MULTIMODAL TRANSPORTATION IN SHIPPING COFFEE BEANS FROM VIETNAM TO GERMANY Contents I. Overview 3 1. Key aspects of the Vietnam and Germany trading relationship 3 2. Situation of coffee exported to Germany 3 3. Product Description 4 3.1 Product Name 4 3.2 Product Description 5 3.3 Labeling 5 II. Multimodal transportation 5 1. About CPT term 5 1.1 Costs of the seller 5 1.2 Responsibilities of the sellers 6 2. Road sea transportation 7 2.1 Road Transport Mode 7 2.2 Sea Transportation mode: 10 2.3 Total cost for Road Sea Route: 12 3. Road Air Transportation 13 3.2 Air transport mode: 13 3.3. Total Cost for Road Air Transportation 15 III. Compare two multimodal transport options 16 IV. Conclusion 16 References 17
DA NANG UNIVERSITY OF ECONOMICS THE UNIVERSITY OF DA NANG INTERNATIONAL BUSINESS FACULTY MULTIMODAL TRANSPORTATION Topic: MULTIMODAL TRANSPORTATION IN SHIPPING COFFEE BEANS FROM VIETNAM TO GERMANY Lecturers: Trần Thị Ngọc Duy Class: 46K01.1 Members: Da Nang, December 8th 2023 Contents I Overview Key aspects of the Vietnam and Germany trading relationship Situation of coffee exported to Germany 3 Product Description 3.1 Product Name .4 3.2 Product Description 3.3 Labeling .5 II Multimodal transportation About CPT term .5 1.1 Costs of the seller 1.2 Responsibilities of the sellers .6 Road - sea transportation 2.1 Road Transport Mode 2.2 Sea Transportation mode: 10 2.3 Total cost for Road - Sea Route: 12 Road - Air Transportation 13 3.2 Air transport mode: 13 3.3 Total Cost for Road - Air Transportation 15 III Compare two multimodal transport options .16 IV Conclusion 16 References 17 I Overview Key aspects of the Vietnam and Germany trading relationship The diplomatic relations between Vietnam and Germany, established in 1975, have set a solid groundwork for a thriving trade partnership over the years In 2022, the partnership between Vietnam and Germany reached a significant milestone, with Germany emerging as Vietnam's largest trading partner in the EU and achieving a trade turnover of US$15.33 billion, reflecting the strength and effectiveness of their economic agreements and robust German investment The EU-Vietnam Free Trade Agreement (EVFTA) acts as a significant gateway, simplifying the process for Vietnam to trade its commodities, such as coffee, with Germany By eliminating tariffs, especially coffee with a 0% tariff, it makes Vietnamese products more affordable and attractive in the German market Additionally, it highlights unique products from Vietnam through geographical indicators, aiding them in gaining a distinctive market presence Collectively, these facets of the EVFTA serve as catalysts, propelling Vietnam's trade and fostering stronger economic ties with Germany, thereby laying the groundwork for prosperous business interactions in the forthcoming days Situation of coffee exported to Germany Germany holds a significant position as a leading importer of coffee beans within Europe, driven by its substantial coffee consumption which overshadows even the consumption of beer, with a per capita consumption of 165 liters of coffee in contrast to 107 liters of beer Importers Imported value in Imported value in Imported value in 2020 2021 2022 World 18,883,949 22,127,850 31,918,994 Europe 9,627,824 11,118,708 16,169,890 2,736,605 3,241,264 4,729,684 Aggregation Germany (Sources: Trademap.org) On the other hand, Vietnam has showcased a robust capability in exporting coffee, particularly to the European Union (EU) In the year 2021, the export turnover of coffee from Vietnam to the EU reached nearly 1.13 billion USD, marking a 7% increase from the previous year A notable share of this export, precisely 35%, was directed towards Germany, amounting to 394 million USD, which is a significant 21% increase compared to the year 2020 Importers Exported value in Exported value in Exported value in 2019 2020 2021 World 2,135,113 1,886,972 2,060,092 Europe 1,224,694 1,054,402 1,129,107 345,468 324,794 394,020 Aggregation Germany (Sources: Trademap.org) Furthermore, the EU-Vietnam Free Trade Agreement (EVFTA) has been a cornerstone in enhancing market access and reducing tariffs for Vietnamese coffee in the German market, thereby elevating its competitiveness and accessibility In conclusion, the amalgamation of Germany's high coffee consumption, Vietnam's substantial coffee export capacity, and facilitated market access through the EVFTA significantly contributes to the escalating coffee exports from Vietnam to Germany Product Description 3.1 Product Name Coffee (excl, roasted and decaffeinated) HS Code: 090111 Export Quantity: 18 tons, 300 bags x 60 kilogram 3.2 Product Description The product includes pure Arabica coffee beans, which have not been roasted or ground These coffee beans are dark brown or green and retain the natural and distinctive flavor of the original coffee beans grown in the central highlands of Vietnam It is suitable for businesses and individuals who want to roast and grind coffee to their taste 3.3 Labeling Product Name: “Dak Lak Highland Arabica” Identification Code of the ICO: "ICO-XXXXXX" Country of Origin: “Product of Vietnam” Classification: “Single Origin Arabica” Net Weight: “Net Wt 500g/bags” Certification Details II Multimodal transportation About CPT term 1.1 Costs of the seller Transportation Costs: The seller is responsible for arranging and paying for the transportation of the goods to the agreed-upon destination This includes the cost of hiring a carrier or freight forwarder, as well as any fees or charges related to the transportation of the goods Export Customs Clearance Costs: The seller is responsible for completing all export documentation and fulfilling any customs requirements for the goods This may involve obtaining export licenses or permits, preparing customs declarations, and paying any customs duties or taxes applicable to the export of the goods Packaging and Labeling Costs: The seller must ensure that the goods are properly packaged and labeled for transportation This includes the cost of suitable packaging materials, such as boxes or pallets, as well as any labeling or marking requirements specified by the buyer or relevant regulations Loading Charges: The seller bears the costs of loading the goods onto the means of transport, such as a truck, vessel, or aircraft This includes any labor or equipment required for loading the goods safely and securely Handling Charges: The seller is responsible for any handling charges associated with the transportation of the goods, such as terminal handling charges or wharfage fees Origin Terminal Charges: The seller is responsible for any charges associated with the handling of the goods at the origin terminal, such as storage fees or demurrage charges Export Documentation Costs: The seller is responsible for preparing and providing all necessary export documentation, such as commercial invoices and bills of lading 1.2 Responsibilities of the sellers Seller provides commercial invoice and other required documents in paper or electronic form Seller is responsible for delivery of goods to the carrier at the place of delivery on the agreed date or within the agreed period Seller is responsible for damage or loss of goods until they are handed over to the carrier at the named point and within the specified time Seller has to contract or organize the transport of goods to the named place of destination If such a place does not exist, the seller can choose the point that best suits this purpose One of the seller obligations is operating according to all transport-related security requirements for transport to the destination Seller has to carry out and pay for export clearance, as well as assisting the buyer with import clearance Seller counts and weighs goods and, if required, packs the goods at its own expense Seller informs the buyer about the delivery of goods to the carrier and provides the buyer with documents authorizing the buyer to take over the goods The seller is not obliged to make a contract of insurance but must provide information for this purpose at the buyer’s request Road - sea transportation 2.1 Road Transport Mode 2.1.1 About Viet Logistics Company Limited (VIET LOGISTICS) Picture 1: Logo of Company Viet Logistics Company Limited, also known as Vietlogs, is a reputable logistics company Established in April 2004, Vietlogs has been providing comprehensive logistics solutions to a wide range of industries With a strong dedication to customer satisfaction and a commitment to excellence, Vietlogs has gained a solid reputation in the market Vietlogs offers a diverse range of services including freight forwarding, warehousing, distribution, customs clearance, and transportation Their team of experienced professionals ensures efficient and timely delivery of goods, both domestically and internationally By leveraging their extensive network and partnerships, Vietlogs is able to offer competitive rates and reliable logistics solutions to meet the unique needs of their clients With a focus on innovation and technology, Vietlogs utilizes advanced systems and processes to streamline operations and enhance supply chain efficiency They prioritize safety and security, ensuring that goods are handled with the utmost care throughout the entire logistics process Whether it's managing complex supply chains or handling individual shipments, Vietlogs is dedicated to providing tailored solutions that meet the specific requirements of each client With their expertise, reliability, and customer-centric approach, Vietlogs continues to be a trusted partner for businesses seeking efficient and cost-effective logistics services in Vietnam 2.1.2 Why we choose Gemadept Corporation to transport coffee from DakLak to Da Nang Port & Cat Lai Port? Expertise in Heavy Haulage: Vietlogs has expertise in transporting heavy and oversized cargo, including trucks They have the necessary equipment, such as specialized trailers and vehicles, to handle the transportation of our coffee truck safely and efficiently Handling and Loading: Vietlogs' experienced team will handle the loading and securing of our coffee truck onto the transport vehicle with utmost care They will use appropriate equipment and techniques to ensure that our truck is properly secured and protected during transit Tracking and Monitoring: Vietlogs utilizes advanced tracking and monitoring systems that allow us to keep track of the progress of our coffee truck during transportation We can stay updated on its location and estimated arrival time, providing us with real-time information Cost-Effectiveness: Vietlogs offers competitive rates for their transportation services They can provide us with a transparent and detailed quotation 2.1.3 Relevant documents in road transportation Freight contract: A freight contract is an important and indispensable road transport document when delivering goods This is a document that clearly and transparently shows transportation activities (between the sender and the service Picture The driver presented the documents provider) The information in the standard freight contract will have all the information such as: o Goods transported, packaging specifications, weight, size o Place of delivery/receipt of goods o Cost, payment method, payment time o Terms, rights, obligations, and responsibilities of each party, This document is an important "travel document" to present to relevant parties such as market management, customs, quarantine, to clearly verify the origin and legality of transported goods Road papers: Road papers are usually issued by transport units to their drivers to serve as confirmation documents for each route as well as to track and account expenses In addition, road papers are also transport documents that verify the identity of the driver, ensuring accurate delivery to the consignee Shipping papers: This is a transport document that can replace invoices or delivery notes in retail The transport unit will provide a waybill to confirm service payment as well as legal proof of the goods transported on the vehicle Freight receipt: A freight receipt is a document prepared by the transport unit This is the document that the goods owner will rely on to pay costs to the transport unit after the delivery work is completed On the freight receipt, information about costs and items is presented clearly and accurately according to the terms of cooperation between the consignor and the service provider Besides that, there are also other transportation terms related to drivers performing delivery operations, including: Driver's license & Transport service business registration certificate: This document determines whether the driver is qualified to perform delivery services or not Transport documents: Documents related to this document determine the legality of the vehicle including: vehicle registration, insurance, inspection, circulation certificate, log number, vehicle badge, 2.1.4 Freight and some related costs in road transportation: Commodity: Coffee Quantity: 18 MT Road transport method: Goods are transported as a whole by truck, a 18-ton truck with dimensions of 9.6m x 2.4m x 2.4m Route Type of Charges Amount (VND) Dak Lak to Da Nang Transportation fee from Dak Lak to Da Nang 16 000 000 Hire a transportation driver Loading and unloading fees Goods insurance fees All prices above not include VAT (10%), and entrance fees to roads are prohibited for heavy loads 2.2 Sea Transportation mode: The journey in this mode of transportation is from Da Nang (Vietnam) to Hamburg (Germany) Port of Loading is Tien Sa port and Port of Destination is the port of Hamburg 10 2.2.1 About Maersk Line Maersk Line, founded in 1928 and headquartered in Copenhagen, Denmark, is one of the world's leading shipping companies With more than 90 years of experience, Maersk Line has built a solid reputation and become an icon in the shipping industry Maersk Line is a global provider of ocean freight services, offering transportation for a wide range of goods including containers, refrigerated goods, and dangerous goods With a modern and extensive fleet, Maersk Line ensures the safe, reliable, and highperformance delivery of goods The pricing of Maersk Line's services is determined by various factors such as the type of goods, shipping distance, delivery time, and specific customer requirements As a customer-centric company, Maersk Line is committed to providing competitive and flexible pricing options to cater to the diverse needs of its customers 2.2.2 Why we choose Maersk Line to transport coffee from Tien Sa port to Hamburg port? Expertise in container shipping: Maersk Line is known for its expertise in container shipping They have the necessary equipment and infrastructure to handle coffee shipments, ensuring proper handling and preservation of the product throughout the journey Global network: With its extensive global network, Maersk Line facilitates efficient transportation of goods to multiple destinations, guaranteeing the dependable and punctual delivery of coffee from Tien Sa port to Hamburg port Quality control: Maersk Line has established quality control measures to ensure that the coffee is loaded correctly and securely in the containers They follow strict protocols to minimize any potential risks of contamination or spoilage during the loading process 2.2.3 Relevant documents in sea transportation Purchase invoice: Accurately record information about the coffee, including quantity, value, origin, and other details Export certificate: Issued by the competent authority to confirm the legal export of coffee 11 Transportation documents: Including shipping invoices and bills of lading, confirming information about the shipment and delivery address Invoice: Details the transaction between the seller and the buyer, including product description, quantity, price, and terms of sale It's crucial for accounting, tax computation, and customs valuation Packing List: Provides information on the packaging of the goods, including quantity, description, and weight, which is essential for customs, logistics, and buyer verification Sales Contract: Defines the terms and conditions of the sale, including product specifications, pricing, and delivery details, providing a legal framework for the transaction Phytosanitary Certificate: Certifies that the agricultural products, in this case coffee, are free from pests and diseases, ensuring they meet the importing country's plant health standards C/O Form B: A Certificate of Origin form B indicates the country of origin of the goods, which is vital for customs and tariff purposes C/O Form ICO: This Certificate of Origin form from the International Coffee Organization is specific to coffee exports and provides the coffee's origin, supporting customs clearance and adherence to trade agreements Certificate of Quality, Quantity, Weight: Verifies the quality, quantity, and weight of the coffee being exported, ensuring it meets the agreed standards and contractual terms Bill of Lading: A document issued by a carrier to the shipper, providing details about the shipment, its receipt, and the agreement to transport the goods to a specified destination Certificate of Fumigation: Certifies that the goods have been fumigated to eliminate pests and insects, ensuring the coffee meets health and safety standards of the importing country 2.2.4 Freight and related costs in sea transportation: Transportation method: Goods is loaded in a 20’DC container Port of Loading: Tien Sa Port Port of Destination: Hamburg Port, Germany 12 Charges (10% VAT included) Amount (VND) Terminal Handling Charge 461.160 Bill of Lading 900.000 Seal fee 200.000 Entry Summary Declaration fee 858.725 Handling fee 667.000 Customs Declaration fee 900.000 Fumigation Certificate 700.000 Certificate of Origin fee (form A and B) 120.000 Lift On - Lift Off 561.600 Sea Freight 5.450.000 Total Cost 10.818.485 2.3 Total cost for Road - Sea Route: Charges (10% VAT included) Costs Road transportation 16.000.000 Sea transportation 10.818.485 Total Cost 26.818.485 Road - Air Transportation We continue to use Vietlogs' services for the reasons mentioned in the previous section However, the fee for shipping goods from DakLak to Tan Son Nhat Airport is different Route Type of Charges Amount (VND) Dak Lak to Cat Lai, Transportation fee from Dak Lak to Cat Lai HCM Hire a transportation driver 12 000 000 13 Loading and unloading fees Goods insurance fees All prices above not include VAT (10%), and entrance fees to roads are prohibited for heavy loads 3.2 Air transport mode: 3.2.1 About the Air Asia Cargo: Air Asia Cargo is a cargo transportation unit of Air Asia, an airline established in 2002 Known as one of the leading low-cost airlines in Southeast Asia, Air Asia Cargo has accumulated over 20 years of experience in the logistics field Currently, they provide cargo transportation services to numerous international destinations worldwide With Air Asia's extensive network, Air Asia Cargo can efficiently and costeffectively transport cargo They offer a range of flexible and diverse cargo transportation services, including express delivery, heavy cargo transport, perishable goods, high-value items, and special cargo To meet the diverse needs of customers, Air Asia Cargo provides customized transportation solutions Air Asia Cargo utilizes advanced technology and high-quality processes to ensure safety and reliability in the cargo transportation process In terms of pricing, they offer competitive shipping packages based on the type of goods, weight, distance, and other special requirements 3.2.2 Why we choose Air Asia Cargo to transport coffee from Tan Son Nhat Airport to Munich Airport? Specialized Handling Facilities: Air Asia Cargo has specialized facilities to handle agricultural goods like coffee They have temperature-controlled storage areas and equipment to maintain the quality and freshness of the coffee beans throughout the journey, minimizing the risk of spoilage or damage Efficient Transit Times: By prioritizing transit time optimization, Air Asia Cargo ensures swift delivery of cargo, including coffee shipments Opting for Air Asia Cargo guarantees that the coffee will reach Munich port promptly, meeting customer expectations and mitigating the time-sensitive nature of transporting agricultural goods Track Record of Reliability: Air Asia Cargo has a proven track record of reliability in cargo transportation Their commitment to on-time delivery and adherence to safety 14 protocols ensures that the coffee shipment arrives at Munich port securely and within the expected timeframe 3.2.3 Relevant documents in air transportation: To transport coffee from Tan Son Nhat Airport to Munich Airport by Air Asia Cargo, the following necessary documents are required and necessary: Airway Bill: This is the most important document, confirming the transportation of goods by air It contains information about the shipper, consignee, description of the goods, and terms of transportation Invoice: The invoice details the items being shipped, including information about quantity, value, and total Export-import documents: This includes the Sales Contract, Customs Documents, and other export-import documents Documents related to the origin of goods: This includes the Certificate of Origin and other documents related to the origin of goods Insurance documents: This includes the Insurance Certificate and other documents related to insurance Other documents: This includes the Phytosanitary Certificate for agricultural products, Health Certificate for food products, Quality Certificate, and other documents that may be required depending on the type of goods being transported 3.2.4 Freight and related costs in Air Transportation Transportation method: Goods is loaded in a ULD Port of Loading: Tan Son Nhat Airport Port of Destination: Munich Airport, Germany Charges (10% VAT included) Amount (VND) Terminal Handling Charge 26.568.000 Airway Bill 246.000 Advanced Manifest Submission 246.000 Handling 246.000 Screening 8.856.000 Customs Declaration 900.000 15 Certificate of Origin (form A and B) 120.000 Fumigation Certificate 700.000 Air Freight 1.333.440.000 Total Cost 1.371.322.000 3.3 Total Cost for Road - Air Transportation Charges (10% VAT included) Cost Road transportation 12.000.000 Sea transportation 1.371.322.000 Total Cost 1.383.322.000 III Compare two multimodal transport options Solutions to transport coffee from DakLak (Viet Nam) to Criteria Hamburg (Germany) Road - Sea (Dak Lak - Road - Air (Dak Lak - Tan Son Danang Port - Hamburg) Nhat Airport - Munich Airport) Transport time Longer time Shorter time Fee Cheaper More expensive Level of Less complex More complex complexity IV Conclusion Opting for the Road - Sea route from Danang Port to Hamburg, costing about 26,818,485 VND, offers a cost - effective solution for large scale coffee shipments Its advantages include financial viability for bulk transport, aligning with sustainable practices, despite its longer transit time In contrast, the faster Road - Air route via Tan Son Nhat Airport to Munich Airport, costing around 1.383.322.000 VND, is way more expensive and less suitable for large shipments due to higher costs and capacity limits 16 Therefore, for our needs, choosing the Road - Sea route is the most practical and economical decision 17 References (ITC), I.T.C (no date) Trade Statistics for International Business Development, Trade Map - Trade statistics for international business development Available at: https:// www.trademap.org/Index.aspx (Accessed: 07 December 2023) (No date) TTWTO VCCI - opportunities from EVFTA for exporting Vietnamese goods to the German market? Available at: https://wtocenter.vn/german-market/19043opportunities-from-evfta-for-exporting-vietnamese-goods-to-the-germanmarket#:~:text=The%20key%20export%20products%20of,08)%20because%20the %20EU%20(including (Accessed: 07 December 2023) Chứng TỪ Vận Tải Khi Giao nhận Hàng Hóa đường BỘ (MỚI) (no date) ALS Available at: https://als.com.vn/chung-tu-van-tai-khi-giao-nhan-hang-hoa-duong-bo (Accessed: 07 December 2023) The German market potential for coffee (no date) CBI Available at: https://www.cbi.eu/ market-information/coffee/germany/market-potential#:~:text=02%20November %202022%20Takes%2012,for%20the%20German%20coffee%20market (Accessed: 07 December 2023) Germany is the biggest market for Vietnamese coffee (no date) Cổng thông tin điện tử Bộ NN PTNT Available at: https://www.mard.gov.vn/en/Pages/germany-is-thebiggest-market-for-vietnamese-coffee.aspx (Accessed: 07 December 2023) Home (no date) Maersk Available at: https://www.maersk.com/ (Accessed: 07 December 2023) INCOTERMS 2020 CPT (2022) ShipHub Available at: https://www.shiphub.co/incoterms-2020-cpt/ (Accessed: 07 December 2023) Trang Chủ (2022) Booking tải Hàng không rẻ Air Asia Available at: https://airasiacargo.vn/ (Accessed: 07 December 2023) 18 Viet Logistics (no date) Công Ty Tnhh Việt logistics, Viet Logistics Available at: https:// vietlogistics.com/vi/ (Accessed: 07 December 2023) Writer, S (2021) Why Germany’s Coffee Market keeps growing, Global Coffee Report Available at: https://www.gcrmag.com/why-germanys-coffee-market-keepsgrowing/#:~:text=It%20even%20surpasses%20beer%2C%20which,the%20market %20segments%2C%E2%80%9C%20he%20says (Accessed: 07 December 2023) 19