of the port, goods through the port must have full symbols
1.2.2 Duties of agencies participating in freight forwarding
The port enters into a contract with the goods owner for loading, unloading, delivery, preservation, and storage of goods, which can be either a consignment contract for forwarding or a lease contract where the goods owner hires the port for these services Additionally, the port is responsible for delivering export goods to the ship and receiving imported goods from the ship, acting on behalf of the import-export goods owners They also maintain accurate accounts with the ship regarding the delivery and receipt of goods and prepare necessary documentation to safeguard the interests of the goods owners.
The port is responsible for loading, unloading, transportation, preservation, and storage within its area They are liable for any loss of goods that occurs during these processes If goods stored in the port's warehouse are damaged or lost, the port must provide compensation, provided there is valid documentation and they cannot prove their lack of fault However, the port is not liable for goods once they have left the warehouse, for goods with intact packaging, or for damage resulting from incorrect or unidentified product codes.
1.2.2.2 Duties of import and export goods cargo owners
Cargo owners must sign an entrustment contract with the port when their goods pass through it, ensuring proper delivery and receipt In cases where goods do not pass through the port, a separate contract for the delivery of import and export goods is necessary For goods passing through the port, cargo owners are required to enter into agreements for loading, unloading, transportation, preservation, and storage Additionally, they must provide the port with essential information about the cargo and vessels, along with necessary documentation for the delivery process For export goods, required documents include a cargo manifest, created by the shipping agent and submitted 24 hours prior to the ship's arrival, and a cargo plan prepared by the first mate, which must be provided 8 hours before loading For imports, essential documents include a commodity manifest and a queuing chart.
To ensure smooth shipping operations, it is essential to submit the hatch list and sea waybill for consignment to the port of shipment at least 24 hours before the vessel reaches the pilot position Following this, the cargo owner must monitor the delivery process to address any issues that may arise, while also preparing necessary documentation for the delivery and receipt of goods This documentation serves as a foundation for any complaints to relevant parties and for the payment of port charges.
Customs authorities are responsible for overseeing customs procedures and conducting inspections of ships and imported and exported goods They ensure compliance with state regulations regarding import and export activities, including the collection of export and import taxes Additionally, customs take proactive measures to detect, prevent, investigate, and address smuggling, commercial fraud, and the illegal transportation of goods and currency through seaports.
1.2.3 Process of forwarding of exported goods
1.2.3.1 For goods that do not have to be stored at the port
Export goods can be transported directly from the owner's or trustee's private warehouses to the port, bypassing the need for storage in port warehouses This process involves two key steps: first, the goods owner or trustee transports the goods to the port using their own means; second, they deliver the goods directly to the ship for export.
• Deliver goods to the port
• Delivery of goods to the ship
• Port of delivery for ships
Exporting and delivering goods to ships involves a series of 16 essential procedures Initially, exporters must register with the port regarding the location and wharf for loading and unloading They then complete customs procedures and, if necessary, apply for hygiene and quarantine certificates Following this, transportation and loading of goods onto the vessel are organized The cargo owner or trustee contacts the captain for the stowage chart, while port workers oversee the loading process, ensuring that all goods are recorded on the tally sheet The ship's mate issues a receipt that documents the quantity and condition of the loaded goods, which serves as the basis for the bill of lading Exporters provide detailed information to the carrier for the bill of lading issuance, which must be signed and stamped Additionally, they prepare payment documents as stipulated in the contract or letter of credit, notify the consignee of the delivery, purchase insurance for the goods if required, and calculate any penalties for expedited loading and unloading.
1.2.3.2 For goods stored at the port
Goods must pass through the port before being delivered to the ship, following a three-step delivery sequence Step 1 involves delivering the goods to the port, where the cargo owner or their representative signs a contract for storage and preservation The owner provides essential documents, including shipping instructions, a cargo list, and a shipping order, before the goods are stored in the port's warehouse or yard Step 2 focuses on the delivery process to the ship, which requires the cargo owner to complete necessary export procedures such as customs clearance and quarantine, notify the port of the ship's arrival, and submit a loading chart The goods are then transported from the warehouse to the port, and the loading schedule is organized Port workers oversee the loading of goods onto the ship, which occurs under the supervision of a customs representative, ensuring compliance throughout the delivery process.
At the end of each day, the officer is required to document the quantity of goods delivered in the Tally Report, and upon loading a ship, this information must be included in the final report A designated staff member on the ship counts and records the delivery on the Tally Sheet, and additional tallying personnel may be hired from specialized companies For each delivery, the port must obtain the Mate's Receipt to create a corresponding bill of lading The final step involves preparing payment vouchers, where the forwarder must compile the necessary documents based on the purchase and sale contract and the Letter of Credit (L/C) for submission to the bank It is crucial that payment documents align with the L/C requirements and are presented within its validity period Additionally, the cargo owner must notify the buyer about the delivery and arrange for insurance for the goods if needed.
For Full Container Load (FCL) shipping, the shipper or trustee must negotiate with the shipping line to obtain a container and agree on pricing Once an agreement is reached, the shipping company issues a delivery order for the container The owner retrieves the empty container and arranges for customs, inspection, and quarantine representatives to oversee the packing process After sealing the container, the owner must deliver it to the designated container yard within the specified time, usually eight hours before loading, to receive a transport receipt Once the container is loaded onto the ship, this receipt is exchanged for the bill of lading at the ship's hangar.
When dealing with Less than Container Load (LCL) shipments, owners collaborate with shipping lines or their agents to provide essential export information Once the shipment is accepted, both parties agree on the delivery date, time, and location The owner or freight forwarder then delivers the goods to the carrier at the designated Container Freight Station (CFS) or Inland Container Depot (ICD) Additionally, the goods owners arrange for a customs representative to inspect and supervise the packing process.
Criteria to evaluate the results of business activities of import and export freight
1.3.1 Criteria of revenue, profit – growth rate of revenue and profit
Revenue is defined by the Vietnamese Accounting Standards System No 14 as the total economic benefits received by an enterprise during an accounting period, stemming from its regular business and production activities, which contribute to equity growth In simpler terms, revenue refers to the income generated from financial, internal, or sales activities By analyzing revenue fluctuations, companies can assess their business efficiency.
Profit represents the difference between a business's revenue and its production costs, serving as the ultimate financial outcome of its activities It is crucial for assessing the economic efficiency of a company, with higher operating profits indicating greater profitability and effectiveness in business operations.
1.3.2 Criteria for profitability ratios of revenue , asset and equity
1.3.2.1 Criteria for profitability ratio of revenue
Return on Sales (ROS) measures the profit margin on net sales, indicating the profit generated per dollar of sales and services provided It represents the percentage of profit collected by the business ROS is calculated by dividing the profit after tax by the total sales for the period; a higher ratio signifies better financial performance.
The higher the ROS ratio, the better the business is, showing that the company controls costs and generates more profits and vice versa
1.3.2.2 Criteria to return on equity
ROE indicator shows the amount of profit after tax that a business earns after investing 100 dong of equity in production and business activities
A high return on equity indicates effective management and utilization of investment capital, reflecting strong business efficiency Conversely, a low return on equity suggests poor profitability from equity and indicates subpar business performance.
1.3.2.3 Criteria to return on asset
The return on fixed assets is calculated by dividing the after-tax profit of a business by its average total fixed assets for the same period This metric indicates the amount of after-tax profit generated by every 100 VND invested in fixed assets, providing insight into the efficiency of the enterprise's production and business investments during that timeframe.
A higher indicator reflects greater profitability and efficiency in the management and utilization of an enterprise's fixed assets during production and business activities This metric is crucial for evaluating an enterprise's resource management capabilities, enabling investors to analyze and make informed decisions regarding effective investment opportunities.
In any service industry, meeting the needs of customers is always the top priority of companies And customer service in logistics is also a top concern in the logistics h
Customer loyalty and the frequency of using logistics services are critical indicators of success in customer care, directly impacting business performance Four key factors influence logistics success in customer service: (i) Time is paramount, as quicker delivery enhances customer satisfaction and boosts the company's reputation (ii) Reliability is essential; a trustworthy brand fosters customer confidence and reduces concerns about fraud (iii) Service price matters significantly; customers prefer affordable services that maintain or exceed quality standards (iv) Flexibility is crucial, as customers increasingly seek products tailored to their specific needs Customizing offerings to address customer problems can significantly enhance satisfaction and loyalty.
Ensuring the safety of commodities is a primary objective for companies in the transportation sector, serving as a key criterion for assessing their forwarding activities When customers entrust their goods to forwarding companies for import or export, these companies must prioritize the protection of the goods throughout the transportation process Despite competitive pricing, unprofessional handling of goods can lead to damage or loss, ultimately harming the company's reputation and resulting in a loss of customer trust and business.
1.3.5 Level of development of the company
In Vietnam, forwarding companies operate at four distinct levels, with larger firms exhibiting stronger capabilities and more stringent processes Level 1 consists of traditional forwarding agents who provide basic services requested by customers, such as road transportation, customs procedures, documentation, storage, and delivery At Level 2, forwarding agents take on the role of consolidators and are authorized to issue House Bills of Lading.
These companies operate by utilizing exclusive agents at key ports to manage the withdrawal and packing of import and export goods At level 3, the forwarding agent functions as an intermodal carrier, collaborating with foreign companies at the discharge port through sub-contracts to ensure seamless transportation of goods to their final destination, in accordance with the bill of lading.
The evolution of forwarding agents into logistics service providers is a natural outcome of industry integration Many forwarding companies that have not yet transitioned into logistics firms are forming partnerships with foreign companies to enhance their capabilities and strengthen their market position.
Service quality
Quality, a concept deeply rooted in human history, varies in meaning based on the context of its use Different cultures and individuals possess unique interpretations of quality and quality assurance While the understanding of quality may evolve, it is not entirely abstract According to the International Organization for Standardization (ISO) in its draft DIS 9000:2000, quality is defined as "the ability of a set of characteristics of a product, system, or process to satisfy the requirements of customers and interested parties."
Quality is determined by how well a product meets consumer needs; if a product fails to satisfy demand, it is deemed low quality, regardless of its advanced manufacturing technology This insight is crucial for quality-focused businesses in shaping their policies and strategies Since consumer needs are constantly changing, the perception of quality also varies over time, location, and usage conditions Evaluating quality requires an understanding of these dynamic factors.
4 TS Nguyễn Đình Phan (2017), “Giáo trình quản trị chất lượng” , NXB Đại học Kinh tế Quốc dân. h
To assess the quality of an object, it's essential to evaluate all characteristics that fulfill specific needs, which extend beyond customer demands to include stakeholder interests, such as legal obligations and community requirements Quality encompasses not only products and goods but also systems and processes, highlighting its broader application in various contexts.
Service quality is defined by customer perceptions and is influenced by individual needs According to Parasuraman, Zeithaml, and Berry (1985), service quality occurs when customer perceptions align with their expectations They emphasize that customer expectations represent their desires, which suppliers are obligated to meet Additionally, Crolin and Tailor (1992) suggest that customer satisfaction should be evaluated in the short term, while service quality should be assessed based on long-term customer attitudes.
Commonly used service quality assessment model
Service quality and customer satisfaction models view service as a combination of both explicit and implicit attributes The most widely recognized scale for assessing service quality is SERVQUAL, developed by Zeithaml, Parasuraman, and Berry This model is commonly referred to by its 5 RATER criteria: Reliability, Assurance, Tangibles, Empathy, and Responsiveness.
Reliability is the ability to perform the promised service reliably and accurately
To fulfill customer expectations, it is essential to deliver on promises, demonstrate genuine care, and effectively resolve issues Providing the correct service from the outset and clearly communicating service timelines are crucial for customer satisfaction.
Assurance is the knowledge and conduct of service personnel as well as their ability to gain trust and credibility It is the trust and confidence of the customer towards h
29 the employee, the peace of mind of the customer when dealing with the employee, the courtesy and courtesy of the employee, the qualification and knowledge of the employee
Tangibles refer to the physical aspects of a service, including the modern equipment, the appealing environment, and the professional appearance of the staff Well-equipped and neatly presented employees contribute to a positive customer experience, while the overall physical condition of the business aligns with the services offered Additionally, convenient operating hours enhance customer satisfaction and accessibility.
Empathy in business involves providing personalized care and attention to each customer, prioritizing their interests above all else Companies recognize the importance of addressing individual customer needs, ensuring that employees are trained to understand and cater to these unique requirements.
Responsiveness refers to the readiness to assist customers by delivering prompt and efficient service This includes providing timely responses, demonstrating a staff's eagerness to help, and swiftly addressing customer inquiries.
Factors affecting freight forwarding services by sea
1.6.1 The factors inside the business
1.6.1.1 Human resources of the enterprise
In business, people are the crucial factor that determines an enterprise's success or failure While some believe that advancements in science and technology have shifted the focus to machinery and equipment, it is essential to recognize that these innovations are ultimately created by humans Without the input and expertise of individuals, modern technologies and sophisticated machinery would not exist, highlighting the importance of human resources in aligning with an organization’s structure and technical capabilities.
The advancement of science and technology drives the growth of the knowledge economy, where the essence of knowledge is reflected in scientific and technical products As machinery becomes more sophisticated, it highlights the increasing demand for a skilled workforce.
Businesses recognize the undeniable impact of knowledgeable and skilled professionals on enhancing performance, making the training and development of human resources a top priority.
For a company to operate effectively, it requires sufficient capital to support its business activities A company with ample financial resources has greater opportunities to enhance its operations Additionally, the business capital of a forwarding company directly influences its forwarding processes.
A forwarding company is required to pre-finance various services such as goods handling, customs clearance, and obtaining the Bill of Lading (B/L) before receiving payment from customers The company only issues a receipt for payment after completing these processes.
When a company relies on customer advances, its financial flexibility is compromised, particularly if payments are delayed Limited cash flow can hinder a forwarding company's ability to manage multiple contracts simultaneously, potentially leading to capital shortages Conversely, companies with ample capital and high liquidity rarely face such financial constraints.
The technical infrastructure is crucial for a business's competitive advantage, as it enhances profitability through its assets, including offices, equipment, factories, and warehouses Regardless of their size, these resources significantly influence business operations and enable employees to generate revenue Additionally, the effective utilization of these facilities directly affects operational costs, highlighting the importance of maximizing their capacity for overall business efficiency.
The performance of the forwarding service business is significantly influenced by the economy, with a stable global economy fostering balanced business activities and a conducive environment for growth Conversely, economic instability can lead to stagnation in business operations In Vietnam, economic stability enhances operational efficiency for businesses, while factors such as inflation and interest rates play a crucial role in shaping business activities A low inflation rate and stable interest rates contribute to a low-risk environment, enabling businesses to thrive; however, fluctuations in these rates can adversely affect performance Additionally, the rising demand for fuel, particularly gasoline, poses challenges in sea transport, as fuel prices directly impact freight rates, a critical concern for the industry.
The freight forwarding industry in Vietnam is significantly shaped by its natural environment, particularly its extensive coastline that enhances sea transportation opportunities However, the inherent challenges of maritime logistics, including lengthy transit times and various transportation risks, necessitate businesses to invest in cargo insurance to safeguard their goods against potential natural disasters at sea.
Competition is a crucial driving force for development and a key factor in enhancing the market economy Businesses entering a market with established products or services must thoroughly understand both existing and potential competitors Success is determined by the ability to offer superior processes and features that meet consumer needs This competitive landscape presents both opportunities and challenges, compelling businesses to innovate and advance beyond their rivals Consequently, it is essential for companies to analyze internal and external factors to formulate effective competitive strategies, ultimately improving their efficiency and market competitiveness.
Shipping lines play a crucial role in influencing the forwarding activities of businesses, with factors such as the number of shipping lines, frequency of trips, transit times, reputation, and freight rates all impacting operations To develop an effective pricing strategy, companies must understand the transportation costs associated with each shipping line Additionally, storage fees, the availability of warehouses, and the number of days goods are held free of charge significantly affect delivery efficiency Ultimately, the cost of delivery is closely tied to the effectiveness of a business's forwarding processes.
Trade agreements play a crucial role in freight forwarding activities by fostering institutional reform and enhancing the competitiveness of goods and businesses They provide access to export markets with preferential tariffs, facilitate free trade, and reduce input costs through technology transfer and cheaper imports under favorable conditions.
SITUATION OF TRANSPORTATION BY SEA AT BACH VIET
General introduction at Bach Viet Transport Co., Ltd
2.1.1 Overview about at Bach Viet Transport Co., Ltd
- Company name: Bach Viet Transport Company Limited
- Short name: BACH VIET GLOBAL CO., LTD
Head office in Hanoi: P405 - Kham Thien Building - 195 Kham Thien, Dong
Branch in HCM: 3rd floor - NGC Building - 42 / 37-38 Hoang Dieu Street –
Branch in Da Nang: P4.2.7 - Danabook Building - 76-78 Bach Dang - Hai Chau
Office in Hai Phong: P426- Thanh Dat 1 Building, 3 Le Thanh Tong, Ngo Quyen,
Office in Quy Nhon: 3rd Floor - Viconship Building - 83 Hai Ba Trung - Quy
- Website: http://bachvietshipping.vn/web/home.aspx
After more than 16 years of establishment and growth, Bach Viet has emerged as a leading freight forwarding company, playing a crucial role in the sustainable development of Vietnam's transportation sector The company collaborates with numerous prominent domestic and international partners, delivering high-quality services to businesses across the region.
Figure 2.1: Logo of Bach Viet Transport Company Limited
Bach Viet, guided by the motto "Develop with customer," is dedicated to delivering high-quality, reputable services that adhere to both domestic and international regulations The company aims to be the top trusted partner in international freight forwarding Furthermore, Bach Viet prioritizes investment in innovative working methods and enhancing human resource quality to effectively address the growing and diverse market demands.
Bach Viet Transport Company Limited specializes in comprehensive freight forwarding services by sea, offering various functions and business lines Their sea freight forwarding service facilitates the export and import of goods from Vietnam globally, including options like FCL cargo and door-to-door delivery Additionally, they provide consolidation services, collecting retail goods weekly from various provinces for export, particularly LCL goods, to major ports such as Shanghai, Shenzhen, and Hamburg Furthermore, the company also offers air freight forwarding services, ensuring efficient transport from the owner's warehouse to the airport or the recipient's location, covering multiple delivery options like airport-to-airport and door-to-door.
Inland transportation services play a crucial role in ensuring efficient and timely delivery of goods across various domestic channels, including road transport with container trailers and trucks ranging from 1.25 to 10 tons, as well as inland waterways Additionally, customs handling is an essential component of these services, ensuring compliance and smooth logistics operations.
Our company offers 35 comprehensive customs services tailored to meet all regulatory requirements for goods Key services include customs clearance, price consultation, entrusted import/export assistance, tax refunds, fumigation, quarantine, inspection, certification of origin procedures, and expert consulting on customs processes.
Founded in 2005 with just one member, Bach Viet has grown to employ 225 staff across branches in Hanoi, Hai Phong, Ho Chi Minh City, Da Nang, and Quy Nhon Within its first year, the company established a representative office in Hai Phong to facilitate delivery orders and assist with import-export procedures, followed by another office in Ho Chi Minh City to tap into this significant market By 2010, after achieving success in the North, Bach Viet expanded its presence in the South with a branch in Ho Chi Minh City, enhancing its competitiveness among local freight forwarding companies The company has excelled in both refrigerated and dry container services, leading to further expansion into Da Nang, Central Vietnam Today, Bach Viet demonstrates its commitment to growth across all regions of Vietnam and beyond, with revenue nearing impressive figures.
100 billion VND With strong development in the three regions of North+Central+South Vietnam, BACH VIET has truly become one of the largest companies in Vietnam In
2015, Bach Viet Shipping opened BACH VIET GLOBAL company to create BACH
VIET GROUP plans to expand its investments abroad, anticipating that in the next decade, Vietnamese companies will adopt overseas investments as routinely as their Korean and Japanese counterparts do in Vietnam To facilitate this, the company will leverage the BACH VIET GLOBAL brand to explore foreign markets and pursue international investments in the coming years In 2016, VIET GROUP achieved significant revenue of 120 billion VND from both domestic and international transportation services, demonstrating its competitive success in a declining freight forwarding industry characterized by oversupply.
Bach Viet Group has consistently excelled in the freight forwarding industry, thanks to its highly professional and well-trained sales team In mid-2016, the company expanded its operations by opening a new office in Quy Nhon, Vietnam, to better serve three mountainous provinces and the regions from Khanh Hoa to Phu Yen The following year, Bach Viet became a member of the prestigious World Cargo Association (WCA), enhancing its competitiveness and market position both domestically and internationally This membership laid the groundwork for the company's future growth and international investments In 2017, Bach Viet achieved sales of VND 150 billion, with ambitious goals to expand to 240 employees and exceed VND 1,000 billion in sales by 2025 Despite the challenges posed by the COVID-19 pandemic, the company recorded its highest revenue ever in 2020, nearly VND 250 billion, while also increasing its workforce to support future growth By 2030, Bach Viet aims to become Vietnam's largest freight forwarder, targeting a revenue of VND 1,000 billion.
(Source: Finance - Accounting Department at Bach Viet Transport Company Limited)
Firgue 2.2:Organizational structure at Bach Viet Transport Co., Ltd
Figure 2.2 illustrates that specialization is a key benefit of the organizational model, enhancing the control and leadership of the Board of Directors Given the small to medium size of the company, this streamlined structure fosters effective interdepartmental communication and addresses the company's specific needs Moreover, this model minimizes waste in management and oversight, contributing to overall efficiency.
2.1.4.1 Role of Board of manager
The Board of Directors oversees the company's business operations and ensures compliance with regulatory authorities Directors possess the authority to manage departmental functions, including direct oversight of the sales department.
The management is responsible for assisting the director in managing all of the company's activities, as well as managing all departments within the company
Financial accountant Human resources Business department
The Sales Department is the most dynamic segment of the company, playing a crucial role in business planning It focuses on nurturing relationships with existing customers while actively seeking new clients Additionally, the department is responsible for negotiating prices and developing strategic relationships that align with the company's goals.
The Accounting Department and Human Resources are responsible for managing financial records, processing invoices, and handling payments to shipping lines and airlines They track revenue and expenditures, ensure timely debt collection from customers to maintain business capital, and organize employee activities Additionally, they establish regulations for rewarding and disciplining staff, oversee recruitment processes, and manage company equipment effectively.
The Customer Service Department plays a crucial role in after-sales support by contacting customers to gather information about products and necessary documentation This team collaborates with international agents and shipping firms to provide updates on cargo status They are responsible for ensuring that all essential documents are managed effectively to facilitate smooth transportation services.
The Marketing Department is tasked with identifying agents for domestic transport services and customs in foreign countries, ensuring efficient door-to-door service for customers Its primary responsibilities include sourcing agents and shipping lines to deliver quality services, offering pricing and procedural information to sales staff based on customer requests, and fostering strong relationships with foreign agents to secure the most competitive market prices.
The Operations Department (Ops) is responsible for efficiently managing customs procedures for export, import, and re-export shipments This department ensures that there is always personnel on duty at ports or airports to promptly address any issues that may arise during the shipping process.
2.1.5 The company's business performance in the period 2018 – 2020
Table 2.1 Proportion of revenue by business form (from 2018 to 2020)
Figure 2.3: Revenue by business model of Bach Viet
The forwarding of import and export goods by sea at Bach Viet Transport Co., Ltd
2.2.1 The process of forwarding of goods imported by sea in the company
Before initiating goods delivery, Bach Viet Company establishes a service contract with customers Once the sales department provides a quote and the customer agrees to the service, both parties proceed to sign the contract For regular clients, long-term contracts are implemented, allowing customers to simply contact their previously assigned sales representative for any service needs.
Before a ship docks, the consignee or their agent must provide the forwarder with essential shipment details, including the vessel's name, nationality, and estimated arrival time at the discharge port The goods owner is required to deliver the original bill of lading and other important documents, such as the import license, commercial invoice, and foreign trade contract, to the forwarder The forwarder is responsible for planning the receipt of the goods and, if authorized, coordinating with the shipper for delivery to domestic recipients Upon the ship's arrival, the forwarder will issue a notice of arrival to the shipment owner, allowing them to prepare for pickup Additionally, the forwarder must conduct necessary inspections and quarantines of the goods.
When handling dangerous or special goods, the forwarder must collaborate with relevant parties, including port authorities, customs, and fire prevention services, to develop a comprehensive prevention plan The forwarder is responsible for the customs declaration of imported goods and, upon being entrusted by the shipper, will present the original or a copy of the bill of lading to the shipping line or its agent to obtain the delivery order Finally, the forwarder organizes the retrieval of goods from the ship and ensures their delivery to the owner, coordinating with the port to complete necessary documentation, such as the inspection report.
Get information before the ship arrives at port
Do the necessary procedures when the ship arrives at the port
Organization of receiving goods from ships and delivering goods
Please inspect and quarantine the goods (if necessary)
The arrangement of goods in the hold is managed by the port and the captain, with accounting records maintained on the ship A certificate is issued for any missing goods if the quantity received is less than that stated in the bill of lading After unloading, any damaged goods must be documented, and if there are suspicions of damage, a letter of resistance should be sent to the transporter within three days of unloading completion Upon receiving the delivery order, the forwarder is responsible for paying any applicable storage and unloading fees before retrieving the goods and completing customs procedures For full containers, they may be unloaded at a separate warehouse for a deposit or at the port The forwarder assists the goods owner in inspections and claims for compensation for damages, and ultimately settles the delivery costs with the shipper.
2.2.2 The process of forwarding of exported g by sea in the company
The initial stage involves the receipt of goods from the consignor (exporter), which is governed by an agreement between the company and the shipper detailing the method and location of delivery The shipper may choose to deliver the goods directly or utilize the company's domestic shipping service, with transportation occurring at a mutually agreed-upon location.
Receive goods from the shipper
Make a set of goods documents h
Receiving goods from the shipper involves strict requirements, as the forwarder assumes responsibility once the goods are accepted For full container shipments, the forwarder is relieved of liability, but for odd shipments, the company may need to recycle or repack the goods to suit shipping methods and routes Goods must conform to foreign trade contracts, and after receipt, the company is responsible for preserving them until delivery to the carrier The next step is hiring a freight carrier, with the forwarder often tasked to charter a vessel based on FOB or CIF terms Depending on the case, the consignor or consignee may entrust the forwarder with this responsibility For established routes, the forwarder contacts previously negotiated shipping companies to reserve space, while for new or expired routes, they seek competitive pricing from various shipping lines Forwarders benefit from preferential pricing due to their consistent cargo volume The final step involves organizing delivery on board; before the ship's arrival, the shipping line provides an estimated time of arrival (ETA) based on the route The forwarding staff must then apply for inspection and quarantine certificates, prepare customs declarations, and ensure smooth customs clearance for export.
To ensure a smooth export process, the forwarder must complete several essential tasks: pay any applicable export taxes, provide loading instructions to shipping lines, and prepare a Cargo List with five copies detailing the import-export company, importer, goods, symbols, quantity, and weight For containerized shipments, the forwarder must request an order for an empty container for packing and handle customs procedures, while for odd shipments, a House Bill of Lading (HB/L) must be issued Upon the ship's arrival at the port and receipt of the Notice of Readiness (NOR), the forwarder checks the ship's loading status and organizes transportation of goods to the port if necessary They create a cargo plan based on the manifest and must be present during loading to address any issues, ensuring the goods are loaded correctly to prevent damage or loss After loading, the forwarder obtains the mate's receipt (MR) for the bill of lading, ensuring it is clean and freight prepaid They compile necessary documents, including the commercial invoice and packing list, into a payment document set for the shipper, and may also arrange insurance for the goods while notifying the shipper of the ship's departure date.
Upon leaving the port, it is essential for the consignee to be notified and to cover necessary expenses, including loading and unloading fees, preservation, storage, and any applicable fines Ultimately, the forwarder will finalize the delivery costs with the shipper.
The company's main freight forwarding market is mainly:
- Northeast Asia: mainly China, Hong Kong
- European Regions: The EU (Germany)
Table 2.2: Sea freight forwarding market structure
Europe Asia Americas Other markets
( Source: Accounting - Human Resources Department, Bach Viet Transport Company
The forwarding markets highlighted consist of countries with significant seaports that facilitate ship access; however, this does not imply that companies overlook regions without seaports These companies offer towing services from ports to inland locations, allowing them to broaden their forwarding market and enhance delivery options to meet customer demands in today's global integration With a presence in nearly every continent, the company primarily focuses on routes from China, which consistently represents about 25% of its market, followed by Southeast Asia.
The company has extensive experience in the market, offering competitive sea freight rates and strong customer relationships, particularly for imported goods Southeast Asia presents a familiar landscape for Vietnam due to shared geographical, cultural, and political ties; however, the company has struggled to fully leverage this market due to limited goods volume and intense competition Additionally, Europe, Asia, and America host numerous large seaports that represent untapped potential for the company, which aims to expand its forwarding services to meet diverse customer needs and boost revenue.
As a forwarding company, we offer a diverse range of products and services, including machinery and equipment, construction materials, and consumer goods.
Table 2.3: Sea freight commodities structure
TOTAL (Rice, cassava chips, corn, cereals, bran )
(Wood, brick, stone, cement, interior decoration )
( Source: Accounting - Human Resources Department, Bach Viet Transport Company
The data reveals that construction materials constitute approximately one-third of the company's product offerings, highlighting their significance in overall sales Over the past three years, the company has secured numerous contracts for construction materials with complex delivery requirements, leading to increased revenue and a growing share of this category Additionally, Vietnam's strengths in exporting agricultural products are evident, as agricultural goods, minerals, and processed items make up a substantial portion of the product structure The company also demonstrates strong performance in other commodities, maintaining robust export and import activities.
Table 2.4: The company's volume of freight forwarding for import and export by sea
Total delivery volume whole company
(Source: Sales Department - Bach Viet Transport Co., Ltd.)
In the past three years, the company's freight forwarding output has steadily increased, peaking at nearly 500,000 tons in 2020, a 40% rise from 2018 Aiming for a milestone of 1,000 tons per year by 2030, the company demonstrates effective strategy and strong customer trust Notably, sea freight forwarding consistently represents a significant portion of total delivery volume, benefiting from the company's established strengths in shipping services Despite the challenges posed by the Covid-19 pandemic in late 2019 and early 2020, Bach Viet capitalized on opportunities and expanded its workforce, resulting in sustained delivery volume growth Furthermore, 2020 marked a year of increased customer retention, reflecting the company's commitment to exceptional customer service and reliability.
2.3 Business results of freight forwarding services by sea at Bach Viet Transport
Co., Ltd in the period of 2018 - 2020
2.3.1 Overview of business results of import and export freight forwarding services by sea in the period of 2018 - 2020 h
Freight forwarding by sea is currently the main service, contributing a large amount to the company's revenue
Table 2.5: Number of orders for freight forwarding services by sea at Bach Viet
Transport Co., Ltd in the period of 2018 -2020
1 Number of international sea freight forwarding service orders (order) 15280 18363 20186
2 Number of orders for inland sea freight forwarding service (order) 64 73 88
(Source: Sales Department - Bach Viet Transport Co., Ltd.)
The data reveals a consistent increase in orders over the years, rising from 15,280 in 2018 to 20,186 by the end of 2020, which represents an increase of approximately 4,906 orders Despite the challenging circumstances posed by the COVID-19 pandemic, which severely impacted many sculpture businesses in Vietnam, Bach Viet managed to sustain and even grow its order volume This resilience demonstrates Bach Viet's ability to seize golden opportunities and navigate risks effectively during the pandemic.
Bach Viet company's transportation service has seen a steady increase in customers over the years, particularly among those who have utilized its services for five years or more A significant portion of the company's revenue is derived from these loyal clients, who consistently ship goods each month Despite this strong foundation, Bach Viet remains committed to nurturing these relationships while actively seeking new customers to expand its client base.
Factors affecting freight forwarding activities at Bach Viet Transport Co., Ltd
Human resources play a crucial role in determining the success of any enterprise, as they are essential for generating both material and spiritual wealth for society At Bach Viet, the company's growth has led to an expansion of its employee network, enhancing both the quantity and quality of its workforce while also broadening its operational scale.
Table 2.11: Labor structure of Bach Viet company in 2020
(Source: Accounting - Human Resources Department, Bach Viet Transport Company
As of the end of 2020, Bach Viet Transport Co., Ltd employed 215 individuals, with a higher number of female employees, reflecting a common trend in the service industry aimed at enhancing customer engagement The majority of the workforce is concentrated in the business department, focusing on customer interactions and problem-solving The company prides itself on a highly qualified staff, with six times more employees holding university degrees compared to those with lower qualifications, underscoring a rigorous selection process essential for its 15 years of experience in the transportation market The labor force is predominantly young, with over 73% aged between 20 and 35, fostering enthusiasm and a willingness to learn, although this youthfulness may lead to challenges in handling complex customer issues due to limited experience Nevertheless, employees over 45 play a crucial role in the company's growth, contributing valuable insights and expertise.
The company boasts a team of 57 seasoned professionals with extensive industry partnerships, contributing significantly to its profitability Since 2018, the Board of Directors has prioritized human resource development by organizing internships, training courses, and seminars aimed at enhancing the skills of final-year university and college students in Hanoi This initiative not only improves the students' employability but also helps the company identify potential future employees Additionally, summer travel activities and team-building programs are conducted to further develop teamwork and skills within the office environment.
Bach Viet, a private company in Vietnam, primarily relies on loans for its capital Nevertheless, with a robust 15-year track record of growth and substantial annual profits, the company has established a solid financial foundation, enabling it to achieve self-sufficiency.
Table 2.12 - Capital of Bach Viet Transport Company Limited
1.Liabilities 135.714 64,36 216.812 63,43 195.364 55,65 214.544 48,54 a.Short- term debt 64.467 47,50 124.342 57,35 117.384 52,22 124.399 57,98 b.Long-term liabilities 71.247 52,50 92.470 42,64 77.980 47,78 90.145 42,01
(Source: Accounting - Human Resources Department, Bach Viet) h
Between 2017 and 2020, the company demonstrated a notable increase in equity, both in value and proportion, indicating its growing financial autonomy and funding capability Although the percentage increase was modest in 2018 and 2020, the overall trend remained upward By 2020, total capital reached 226 billion, representing 51.33% of the total capital, nearly doubling from 35.71% in 2016.
Between 2017 and 2020, the company's total liabilities steadily decreased, with proportions of 64.36%, 63.43%, 55.65%, and 48.54%, indicating effective utilization of business capital and profit growth Despite a significant increase in total capital—more than doubling by 2020—the changes in loan and equity proportions remained minimal, suggesting that the management of the company's receivables could be improved.
Bach Viet's headquarters is centrally located at 195 Kham Thien, Hanoi, providing convenient access for travel The office features an open workspace where all departments coexist, allowing for a collaborative atmosphere with personal desks, computers, and desk phones for each employee The management and staff share the same environment, with a glass-partitioned meeting room fostering a sense of unity and eliminating hierarchies The office is fully equipped with essential technology, including a fiber optic network, printers, fax machines, scanners, and photocopiers, all maintained for optimal efficiency Additionally, a dedicated dining area is available for employees, complete with microwaves, refrigerators, and catering services, promoting health and enhancing productivity.
The company offers a comprehensive range of equipment and services, ensuring stable air conditioning and machinery with prompt repairs by on-site technical staff, minimizing downtime and repair costs However, the diverse computer systems are managed by only one IT staff member, leading to slow response times and increased employee downtime due to technical issues This delay negatively impacts the company's performance and overall business results, despite having a fully equipped information exchange and processing system.
The economic development of Vietnam significantly influences Bach Viet's operations, particularly through the stability of the exchange rate Fluctuations in the exchange rate can impact the company's invoicing practices, as higher rates may allow for increased revenue from unpaid customers However, rising exchange rates also lead to higher costs for obtaining bills of lading and processing delivery orders with shipping lines Consequently, these exchange rate variations present both opportunities and challenges, necessitating that Bach Viet closely monitors exchange rate changes to effectively navigate their business environment.
Between 2018 and 2020, the global economy faced significant challenges that hindered import and export growth However, by the third quarter of 2020, signs of recovery emerged, driven by the positive effects of the Covid pandemic.
Despite the challenges posed by the COVID-19 pandemic, the logistics industry is poised for growth and profitability In the first nine months of 2020, the General Statistics Office reported a GDP increase of 2.12% compared to the same period in 2019, marking the lowest growth rate from 2011 to 2020 However, signs of financial recovery are emerging, indicating a positive outlook for the logistics sector moving forward.
Bach Viet has the potential to expand its customer base by capitalizing on the growing import and export volume of Vietnam's goods, particularly in light of the US-China trade war As the US imposes tariffs on Chinese imports, Vietnam stands to benefit by leveraging its export strengths, thereby increasing market share By seizing this opportunity, logistics companies like Bach Viet can enhance revenue and strengthen their competitive edge against both domestic and international rivals.
At the Vietnam Logistics Forum 2020, Minister Tran Tuan Anh emphasized that new-generation free trade agreements, including CPTPP, EVFTA, and RCEP, will significantly enhance institutional reform and boost the competitiveness of goods and businesses These agreements provide access to export markets with preferential tariffs, promote trade liberalization, and facilitate reduced input costs through technology transfer and cheaper imports under favorable conditions.
In 2020, Vietnam successfully navigated the dual challenge of combating the Covid-19 pandemic while leveraging opportunities from new-generation free trade agreements like CPTPP and EVFTA, leading to a swift economic recovery The country's macroeconomic stability was maintained, with controlled inflation, a secure financial and monetary balance, reduced interest rates, and a stable foreign exchange market The commitments to market openness in logistics services under these agreements align closely with Vietnam's WTO obligations and domestic policies Notably, these agreements enhance the logistics sector's growth prospects through commitments to open transport markets and increased demand for high-quality services, ultimately boosting market volume.
61 expansion, investment and service implementation service In both these aspects, the opportunities and challenges are quite large in the context of domestic logistics enterprises with low competitiveness
Vietnam is strategically positioned next to the East Sea, a vital trade corridor on the global maritime map Among the 39 active maritime routes worldwide, 29 are significant, with one major route traversing the East Sea and five additional related routes On average, ships transit through the East Sea 250-300 times daily, with over 50% of these vessels exceeding 5,000 DWT and approximately 15-20% weighing 30,000 DWT or more, highlighting its crucial role in global shipping traffic.
The criteria for evaluating the results of business activities of import and export
2.5.1 Revenue, profit and asset criteria h
Table 2.13 Some indicators related to business performance of Bach Viet Transport
(Source: Accounting - Human Resources Department, Bach Viet)
Between 2018 and 2020, Bach Viet demonstrated a significant improvement in its business performance, particularly reflected in its profit-to-sales ratio This ratio rose consistently from 10.941% in 2018 to 16.794% in 2020, indicating a positive trend in the company's profitability relative to its revenue.
In 2018, the company's profit-to-revenue ratio was 10.941%, meaning that for every 100 dong earned from business activities, it generated 10.941 dong in after-tax profit This ratio increased to 12.915 dong in 2019, reflecting significant growth in profitability By 2020, the company achieved its highest level of performance, underscoring a positive trend in financial results.
In 2019, the enterprise's after-tax profit dropped to 12.915% from 1.974% in 2018, indicating it earned only 12.915 dong for every 100 dong of revenue The Return on Equity (ROE) showed a positive trend, rising from 14.497% in 2018 to 16.81% in 2020, meaning that for every 100 dong of equity, the enterprise earned 16.810 dong in after-tax profit in 2020 Despite a slight decrease in 2019, where the ROE was 16.431%, the overall increase over the years reflects effective equity utilization Additionally, the Return on Assets (ROA) demonstrated significant growth, peaking at 20.987% in 2020, compared to just 11.302% in 2018, indicating improved efficiency in asset utilization The ROA increased consistently over three years, showcasing the company's strong performance and effective management of resources.
Service quality is evaluated both during and after contract execution Throughout the contract performance phase, document staff efficiently prepare the necessary paperwork for customer signatures and stamps Additionally, the delivery team ensures a swift delivery process while prioritizing the safety of goods, preventing any loss or damage.
Bach Viet offers affordable service prices and efficiently prepares documents for certificates of origin Their skilled staff ensures a smooth payment process for customers and partners, and promptly returns all documents upon contract completion.
Table 2 14: The proportion of quality goods delivered by Bach Viet
Despite successfully implementing the contract, Bach Viet lacks a robust customer appreciation program, offering gifts primarily during the Lunar New Year and other calendar holidays This indicates that while the company's service quality during contract execution is commendable, their post-contract customer service and gratitude initiatives are lacking.
2.5.3 Market share criteria of enterprises in the field of freight forwarding
The company's current market share in freight forwarding is relatively modest, representing approximately 8% of the overall market and around 6% in the sea freight sector While this share is not insignificant in terms of proportion and value, it poses a challenge for the company considering its overall development scale.
In the competitive landscape of sea freight forwarding in Vietnam, local companies face significant challenges from foreign firms and joint ventures, which leverage superior capital and technology to offer lower prices and better services This price sensitivity heavily influences customer decision-making, compelling local companies to enhance their offerings to improve market positioning Currently, there is a notable imbalance in the types of goods transported by sea, with imports consistently outpacing exports This discrepancy is partly due to Bach Viet's higher export pricing compared to its industry peers, highlighting the need for strategic adjustments to achieve a more balanced and competitive market presence.
2.5.4 Criteria for the level and speed of business development
After 16 years of development, Bach Viet is currently operating as a level 1 agent that only delivers services requested by customers, customs clearance, document making, storage, warehousing, forwarding Although means of transport and equipment, machinery or warehouses are must-have assets of companies operating in the field of Logistics in order to provide customers with the best and fast shipping solutions Best
Bach Viet Foreign companies Other companies h
Bach Viet opts not to invest in high-value assets due to their significant maintenance and repair costs, which could lead to excessive total expenses without fully utilizing the vehicles' capabilities Instead, the company outsources transportation and machinery needs to reputable partners like Safaco and Sao Hai Phong, specializing in providing a range of trucks and tractors for retail and long-distance logistics This strategy allows Bach Viet to effectively serve routes with high demand but limited supply, such as from Cat Lai port to remote regions like Lam Dong and Gia Lai Furthermore, the company avoids investing in physical structures by utilizing warehousing services from providers like NCTS and GWS, while also focusing on maintaining essential management devices Regular technical checks on computers, printers, and other equipment ensure optimal performance, and Bach Viet invests in software solutions for its operations, representing a significant portion of its fixed assets.
The service quality assessment model that customers often use
To evaluate customer perceptions of service quality at Bach Viet Company, an author-designed questionnaire was distributed to clients This research aims to identify customer satisfaction levels and pinpoint areas needing improvement By analyzing the survey results, the study seeks to uncover customer dissatisfaction, its underlying causes, and specific requirements, ultimately providing actionable suggestions for enhancing service quality Data was collected through email interviews with current and past partners of Bach Viet.
Due to time and resource constraints, this small study targeted 80 email addresses of logistics companies that have conducted transactions with Bach Viet Company The email contacts were sourced from the company's customer list and various platforms, including the Shipping Gazette magazine, which specializes in international transportation The response was favorable, with 53 out of 80 companies replying via email The findings from the interviews and additional information gathered during the research and internship provided a solid foundation for assessing customer perceptions of the company's service quality.
2 Delivery area spread all over the world
3 Goods are always delivered safely, ensuring the original quality
4 Carry out the procedures, make documents quickly and accurately
5 The ability to well meet the special needs of customers
(such as specialized ships, dangerousgoods transport , goods that need to be duffled)
A recent analysis of customer satisfaction at Melody Logistics revealed significant concerns regarding delivery times, with 17% of respondents rating the service as poor and 37.7% as average The complexity of the forwarding process, involving multiple parties such as shippers, carriers, and customs agents, can lead to delays due to unforeseen circumstances like weather or logistical issues While the company strives for timely delivery, occasional negligence has been noted However, 26.4% of customers still rated the delivery time as good, and 18.9% as very good, likely due to the company's proactive approach in coordinating with other forwarders to ensure efficient handling of smaller shipments.
Table 2.16: Statistical table of assurance
1 The behavior of the company's employees creates trust for customers
2 Customers know a lot of information through the advice of the company's staff
3 Customers feel confident in professional qualifications company employee service
4 The company's employees are always polite and friendly to customers
Service quality assurance relies heavily on the knowledge and behavior of service providers, as well as their ability to foster trust and confidence in customers Unlike tangible products, services are defined by customers' perceptions rather than the company's offerings Evaluations of service quality are inherently subjective and can vary significantly depending on the individual staff member interacting with the customer This study, based on a limited number of responses, highlights specific cases and personal observations A key finding is that customer confidence in the company's services is paramount; however, 25% of customers perceived Bach Viet's staff as providing only a moderate level of trust, with 5.7% rating their behavior poorly This suggests a need for improvement in staff interactions to enhance overall customer satisfaction.
A significant 72% of customers express distrust in the professional qualifications of service staff, with only 28.3% rating them as good and 24.5% as very good The overall professionalism of employees in the forwarding industry is deemed poor, highlighting the need for comprehensive knowledge beyond basic sales skills Effective salespeople must be well-versed in forwarding operations, customs regulations, import and export activities, and relevant legislation, as well as have an understanding of the nature of goods involved in transportation Most employees at Bach Viet are young and knowledgeable but lack experience, which can lead to challenges in meeting customer expectations.
1 Company employees dress politely, suitable for the situation
2 Company related documents such as catalogs, website, quotes…Scientifically presented and eye-catching
3 The company's office is arranged neatly and attractively
4 The company has a full range of equipment and facilities to serve the needs of cutomer
Services are inherently intangible, yet tangible factors significantly enhance their delivery, including physical conditions, equipment, and the appearance of service staff A survey revealed that 41.5% of customers rated the company's equipment as good, while 20.8% rated it as very good, highlighting Bach Viet's commitment to utilizing and innovating technology The office is well-equipped, with each employee having access to individual computers and desk phones, along with essential office equipment like fax machines, printers, and photocopiers to meet business needs Customers can easily communicate with relevant departments and employees, as all computers are internet-connected, facilitating seamless interactions with customers, partners, and branches Notably, the company has implemented an electronic customs declaration system, allowing customs declarants to submit data efficiently from the office, with the system automatically processing the declarations.
1 The company's staff is always dedicated to serving customers, ready to solve, answer all customer questions
2 Customers dealing with the company are always interested and noted by a certain employees
3 The company always understands the needs of customers well
Bach Viet prioritizes customer care by assigning dedicated employees to each client, ensuring personalized attention from the beginning to the end of the contract and beyond This commitment is reflected in a recent survey, where 49% of customers rated the staff's attention as good, and 28.3% rated it as very good The majority of clients, 52.8%, praised the dedicated service of Bach Viet employees, highlighting their readiness to address diverse questions and concerns Each employee maintains a personal notebook to capture essential client information, allowing them to tailor their approach based on individual preferences and working styles This understanding of customer psychology enables staff to effectively meet varying needs, whether clients prioritize progress, pricing, or detailed fee descriptions Overall, the survey results indicate that the company's employees excel in understanding customer needs, with no negative feedback reported.
1 The company handles questions and complaints complain quickly
2 Complaint settlement results make customers feel satisfied
3 Informationbetween customers and company employees is always maintained
Service quality is fundamentally determined by the company's responsiveness to customer complaints, which can only be assessed after the service is rendered A recent survey revealed that 28.3% of customers found the company's complaint handling to be slow, while 52.8% rated it as acceptable, and only 18.9% considered it good or very good Given the complexities and risks involved in international trade, the company faces numerous challenges from the moment goods are prepared until they reach the recipient Customers desire timely updates on their shipments, including progress, quality status, and documentation issues The communication flow between customers and company employees is generally rated positively, with 62.3% of customers acknowledging it as good or very good, while 39.7% rated it as normal Employees' sense of responsibility towards customers is also commendable, as they consistently maintain communication and promptly address any issues that arise.
A total of 76 customers received a prompt response from the company, maintaining accountability throughout the process However, their overall satisfaction with the feedback results was only average, with 30 customers (56.6%) rating it as "normal" at 3 points Additionally, 5 customers (9.4%) expressed dissatisfaction by rating the company's complaint handling as poor.
General evaluation
Between 2018 and 2020, Bach Viet achieved significant growth, marked by stable annual revenue and profit increases The company's revenue and profit consistently exceeded previous years, with rising Return on Equity (ROE) and Return on Sales (ROS) indicating improved management of business expenses Additionally, in early 2017, Bach Viet began developing customs and domestic transportation services, integrating them into its freight forwarding operations to enhance its competitive edge This strategic expansion contributed to a notable increase in total revenue and profit in 2019 compared to 2018, aided by the company’s efforts to broaden its import and export markets.
Bach Viet's investment in domestic services has significantly increased customer attraction and retention, boosting sales and enhancing competitiveness In 2017, the company joined the WCA (International Freight Forwarding Association), allowing it to collaborate with reputable global agents, co-loaders, shipping lines, and airlines This partnership has positioned Bach Viet as a VIP customer, enabling the company to receive prioritized services and competitive pricing Over the years, these favorable prices have become synonymous with Bach Viet's brand, strengthening its competitive edge against domestic rivals and laying the groundwork for international expansion Additionally, the effectiveness of its salary regime for personnel has been validated by an internal company survey.
Bach Viet offers competitive salary and bonus structures, particularly for its sales staff, who enjoy the flexibility to set their own prices based on customer insights rather than adhering to a fixed company price This autonomy, combined with a substantial discount income of 30-35% of profits, motivates employees to maximize profitability and enhance overall business efficiency Additionally, the company's well-defined forwarding contracts outline clear pricing and payment terms, ensuring that rights and obligations are understood, which minimizes disputes and customer complaints.
Bach Viet's import and export freight forwarding process is designed for efficiency, featuring a well-defined division of responsibilities among Sales, documentation, delivery, reception, and accounting teams This specialization ensures that each step of the delivery process is executed optimally, facilitating a swift and reliable service.
Firstly, customers also complain a lot about delivery time and lost, broken goods
In 2018, the percentage of damaged goods reached its peak at 4.9%, while the lowest rate was recorded in 2020 at 2.4% Additionally, the highest rate of goods delayed compared to the plan occurred in 2017, with a notable low of 2.1% in 2019 These issues have led to significant problems for customers, negatively impacting their businesses and resulting in dissatisfaction with the company's services Currently, only about 50% of customers remain loyal to Bach Viet's services, having used them for six years or more.
Firgue 2.9 Proportion of damaged and delayed goods in Bach Viet's delivery process,
Despite increasing personnel for business expansion, Bach Viet Transport Co., Ltd still struggles with the quality of its customs clearance services and domestic transportation arrangements The average processing time for a customs declaration is 1-2 days under normal conditions, but delays can extend this significantly, especially when customs checks are required Such delays can lead to additional costs, including storage fees for containers at the yard when shipping companies cannot issue orders promptly Furthermore, the company’s domestic transportation arrangements lack proactivity, requiring a day’s notice for full-container deliveries and half a day for less-than-container-load (LCL) shipments to ensure timely delivery to customers.
Despite having a structured plan for employee training and periodic evaluations based on specific criteria, the overall quality of staff remains inconsistent Many employees are young and lack experience, with a significant number being recent graduates or still in school Training is primarily conducted on the job by former employees who share their experiences and insights into work processes.
Many mistakes in the working process arise from a lack of understanding of the job, as well as insufficient knowledge and skills, ultimately impacting service quality.
The quality of post-delivery customer service remains inadequate, with a lack of appreciation programs that negatively impacts the relationship between the service provider and customers.
The company's market share in the Vietnam Logistics market remains low, positioning it similarly to other forwarding companies of comparable size Additionally, its development level is limited, as it is currently rated as a level 1 forwarding company, primarily providing requested services without advanced capabilities Despite issuing a House B/L, it has yet to achieve level 2 status, largely due to the absence of exclusive agents at ports for handling import and export goods.
The company faces significant challenges in debt collection, resulting in a large amount of capital being tied up and an extended average collection period that negatively impacts its capital turnover Only 45-50% of customers pay their debts on time, with invoices typically issued 15-20 days after delivery However, many customers prefer to consolidate payments at the end of the month, leading to actual debt collection extending to about 45 days, which is roughly 20 days overdue compared to approved terms Consequently, the enterprise's capital efficiency declines due to additional costs incurred from bad debts.
Secondly, the arrangement of personnel is not effective, the number of sales department staff is very large (accounting for more than 2/3 of the company's staff) but h
The after-sales support team is understaffed, struggling to manage the workload generated by the sales department Key departments such as Pricing, Customer Service, and Operations frequently face overwhelming demands, often requiring employees to extend their hours until 7 or 8 PM to complete daily tasks.
The delay in delivery is primarily caused by the outsourcing of both the garage and warehouse operations, leading to a lack of coordination in the delivery plan Customers often face urgent shipping needs, but once goods arrive at the warehouse for retail processing, they can wait up to 14 hours before delivery vehicles are arranged This timeline is further complicated by the availability of rental cars, making it challenging to ensure timely deliveries.
The seasonality of forwarding services leads to significant fluctuations in activity, heavily influenced by the import-export market Typically, the first months of the year experience low activity, while the last six months are marked by overwhelming demand, placing immense pressure on staff and potentially reducing productivity and efficiency Additionally, challenges such as shipping lines running out of space or missing containers compel employees to seek alternative solutions, which can inadvertently raise costs and delay shipments.
Unfavorable weather conditions and an underdeveloped seaport system contribute to significant delays in train and shipping services in Vietnam Many ships are forced to transship through other ports, leading to increased instances of dropped goods and prolonged delays Additionally, logistical challenges are exacerbated by customers failing to provide necessary shipment documents on time, further impacting the quality of logistics services.
SOME POWERFUL SOLUTIONS FOR TRANSPORTATION
Objectives and development orientation of the company in the coming time
To ensure sustainable growth and adaptability to economic fluctuations, Bach Viet's board of directors implements timely strategies, focusing on enhancing sea freight forwarding operations This involves refining processes, ensuring meticulous supervision from the initial goods reception to customs declaration, thus minimizing costly errors The company aims to expand its delivery services for high-value and specialized goods requiring inspection certificates, which will help attract and retain clients, ultimately boosting revenue Maintaining long-term partnerships domestically and in the ASEAN region, while targeting new markets in Europe and America, is also a priority Additionally, Bach Viet is committed to developing a robust business management and pricing mechanism to enhance competitiveness and service quality Employee training in foreign trade and soft skills is essential for addressing unexpected challenges, with regular assessments to identify strengths and areas for improvement.
83 close coordination relationship between departments in the company's office, between the office and the branch and between the branches together for the common benefit of the whole company.
Analysis of the company's opportunities and challenges
Simple personnel organization: Currently, Bach Viet's personnel structure includes
A streamlined organizational structure featuring a director, a deputy director, and various departments enables rapid capitalization on market opportunities With minimal intermediate layers, this design facilitates direct and swift communication, allowing for the quick implementation of new strategies The simplicity of this structure reduces collaboration challenges that frequently arise in more complex organizations.
Bach Viet has established a strong reputation in the shipping industry by consistently enhancing service quality and offering professional services, including customs consulting, import and export entrustment, and document receipt and delivery This commitment enables Bach Viet to deliver exceptional service to its customers.
With 16 years of experience in logistics, the company has established a strong brand image and a continuous value-added chain for its customers It offers comprehensive logistics solutions, including sea and air transportation, supply chain management, warehousing, cargo clearance, and road transport These robust operations have solidified the company's position in the market.
The rapid advancement of information technology has underscored the critical importance of information in today's market With a young and dynamic workforce adept at swiftly understanding import and export trends, customer needs, and competitor pricing, Bach Viet has effectively established a strong market presence, excelling in both pricing and service quality.
The company boasts advanced technology with comprehensive Wi-Fi coverage, enabling employees to efficiently manage their customer systems through a centralized website This seamless integration with other departments ensures that customers are consistently informed about their goods' status, receiving notifications when items depart from the port and upon arrival at their destination Additionally, customers can easily track their shipments by visiting Bach Viet's website and entering their REF or container numbers.
Bach Viet leverages strong relationships with major shipping lines like Maersk, One, and COSCO, enabling them to secure advantageous contracts that offer competitive pricing for a high volume of import and export goods This diverse network of suppliers not only allows Bach Viet to provide a variety of prices and services but also enhances the uniqueness of their products, effectively catering to the evolving needs of their customers.
Despite its advantages, Bach Viet faces several challenges in the import and export delivery process that require attention The integration of science and technology in forwarding procedures, particularly in electronic customs declarations, is progressing slowly and is prone to errors in tax codes and declaration data Additionally, the document verification and preparation process can be cumbersome due to the variety of required documents, especially for complex orders, which may include contracts, commercial invoices, customs declarations, packing slips, and certificates of origin This complexity can lead to delays in customs clearance due to incorrect, invalid, or conflicting documentation Furthermore, although the company boasts a large and dynamic workforce, many employees are young and lack the necessary experience and expertise to effectively navigate these challenges, necessitating significant training and development.
Fourthly, the company's import entrustment service often encounters many difficulties
Each year, the company refreshes its imported goods, but this continuous innovation hampers its ability to fully understand individual commodity markets, resulting in a lack of strong reputation in the international trade arena.
Under Prime Minister Nguyen Xuan Phuc, Vietnam's logistics industry, particularly sea freight forwarding, is experiencing significant growth and promotion The implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on January 14, 2019, has created numerous opportunities for international businesses in Vietnam, as the country is one of the 11 participants in this agreement Additionally, the Vietnam-Europe Trade Agreement (EVFTA) is set to officially take effect, further enhancing trade prospects.
In 2020, the import-export and logistics sectors in our country experienced significant growth, driven by a favorable agreement with the EU that offers 0% import-export tax incentives on over 90% of goods from Vietnam As Europe emerges as a key market alongside China and Asia, the potential for industry development is immense With government support creating a conducive environment for growth, businesses have a unique opportunity to expand and thrive in both domestic and international markets.
Many Vietnamese enterprises have yet to fully develop their transportation and forwarding services, often acting merely as subcontractors for foreign companies by handling isolated tasks like customs procedures or leasing transportation means Consequently, with its available resources, Bach Viet is empowered to determine its own future direction.
Bach Viet Company may not have the extensive expertise of its competitors, but it has accumulated significant valuable experience As the market grows, the competition for top talent intensifies However, Bach Viet's scale and structured professional training processes provide a competitive edge in attracting and retaining skilled human resources.
Customers consistently demand low freight rates; however, management faces the ongoing challenge of enhancing delivery service quality This issue is not unique to Bach Viet, as many companies grapple with balancing cost efficiency and service excellence.
Logistics companies often face the challenge of balancing customer satisfaction with profitability To thrive, businesses must implement strategies that align the interests of both the company and its clients However, achieving this balance in practice can be quite difficult, as meeting customer needs while ensuring financial sustainability requires careful planning and execution.
The management mechanisms and policies within agencies and sectors face significant challenges, leading to overlapping responsibilities and inconsistencies that hinder business operations A notable example is the customs declaration process for retail goods, where the customs authority mandates that goods must arrive at the port and be stored in a warehouse before declaration, while the warehouse requires a separate declaration for the goods to be admitted.
Some solutions to develop freight forwarding services
In today's highly competitive forwarding market, expanding market reach is essential for companies to survive and thrive This strategic move not only helps achieve profit objectives but also reinforces the company's market position.
At the present time, the company reaches out to many international markets, operating mainly in the Chinese market (which is a large market, quite similar in culture and habits to Vietnam, the region in Southeast Asia) However, there are still a number of potential markets that the company has not fully explored such as the Americas, Europe, Africa, South America (such as Mexico, )
Market expansion is a rather complicated job because each market has different characteristics in terms of economy, politics, culture - society, law, customs and traditions This has a great impact on the business environment, social consumer psychology, and greatly affects the company's market penetration and expansion Therefore, in order to expand the market, the company must carry out the following tasks:
• First of all, the company needs to learn about the customs and laws in that market, what is different from the markets in which the company has been operating Do these differences cause difficulties or obstacles for the work of entering the market and performing freight forwarding work there
The US market is a key focus for the company's strategic expansion in the coming years, presenting significant demands not only in terms of consumer needs but also regarding compliance with US regulations.
The legal system is intricate and stringent, with each state enforcing its own distinct regulations As a result, even if you achieve success with one contract, the lessons learned may not be applicable to subsequent contracts due to varying legal requirements.
Studying the forwarding demand in a market is crucial for determining its long-term development potential Understanding the demand and quantity of services required can reveal promising opportunities for growth Early penetration into a market with potential can lead to significant profits Currently, China represents a key market for the company, with a substantial volume of goods delivered The company continues to explore and deepen its presence in this market Additionally, the US and European markets are viewed as highly promising, and the company is actively establishing relationships to lay a strong foundation for future business activities.
Entering a new market requires thorough research on competitors to understand market competitiveness and identify their strengths and weaknesses This analysis enables the company to develop effective strategies to successfully compete in the new market.
To successfully penetrate the market with low costs and high efficiency, a company must ensure that its information is complete and accurate Understanding current customer needs and future growth potential is essential, as it determines the company’s ability to meet those demands both now and in the future If the services offered align with customer needs, the company should consider expanding its service range strategically to maximize market demand and responsiveness To gather this vital information, the company should invest in qualified staff who can engage in knowledge exchange with both domestic and international firms and participate in professional training courses.
The company strategically seeks to expand its customer base by understanding both customer needs and market dynamics Sales staff are tasked with visiting clients to promote the company's services, while leaders engage in seminars and meetings to foster relationships with international firms, ultimately securing forwarding and entrustment contracts This approach necessitates a well-planned penetration strategy, alongside a workforce equipped with strong professional expertise, marketing acumen, and effective communication skills Although entering the market independently allows the company greater control, it also entails accepting risks, as initial efforts may not produce immediate results.
Joint ventures with foreign companies are a prevalent strategy for entering new markets, as these partners possess valuable market knowledge While companies may share profits and face a relatively weaker position, they benefit from the capital and established relationships of their partners This approach allows businesses to bypass extensive market research and quickly enhance their market share while reducing associated risks.
In the realm of import and export freight forwarding by sea, the company offers essential services including the transportation of bulk cargo, full container cargo, and warehouse-to-warehouse delivery A key focus should be placed on the consolidation service, which provides significant advantages for all parties involved Carriers benefit from reduced delivery and distribution times for mixed shipments, while also alleviating concerns about collecting freight from retail owners due to the forwarder's management Shippers enjoy cost savings by avoiding the need to rent an entire container, and forwarders increase their revenue, as the freight for retail goods typically yields higher returns.
Shipping full container goods is a straightforward and efficient service for forwarding companies, provided they establish reliable delivery and packing stations while ensuring careful and responsible handling during transportation.
To enhance operational efficiency, the company must establish contracts with domestic and international shipping lines, airlines, and railways, ensuring proactive management of transport means and seating during peak seasons Close coordination at transshipment points is essential, with branch agents responsible for monitoring and communicating schedules and departure times Selecting the right carriers will facilitate timely connections upon arrival at transshipment points, optimizing space and preventing cargo loss Furthermore, investing in the expertise and experience of professional staff is crucial for building a strong market reputation, which is vital for the growth of this service.
To ensure efficient contract performance, all departments must collaborate effectively to deliver goods to customers swiftly, conveniently, and cost-effectively Field staff should be engaged immediately after a sale is finalized, rather than waiting until the goods arrive, to assist customers with necessary procedures and required documentation This proactive approach minimizes the risk of errors discovered at customs, which can lead to significant delays and additional costs Sales personnel should routinely verify that customers have signed and sent contracts, as well as prepared the essential documents for customs clearance, ensuring a seamless process and enhancing customer confidence in Bach Viet's delivery services.