INTRODUCTION OF NGHI SON AQUATIC PRODUCT
Establishment and development
Nghi Son Aquatic Product Exim Co., Ltd, established in 2014, is part of the Nghi Son Foods Group, a family-owned business with extensive expertise in the seafood industry The company's vision is to become a leading manufacturer and exporter of high-quality seafood in Asia, with a particular focus on Vietnam This overview highlights the key aspects of Nghi Son Aquatic Product Import Export Limited.
Legal name: NGHI SON AQUATIC PRODUCT IMPORT EXPORT COMPANY LIMITED
Abbreviation name: NGHI SON CO.,LTD Head office: Floor 7th, 85 Nguyen Huu Cau, Tan Dinh Ward, District 1, Ho Chi Minh City
Legal representative: Nguyen Van Minh Tax code: 0312962965
Main business fields: Processing and trading Marine fish, Freshwater fish and Dried seafood
Leveraging family traditions in seafood knowledge, the company effectively manages its supply chain, encompassing the catching of raw materials, freezing, drying, packing, and delivering high-quality products to consumers at competitive prices Continuous improvements in processing and shipping systems support extensive retail distribution both in Vietnam and international markets.
Consumer recognition in the home country highlights the effectiveness of the company's efforts to improve its services This positive feedback has enabled the firm to successfully expand into international markets, including China, Japan, Korea, the Philippines, Malaysia, Spain, Thailand, India, Indonesia, and Egypt.
Functions, missions, organizational structure and human resources
Nghi Son Aquatic Product Exim Co., Ltd specializes in processing and trading a variety of fishery products, including marine and freshwater fish, dried seafood, Pangasius, Yellowfin Tuna, and Shrimp The company's processing operations are conducted at its factory in Binh Thuan Province, where it not only exports its own processed goods but also fulfills export orders for aquatic products from other factories based on sales contracts While Nghi Son imports frozen fishery products, these account for a small fraction of its overall business compared to exports With a vision to lead in the supply and export of high-quality aquatic food, the company is committed to enhancing its processing systems and supply chain management to ensure efficient and cost-effective delivery of its products.
Nghi Son is dedicated to adhering to both domestic and international laws and regulations while prioritizing integrity in all business dealings The company's core mission emphasizes its commitment to ethical practices and compliance, ensuring responsible operations in every aspect of its activities.
Nghi Son operates legally under business license number 0730103446345, engaging in the processing and trading of fishery products while fulfilling tax obligations The company is committed to delivering high-quality fishery products that comply with both Vietnamese regulations and the standards of its international partners To meet the growing demand for aquatic goods, Nghi Son continuously conducts market research to expand its trading markets.
Nghi Son prioritizes human resources management by emphasizing the importance of human capital The company not only adheres to Labour Law but also fosters employee development and growth This commitment is reflected in its core values, which aim to cultivate a corporate culture driven by humanitarian principles, motivating employees to work diligently and enhance the company’s overall value.
1.2.3 Organizational structure and human resources management 1.2.3.1 Organizational structure
Nghi Son Aquatic Product Exim Co., Ltd is structured into four key departments: Documentation, Sales, Accounting, and Human Resources & Administration This departmental organization supports a functional management approach, ensuring clarity in specialized tasks and responsibilities The accompanying chart illustrates the company's organizational structure effectively.
(Source: Human Resources & Administration Department)
The functional structure features a well-defined hierarchy, with each department led by a head responsible for maintaining the quality and consistency of employee performance The fixed and repetitive roles within each department enable employees to enhance their skills and boost their performance The Board of Directors and various departments play crucial roles in this organizational framework.
Board of Directors includes three people One General Director, the firm’s legal representative, oversees the overall performance of the company and directs
Nghi Son's organizational structure includes a financial director and a manufacturing director overseeing finance and manufacturing operations, respectively The Board of Directors is tasked with formulating the firm's objectives and strategies, establishing partnerships with economic organizations both domestically and internationally, ensuring compliance with Vietnamese laws and regulations, and promoting employee involvement in business management to optimize performance.
The Documentation Department consists of four members: a head supervisor overseeing tasks, a logistics executive handling bookings, a documentation executive preparing essential documents, and a team member managing customs and outdoor activities This department is crucial for booking and preparing necessary documentation, including Commercial Invoices, Packing Lists, Certificates of Origin, and Health Certificates, while also ensuring compliance with customs formalities.
The Sales Department is comprised of nine members, including one head and eight sales staff Their primary responsibilities involve identifying potential consumers and gathering contact information through various channels such as fairs, conferences, seminars, partnerships, the Internet, and social media The sales team engages with consumers through phone calls, emails, and direct communication, negotiates transactions, prepares contracts, and collaborates with the Documentation Department to execute these contracts effectively.
The Accounting Department consists of three key roles: a chief accountant, a warehouse accountant, and a treasurer This team is responsible for managing financial matters, including recording transactions, generating monthly, quarterly, and annual financial reports, ensuring compliance with tax laws, budgeting for business operations, and monitoring revenue, costs, and profits.
The Human Resources & Administration Department is led by a dedicated female professional who manages internal communications and oversees human capital, which encompasses recruitment, document management, and various administrative responsibilities.
Since the company is small-sized, one person is enough to undertake the above mentioned things
The Sales, Accounting, and Human Resources & Administration Departments are adequately staffed to fulfill their job requirements However, the Documentation Department faces a staffing shortage, as highlighted by its head During peak shipment periods, the limited personnel—only one employee handling each task, including booking, documentation, and customs—leads to overwhelming workloads and hectic days.
Nghi Son Aquatic Product Exim Co., Ltd employs a total of 23 directors and staff members, with a notable majority being female In terms of educational qualifications, employees holding bachelor's degrees represent the largest group compared to other degree levels.
Table 1.1 Human resources by gender and education level of Nghi Son
Aquatic Product Exim Co., Ltd
(Source:Human Resources & Administration Department)
In terms of gender, the vast majority of human resources are female, which is
In a workforce of 23 individuals, 16 are female, representing 69.75%, while 7 males account for 30.43% Notably, there are twice as many women as men in this group Outdoor roles, such as operation staff, are predominantly filled by men due to the physical demands of the job Conversely, the accounting department is exclusively staffed by women, and a significant proportion of sales and documentation positions are also held by females These roles emphasize carefulness and detail orientation, often requiring minimal outdoor activity.
More than 50% of employees possess a university degree, effectively meeting job requirements Managerial roles are typically held by individuals with master's or bachelor's degrees combined with extensive experience Non-managerial positions are filled by college graduates with practical skills and seasoned professionals, as well as recent graduates eager to learn, despite their limited practical knowledge.
Business outcomes
The table presents the business outcomes of Nghi Son Aquatic Product Exim Co., Ltd over three years, from 2017 to 2019, focusing on revenues, costs, and profits as key performance indicators It includes annual values for each variable, along with comparisons of absolute and relative changes between 2018 and 2017, as well as between 2019 and 2018, providing a comprehensive analysis of the company's financial performance during this period.
Table 1.2 Business outcomes of Nghi Son Aquatic Product Exim Co., Ltd between 2017 and 2019
Currency: USD (United States Dollar)
Table 1.3 Comparison of business outcomes of Nghi Son Aquatic Product
Exim Co., Ltd from 2017 to 2019
Currency: USD (United States Dollar) Comparison
Between 2017 and 2019, the company experienced increases in revenues, costs, and profits after taxes, both in absolute and relative terms Notably, profits saw the highest growth rates during the periods of 2017-2018 and 2018-2019, while the growth rate for costs was comparatively lower This analysis of the business outcomes from 2017 to 2019, as reported by the Accounting Department, will be explored in more detail.
In 2018, revenues rose significantly, increasing by USD 1,034,606.41 from USD 10,943,935.85 in 2017 to USD 11,978,542.26 The upward trend continued in 2019, with revenues reaching USD 13,279,268.16, reflecting a growth of USD 1,300,725.90 compared to the previous year Additionally, costs experienced an increase of USD 846,583.29 from 2017.
In the period from 2018 to 2019, revenues increased by USD 1,107,578.14, outpacing costs and leading to higher profits Specifically, profits in 2019 surpassed those of 2018 and 2017 by USD 188,023.12 and USD 193,147.76, respectively.
Between 2018 and 2019, revenue growth at Nghi Son reached 10.86%, surpassing the 9.45% growth seen from 2017 to 2018, primarily due to the establishment of long-term customer relationships and numerous contracts following five years of operation Conversely, cost growth accelerated from 8.52% in the 2017-2018 period to 10.27% between 2018 and 2019, driven by the expansion of the fishery-processing factory in Binh Thuan Province and the hiring of additional sales staff to support a five-year growth strategy Although profits increased more significantly in absolute terms between 2018 and 2019 compared to 2017 and 2018, the growth rate was lower, partly due to rising raw fishery product prices impacting overall profitability.
The importance of documentation department in Nghi Son Aquatic
The documentation department at Nghi Son Aquatic Product Exim Co., Ltd plays a crucial role in coordinating with the sales and financial accounting departments to manage export and import activities, which are vital to the company's operations This team is responsible for preparing and booking necessary documents and ensuring compliance with customs formalities Throughout the documentation process, employees closely monitor shipments to gather relevant information, guaranteeing the accuracy and completeness of documents sent to customers Once contracts are finalized, the documentation department takes on significant responsibilities in executing these contracts effectively.
Summary of internship period
From 13 July, 2020 to 14 July, 2020, I worked as an intern in the Documentation Department I have had the opportunity to learn and understand practical knowledge regarding import and export, especially the process for executing export contracts at Nghi Son during the last five weeks My internship period at the company can be summarized as follows:
Tasks: Read up on the company; having been taught about the general export process at the company; copied and scanned some documents
Results: Learned of the establishment and development of Nghi Son, got acquainted with how the company works, gained general understanding about the process for exporting a shipment
Tasks: Read documents of previous shipments; , observed how Customs declaration, Health Certificate application and Certificate of Origin registration were conducted online
Results: Understood information included in the documents, improved the grasp of practical export process
Results: Understood how to draft documents, such as Invoice, Packing List, Shipping Instruction (SI), Verified Gross Mass (VGM)…
Week 4 and 5 (3 August – 7 August and 10 August – 14 August, 2020):
Under the guidance of Mr Thong, the Head of the Documentation Department, tasks involved the ongoing preparation of essential documents such as invoices, packing lists, shipping instructions (SI), verified gross mass (VGM) certificates, health certificates, and certificates of origin.
Results: Enhanced carefulness and skill in preparing documents, having been familiar with process for executing export contracts.
PROCESS FOR EXECUTING THE EXPORT SALES
General process for executing an export sales contract at Nghi Son
The following figure illustrates the export contract process at Nghi Son Aquatic Products Exim, Ltd., which consists of seven key steps following the signing of the sales contract This overview of the export contract execution will be complemented by a detailed analysis of a specific shipment currently managed by the company during my internship.
Figure 2.1 General process for executing an export sales contract at Nghi Son
(Source: The author’s collecting data through observation)
Upon receiving an email from the importer regarding deposits sent to Nghi Son's bank account or the application of the original Letter of Credit as per the sales contract, the Sales Department promptly forwards this email to the Accounting Department The Accounting Department then verifies the bank account status or the issuance of the Letter of Credit Once confirmed, they check whether the bank account has been credited for any advance deposits made via Telegraphic Transfer.
4 Stuffing empty containers with cargo
7 Completing and sending the set of original documents to the Buyer the Letter of Credit has been issued, the incharge sales person of such contract will then email Purchasing Team based in Binh Thuan province for their preparation of the goods There are two main ways which the goods are prepared First, the goods are processed within the company’s factory in Binh Thuan Second, Purchasing Team is responsible for purchasing fishery products from fishermen, or ordering them from other factories in accordance with requirements of Buyers under specific contracts
Nghi Son's exports, primarily aquatic products, undergo safety checks by the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) For products processed in-house or sourced directly from fishermen, Mr Long oversees marine and freshwater fish, while Mr Phi manages catfish, ensuring that current samples are sent to NAFIQAD for food safety testing When goods are sourced from external factories, the Documentation Department coordinates with the processing facility's staff to gather necessary documentation, including sample information and the Certificate of Origin requirements.
If the factory is close to NAFIQAD, samples are tested on-site; otherwise, they must be sent to NAFIQAD centers Normal testing results are available within five working days of sample receipt, while tests for antibiotics and heavy metals take seven working days to deliver results, starting from the same sample receipt date.
NAFIQAD's testing objectives extend beyond ensuring food safety; they also include issuing Health Certificates upon request from importing countries A Health Certificate is granted only when the tested samples comply with export standards If the samples fail to meet these criteria, they may undergo a single re-test or may not be tested again at all.
Most export trade agreements between Nghi Son and its buyers utilize C terms, specifically CFR and CIF Consequently, Nghi Son is typically responsible for arranging the vessel for nearly all transactions, with the documentation staff handling the vessel booking process.
When NAFIQAD testing results for food safety are available, Mr Cuong, responsible for booking vessels, communicates with forwarding agents via email to negotiate freight rates, vessel schedules, and terms The company typically collaborates with forwarders such as Headway Logistics, Thami Shipping & Airfreight Corporation (TMC), Oscar Logistics, Advantage Logistics, Golden Line Transport Corp., and NYD Logistics Corporation These inquiries enable the selection of the most cost-effective forwarder with a suitable schedule Once a forwarder is chosen, Mr Cuong receives a Booking Confirmation for FCL shipments or a Booking Note for LCL shipments, which he then forwards to the trucking company, warehouse staff, and packing-related employees via email Additionally, this information is shared with the Documentation Department group on Viber for verification.
2.1.4 Stuffing empty containers with cargo
After confirming the booking with the trucking company, Mr Cuong calls them to arrange the pickup of empty containers from the designated shipping line location and transport them to the stuffing warehouse in Hoang Lai, Long An province for Nghi Son's operation staff to load cargo under the specified conditions and temperature The trucking company sends photos of the container information and seal numbers to Mr Cuong via Zalo upon receipt of the empty containers Once the containers and seal information are received, Ms Hanh, the Documentation executive, prepares the Shipping Instruction (SI) and Verified Gross Mass (VGM) documents and forwards them to the forwarder to obtain the draft Bill of Lading.
Once the goods are ready for loading, operational staff meticulously load cargo into reefers, ensuring proper technical procedures are followed These reefers are essential for transporting dried and frozen products, with temperatures adjusted to minus 10 degrees Celsius for dried items and minus 18 degrees Celsius for frozen ones After loading, the containers are dispatched to the port by a trucking company If any issues arise during the stuffing process, such as container conditions or discrepancies in goods quantity, the warehouse staff in Long An must promptly inform the head of the Documentation Department to resolve the issues.
Draft documents are created based on sales contracts, with Ms Hanh responsible for their preparation Mr Thong reviews these documents before sending them to Sales for the Buyer’s verification and confirmation The two parties negotiate the contents via email, and the Documentation Department of Nghi Son makes necessary adjustments The required documents include a Commercial Invoice, Packing List, Health Certificate (if applicable), and Certificate of Origin (if applicable) For sales contracts with CIF Incoterms® 2010, the Documentation Department must submit the draft Bill of Lading and draft Invoice, confirmed by the Buyer, to the insurer prior to the vessel's departure from the loading port.
Mr Thong or Ms Hanh oversees customs and e-port declarations, while Mr Lam manages customs clearance, liquidation, and vessel records before the port's closing time E-port declarations are processed online at eport.saigonnewport.com.vn for container lifting-on and lifting-off procedures, along with online payment of associated fees Customs declarations are submitted through the VNACCS system, with immediate results from the Customs Authority Following this, Mr Lam prints the customs declaration form and proceeds to the port to finalize customs clearance, liquidation, and vessel records Notably, there are no export duties on fishery products, with nearly 80-90% classified as green channel, 10-20% as yellow channel, and only 1-2% as red channel, the latter being assigned randomly by customs authorities.
2.1.7 Completing and sending the set of original documents
After receiving confirmation from the Buyer regarding the documents, the Documentation Department will promptly adjust and finalize the necessary paperwork This set of documents typically includes the Commercial Invoice, Packing List, Health Certificate (if applicable), and Certificate of Origin (if applicable).
For telegraphic transfer, the Sales Department emails scanned documents to the Buyer, while the Documentation Department dispatches original documents via DHL express The remaining payment is processed once the Buyer receives the scanned documents In cases of payment by Letter of Credit, original documents are sent to Nghi Son’s bank as stipulated in the sales contract.
Detailed description of process for executing export sales contract of
On July 13, 2020, Dried Anchovies were ordered from Workshop Dried Marine Products - Phu Hai Sea Products Factory, despite the contract being dated July 12, 2020 No deposits were required for this order, and it followed a previous shipment to the same buyer, allowing for a swift one-day turnaround The General Director personally oversaw this export contract, ensuring that any changes in requirements were promptly communicated via phone and email among him, Ms Rose from Nghi Son, and the responsible employees at Phu Hai factory.
The total weight of Dried Anchovies is 52,000 kilograms, packed in 4,000 cartons of 13 kilograms each These cartons are labeled according to the requirements provided via email by Ms Rose to the factory's marking supervisor The goods are stored at a temperature of minus ten degrees Celsius There are two lots, NS0004 and NS0005, each weighing 26,000 kilograms, with production dates of June 1, 2020, and June 2, 2020, respectively Both lots have a shelf life of two years from their production dates.
Nghi Son prepares goods either by processing them in-house or purchasing from external sources, such as fishermen or other factories In this instance, the goods were ordered from Phu Hai Factory, which expedited the shipment preparation due to prior orders Without this established relationship, the processing time could have been significantly longer The new order saw minimal changes, primarily in quantity and pricing The ongoing partnership between Nghi Son and Yin Qing Company, along with their regular dealings with Phu Hai, facilitated efficient goods preparation However, Nghi Son lost some control over ensuring sufficient goods were available for the scheduled departure, necessitating a revision of the Booking Confirmation.
On July 13, 2020, after completing an order with Phu Hai factory in Binh Thuan Province, Ms Rose advised Mr Thong, head of the Documentation Department at Nghi Son, to contact Phu Hai's Documentation team to ensure that the dried anchovies met NAFIQAD standards Given a prior similar order, Mr Thong received confirmation of Phu Hai's compliance within five to seven minutes Additionally, as the buyer was from China, a Health Certificate was required for importing fishery products, as stipulated by Annex VIIA of Circular No 16/2018/TT-BNNPTNT Consequently, Nghi Son was responsible for obtaining the Health Certificate for the dried anchovies destined for Yin Qing Company, with the application process managed by Nghi Son's Documentation Department.
On July 24, 2020, Mr Thong submitted an online application for a Health Certificate through the Vietnam National Single Window (vnsw.gov.vn), requiring three essential documents: the Bill of Lading, the Health Certificate Registration Form, and a Detailed Packing List as specified by NAFIQAD After completing the health certification declaration, he contacted NAFIQAD 4 via email at chungnhanonline@nafi4.com.vn for the issuance of the Health Certificate Subsequently, on July 27, 2020, Mr Lam received the Health Certificate by post from NAFIQAD 4, referenced under the number YD 14354/20/CH.
Comments: Like preparation of the goods, the previous order of Dried
Anchovy significantly streamlined the quality testing process for Nghi Son at the Phu Hai factory Following NAFIQAD 4's Health Certificate issuance procedure, companies typically receive their original Health Certificate one working day after registration In this instance, since the application was submitted on a Friday, the original Health Certificate was successfully obtained by the following Monday.
Under the CIF Huang Pu, China, Incoterms® 2010 for the Dried Anchovies contract, Nghi Son is responsible for booking the vessel On the afternoon of July 13, 2020, after confirming that safety checks complied with NAFIQAD standards, Mr Thong communicated with Mr Cuong via Skype regarding his inquiries about freight services with forwarders A Booking Confirmation was sent to Mr Cuong on July 14, 2020, as the shipment constituted a full container load.
Conditions of containers were required to be new, clean, in good conditions,
On July 22, 2020, a shipment with a gross weight of 34 MTs was scheduled to depart at a temperature of minus 10 degrees Celsius However, due to insufficient quantities of dried anchovies from the Phu Hai factory, Mr Cuong was forced to revise the booking A new Booking Confirmation was issued on July 20, 2020, with a revised Estimated Time of Departure (ETD) set for July 25, 2020 This confirmation was communicated to the Documentation Department via Viber, as well as to the warehouse, operations staff, and trucking service through email Additionally, Mr Cuong made a phone call to the trucking service to ensure they were informed about the pickup details and the condition of the empty containers.
The collaboration between the company and its regular forwarders, along with Mr Cuong's expertise in booking, ensured a smooth and efficient booking process It is essential for Phu Hai factory to deliver the agreed quantity of Dried Anchovy to Nghi Son by July 22 to avoid unnecessary revisions in bookings While booking revisions incur no additional charges, they can lead to wasted time and potential delays in delivery under the export contract with Yin Qing Company.
2.2.4 Stuffing empty containers with cargo
On the morning of July 22, 2020, a trucking company was tasked with retrieving two empty high-cube reefer containers from G-Fortune Depot in Dong An Industrial Park, Binh Duong These containers were then transported to the Hoang Lai warehouse in Long An for stuffing Throughout the process of acquiring and stuffing the containers, logistics staff member Mr Cuong and operations staff member Mr Quang maintained constant communication and oversight to ensure compliance with all requirements Documentation, including photos of the containers and Equipment Interchange Receipts with container and seal numbers, was also sent for record-keeping.
Mr Cuong communicated via Zalo and shared information in a Viber group chat, while Ms Hanh completed and sent the Shipping Instruction (SI) and Verified Gross Mass (VGM) to NYD Logistics Corp for the Export Contract and Booking Confirmation A draft Bill of Lading was issued by Evergreen Line around 2 P.M., which Mr Thong and Ms Hanh reviewed and found to be error-free Communication between the Documentation Department and the forwarder was conducted through email Additionally, containers were transported to Cat Lai Port in Ho Chi Minh City for storage that afternoon.
During this stage, employees across different functions collaborated effectively due to a standardized procedure recognized by all departments Communication occurred through various channels, including email, Viber, Zalo, Skype, and phone, showcasing flexibility The Dried Anchovies contract utilized CIF Incoterms® 2010, which was unsuitable for container shipments, as risk transfer occurs "on board the vessel." In this company's case, risk actually transferred at the exporter’s warehouse after the containers were loaded, rather than at the vessel.
On July 22, 2020, the Documentation Department received a draft Bill of Lading from Evergreen Line via email from the forwarder Ms Hanh proceeded to prepare essential documents, including the Commercial Invoice, Packing List, Health Certificate, and Certificate of Origin Once Ms Hanh completed the draft documents, Mr Thong reviewed them and confirmed there were no issues He then forwarded the documents to Ms Rose for distribution to the Buyer.
On 23 July, draft documents confirmed by the Buyer were sent to Mr Thong There were some formatting mistakes The contents were acceptable Therefore, Ms Hanh did not need to substantially change those documents On 24 July, Commercial Invoice, along with draft Bill of Lading were sent to the Insurer to obtain insurance for the shipment
Thanks to the expertise of documentation professionals like Mr Thong and Ms Hanh, the process of drafting and reviewing documents is efficient and swift An accompanying Excel file with sample templates for essential documents such as Commercial Invoices, Packing Lists, Shipping Instructions, and Health Certificates significantly streamlines the workflow for documentation staff This resource allows them to quickly fill in key sections based on the Contract and Booking Confirmation, requiring only the addition of container and seal numbers.
General comments on the current procedure of the company
The company's export sales contract process is generally uniform, with each employee clearly aware of their tasks and responsibilities, which significantly streamlines execution However, this standardization does not imply rigidity; each step can be adjusted based on the specific circumstances of a contract.
Documentation executives in Nghi Son possess extensive experience, ensuring that document preparation is efficient and deadlines are consistently met This expertise not only saves significant time but also facilitates effective communication and negotiation among all departments involved in contract execution In the event of any discrepancies, prompt adjustments are made to maintain smooth operations.
Effective communication through multiple channels demonstrates flexibility, particularly with the online application processes for the Certificate of Origin and Health Certificate, along with electronic customs declarations These digital systems significantly minimize the need for staff to travel to physical locations, proving especially beneficial during the Covid-19 pandemic.
Nghi Son effectively leverages its strong relationships with regular customers, as evidenced by multiple repeat contracts This approach significantly reduces negotiation time and costs, exemplified by the Dried Anchovies contract, which omits product descriptions due to prior agreements, streamlining the current contract process.
The sales contracts between Nghi Son and its buyers do not explicitly reference the latest Incoterms® revision, leading to ambiguity regarding the applicable terms While both parties have a long-term business relationship that implies the use of Incoterms® 2010, it remains uncertain if other buyers adhere to this version Despite the current Incoterms® 2020 being effective since January 1, 2020, parties can still choose earlier versions, which poses a risk of misunderstandings and potential disputes Additionally, most of Nghi Son's export contracts involve container shipments under CFR or CIF terms, where the risk transfers "on board the vessel," as demonstrated in the analyzed contract that utilized CIF, Incoterms®.
2010, but risks actually transferred at the warehouse in this real case
In sales contracts with regular customers, such as the ongoing relationship between Yin Qing and Nghi Son, there are typically no deposits required for payment terms aside from Letters of Credit Despite this established business rapport, the Exporter risks non-payment from the Consignee, potentially incurring additional costs for return fees or having to sell the cargo at reduced prices if the Buyer declines delivery While negotiations may occur in cases of delivery refusal, they often consume significant time and resources.
When ordering goods from factories outside of Nghi Son's facility, the company faces uncertainty regarding the availability of sufficient stock at the time of loading This lack of adequate quantity often forces booking staff to adjust the estimated departure times from the port, which, while not incurring additional fees, results in wasted time Consequently, delays in the preparation of goods can lead to late deliveries.
During peak shipping seasons, the insufficient number of documentation staff can result in significant challenges, as one executive must manage a diverse range of products, including marine and freshwater fish and dried fishery items This staff shortage often leads to errors in document preparation, ultimately wasting valuable time and resources.
REVIEW OF INTERNSHIP PERIOD AND
Comparison between current procedure of the company and that of
The fundamental steps for executing export contracts in Nghi Son closely align with theoretical procedures, primarily involving a set of key documents such as the Sales Contract, Commercial Invoice, Packing List, and Certificate of Origin Nonetheless, discrepancies between theory and practice are unavoidable, and the author will further explore these differences in the subsequent section.
Nghi Son's export process reveals significant differences from theoretical expectations Unlike the theoretical framework, the company opts for CFR and CIF terms over CPT and CIP for container shipments in export contracts Additionally, Nghi Son is exempt from applying for export permits, as its fishery products are not classified as requiring one The customs declaration process is streamlined through the VNACCS system at their office, bypassing the need to go to the port While theory advocates for the use of Letters of Credit, Nghi Son primarily relies on TTR payments due to established long-term relationships with buyers Furthermore, the company must obtain a Health Certificate alongside food quality testing, as many of its buyers require this certification for imported fishery products.
Lessons learned from the internship
During my five-week internship at Nghi Son, I observed the execution of export contracts and practiced drafting shipment documents My academic background in International Commercial Transactions and International Transportation helped me navigate this process with ease Overall, the practical experience I gained during my internship closely aligned with my theoretical knowledge from university, enhancing my understanding of the industry.
In Nghi Son, CFR and CIF are the primary trade terms utilized in export contracts, particularly for container shipments According to Mr Cuong, a booking staff member, the transfer of risks occurs once the operation staff completes stuffing the containers and the trucking company transports them to the designated port When I inquired with Mr Thong, the Head of the Documentation Department, about the use of CPT and CIP terms in their export contracts, he confirmed that these terms had never been applied This indicates that the choice of trade terms and the specific conditions in contracts largely depend on the established practices and mutual agreements between the contracting parties In the event of conflicts, the parties engage in negotiations to reach a consensus.
This internship has proven invaluable in reinforcing my academic knowledge, particularly in document drafting I gained hands-on experience preparing draft Certificates of Origin, which familiarized me with the specific forms required for different countries; for instance, a Certificate of Origin form E is necessary for shipments to China, while form D is designated for Singapore Additionally, I learned that product quality checks vary by category; agricultural commodities require phytosanitary inspections, whereas a Health Certificate is needed for aquatic animals, depending on the importing country's regulations.
During my university studies, I became familiar with terms like Commercial Invoice, Packing List, and Bill of Lading, but my real-world experience in the Documentation Department introduced me to additional complexities The department maintains an Excel file with templates for various documents, including Shipping Instructions and Health Certificates Initially, I thought completing these templates would be straightforward; however, I soon realized the necessity of understanding related documents like the Contract and Booking Confirmation to determine the correct information to include I also learned that Shipping Instructions are essential for issuing a draft Bill of Lading Furthermore, the documentation team must adhere to critical deadlines outlined in the Booking Confirmation, such as cut-off dates for Shipping Instructions and Verified Gross Mass.
3.2.2 Lessons learned regarding attitudes and soft skills at workplace
My five-week internship has exceeded my expectations, primarily due to my proactive, can-do attitude Embracing new challenges beyond academic knowledge, I actively sought guidance from Mr Thong and other colleagues to reduce errors in document drafting and to bridge the gap between theory and practice Additionally, I remained curious and took every opportunity to learn about specialized topics, enhancing my practical experience Adopting an open mindset towards diverse environments and cultures has allowed me to adapt quickly to the business setting at Nghi Son, which will be invaluable in future roles within multinational companies Moreover, I welcomed feedback as a vital tool for professional growth, helping me identify my strengths and areas for improvement, thus fostering my development each day.
In the import-export industry, proficiency in English is essential, as most documentation, including Sales Contracts and Shipping Instructions, is in English To enhance my competitive edge, I am committed to improving my English skills daily Time management is crucial, as documentation staff must adhere to strict deadlines to prevent delays in shipments and potential contract breaches Effective task organization is vital when managing multiple shipments simultaneously, demonstrating professionalism and dedication Communication skills, both written and verbal, are integral to my role I focus on crafting clear messages in emails and communication apps, ensuring an appropriate tone for each situation In face-to-face interactions, I prioritize active listening, maintaining eye contact, and confirming my understanding to enhance communication Practicing concise communication with supervisors is important to respect their time I am grateful for the support and guidance from Mr Thong and other senior staff, which has enriched my internship experience with valuable insights and practical knowledge.
3.2.3 Lessons learned regarding carreer orientation
My internship experience at Nghi Son provided me with a comprehensive understanding of export-import practices and the vital role of a documentation executive This hands-on experience not only equipped me with valuable skills and practical knowledge but also allowed me to envision my future in the import-export sector As a documentation intern, I recognized the essential attitudes, attributes, and knowledge required for success in this field.
Working with documents can be highly stressful, as employees must ensure accuracy in every figure and word This responsibility requires documentation executives to be exceptionally careful and thorough in their work Women often exhibit these meticulous traits, making them particularly well-suited for documentation roles.
Documentation tasks are inherently repetitive, which can lead to feelings of boredom among staff To thrive in this environment, documentation professionals must demonstrate a long-term commitment to their roles Additionally, adherence to professional ethics is crucial, as these individuals are privy to significant business secrets.
Having a solid understanding of international trade, including aspects like transportation, commercial transactions, and payment systems, is a significant advantage for documentation employees My academic background allowed me to quickly adapt to the processes involved in executing the company's export contracts While documentation roles may not require frequent outdoor activity like operational staff, it is crucial for documentation executives to remain proactive in staying updated on changes in import and export duties and quality testing regulations.
Recommendations for the export contract of fishery products at Nghi
3.3.1 Choosing and incorporating Incoterms® rule appropriately
The absence of a specified Incoterms® version in sales contracts at Nghi Son poses significant risks in the event of disputes, as newer versions do not invalidate previous ones Additionally, while all export shipments are conducted in containers, the company uses CFR or CIF terms from Incoterms® 2010, which stipulate risk transfer "on board the vessel." This is inconsistent with container shipments, where the risk transfer should occur "at the warehouse," highlighting the need for clarity and alignment in trade terms.
Detailed recommendations: It is advisable that the year of Incoterms® should be referred in the contract, for example, Incoterms® 2002 or Incoterms®
To prevent conflicts in sales contracts with both regular and new buyers, sales employees should prioritize using appropriate trade terms for container shipments It is recommended to use CPT (Carriage Paid To) and CIP (Carriage and Insurance Paid To) instead of CFR (Cost and Freight) or CIF (Cost, Insurance, and Freight) when negotiating export contracts, due to the differences in risk transfer points associated with these terms.
3.3.2 Including deposits in every payment term regardless of Buyers
Under long-term sales contracts, the absence of deposits poses significant risks for exporters like Nghi Son, particularly if buyers refuse to accept goods This situation not only leads to wasted time and resources during potential renegotiations but also threatens Nghi Son's financial stability If negotiations fail, the company may face non-payment from the consignee and incur additional costs for returning unsold cargo or selling it at reduced prices.
When establishing payment terms between the Seller and Buyer, it is advisable to include deposits, excluding Letters of Credit The required deposit amount may vary based on the nature of the business relationship, but it should always be sufficient to cover at least the return shipping fees if the shipment is refused and needs to be sent back from the importer's country to the exporter's country.
3.3.3 Keeping close track of preparation of the goods ordered from other factories
Inadequate preparation of goods concerning quantity can significantly waste time by necessitating booking revisions to adjust estimated delivery dates, potentially resulting in late shipments Furthermore, when sourcing goods from factories outside of Nghi Son, the company risks losing control over inventory levels, particularly when containers are being loaded with cargo.
After finalizing the sales contract, it is crucial for the company to ensure that the goods prepared meet the agreed-upon quality and quantity standards before being loaded onto containers The Purchasing Team should actively remind factories, particularly those outside of Nghi Son’s facility, to maintain quality and timely preparation of goods Utilizing various communication channels such as phone, email, Zalo, and Viber can enhance these reminders Additionally, when negotiating processing contracts with external factories, Nghi Son should clearly outline all requirements regarding time, quantity, and quality from the outset Including penalty clauses in these contracts can help address any shortages of goods that occur at the agreed-upon time.
3.3.4 Providing internal employees with training for back-up purpose Basis for recommendations: When there are a great number of shipments, employees in the Documentation Department feel stressed because there are inadequate people to deal with many shipments at the same time For booking, operation and documentation, each function has only person taking on the position
As a result, it is certain that those employees are put under pressure during peak seasons, leading to unexpected errors in documents
Preparing documents can be simplified with the use of sample templates, but attention to detail is crucial To enhance this process, the Human Resources Department should facilitate training sessions led by the Documentation Department, focusing particularly on the Sales Department, as sales employees frequently interact with Buyers and are more likely to be familiar with the documentation Additionally, during peak periods, sales executives could serve as backup documentation personnel, with incentives such as bonuses for outstanding performance.
My five-week internship at Nghi Son Aquatic Product Exim Co., Ltd provided me with valuable insights into the export process and essential skills that enhance my professional development This experience allowed me to reflect on my university education and solidify my commitment to a career in the import-export sector Nghi Son specializes in processing and trading various fishery products, including marine and freshwater fish, dried seafood, and shrimp Despite being established only six years ago, the company has effectively managed its supply chain, benefiting from the longstanding fishery business tradition of its parent company, Nghi Son Foods Group From 2017 to 2019, Nghi Son experienced growth in revenues, costs, and profits, as it seeks to expand its export markets while maintaining strong relationships with existing customers The company is supported by a capable workforce of 23 employees across five departments, including the Board of Directors.
The export sales contract process at Nghi Son involves seven key steps, aligning closely with theoretical frameworks The company effectively leverages its long-term customer relationships to finalize contracts However, despite its successes in executing these contracts, Nghi Son faces common challenges, particularly regarding Incoterms® compliance and payment issues.
During my internship, I gained valuable insights into practical knowledge, professional attitudes, essential soft skills, and crucial career orientation Additionally, this report outlines recommendations to address identified drawbacks, aiming to mitigate risks for Nghi Son in future sales contracts I sincerely hope that Nghi Son will continue to thrive and grow positively in the fishery business moving forward.
Hoàng Văn Châu, 2009, Logistics và Vận tải quốc tế, NXB Thông Tin Và Truyền Thông
Nguyen Tien Hoang, 2013, International commercial transaction, VNU-HCM
Phạm Duy Liên, 2012, Giáo trình giao dịch thương mại quốc tế, NXB Thống Kê Đinh Xuân Trình, 2011, Giáo trình Thanh toán quốc tế, NXB Khoa Học Và Kỹ Thuật
Vũ Hữu Tửu's 2007 textbook on foreign trade techniques, published by Giáo Dục, and Đoàn Thị Hồng Vân's 2005 guide from NXB Thống Kê, provide essential insights into the field Additionally, the 2020 fishery profile by VASEP, accessible online, offers valuable data on the seafood industry, highlighting its significance and trends For more information, visit the VASEP website.
In June 2020, seafood exports experienced a continued decline of 10%, highlighting ongoing challenges in the industry For more details, visit the source at VASEP.
Bảo Ngọc, 2020, Xuất khẩu thủy sản VN từ 1/1 đến 15/6/2020, [online] Available at: http://vasep.com.vn/Tin-Tuc/123_61358/Xuat-khau-thuy-san-VN-tu-11-den- 1562020.htm [Accessed 14 July, 2020]
Ha Thanh, 2020, Seafood exports gained momentum after Covid-19 pandemic,
[online] Available at: https://customsnews.vn/seafood-exports-gained-momentum- after-covid-19-pandemic-14582.html [Accessed 15 July, 2020]
Kylie Nguyen's 2020 article highlights positive trends in seafood exports, emphasizing key products that are driving growth in the industry The insights provided by NAFIQAD in 2019 detail the registration process for obtaining export certificates for seafood shipments, underscoring the importance of compliance in enhancing export opportunities These developments reflect a promising outlook for the seafood sector, showcasing its potential in international markets.
[online] Available at: http://www.nafiqad4.gov.vn/hoat-dong/kiem-tra-chung- nhan/thuy-san-xuat-khau/quy-trinh [Accessed 16 July, 2020]
The process of exporting goods by sea involves several key steps that ensure efficient and compliant shipping It begins with proper documentation, including invoices and packing lists, followed by selecting a reliable shipping method Customs clearance is crucial, requiring accurate declarations and adherence to regulations Once cleared, goods are loaded onto vessels, with tracking systems in place for monitoring Finally, effective communication with logistics partners is essential for a smooth delivery process For more details, visit Lec Group's comprehensive guide on exporting goods by sea.
Nitoda, 2019, Export process by seaway (FCL), [online] Available at: https://www.nitoda.com/lp/export-process-by-seaway-fcl.html [Accessed 20 July,
Seller(卖方公司): NGHI SON AQUATIC PRODUCT IMPORT EXPORT COMPANY LIMITED
Buyer: Invoicing Company (买方) GREAT HAND CO., LTD 深圳恒瑞喜供应链有限公司
Contact person(联系人): Emily Xu Phone NO(电话): +86 755-83191703
Address(地址): Room 1633 International Culture Mansion Futian Road, Futian Dist Shenzhen City,
For the end user/ consignee: 昆明冬冬食品有限公司