In the context of global integration and trade liberalization, foreign trade activities are increasingly developing and playing an important role in the economies of countries. In Vietnam, the government has continuously made efforts in international integration, changing policies, signing agreements, and promoting the development of import-export trade. In the 5 years 2018 - 2022, the average growth rate of Vietnam's export and import turnover reaches 11.3%/year. In 2023, China has become the market with the largest two-way trade relationship with Vietnam with the total export and import turnover of the two countries in this year estimated at 173.2 billion USD (General Statistics Office, 2024). One of the essential phases in fostering the advancement of international trade is the provision of import and export freight forwarding services. The potential for the development of forwarding services in Vietnam is quite large, so the international freight forwarding industry is increasingly interested and improved to support the import and export sector. According to the 2023 Emerging Market Logistics Index report published by transportation and logistics service provider Agility, Vietnam ranked 10/50 emerging logistics markets, up 1 place compared to the previous year (The Ministry of Finance, 2023). With an average annual industry growth rate of 14 - 16%, the quantity and quality of logistics services have improved, making an important contribution to increasing Vietnam's total export-import turnover. With the continuous development of foreign trade activities as well as maritime transportation, freight forwarding companies also encounter fierce competition in the industry. Therefore, freight forwarding companies need to improve service quality and renovate processes to increase business efficiency, attract more customers and create competitive advantages for businesses. By organizing a reasonable forwarding service process, International Logistics Forwarder Corporation will not only control the output quality well but also maintain a professional image in the eyes of customers. Besides small customers and individual business households, ILOG also wants to dominate the market share of the FCL freight forwarding market. ILOG's target customers in this field are small and medium-sized enterprises that intend to import raw materials or goods from abroad but do not have much experience in import-export and customs declaration. The import goods forwarding process is organized through many complex steps, requiring the development of detailed processes to ensure the goods transportation process takes place quickly and smoothly. However, processes will have some errors and weaknesses that need to be gradually improved to increase service quality for future customers. This is the reasons why the topic: “Analyzing the forwarding process of importing full container load (FCL) commodities from China to Vietnam by sea at International Logistics Forwarder Corporation” was chosen with the hope that this report can give people a better insight into the freight forwarding process in ILOG and from there can contribute efforts to help the company improve some factors in the forwarding process of importing in the current situation. 2. Objectives This study was conducted with 3 main objectives: - First, the report describes and analyzes the forwarding process of importing FCL commodities by sea at ILOG . - Second, the report evaluates the advantages and disadvantages in the forwarding process of importing FCL commodities by sea at ILOG. - Third, the report offers a number of recommendations to improve the forwarding process of importing FCL commodities by sea at ILOG.
THEORETICAL OVERVIEW OF THE FORWARDING
Overview of process
According to TCVN ISO 9000:2015 (2016), “Process is a set of interrelated or interacting activities that use inputs to deliver an intended result” Whether the “intended result” of a process is called output, product or service, depends on the context of t he reference Inputs to a process are generally the outputs of other processes and outputs of a process are generally the inputs to other processes Processes in an organization are generally planned and carried out under controlled conditions to add value
According to Dumas (2018), Business Process Management (BPM) is about managing entire chains of events, activities, and decisions that ultimately add value to the organization and its customers These chains of events, activities, and decisions are called processes
1.1.2 The role of process for business
The way processes are designed and performed affects both the quality of service that customers perceive and the efficiency with which services are delivered An organization can outperform another organization offering similar kinds of service if it has better processes and executes them better (Dumas et al., 2018)
The report uses 4 aspects of evaluating process performance (Dumas et al., 2018) including:
One of the first and most important criteria to evaluate the process is time Specifically, a very common performance measure for processes is cycle time (also called throughput time) Cycle time is the time that it takes to handle one case from start to end Other aspects of the time dimension come into view when we consider the components of cycle time, namely:
+ Processing time (also called service time): the time that resources, such as process participants or software applications invoked by the process, spend on actually handling the case
+ Waiting time: the time that a case spends in idle mode Waiting time includes queueing time—waiting time due to the fact that no resources are available to handle the case—and other waiting time, for example because synchronization must take place with another process, with other activities, or because an input is expected from a customer or from another external party
Obviously, a yield increase may have the same effect on an organization’s profit as a decrease of cost However, process redesign is more often associated with reducing cost A cost notion which is closely related to productivity is operational cost Operational costs can be directly related to the outputs of a business process A substantial part of operational cost is usually labor cost, the cost related to human resources in producing a good or delivering a service Within process redesign efforts, it is very common to focus on reducing operation cost, particularly labor cost The automation of tasks is often seen as an alternative for labor Obviously, although automation may reduce labor cost, it may cause incidental costs involved with developing the respective application and fixed maintenance cost for the lifetime of the application
The quality of a business process can be viewed from at least two different angles: from the client’s side and from the process participant’s perspective This is also known as the distinction between external quality and internal quality
+ The external quality can be measured as the client’s satisfaction with either the product or the process Satisfaction with the product can be expressed as the extent to which a client feels that the specifications or expectations are met by the delivered product On the other hand, a client’s satisfaction concerns the way how the process is executed A typical issue is the amount, relevance, quality, and timeliness of the information that a client receives during execution on the progress being made
+ The internal quality of a business process relates to the process participants’ viewpoint Typical internal quality concerns are: the level that a process participant feels in control of the work performed, the level of variation experienced, and whether working within the context of the business process is felt as challenging
The criterion that is least noted to measure the effect of process redesign is the flexibility of a business process Flexibility can be defined in general terms as the ability to react to changes These changes may concern various parts of the business pr ocess, for example:
+ The ability of resources to execute different tasks within a business process setting;
+ The ability of a business process as a whole to handle various cases and changing workloads;
+ The ability of the management to change the structure and allocation rules; + The organization’s ability to change the structure and responsiveness of the business process to the wishes of the market and business partners.
Overview of sea transport
Of the world’s international trade 90 per cent is transported by sea The customs and practices associated with this form of transport have been refined over centuries of worldwide trade Sending cargo by sea is ideal for high -volume cargoes that are not necessarily time sensitive or have long lead times for delivery However, this mode of transport is slow and fraught with possibilities for delay (Rushton et al., 2014)
1.2.2 Advantages and disadvantages of sea transport
+ One of the significant advantages of sea freight is its cost -effectiveness, especially when dealing with large shipments or bulk goods
+ Sea freight can accommodate most types of cargo, especially bulk goods & large packaged consignments going long distances
+ With an extensive network of ports around the globe, sea freight provides unparalleled global connectivity for businesses This connectivity enables access to multiple markets
+ One of the main drawbacks of sea freight is its longer transit times compared to air freight or express shipping
+ Sea freight is subject to various factors that may lead to delays and uncertainties during shipping processes Adverse weather conditions, port congestion, labor strikes or unforeseen events can disrupt schedules and impact delivery timelines + Compared to air cargo, sea cargo is more prone to damage or destruction This is a result of the longer voyage time and increased vulnerability of ships.
Overview of forwarding
According to Article 163 of the 1997 Commercial Law: “Freight forwarding service is a commercial act, whereby the person providing the forwarding service receives goods from the shipper, organizes transportation, storage, other document- related activities and other related services to deliver goods to the consignee as authorized by the goods owner, carrier or other delivery service provider (collectively referred to as customer)”
Another concept about freight forwarding according to FIATA (2004): "Freight forwarding are services of any kind relating to the carriage, consolidation, storage, handling, packing or distribution of goods, as well as ancillary and advisory services in connection therewith, including but not limited to customs and fiscal matters, declaring the goods for official purposes, procuring insurance of the goods and collecting or procuring payment or documents relating to the goods Freight forwarding services also include logistic services with modern information and communication technology in connection with the carriage, handling or storage of the goods, and de facto total supply chain management
1.3.2 The role of forwarding activities
Freight forwarding plays an important role in international trade, such as: Meeting the need to transport increasing volumes of exported goods; Cutting unnecessary costs for importers and exporters etc
In addition, the development of forwarding has created conditions for goods to flow quickly, safely and economically; utilized resources
In addition to arranging freight, forwarding companies also provide many other ancillary services such as customs clearance, related -document matters, inventory management, logistics and supply chain management activities for businesses The forwarder is also a useful information channel on international trade, providing consulting support for new customers entering the field of foreign trade
According to Article 163 of the 1997 Commercial Law, a person providing freight forwarding services is a trader with a certificate of business registration for freight forwarding services
According to FIATA (2004), the freight forwarder is the party who ensures that internationally traded goods move from point of origin to point of destination to arrive: at the right place, at the right time, in good condition, at the most economical cost Typical services that are offered by freight forwarders include:
- preparation and checking of shipping documents;
- arranging the order collection from the point of origin to the shipping port;
- arranging the customs clearance and final delivery at the destination country;
- provision of advice in export regulations, documentation requirements, etc;
- detailed knowledge of carriers, ports, etc;
- knowledge of the different modes of international transport;
- knowledge of the different costs associated with different modes and destinations
1.3.4 Relationship between forwarder and related parties
Figure 1.1 Relationship between forwarder and related parties
(Source: Ngo Thi Hai Xuan, 2014) Forwarders are considered the link between many organizations and stakeholders in import and export activities
- For the government and other authorities: Freight forwarders directly work with parties such as customs authorities, port management agencies, airport management agencies to carry out clearance procedures
- For shipper and consignees: Forwarders directly represent these entities to perform work related to the delivery and receipt of import and export goods
- For insurance companies: The forwarder acts on behalf of the shipper/consignee to buy insurance for the shipment
- For carriers: Forwarders book ships, organize loading and unloading of goods
- For banks: Forwarders make payments for freight, contracts
FCL stands for Full Container Load, meaning shipping the entire container This can be understood as a way of transporting goods when the shippers have full rights to use the container for packing goods without sharing with other shippers (Vinalogs,
1.3.5.2 Documents in the FCL forwarding process
+ Customs declaration: A customs declaration is an official document that lists and gives details of goods that are being imported or exported
+ Bill of lading: A bill of lading is a legal document issued by a carrier (transportation company) to a shipper that details the type, quantity, and destination of the goods being carried A bill of lading also serves as a shipment receipt when the carrier delivers the goods at a predetermined destination + Commercial contract: Is a legal document signed by two or more parties to clearly state the terms and divide the responsibilities of each party when participating in business activities
+ Commercial invoice: Commercial Invoice is a type of commercial document used to pay for the value of goods between the exporter and importer A standard commercial invoice will include the following information: goods characteristics, import price, quantity, total value of goods, delivery conditions, payment method…
+ Packing list: A packing list itemizes the contents of each package (box, pallets, etc) It includes weights, measurements and detailed lists of the goods in each package
+ Arrival Notice (A/N): An arrival notice is a document that is issued out by a carrier that lets all relevant parties know when a shipment will arrive at a specified destination
+ Delivery Order (D/O): Delivery Order is a document in international transport, issued by the carrier or forwarder to present to the goods supervision agency so that goods can be removed from the yard, container
+ Certificate of origin (C/O): The certificate of origin is an important document in import and export, in order to determine the origin of the product, thereby considering whether it can apply preferential tax policies
+ Fumigation certificate: A fumigation certificate is a document that serves as confirmation that any wooden packing materials (ie, pallets) used in a cargo shipment have been fumigated They contain details such as treatment purpose, fumigants used, and temperature range
+ Phytosanitary certificate: A phytosanitary certificate verifies agricultural products have been inspected and are pest and disease free
+ In addition, depending on the characteristics of each product and the requirements of the exporting and importing countries, a number of other documents may be required to present: Insurance document, Quarantine certificate, Quality certification, Health certificate
1.3.5.3 The basic forwarding process of importing FCL commodities
Figure 1.2.The basic forwarding process of importing FCL commodities
(Source: Ha Thi Ngoc Oanh, 2009)
Sales staff need to collect necessary information related to the shipment from customers such as name of goods, volume, exporter information, Incoterms conditions Then the sales staff sends the above information to the documentation department
Step 2: Book space with shipping lines (depending on Incoterms)
If importing under Incoterms 2020 conditions is EXW, FCA, FAS, FOB, the forwarding company's documentation department needs to contact the carrier to book space If importing under the remaining Incoterm 2020 conditions, the exporter will take responsibility for ship chartering
Step 3: Receive and check documents from importers
After receiving draft documents (commercial invoice, packing list, bill of lading…) from the exporter, the importer will send all documents to the forwarding company to check the information If the information on the draft documents is missing or incorrect, the documentation department needs to immediately contact the importer so that the importer can request the exporter to correct or supplement as soon as possible
Information to check on a commercial invoice: invoice number, exporter name, importer name, term of payment, delivery term, description of goods, volume of goods, unit price, total value of shipment…
Information to check on a packing list: gross weight, net weight, description of goods match with commercial invoice or not
Information to check on a Bill of lading: B/L number, shipper information, consignee information, port of loading, port of discharge, quantity & package, description of goods, gross weight, measurement…
If the shipment has other documents such as certificate of origin, the forwarding company's documentation department also needs to check the information according to regulations to avoid charging later
Step 4: Get a Pre-alert from the export agent
The Pre Alert dossier set includes HBL, MBL, commercial invoice, packing list, customs declaration, certificates of origin will be sent by the agent in the exporting country to the recipient in the import country
OVERVIEW OF INTERNATIONAL LOGISTICS
Basic information about ILOG
ILOG was established and has been in operation since 2003, a company specializing in serving all types of transportation services, freight forwarding and import-export customs declaration After more than 20 years of establishment and development, up to now, the company has achieved many significant achievements and become one of the most prestigious forwarding companies in the Da Nang market
English Name: INTERNATIONAL LOGISTICS FORWARDER CORPORATION Vietnamese Name: CÔNG TY CỔ PHẦN GIAO NHẬN VẬN CHUYỂN QUỐC TẾ Abbreviations: ILOG CORP
Website: www.interlogistics.com.vn
Email: info@ilog.com.vn
Office: No 72 Nai Nam, Hoa Cuong Bac ward, Hai Chau district, Da Nang city
(Source: www.interlogistics.com.vn)
History of formation and development
In 2003, International Freight Forwarding Joint Stock Company was officially established with the abbreviation name Interlink Da Nang The company operates in the fields of forwarding, transporting import and export goods by sea and air, customs declaration Since establishment, Interlink Da Nang has boldly invested, developed and expanded business markets with domestic and foreign partners Currently, the company is a member of many prestigious organizations such as: Vietnam Freight Forwarders Association - VIFFAS, International Federation of Freight Forwarders Associations - FIATA, Vietnam Chamber of Commerce and Industry - VCCI, This is an opportunity for the company to expand relationships, access markets and new
18 potential partners After nearly 20 years of construction and development, the company has achieved a number of notable achievements such as:
- Quality Management Certificate according to ISO 9001:2000 standards issued by TUV Rheinland Group (German Federation) in 2005
- Vietnamese Strong Brand Award voted by the Ministry of Trade and Vietnam Economic Times in 2005 and 2006
In April 2023, the company changed its English name to INTERNATION AL LOGISTICS FORWARDER CORPORATION (abbreviated as ILOG CORP) - merged into the INTERLOGISTICS corporation system
In August 2023, the company signed a franchise agreement with INTERLOGISTICS company and officially used the INTERLOG brand identity to operate and develop business.
Business activities segment
- LCL - Less-than-container load: This is considered an important service at ILOG
Up to now, the business has more than 60 agents around the world, supporting customers in shipping small goods all over the world
- FCL – Full Container load: ILOG provides full container shipping services by sea Thanks to a team of experienced staff and professional working methods, ILOG can meet customers' strict requirements in terms of time and cost
Air freight forwarding service is a service that ILOG is focusing on developing The company is making efforts to establish good relationships with many airlines to ensure competitive prices and on-time delivery to customers
ILOG's Trucking in-land services are provided to most of the country, especially inland transportation by Container from Da Nang to Ho Chi Minh City, Hai Phong and vice versa ILOG always ensures fast and safe in-land trucking service to customers
ILOG can perform all customs declaration and goods inspection procedures at the port as quickly as possible on behalf of customers With a team of well -trained,
19 professional, experienced, enthusiastic and dedicated staff, ILOG can meet all customs requirements of customers
The warehousing and packaging services provided by ILOG to customers are: Storage for goods awaiting circulation, imported goods awaiting distribution and goods gathered awaiting export; Packing; Packing in container; Loading and unloading goods; Inventory management
ILOG provides complete Logistics services from receiving goods to delivering them to the recipient (Door to Port, Door to Door)
The services that the business provides include: Door -to-door delivery; Packing; Transportation and storage; Carry out customs procedures; Unloading and transferring goods onto ships or airplanes; Receiving goods abroad; Deliver goods directly to the recipient
2.3.7 Carry out procedures to apply for Certificates
One of the outstanding services at ILOG is applying for all types of Certificates of Origin (C/O) Through this service, the company has helped reduce many difficulties and saved time as well as costs for customers.
Organizational structure and functions of departments
Figure 2.2 Organizational structure chart at ILOG
The Board of Directors includes 1 director and 1 deputy director, responsible for managing the business's activities, building strategies and organizing company development The Director takes on the highest role, shaping operating strategies, managing all company activities, solving arising problems and ensuring working conditions for employees The Deputy Director supports the Director in implementing strategies, making specific plans for the Operation department and Business Development department, and monitoring as well as inspecting the process implementation
Due to the small number of employees, the Director and Deputy Director also take on the role of direct business development as a sales staff They maintain relationships with long-standing and important customers for ILOG In particular, the Director and Deputy Director are the ones who directly resolve issues with the Customs Department when encountering difficult situations in the forwarding of import and export goods
Administrative office staff undertake all tasks related to administrative processes and procedures; manage and supervise the work of employees in the company; recruit new employees, manage human resources in the company and implement policies for employees
Employees of the Finance and Accounting Department are responsible for performing professional operations according to accounting principles, State regulations and Vietnamese law; accounting employee salaries; developing financial plans and annual financial reports; preparing monthly financial reports; managing and using of capital resources; paying for company fees and operations; Declaring and paying taxes on time and fully; managing and paying domestic and foreign debts
ILOG's Inland Trucking department is responsible for receiving goods, then coordinating vehicles to carry out shipments from the port to the customer warehouse and vice versa In addition, this department also offers many fast and economical domestic transportation solutions for customers
This is considered the department responsible for the most important work at ILOG because Cus staff needs to perform tasks related to documents such as issuing, checking and sending documents to relevant parties in the import and export shipments; Search and develop forwarder agents in foreign markets; check ocean freight and book space when needed; contact and resolve issues related to shipping lines, agencies
The customs department at ILOG will perform tasks related to customs declaration such as manifest declaration, import and export customs declaration At the same time, when a shipment is assigned a yellow or red channel, the customs department is also responsible for preparing documents and conducting goods inspection with the customs authority
The Certificate of Origin department performs the work of supporting customers in understanding C/O regulations in exporting/importing countries and applying for all types of C/O
The role of the business development department is to develop Sales plans; search for potential customers; making a price quote; consulting on prices and convincing customers to use ILOG's services; caring customers before, during and after completing the service
Business environment
ILOG's operating market is both in Vietnam and internationally In Vietnam, 70% of ILOG's customers come from Da Nang city Because ILOG's headquarters is located in this city and Da Nang is a developed city with many industrial parks and business households, there is a need for forwarding services and import/export -related services Next, ILOG's operating market expanded to neighboring provinces such as Thua Thien Hue, Quang Nam and spread throughout other provinces
International transshipment accounts for about 4/5 of ILOG's annual revenue Among them, the US is the main market with the most shipments, followed by the markets of Singapore, Canada, Australia, India, England, New Zealand,
ILOG's main customers are small business households, especially handicraft businesses in Ngu Hanh Son District, Da Nang city In addition, a number of customers who are unable to perform import-export tasks such as tourists and individual households also contribute a large amount of ILOG's revenue Currently, ILOG is also developing a market expansion plan and targeting companies in industrial parks in Central Vietnam
At present, the forwarder market in Da Nang in particular and Vietnam in general is quite competitive with many companies such as Bee Logistics, Bach Viet Shipping, Melody Logistics To compete with other forwarder companies, ILOG has built many flexible business strategies, constantly making efforts to change and adapt, meeting customer requirements well.
Business performance from 2021 to 2023
Table 2.1 Business performance results of ILOG for the period 2021 -2023
Insurance revenue and service provision 7374 7732 8014
Gross profit of insurance and service provision 2740 2936 3077
Profit after corporate income tax 1628 1758 1847
2021 is the year when the country's economy is heavily affected by the Covid 19 pandemic Therefore, during this period, ILOG also encountered some difficulties in finding customers and solving related problems due to State regulations on social distancing However, in the last months of the year, when the Covid 19 situation was more controlled, ILOG's revenue also increased and reached 7,374 billion VND 2022 and 2023 are the years of economic recovery after the Covid 19 pandemic During this period, businesses and tourists begin to operate strongly again Besides, with many efforts and appropriate business strategies, ILOG gradu ally regained the market and is always in the momentum of revenue and profit growth
Table 2.2 Revenue of ILOG in the period 2021-2023 by type of service
(Source: Financial Accounting Department) The above table shows that LCL freight forwarding services always account for the largest value to ILOG's revenue during the period 2021-2023 Following that, FCL freight forwarding services also contributed a large part to annual revenue In summary,
24 sea freight forwarding services are ILOG's main services, always accounting for more than 85% of service revenue The reason is that sea shipping services have cheap rates
In addition, the items delivered at ILOG are mainly stone statues and bulky handicraft products, so most of them have to be transported by sea
ILOG's air freight forwarding service contributes about 5% of revenue each year This is not a very large number because this service is not ILOG's strength and the company is just planning to develop this field ILOG's customs declaration service also has significant growth in revenue from 532 million VND in 2021 to 621 million VND in 2023 This proves that ILOG's service quality in this area is very good and is increasingly receiving recognition and trust of customers
SITUATION OF THE FORWARDING PROCESS OF
Diagram of the forwarding process of importing FCL commodities from China
The forwarding process of importing commodities at ILOG will vary depending on each shipment, delivery conditions and customer requirements However, in general, the main steps will be similar to the diagram below This is the process of forwarding imported FCL trolley case shipments under FOB conditions from China to Vietnam that ILOG undertakes
Figure 3.1 Diagram of the forwarding process of importing FCL by sea at ILOG
Description and analysis of the forwarding process of importing FCL
commodities from China to Vietnam by sea at ILOG
3.2.1 Search for customers and receive goods information from customers
Typically, ILOG's customers come from the following sources:
- Source 1: Customers have needs and contact ILOG's sales department directly
- Source 2: Sales department proactively searches for customers through fairs, events, old customer data, social networking sites
- Source 3: Receiving customers from foreign agents
In this case, ILOG's customers come from source 2 Specifically, ILOG's business development department actively contacts and promotes forwarding services through the social networking platform Zalo to Lua Store Household Business - an old customer of ILOG
After receiving customer information, ILOG's sales department will collect basic information about the shipment to provide consultation and appropriate prices for customs clearance and transportation Basic information includes: Name of goods, quantity of goods, packaging specifications, shipper and consignee information, other documents (if any), Incoterms conditions In this case, the specific information are as follows:
+ Quantity of goods and packaging: 789 pcs - 250 packages
+ Shipper: Baoding Eberth Bags Manufacturing Co., Ltd
+ Address: No 6 Yanling Road West of Xingzheng Street BaiGou New City + Tel: 86-13803269477
+ Consignee: Lua Store Household Business
+ Address: 71 Le Dinh Ly, Vinh Trung Ward, Thanh Khe District, Da Nang City, Vietnam
3.2.2 Quote and close booking with customer
After receiving the customer's basic information from the Sales department, the Cus department will check the price as requested and quote the price with shipping schedule to the Sales department The sales department is responsible for conveying the above information to customers After the customer confirms and agrees all information, the two parties will sign the contract
The contract between ILOG and Lua Store contains a lot of confidential business information so it cannot be made public However, the contract ensures that the following basic things are fully expressed:
- ILOG is responsible for booking ships and transporting goods to the right place and at the right time according to regulations
- Lua Store authorizes ILOG to: Declare, sign, stamp on declarations, register for state quality inspection and related documents sent to customs authorities; Submit and present customs documents related to the shipment; Present the goods for inspection by the Customs authority and witness the inspection of the goods; Sign records prepared by Customs officers related to export and import shipments
- Lua Store is responsible for paying import taxes, fees and other fees related to imported and exported goods and transferring all necessary documents as well as making timely payments to ILOG
3.2.3 Book space with shipping lines
Based on the information provided, Baoding Eberth Bags Manufacturing Co., Ltd and Lua Store Household Business decided to choose to import goods based on FOB
- Incoterms 2020, which means that: Representative of Baoding Eberth Bags Manufacturing Co., Ltd has the main responsibility to prepare and transport goods from warehouse to port and place goods on ships, carry out export customs procedures Representative of Lua Store has the main responsibility to book space on ships, carry out import customs procedures and transport goods from the import port to the warehouse Therefore, after signing a contract with Lua Store, ILOG's Cus department will provide information via gmail to Shenzhen JW International Transportation Co.,
Ltd to book space This is an international freight forwarding company and an agent in China of ILOG Information sent to agents includes:
- Port of Loading (POL): Tianjin Xingang, China
- Port of Discharge (POD): Da Nang, Vietnam
- Estimated date of delivery: January 20, 2024
After receiving the above information, Shenzhen JW International Transportation Co., Ltd will proceed with space booking with the shipping company and send shipping schedule information via email to ILOG ILOG receives the information and checks, if all information is suitable, Cus staff will confirm the booking with the Shenzhen agent and send schedule information back to the customer so that the customer can grasp the ship schedule For this case of importing trolley cases, the parties decided to choose book space at SITC shipping company
After completing the booking, Baoding Eberth Bags Manufacturing Co., Ltd begins to prepare, pack the goods and send Shipping Instructions (SI) to Shenzhen JW International Transportation Co., Ltd After receiving the SI from the exporter, Shenzhen will start making a set of draft documents including: commercial invoice, packing list, certificate of origin, bill of lading and then send it to relevant parties for checking After receiving Shenzhen's email, ILOG's Cus department will download the document files to the computer and begin reviewing as well as checking the information
Figure 3.2 Commercial Invoice of this shipment
Important information in Commercial Invoice:
- Term of payment: T/T after shipment
Table 3.1 Information of commodities in commercial invoice
Nos Description of Goods Quantity Unit Price
SIXTY SEVEN POINT FIFTY FIVE
After checking the information in Commercial Invoice, ILOG's Cus Department continues to check the information on the Packing List to see if it matches the information on Commercial Invoice Information that needs to be checked includes: Shipper's information; Consignee's information; Name of goods; Quantity of goods In addition, the information on the packing list shows that the goods are packed into 250 cartons with a net weight of 2795 kg, gross weight of 2955 kg and CBM of 28 CBM
Figure 3.3 Packing List of this shipment
For Bill of Lading, ILOG's Cus department will carefully check the following information:
● Name: Shenzhen JW International Transportation Co., Ltd
● Address: 6th Floor, Block B1, Funian Building, Futian Free Trade Zone, Shenzhen, China
● Name: International Logistics Forwarder Corporation
● Address: No 72 Nai Nam Street, Hoa Cuong Bac Ward, Hai Chau District, Da Nang City, Vietnam
● Name: Baoding Eberth Bags Manufacturing Co., Ltd
● Address: No 6 Yanling Road West of Xingzheng Street BaiGou New City + Consignee:
● Name: Lua Store Household Business
● Address: 71 Le Dinh Ly, Vinh Trung Ward, Thanh Khe District, Da Nang City, Vietnam
● Place & date of issue: Shenzhen, China - 07/01/2024
● Port of loading: Tianjinxingang, China
● Port of discharge: Danang, Vietnam
● Ocean Vessel/Voy No.: SITC RUIMING 2402S
● Description of goods: Shipper’s load count & seal S.T.C Trolley Case
● Total number of containers: 1x20’ container only
● Date of loading on board: 07/01/2024
Figure 3.4 House Bill of Lading of this shipment
Besides, the Trolley case is a normal commodity, not included in the import ban or conditional import section However, if businesses want to import into Vietnam, they will have to pay a preferential import tax of 25% and VAT of 8% To reduce the import tax rate to 0%, exporters from China will have to provide C/O form E
Figure 3.5 C/O form E of this shipment
The Cus department is responsible for checking whether the set of documents is full or not and whether the information between documents is consistent or not? If there are errors or missing documents, ILOG's Cus department needs to contact Shenzhen to promptly supplement and adjust the set of documents to avoid being charged In this case of importing Trolley Case, ILOG's Cus department checks that the set of documents is correct and complete, so they will send back the document information to Lua Store
After the relevant parties complete the Draft Bill checking and confirm with the shipping line, the shipping line will begin issuing the MBL Any corrections after the shipping line issues the MBL will incur a fee called the MBL amendment fee After that, Shenzhen JW International Transportation Co., Ltd will issue HBL
When the ship departs, Shenzhen JW International Transportation Co., Ltd begin sending the pre-alert via email and the original set of documents via airmail to ILOG Upon receiving the pre-alert and original set of documents, ILOG's Cus department is responsible for opening the set of documents and checking to see if the information is correct and complete or ot, and if the information among other documents matches the each other or not If there is a discrepancy between MBL and HBL, ILOG's Cus department will immediately write an email to Shenzhen JW International Transportation Co., Ltd asking them to check whether the details on the MBL are correct or whether the HBL is correct to edit and submit the manifest In this case, ILOG's Cus department checks that the information is correct and matches each other, so they will start writing a confirmation email with Shenzhen JW International Transportation Co., Ltd
3.2.6 Receive A/N and Debit note from Shipping line and release A/N to customer
When the ship nears port, the SITC shipping line's agent will issue an Arrival Note with a debit note and send it to the ILOG company's email After receiving the A/N from the shipping company, the Cus department will continue to issue another A/N and send it to Lua Store via email so that Lua Store can know information about the ship's arrival date and local charges to pay
Information recorded on the A/N includes:
- Vessel/trip name: SITC HAINAN 2402S
- Expected arrival port: Tien Sa, Danang
- Estimated time of arrival: January 19, 2024
- Bill of lading number (B/L): JWFEM23120700
Fees need to be paid upon receiving the delivery order according to the shipping company's regulations:
Assessment
In general, the forwarding process of importing FCL commodities at ILOG is quite complicated with many different steps During the implementation process, departments always try to complete their tasks and coordinate smoothly with other departments so that the process can go as smoothly and conveniently as possible In addition, ILOG is constantly improving its forwarding process to meet the strict requirements of customers and stakeholders to help customers save time and budget
However, ILOG's forwarding process still has a few shortcomings that ILOG needs to further improve to enhance service quality and attract as well as retain customers
First, the employees in charge of each department are people with many years of experience in the logistics field and have performed similar tasks many times Therefore, the process of handling each task in the process goes quite smoothly with few errors This can ensure that processing times are met and reduce the time required to correct errors
Waiting time and processing time in the next steps can be reduced thanks to the development of science and technology and the application of science and technology to ILOG's process More specifically, declaring Manifest and implementing customs declaration through website and software will be much faster and more convenient than traditional declaration Besides, since the appearance of EDO, ILOG has also saved time moving to Shipping lines to do procedures and get D/O Thanks to that, ILOG staff will quickly get the necessary documents to proceed to the next step
The number of employees at ILOG is quite small, each department mainly has only 1 - 2 employees In particular, the Cus department has only 1 employee but is
45 responsible for too many tasks More specifically, during the import forwarding process, this department participates in 7/11 steps of the process Therefore, during peak seasons with a large number of customers and shipments, staff are likely to be overlo aded, leading to delays in preparing and checking documents, slow responses to relevant parties This can affect the performance of other departments and lead to customer dissatisfaction
Besides, ILOG has not built good relationships with many Shipping lines, so most shipments need to go through agents to be able to book ships at the best prices for customers Therefore, the step of quoting prices and vessel schedules can increase waiting time because it must go through a third party
ILOG does not have specific regulations on the maximum time that each department must comply with to perform each task In fact, sometimes employees do not perform tasks immediately but tend to postpone them to do other tasks because they think the task is not too urgent In this case, processing times will not be optimized and stakeholders do not know the progress of the process
The number of ILOG employees is quite small, so the salary to pay employees is not too much In general, the entire FCL import forwarding process above only requires
5 employees to operate That means ILOG can save on labor costs because there are not many employees involved in the process
ILOG's staff have professional skills, so they will limit errors when implementing, leading to a reduction in penalty fees such as MBL amendment fees, Manifest amendment fees In addition, the investment and application of technology also helps reduce labor costs Because the process of declaring a manifest, customs declaration, and obtaining an EDO can be done quickly online, only one employee is needed
Booking space in a vessel through an agent and not directly at the shipping company can increase ILOG's costs More specifically, when an agent books a ship, they receive an additional portion of the commission Therefore, ILOG's freight commissions must be reduced to create competitive rates and attract customers If ILOG
46 builds a good relationship with shipping lines to negotiate preferential rates, it can increase commissions and reduce ship booking costs
During the process of checking documents, there are still a few cases where staff check and respond to incorrect information, especially when staff have to make too many shipments at the same time That leads to incurring costs for amend documents
In general, customers after using ILOG's forwarding service feel satisfied and have many positive feedback Customers commented that: ILOG's staff are very enthusiastic and professional, always wholeheartedly supporting customers; The services that ILOG provides are also very good, meeting many customer needs; ILOG also carefully performs and completes the responsibilities set out in the contract
Employees in the company work in a professional and dynamic environment and perform tasks according to their expertise and responsibilities, so there have never been any cases of employees complaining about the content of their work In addition, employees at ILOG also regularly participate in professional improvement training courses to be able to complete their jobs better
Although employees have no opinion on the content and responsibilities of their work, the workload of the Cus department is too much, leading to this department being overloaded during peak shipments This can lead to a decrease in employee performance and in process quality
There is no detailed investment in surveying and receiving feedback from customers after completing the service In general, with the question -and-answer method via Zalo or email, ILOG only receives general feedback from customers about whether they are satisfied with the process or not ,without knowing specifically whether each step of the process actually meets their needs or does the customer want to improve anything in the process?
ILOG employees are thoroughly trained to adapt in a constantly changing environment For example, from traditional declaration to online declaration, from going
47 to the shipping line to register to receive A/N and D/O to applying for online documents via email, ILOG employees can adapt quickly and well In addition, ILOG has made good use of the development of digital marketing by building a professional page and website to introduce the company's services, enhancing the company's recognition with customers, thereby capable of attracting more potential customers
ILOG's departments also continuously update new regulations of the State, customs authorities, shipping lines to be able to plan changes and adjust implementation processes more appropriately
ILOG also organizes internal meetings each quarter to evaluate the company's activities in that quarter as well as learn about market changes to proactively plan more specifically and effectively
Each department undertakes specialized positions and tasks Therefore, departments cannot share the workload with each other if one or several departments are overloaded with work Besides, most departments only have 1 member, so in case that employee takes an unexpected day off and cannot do this work, it will be very difficult for the remaining departments to arrange people to take on the task of that employee.
Recommendation
4.2.1 Regulate the time to complete the work
ILOG should consider adding regulations on the maximum time that departments need to perform a certain task in the process This can help employees work more quickly and efficiently Besides, departments that perform the following steps will also know the specific time that they receive input for their work
Figure 4.1 Illustrate the process with specified implementation time
As shown in the illustration above, the Cus and Accounting departments need to coordinate with each other to send an email asking for A/N, release A/N to Customer and transfer money to Shipping Lines within 24 hours The above time includes waiting time for Shipping lines to receive emails and transmit A/N Thus, the Cus department will know that after a maximum of 24 hours it will receive input to take the EDO order and after a maximum of 8 hours, the Customs department will have enough documents to declare the manifest
Such time regulations will urge departments to carry out work more quickly, ensure completion before the deadline, and create conditions for other departments to arrange the implementation of their tasks In addition, adding the time factor to each step in the process also helps the management department easily control the entire implementation process
4.2.2 Build good relationships with shipping lines
To build good relationships with shipping lines and negotiate preferential sea freight rates, ILOG needs to book ships in large numbers and regularly each year During the initial period, when there are new shipments, ILOG may consider directly booking ships with shipping lines and accept lower commissions to both create competitive prices compared to competitors and create relationships with shipping lines When the number of bookings at shipping lines is higher, ILOG can negotiate much lower sea freight rates The difference in sea freight before and after can be turned into ILOG's revenue
4.2.3 Develop a more detailed customer care policy
In order to improve customer service and better understand customers, ILOG should build a more detailed form of process -related issues instead of only asking in general terms whether customers have satisfied with the process or not? Some aspects that ILOG may consider to include in the form are:
- Is the sales staff's consultation and price quote specific?
- When sending documents, has the Cus department instructed customers on how to check?
- Do you receive responses from ILOG quickly?
- Do you think the rates offered by ILOG are appropriate?
- Is the employee's attitude when working directly with you professional and cheerful?
- Do you want ILOG to improve any step in the process to make you more satisfied?
The customer perception survey form after using the service not only helps customers realize that ILOG is a professional company, always has a progressive spirit and listens to customers, but also helps the staff at ILOG have can identify specific existing problems to promote strengths, overcome weaknesses and perfect the process, moving towards building a standard forwarding process
4.2.4 Expand appropriate staff size and improve staff quality
As mentioned above about the problem of work overload during peak season, especially at the Cus department, ILOG should have a plan to recruit new employees to be able to coordinate work more effectively and reduce workloads in mental and health pressure for current employees In addition, adding suitable personnel is also a potential business development strategy because when human resources are available, ILOG can boldly expand its business market and find many new customer sources
In particular, ILOG departments should also improve their foreign language skills Because when working in the field of import and export freight forwarding, employees often have to work with foreign agents/customers and all information transmitted is in English Therefore, improving foreign language skills will help ILOG staff avoid unnecessary misunderstandings when receiving and updating information to relevant parties
In the context of development in import - export and strong trade between countries, related services such as forwarding services are also constantly growing That is also the reason why this field is fiercely competitive and forwarding companies must make constant efforts to improve their services
With many years of experience in the logistics field, ILOG has built its own brand and attracted customers through a diverse and quality service system Besides, ILOG also constantly listens, modifies and improves the quality of its services to best serve customers
During my internship at the company and implementing the report "Analyzing the forwarding process of importing full container load (FCL) commodities from China to Vietnam by sea at International Logistics Forwarder Corporation", I have observed, learnt a lot from colleagues and have the opportunity to interact with a real working environment Since then, I have partly understood the process and steps necessary to forward a shipment of imported goods In addition, through my internship, I have noticed a few problems that still exist in the process of forwarding imported FCL commodities at ILOG such as unspecified implementation time, lack of resources and customer care policy is not effective Since then, I have made a few recommendations with the hope that ILOG can improve and build a more standardized process
Once again, I would like to sincerely thank the staff at ILOG for helping and supporting me throughout the internship process I would like to sincerely thank M.S Tran Thien Tri for orienting and guiding me to complete my internship report With limited knowledge and skills, the above report will certainly have some shortcomings I am looking forward to comments from lecturers so I can perfect my report Thank s sincerely!
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