In the trend of international integration, import-export activities is considered a potential field to bring big profits to businesses and is also an effective way to promote the country's economic development. Nowaday, Vietnam has been moving further and further in the process of integrating with the international market by participating in international organizations and signing free trade agreements. The import-export activities have had many major changes since Vietnam became an official member of the World Trade Organization (WTO) in 2007. Besides, Vietnam has also joined many other international organizations such as APEC, ASEAN and other international organizations to seek more development opportunities for the country's economy. As a country located in the Inner Tropic of Cancer, Vietnam's agriculture dominants than other fields, in which agricultural products play a significant role in the industry structure. Simultaneously, in the context that Vietnam continues to integrate deeply into the international economy, especially participating and implementing commitments of new generation bilateral and multilateral trade agreements, agricultural products will have more opportunities when searching and expanding markets. Accordingly, Vietnamese agricultural products are gradually asserting their value in the international market by successively conquering many difficult markets such as the US, China, Japan, South Korea, United Kingdom, Australia,... In recent years, Vietnam's dried fruit exports to Australia have developed significantly. Thanks to the Free Trade Agreement between Vietnam and Australia (VN-AU FTA), signed in 2020, import and export businesses have enjoyed a more favorable trade environment, reducing import taxes and eliminating non-tariff barriers, creating favorable conditions for the export of dried fruit from Vietnam to Australia. Vietnam is among the top countries with import output of fresh or dried agricultural products with HS code 0804, such as mango, pineapple, guava,... into the Australian market in recent years. Specifically, in the period from 2018 to 2022, the import value of these products into Australia increased by 21% (data from trademap.org). However, the process of exporting dried fruit to Australia via maritime transport still faces many difficulties, especially in the preparation of legal documents. It requires businesses to clearly understand legal and technical requirements and master regulations to apply to prepare documents accurately and effectively. Cheer Farm Food JSC is the producer and exporter of dried fruits in Vietnam. With more than 8 years of experience in the field of dried fruit export, we have been aiming to penetrate deeper into the international market. Since 2021, Cheer Farm Food JSC has begun to successfully penetrate the Australian market - A market with high demand for dried fruit over the years. However, there are a few cases that we still have difficulty implementing export documents and completing the export process for dried fruit to Australia by sea. This affects the export activities, causing waste of time and resources. Realizing the importance and value of analysis, I chose the topic "Analyzing the process for preparing documents for exporting dried fruits to Australia by sea transport at Cheer Farm Food Joint Stock Company". By focusing on key factors such as necessary documents for export activities, the process of preparing each type of document, what should be noted in the set of documents for dried fruit when exporting to Australia compared to documents in other countries,... At the same time, the report will explore the risks and difficulties that the company is facing, and propose solutions to improve the efficiency and effectiveness of the process for preparing export documents at the company. 2. Research objectives This report is intended to systematize the theoretical basis for the process of preparing documents for exporting dried fruits to Australia by sea transport. Through the theoretical basis, we analyze the current status of the process of preparing documents for this item at the enterprise, thereby providing recommendations and suggestions to improve this process at the enterprise. To achieve the above goal, the following tasks need to be performed: • First: Learn the theoretical basis for the process of preparing export documents for dried fruit products. • Second: Find out the current status of preparing export documents for this product at Cheer Farm Food JSC. • Third: Propose and comment on solutions to resolve existing problems in the process of preparing export documents of enterprises.
THEORETICAL BACKGROUND
The concept of export
According to the provisions of Article 28 of the 2005 Commercial Law on Purchase and Sale of goods:
“1 Export of goods means the bringing of goods out of the territory of the Socialist Republic of Vietnam or into special zones in the Vietnamese territory, which are regarded as exclusive customs zones according to the provisions of law.”
Exports are goods and services that are produced in a country and sold to buyers in other countries Instead of being limited to their own geographical borders, countries often deliberately seek external markets around the world to trade, providing greater revenue and trading opportunities In general, exports along with imports make up international trade and create benefits for all stakeholders
Goods may be sent via direct exporting or indirect exporting Direct exporting entails working directly with the importers in the foreign countries The exporting company will not pay a middleman charge because they manage all client communications Because the direct export method can require specialized staff, many companies opt to contract out a middle party to facilitate indirect exporting
According to A Basic Guide to Exporting (Barry & United States, 2015), the export process includes many stages and various influencing factors First, the exporter needs to seek out potential customers in the foreign countries and access distribution channels to promote the sale of goods Then, the exporter has to evaluate legal regulations, trade restrictions, technical barriers, taxes, and necessary paperwork required by the importing country to ensure legal compliance Commodity requirements and packaging techniques may vary from country to country Therefore, exporting businesses need to research carefully in advance and reach an agreement with the importing party to make the customs clearance process go more smoothly
After preparing the goods, the exporter transports goods to port or airport and completes export procedures Both the exporter and the importer need to comply with previous agreements to ensure that the goods arrive on schedule and safely, without
5 having to deal with other arising situations such as not having enough documents to receive goods, and need to pay additional warehouse fees,
At the export airport, necessary documents such as invoices, bills of lading, certificates of origin, etc need to be prepared and checked to ensure that the export process is carried out smoothly When the goods arrive at the designated destination, the importer needs to provide all necessary documents to receive the goods
1.1.3 The role of export activities
Exports are vital to modern economies because they offer people and businesses more markets for their goods One of the main functions of foreign policy and diplomacy between governments is to promote economic trade, encouraging exports as well as imports for the benefit of all trading parties
In general, exports bring economic benefits to each country Exporting businesses can increase sales and profits if their goods reach new markets or expand existing markets, and they can even offer the opportunity to capture significant global market share Besides, export companies will disperse business risks by diversifying into many markets At the same time, boosting exports to foreign markets can often reduce per- unit costs by expanding operations to meet growing demand Finally, businesses exporting to foreign markets gain new knowledge and experience, discover new technologies, and gain insight into foreign competitors
However, export activities also pose many risks and challenges for businesses These include risks such as high transportation costs, goods ownership risks, currency risks, and legal risks when there is not much experience and knowledge about regulations in the import country.
The concept of documentation
Documentation in import and export are defined as a set of papers necessary to prove and confirm information about import and export transactions The set of documents can include documents such as commercial invoices, packing lists, bills of lading, certificates of origin, insurance documents, and other documents related to the rights and obligations of the parties participating in import and export transactions
When carrying out import and export activities, documentary evidence is a necessary and extremely important element because it is proof of all the transactions you have made If any dispute arises with an overseas importer, this written information
6 will help overcome misunderstandings and oversights for both parties Besides, the socio-economic and political issues of the importing country cannot be fully updated, especially due to the constant changes that occur Therefore, proper documentation will help exporters and importers handle your transactions in every way including time management, payment protection, loss claims, etc
Specifically, we can evaluate the importance of documentation in exports and imports as follows (Documents for Exports, 2023):
When an export order is finalized, a sales contract will normally be prepared to set out all the terms and conditions to which parties involved must comply Therefore, all documents such as invoice, packing list, certificate of origin, insurance, are prepared on the basis of the sales contract signed by both the exporter and the exporter
In each country there will be a government management agency to control the import and export trade of that country Each country's government has its own guidelines for businesses to follow and prepare export documents legally
To receive help and support from the government, businesses are required to have all appropriate documents about their export activities according to regulations Accordingly, there are many support activities offered by the government of each country to support domestic export enterprises and increase foreign exchange revenue for the state.
Documentation relating to exporting activities
According to a definition in Article 385 of Civil Code 91/2015/QH13: “A contract means an agreement between parties in relation to the creation, modification or termination of civil rights and obligations.” (thuvienphapluat.vn, 2024c)
A sales contract is defined as a legally binding document between a buyer and seller This document includes the details of the exchange, the terms of sale, clear product/service descriptions and more than that A good sales contract should not leave any doubt in either party’s mind about their rights and obligations during the transaction
Sale contract is an important document created under the agreement of both buyer and seller It is an important document that increases transparency, eliminates the possibility of deception and establishes appropriate expectations for both parties involved A valid contract serves as a document of offer and acceptance between the parties, requiring the parties to comply with the agreed terms of the contract
Some elements commonly included in a sales contract include: Information about seller and buyer; Commodity/Goods description; Quantity, Unit Price, Total value; Packing; Delivery terms and Payment terms; Documents required (Documentation); Arbitration; Force Majeure; Penalty and Compensation; Installation, Warranty; General conditions; Others,
According to Article 3, Decree 123/2020/ND-CP prescribing on invoices and records, invoice can be defined as:
“1 “invoice” means an accounting record which is created by a goods seller or service provider to record information about the sale of goods or service provision Invoices are represented in the electronic form or are printed according to orders placed by tax authorities.” (thuvienphapluat.vn, 2024d)
A Commercial Invoice (C/I) is a document issued by the seller that establishes the weight of the goods, the number of items, a description of the goods, and the price of the goods being sold It is the document to assist customs officials in arriving at import duties and taxes, depending on the total cost recorded in a commercial invoice
C/I is issued after the goods have been sent or after the goods have been packed into a container Because that is the time when there is complete and accurate information about the type, quantity of goods, etc Sometimes, a Commercial Invoice can also be issued at the same time as the delivery contract or after the buyer makes an advance payment
C/I provides the importer with accurate information to prepare payment for the shipment and is necessary information for customs procedures Some countries require invoices to follow a certain form However, most countries will accept C/I as presented by the exporter or seller, provided they contain all the necessary information.
C/I is used in international transactions and must comply with legal regulations Accordingly, a C/I usually includes: Information about importer and exporter; Invoice
Number; Invoice date; Terms of Payment such as Telegraphic Transfer (T/T), Letter of Credit (L/C), Documents against Acceptance (D/A), Documents against payment (D/P); Product information like name, total weight, number of packages in units; Total value; Incoterms conditions,
In general, C/I is the most important document for payment and reconciliation of information across all forms of payment This is also a required document accompanying the B/L to complete customs clearance procedures and prepare import- export documents for goods statistics and trade investigation purposes.
Packing List (P/L) is a document used in international trade, which provides the exporter, international freight forwarder, and ultimate consignee with details about the shipment, such as packing method, the size and weight of each package, and the marks and numbers that are indicated on the outside of the boxes (Packing List, n.d.)
It serves as a guide for the carrier when loading or unloading goods and for the buyer when checking the product that they receive It also acts as one supporting document presented for custom declaration and payment
P/L is usually prepared by the exporter after the goods are packed when the exact quantity is known However, for familiar orders that are repetitive in quantity, price, and content that do not change, the P/L can be created before packing In addition, in case the shipping company requests a bill of lading early, the seller must prepare a packing list early to use it as a basis for preparing a B/L to send to the shipping company (Research, n.d.)
P/L usually includes the following information: Title, P/L Number, Date; Shipper and Consignee information; Product information: product name, detailed description, quantity; Packaging: Includes information about the packaged item, weight, size, and detailed packaging information; Quantity and weight: Quantity of goods per unit; Number of bales, crates and packing boxes; net weight, gross weight; Information about the port of loading/discharge, information relating to means of transportation,
P/L has an important role in the delivery process, especially when shipping goods across international borders Buyers need to ensure that orders are shipped properly and safely Therefore, they ask the sellers to provide details about P/L In addition, the government also needs accurate and complete information to manage the import and
Process for preparing documents
According to ISO 9000:2015, process is defined as a set of interrelated or interacting activities that transform inputs into outputs (ISO 9000, n.d.) And the process for preparing import - export documents refer to the series of steps and activities undertaken to create, compile, and complete all necessary materials according to import and export regulations
1.4.2 The criteria to evaluate the process
According to Dumas, the four common aspects of process performance metrics are time, cost, quality, and flexibility (Dumas et al., 2018)
Time: A common efficiency measure for processes is cycle time The time cycle required to process a task from start to finish We will consider the elements of cycle time, including: processing time and waiting time
Processing time (service time) is the time that resources, such as process participants or software applications invoked by the process, spend on actually handling the case While waiting time is the time that a case spends in idle mode which includes queueing time due to the fact that no resources are available to handle the case, and other waiting time such as because synchronization must take place with another process, with other activities
Cost: A common aspect for service process analysis that is financial in nature, with an emphasis on turnover, yield, or revenue There are different views on costs It may be a matter of distinguishing between fixed and variable costs Fixed costs are overhead costs, largely unaffected by processing intensity, typically stemming from the use of infrastructure and software systems On the other hand, variable costs are proportional to variable quantities, such as level sales, quantity purchased,
Another cost notion closely related to productivity is operational cost, which can be directly related to the outputs of a business process A significant portion of operational cost is usually labor cost, the cost associated with human resources to produce a good or deliver a service In process redesign efforts, organizations often focus on cutting operating costs, especially labor costs And automating tasks is often seen as an alternative to labor
Quality: The quality of a business process can be viewed from two different perspectives, which includes the perspectives of customer and the perspective of the process participants This is also known as the distinction between external quality and internal quality
External quality can be measured by customer satisfaction with the product or process Besides, satisfaction is also related to the way the process is implemented, typically the relevance, quality, and timeliness of information that customers receive during the implementation process In contrast, internal quality concerns the perspective of those involved in the process Internal quality concerns such as level of control over the work, whether steps in the process feel difficult to follow
Flexibility: This is the least noted criterion for measuring the effectiveness of process redesign Flexibility involves the ability to respond to changes and it involves different parts of the process These changes can be related to different elements of the process such as: the ability of resources to perform different tasks; the ability of a process to handle different circumstances and changing workloads; The ability to respond to the wishes of partners and the market;
The concept of sea transportation
Sea transport/Maritime transport is defined as any movement of goods and/or passengers using seagoing vessels on voyages which are undertaken wholly or partly at sea (Sea Transport, 2017) This mode of transport provides effective means for very high volume freight movements at low freight costs but with relatively long travel times
Marine transportation accounts for the majority of imports and exports for nation- states large and small According to UNCTAD 2018, it is estimated that over 80 - 90% of global trade by volume is transported across oceans (Review of Maritime Transport
2018, 2018) In addition, according to a report by Statista, Vietnam has one of the highest liner shipping connectivity indexes in Asia, making it an internationally recognized regional maritime trade hub Moreover, the Vietnamese maritime industry has been relatively attractive for foreign investments due to its location advantage and potential for shipbuilding
It can be seen that maritime transport has a lot of advantages First, this mode of transport is often more cost-effective, especially for transporting large quantities of goods over long distances Ships have a high cargo capacity, making them efficient for
15 bulk cargo transport Second, ships can transport a wide variety of cargo, including containers, bulk goods, liquid cargo, and oversized items, making them versatile for different industries Third, maritime transport is effective when linked to multimodels to provide door to door service Finally, according to OECD, shipping represents 2,6% of overall greenhouse emissions Although shipping does contribute to carbon emissions, the carbon footprint per ton-mile is generally lower compared to other modes of transportation, such as air transport.
The regulatory basis of exporting dried fruits
1.6.1 Regulations of the exporting country
According to the provisions of Article 4 of Decree 69/2018/ND-CP on export and import procedures as follows:
“1 For goods exported or imported under license, export or import traders must have a license from the relevant ministry or ministerial-level agency
2 For goods exported and imported under conditions, exporting and importing traders must meet the conditions prescribed by law
3 For goods on the List of exported and imported goods subject to inspection according to the provisions of Article 65 of the Law on Foreign Trade Management, traders exporting and importing goods must be subject to inspection by competent authorities rights according to the law
4 For goods not falling into the cases specified in Clauses 1, 2, 3 of this Article, traders only have to handle export and import procedures at the customs office.”
In addition to regulations on documents and procedures, dried fruits when exported from Vietnam often undergo inspection and certification by competent authorities Plant quarantine activities, certification of origin or other popular certifications such as Food Safety Management System (ISO 22000), Good Manufacturing Practice (GMP), Hazard Analysis and Critical Control Points (HACCP) can be required when preparing documents Therefore, depending on the regulation of different importing countries around the world, businesses need to adjust and provide appropriate documents
1.6.2 Regulations of the importing country
The Australian market is evaluated as a market that brings many opportunities for Vietnamese enterprises in particular and foreign businesses in general because it depends heavily on imported goods for domestic production and consumption (Business Forum Magazine, 2023) Besides, Australia imposes no import quotas In particular, according to the ASEAN - Australia - New Zealand Free Trade Area (AANZFTA) states that about 96% of Australian tariffs were removed in 2010 and the rest will be eliminated by 2020
On the other hand, Australia is considered one of the most demanding markets in the world, with many requirements for high product quality standards and strict import processes In this market, there are a lot of strict standards in technical barriers, labeling requirements, and food hygiene, and safety, some standards are even higher than those in the EU and US Besides, Australia also requires many import regulations such as tax rates and tax policies; packaging and labeling regulations; hygiene, safety, and food quarantine regulations; intellectual property rights, rand, and business practices, etc In addition, Australia is also a market with abundant domestic agricultural products Therefore, if exporters from Vietnam want to enter this market, they must prioritize product quality instead of price
Australia's quarantine regulations are very strict All imported plants, whether fresh or not, or parts of plants such as fruits, seeds, branches, leaves, etc., must be quarantined and transferred to the plant quarantine agency Imported products found to be contaminated will have to be treated, destroyed or returned at the owner’s expense (Điều Kiện Nhập Khẩu, 2017)
At the same time, all plant based food, drink, or supplements intended for human consumption when imported into Australia must comply with the Biosecurity Act 2015 of this country These conditions are designed to protect against the risk of spreading harmful diseases and pests that could devastate the environment and agricultural industries of Australia
Before importing plant-based products for human consumption to Australia, exporters will need to search the department’s Biosecurity Import Conditions system (BICON) to determine:
- If the country of export is approved for the particular commodity
- Import conditions will have to be met, which includes packaging, documentation, and treatment requirements
Any item not listed in BICON or not listed for the intended exporting country cannot be imported until a risk assessment has been conducted as well as import conditions have been developed by the department and published in BICON (Importing Plant Based Food, Drink and Supplements - DAFF, n.d.)
It is the importer’s responsibility to ensure that all imported food complies with the Imported Food Control Act 1992 The standards for labeling and composition of all food sold in Australia are set out in the Australia New Zealand Food Standards Code (FSC) which is administered by Food Standards Australia New Zealand (FSANZ)
In general, when exporting dried fruit to countries around the world in general and to Australia in particular, a PHYTO certificate is an important document needed to certify that the goods have been inspected and comply with regulations Plant protection When exporting dried fruit to Australia, a Phytosanitary certificate may be required by the Australian Department of Agriculture, Fisheries and Forestry (DAFF) to ensure that goods comply with Australian phytosanitary regulations and standards.
According to international laws, regulations, and practices, enterprises exporting dried fruit to any country must follow strict regulations on factors such as quality and food safety, quarantine, customs,
Countries often have food safety regulations to ensure that dried fruit produced and exported complies with food safety standards For example, regulations of the Food and Agriculture Organization - FAO and International Food Safety Standards
Regulations on quality and standards:
Countries may impose quality regulations and standards on imported dried fruit, including size requirements, moisture content, preservative content and other requirements For example, the International Maritime Organization - IMO, has regulations on packaging and shipping standards of goods
Phytosanitary regulations may apply to ensure that dried fruit does not carry pests that can harm crops and the environment These regulations are generally governed by the International Plant Protection Convention - IPPC
Countries may have special import and customs regulations for dried fruit This may include import paperwork requirements, customs checks and tariffs
The above regulations may vary and vary depending on the importing country and region Therefore, to export dried fruits smoothly, businesses need to carefully research and strictly comply with international regulations as well as laws in the country they export to
INTRODUCTION ABOUT THE CHEER FARM FOOD JOINT
General information
Cheer Farm Food Joint Stock Company is the leading investment, production and distribution company of natural dried fruits in Vietnam
With a farm and main factory located in Chau Thanh, Kien Giang, the company strictly controls the production process, especially hygiene and safety, ensuring completely natural products not treated with additives or other chemicals, are strictly managed from farm to production Besides, Cheer Farm continuously improves and optimizes the production process to increase output and ensure stable prices
Figure 2 1 Logo of Cheer Farm (Source: Cheerfarm.com)
- Vietnamese name: CÔNG TY CỔ PHẦN THỰC PHẨM NÔNG TRƯỜNG
- International name: CHEER FARM FOOD JOINT STOCK COMPANY
- Abbreviations: CHEER FARM FOOD JSC
+ Office: Lot 24-B1.95, Nam Nguyen Tri Phuong Urban Area, Hoa Xuan
Ward, Cam Le District, Da Nang City, Vietnam
+ Factory 1: Street No 8, Hoa Cam Industrial Zone, Hoa Tho Tay Ward,
Cam Le District, Da Nang City
+ Factory 2: 221 An Ninh, Binh An ward, Chau Thanh dist., Kien Giang,
- Representative: Vo Thi Mai Anh
- Type of business: Non-state joint stock company
- Business field: Produce and supply premium dried fruits
History of establishment and development
In 2015, Cheer Farm Food Joint Stock Company was established, which has a factory located in Kien Giang province
In 2017, Cheer Farm Food JSC successfully brought its premium dried fruits product into the Singapore market
In 2018, Cheer Farm Food JSC successfully entered the Hong Kong market
In 2019, Cheer Farm Food JSC successfully entered the Korean market
In 2020, Cheer Farm Food JSC expanded the scale and improved the factory's production capacity
In 2021, Cheer Farm Food JSC continued to expand international markets, successfully entering the Australian market
In 2022, Cheer Farm Food JSC successfully entered the Japanese market
In 2023, Cheer Farm Food JSC successfully entered the Russian market
Up to now, Cheer Farm continues to research products, prepare strategies to penetrate many new markets such as the UK, US,
Cheer Farm is a manufacturer of natural fruit products in Vietnam with the mission is to develop people's living quality and protect nature The company has been closely cooperating with the farmers in many local farms, investing intensively in the research and development of natural products and sharing the value with the partner The company endeavors to improve the living conditions of smallholder farmers in Mekong Vietnam with whom we share the same philosophy and form mutual commitments
For more than 8 years of operation, Cheer Farm has continuously strived to perfect and develop products with the goal of expanding export markets to many countries around the world, bringing quality agricultural products from Vietnam further into the international market.
Organizational structure
Up to the present time, when the key positions in the company have been identified, the company's organizational structure has also been formed and clearly decentralized according to each department At Cheer Farm, accounting and financial activities are performed by an outsourced accounting company Therefore, the company does not need to directly handle or control human resources for this activity Below is the organizational chart with Cheer Farm's main departments up to now:
Figure 2 2 Company organizational chart (Source: Cheer Farm)
Directly organize and manage the company's activities At the same time, determine the goals and build the company's development direction in all areas: investment and development, business plan development, short-term and long-term strategies of the enterprise, Besides, the CEO of Cheer Farm also directly manages and maintains relationships with customers who are large businesses abroad
Production is a department that is responsible for the direct research and product development activities This department implements product processing, manufacturing, and packaging activities at 2 factories in Kien Giang and Da Nang In particular, the factory in Kien Giang is responsible for main production to supply to the market While the factory in Da Nang has a smaller scale with the role to support the
22 main factory in Kien Giang as well as serve research and development of new products Besides, both of them also control the status of inventory, input raw materials, and output products of Cheer Farm
Marketing department develops communication plans and campaigns, with the aim of bringing the Cheer Farm brand of dried fruits to many customers around the world This is where the company's image is built, bringing customers' trust in the product In addition, this department also supports information collection to determine market needs and potential customers In addition, international marketing staff also perform the task of researching new product development trends in the market to advise the director on marketing strategies
The business department includes 2 main teams: the department in charge of sales activities and the department that processes documentation
The sales team is responsible for finding new potential domestic and foreign customers, caring for and maintaining relationships with current customers with the ultimate goal of increasing sales for the business In addition, they research potential markets to advise and give suggestions to the Director on issues related to the effective distribution of the company's products and services to the market
The documents team will perform the main task of preparing necessary documents and papers for each shipment when exported They coordinate closely with other parties such as outsourcing accounting agencies to handle taxes, forwarders to complete customs clearance documents, the Ministry of Industry and Trade office to declare a certificate of origin,
It can be said that the organizational structure of a business is the most important factor determining the success or failure of a company's production activities The management model applied by Cheer Farm Food JSC is appropriate to the company's scale and scope of operations, promoting the capacity and expertise of employees in each department.
Scale of the enterprise
Cheer Farm Food JSC is a small and medium-sized enterprise, with a total number of employees of about 40 people Because Cheer Farm JSC operates in the
23 direction of self-producing and exporting the products they make, human resources are mainly concentrated in the factory The number of workers at the two factories accounts for 85% of the company's total human resources The remaining workforce operates mainly in the main office to find customers, research and development, marketing, prepare documents, etc Up to now, the number of personnel allocated specifically in departments is summarized through the following data table:
Table 2 1 Human resource structure at Cheer Farm Food JSC in 2023
As I mentioned above, the main office of Cheer Farm Food JSC is located in Da Nang Besides, the company also has a small factory here to research new products and produce when the main factory in Kien Giang cannot produce enough product in time to ensure the amount of goods supplied to the market Therefore, the human resource scale in Da Nang is quite small Specifically, the office in Da Nang has a total of about
10 employees with: Executive Board (1 employee), Marketing Department (2 employees), Business Department (2 Sales employees and 1 Documentation employee), Production department in Da Nang (4 employees) The number of employees in Da Nang only accounts for about 25% of the company's total employees in both Kien Giang and Da Nang provinces However, this human resource in Da Nang plays a more important role in most stages of the company's operations and development
In addition, Cheer Farm JSC has been using outsourcing resources to handle related tasks instead of choosing to hire employees to work at the company Specifically,
24 the company has been coordinating with outsourced accounting and forwarders to handle related issues in each order As a result, it can be seen that Cheer Farm JSC has a workforce scale that is not too large but still ensures stable operations and reasonable allocation of personnel in each department.
Business activities at Cheer Farm
Cheer Farm’s products are All-Natural, have no artificial substances, and strictly manage from the farm The product list that has been producing at Cheer Farm are:
Table 2.2 List of products at Cheer Farm Food JSC
Premium Dried Mango Strip/ Slice/ Cheek
Dried Mango Tidbits Dried Mango Chunk Premium Dried Pineapple Slice/ Ring
Dried Pineapple Tidbits Premium Dried White Dragon Fruit Dried White Dragon Fruit Tidbits/ Quarter Premium Dried Red Dragon Fruit Dried Red Dragon Fruit Tidbits/ Quarter
Dehydrated Lime Dehydrated Lemon Dehydrated King Orange
The input material is 100% tree-ripened fruit from local farms The company strictly monitor the fruit source with high quality and safety standards All products are natural-tasting and nutritious because we grow our fruits traditionally and sustainably
Besides, in fruit processing, Cheer Farm neither uses sulfur, additives nor preservatives Therefore, products from Cheer Farm ensure the following standards: Non GMO, No additives, No added sugar, No preservatives, Unsulfured These highlights have contributed to creating value for products from Cheer Farm These are all important conditions to meet quality standards when exporting to foreign markets
At Cheer Farm, low temperature drying technology (about 50 o C) has been used to dry ripe fruit Cheer Farm strictly controls the production process, especially hygiene standards, meeting the necessities in producing natural products without pre-treatment, without using artificial substances or chemicals enter Besides, the company constantly innovates and optimizes production processes to increase capacity and stabilize prices
Figure 2 3 Process of manufacturing at Cheer Farm (Source: Cheerfarm.com)
Cheer Farm JSC operates in both domestic and international markets
Cheer Farm has established long-term and sustainable cooperative relationships with major distributors, including wholesalers, five star hotels and resorts, coffee chains, hamper suppliers, groceries, retail chains Specifically, Cheer Farm's dried fruit products have become available at distribution points such as Aeon Mall, Naman Market, Danang Souvenirs, Lotte Duty Free,
Cheer Farm's main source of revenue is from export activities to foreign markets During its years of operation, Cheer Farm has continuously expanded its export markets, successfully conquering even difficult markets with many strict requirements on inspection activities and product quality
Currently, the company's main export markets are towards major countries such as Korea, Australia, Singapore, Russia, Hong Kong, Japan, In addition, the company
26 is still preparing plans to enter the US and UK markets with the goal of bringing the Vietnamese dried fruits brand more widely around the world
Of all Cheer Farm Food JSC's export markets at the present time, Australia is one of the main markets that brings a large revenue to the company and has long-term development potential In general, Cheer Farm has a stable customer base in Australia bringing from 20,000 USD to 30,000 USD in revenue for each order Although the number of orders to Australia at Cheer Farm is not as large as other markets such as Korea, Russia, But the profits this market earns are much higher than the others This is also the reason that in this report, I chose to analyze the documents for Cheer Farm's dried fruit shipments to the Australian market to find solutions to better exploit the development potential of Cheer Farm this market
Cheer Farm operates on a business-to-business model (B2B) Therefore, the company's main customers are enterprises with food-related business activities in domestic and foreign countries
Besides, in the direct distribution channel, Cheer Farm’s dried fruits are still accessible to individual consumers They can be tourists, consumers aiming for healthy products, or they can be lovers of dried fruits from Vietnam, Although individual customers only make up a small part of the revenue structure, this is also a great opportunity for Cheer Farm JSC to promote its products and bring dried fruit closer to customers around the world
With the strong development of international trade and the development potential of the dried fruit export industry from Vietnam, Cheer Farm JSC faces many other competitors in the market
It can be seen that a few businesses are also providing dried fruit products from Vietnam, which are direct competitors of Cheer Farm today: Luong Gia Food Technology Corporation - An enterprise that produces and exports many types of fruit dried fruits such as jackfruit, coconut, mango, banana, rambutan, gooseberry, longan, etc.; Nafoods Group JSC - An enterprise with a diverse product portfolio including concentrated juices; puree juice/NFC; IQF frozen products; fresh fruit; dried fruits and nuts, Although in terms of business scale, Cheer Farm JSC may not be as large as the
27 above competitors However, the business has successfully built a reputation and a certain consumer market in many countries around the world over the years of operation.
Business performance in the period 2021 - 2023
Table 2 3 Cheer Farm's business results for the period 2021 – 2023
(Source: The author self-synthesizes from financial reports)
Based on the business performance of Cheer Farm Food JSC from 2021 - 2023, we can see that Cheer Farm's net revenue has grown significantly each year, showing that the company's business activities are developing stably and positively However, the company's total costs also increased over the years with mainly the costs of input materials and labor for production activities Therefore, the company needs to apply a policy of optimizing cost of goods sold to improve profits
Proportionate to the growth of revenue, the company's profit after tax also increases significantly (up more than 2 billions VND in 2023 compared to 2021) Thereby, it can be seen that during the global economic recession, Cheer Farm can still control and adjust its business strategy to ensure that export activities remain stable and on a good development path
ANALYZE THE PROCESS FOR PREPARING THE DOCUMENTS
Summary the process of exporting at Cheer Farm
3.1.1 Terms of use and support partner
To make the export process easier and more effective, Cheer Farm Food JSC has chosen a third party to complete the necessary delivery procedures on behalf of the company Specifically, Thong Minh Multimodal International Logistics Company Limited was chosen as the Forwarder unit to support Cheer Farm Food JSC in carrying out cargo delivery procedures, booking ships and ensuring shipping process is carried out effectively in accordance with the provisions of law Besides, the forwarder is also the party that prepares the documents and applies for the Phytosanitary certificate for the shipment of Cheer Farm Food JSC.
About terms of use, the export process at the company often applies Incoterm FOB terms (Free On Board) With the Incoterm FOB clause, Cheer Farm Food company will be responsible for the goods until they are loaded on the ship's deck at the loading port After that, the responsibility will be transferred to the buyer and the shipping company Thanks to FOB conditions, the exporting company avoids part of the costs, responsibilities and risks related to transporting goods to the destination, especially in the event of errors or related violations to the arrangement and transportation of goods at the destination port of foreign countries However, the use of FOB terms requires a lot of specialized skills in interpreting commercial terms to avoid disputes between parties during the transportation of goods.
With the application of Incoterm FOB terms and support from the Forwarder, Cheer Farm has ensured accuracy and transparency in payment and management of export documents along with the clear allocation of responsibilities to each party involved throughout the transaction process Since then, the company's business efficiency has been improved and the export process has also been simplified.
3.1.2 The role of employee involved in the document preparation process
The process of preparing export documents includes many steps from receiving orders and customer information, creating commercial invoices, registering customs procedures, and providing related documents such as B/L, C/O, transport documents, etc At Cheer Farm, the import-export documentation staff is responsible for most of the work throughout this process.
To start the export process, the business department's documentation staff will check and confirm the Purchase Order, and prepare related documents such as Proforma Invoice (P/I), Commercial Invoice (INV), Then contact the Forwarder to understand the time and destination of the goods After receiving the B/L from the Forwarder, the documentation staff continues to check the schedule and information about the ship and then discuss with the production department to prepare the goods and determine the packing date When the goods are prepared for export, the carrier will go to the factory to carry out goods delivery procedures The documentation officer continues to complete customs procedures and prepare necessary certificates.
When the goods have been loaded onto the board and are ready for transportation, the documentation staff continues to monitor the shipping process, updating information and order status for the company Depending on the customer's requirements, the documentation staff will coordinate with the department head and forwarder to support the preparation and completion of those necessary documents The specific tasks of the documentation staff will be presented more clearly in each step of the document preparation process in section 3.2.
Detailed description of the process of preparing export documents
Figure 3 1 Flow chart of preparing documents process (Source: Cheer Farm)
Upon receiving the P/O, the documentation staff checks and confirms that the information in the P/O such as customer name, address, product, quantity, price and delivery terms are correct and appropriate Next, the documentation staff will contact the head of the production department to check and confirm the ability to supply goods That means they need to be consistent and ensure that the company has the ability to provide the quantity of goods with high quality as requested by the customer in the P/O
If there is not enough, they need to contact relevant departments such as production, transportation, planning or discuss again with the importer about delivery time or quantity of goods to ensure supply capacity Then, the documentation staff needs to agree with the customer on special terms in the P/O such as payment conditions, delivery time, contract validity, and any other special requirements.
Once the above has been completed, the documentation clerk needs to determine the specific documentation requirements from the customer They may include export invoices, certificate of origin, quality certificates, phytosanitary certificates, and other shipping documents, to prepare at the next step.
To better illustrate the steps in the document preparation process at Cheer Farm Food JSC, I used information from an order to Australia No 30127 Specifically, in P/O
Receive Purchase OrderCompose Proforma InvoiceCompose Commercial Invoice and Packing ListReceive Bill of Lading from forwarderReceive Phytosanitary Certificate from forwarderDeclare and check Customs DeclarationsApply For Certificate of Origin
No 30127, an importer from Australia placed an order on December 10, 2022 with 2 items: Premium dried Queen Pineapple (100% tree-ripen Queen Pineapple, Free pesticide fruits, no added sugar, no preservatives, no additives), packaged 500 grams/bag x 20 bags/carton; Premium dried Mango (100% tree-ripen Mango, no added sugar, no preservatives, no additives), packaged 1000 grams/bag x 10 bags/carton Documentation staff checked the information on the P/O right on that day to confirm the type, quantity, and unit price, to prepare documents.
Based on the information identified from the P/O, the documentation staff prepares a Proforma Invoice (P/I), including information about product name, quantity, unit price, calculation unit and other terms & conditions P/I is usually made immediately after receiving the P/O and confirming all information on the P/O In addition, the document clerk needs to calculate the total value based on the quantity and unit price of each item in Proforma Invoice by multiplying the quantity by the unit price and then calculating the total value If necessary, documentation staff also need to consult with the department head to adjust the price in the Proforma Invoice according to the requirements Besides, in P/I, documentation staff need to add terms & conditions such as Payment terms, Delivery, Shipping docs,
In order No 30127, the documentation staff prepared P/I on December 10 th 2022 with information based on P/O Documentation staff needed to fill in the complete order number and date; name, address, tell, Attn, of buyer, seller and consignee Next, the documentation staff entered the goods information table with full description, quantity, unit price (according to FOB method), and total amount.
In addition to the above information, the documentation staff also needs to provide all relevant information about terms & conditions based on the company's regulations on goods going to Australia by sea transport, including:
- Payment terms: Deposit 40% total value will be paid in advance to confirm the order and the rest will be paid after production and before delivery Bank's fee is shared by each party.
- Delivery term with shipping method by sea, the departure port is Cat Lai port and the arrival port is any port in Australia
- Shipping docs are required, including Packing list, Commercial invoice, Certificate of origins, PHYTO certificates
- Shelf life of the product is 10 months after production date in tight pack, repacking is not allowed
- Beneficiary information is information from the company
Figure 3 2 Sample of the P/I for the order No 30127 (Source: Cheer Farm)
3.2.3 Compose Commercial Invoice and Packing List
After the importer confirmed and agreed to the terms and information in the P/I, the documentation staff can prepare the C/I Accordingly, C/I must contain the same information as P/I, including information about the exporter, importer, product description, quantity, price, payment terms, delivery terms and any other additional information is relevant.
In addition, the documentation staff also needs to prepare a packing list (P/L) that provides detailed information about the contents of each package, including item name, quantity, size and weight.
With these two documents, the documentation staff often complete all of them within a day Besides, she needs to ensure that the C/I and P/L are accurate, clear and in accordance with all specific requirements of the destination country or international trade regulations as well as terms previously agreed with the importer.
In order No 30127, after the adjustment period and reaching consensus on quantity, price as well as other related information contained in the P/I, on January 7 th
2023, I was prepared based on the company's form Accordingly, the document staff needed to enter complete and correct information of the importer, P/O number, C/I number and C/I date of creation as well as detailed information about the order such as product name, description, packing size, unit price, quantity, total price, Especially, in the INV of the order No 30127, there was an additional product - Thoroughly Dried Pineapple, with FOC price It meant that this product was Free of Charge and the importer did not need to pay for it because this was a gift from Cheer Farm Food JSC for this shipment.
Figure 3 3 Sample of C/I for the order No 30127 (Source: Cheer Farm)
Similarly, P/L is also created on the same day as C/I, documentation staff also accurately entered information of consignor, consignee, goods information as well as packaging and packaging size Specific information is described in the following sample P/L of the order No 30127:
Figure 3 4 Sample of P/L for the order No 30127 (Source: Cheer Farm)
3.2.4 Receive Bill of Lading from forwarder
Documentation staff contact the forwarder, providing information for them to prepare a Bill of Lading (B/L) - a document that serves as evidence for the shipping company's contract of transportation and receipt of goods.
Time to receive B/L depends on train departure date After receiving the draft BL from the forwarder, the documentation staff needs to check and verify the accuracy of the B/L, including detailed information about the shipper and consignee, goods description, and container number or lot number and any special instructions or confirmations Then respond to the forwarder so they can release the official B/L
EVALUATING THE PROCESS FOR PREPARING THE
Evaluate the process of preparing the documents for exporting dried fruits to
to Australia by sea transport at Cheer Farm JSC
Based on the process evaluation criteria of Dumas et al Having presented in the theoretical basis section, I personally have some views and assessments on the process of preparing export documents for dried fruit products to Australia by sea at Cheer Fam Food JSC as follows:
Table 4 1 Estimated time to complete the document preparation process
Receive Purchase Order Within a day
Compose Proforma Invoice Within a day or next day
Compose Commercial Invoice and Packing List Within a day
Receive Bill of Lading from forwarder Depends on train departure date Receive Phytosanitary Certificate from forwarder 1 day before the train departs Declare and check Customs Declarations 1-2 days
Apply For Certificate of Origin 1-2 days
Source: The author self-synthesizes
Time is assessed based on the progress of processing work in steps such as collecting information, preparing documents, waiting time for document approval, or the waiting process due to lack of resources such as booking ships, waiting production, Some views on advantages and limitations based on time criteria are:
With nearly 10 years of operation in the field of production and export of dried fruits to many markets around the world, Cheer Farm Food JSC's staff are highly qualified and experienced in the profession Therefore, the processing speed of the steps
42 in the process is relatively fast, and errors decrease significantly Work is specialized in each department and distributed to employees to coordinate smoothly throughout the process, ensuring the progress of activities as expected.
The total process implementation time is shortened thanks to the use of third- party partners who have enough expertise and experience to handle related issues Specifically, the Forwarder supports transportation, ship booking, declaration support and PHYTO Certification,
Besides, using online systems to support the process of preparing documents, such as the ECOSYS system, ECUSS customs declaration software, not only helps save a lot of time and money but also simplify the processing of these related documents.
In addition, communication with partners such as forwarders or outsourcing parties is done via Zalo, Email, and Linkedin In many cases, documents are also sent online through these channels instead of using express delivery services This flexibility helps Cheer Farm Food JSC avoid many difficulties in time and costs of sending documents Furthermore, the company always coordinates and maintains good relationships with relevant parties such as shipping agencies, forwarders, to promote the process to go smoothly and quickly.
Besides the above advantages, there are some problems that affect the progress of the process such as:
The company has a small and medium production scale Therefore, production capacity is also limited In some cases, when the order is large, the company cannot produce in time to ensure progress This leads to a series of other impacts such as slow preparation of goods, not being able to pack goods in time and deliver them to the shipping unit Not only that, it also delays the process of preparing and processing documents for the shipment.
The time zone difference with the importing country also makes communication between participating parties difficult For example, when waiting for Proforma Invoice confirmation from the customer, because of the time zone difference, the time is extended from 1 to 2 days.
Errors by staff during document preparation can also make the time take longer Specifically, when applying for C/O with some new shipments, documentation staff do
43 not have experience in preparing documents and declaring on new types of C/O Forms, the errors may occur Therefore, the process of waiting for approval and editing of approval documents can sometimes last up to a week In another case, when declaring to customs, if the shipment falls into the red channel, the company must wait for the customs side to re-check the documents and the actual goods for approval.
Besides, cooperating with the forwarder to handle some steps in shipping and receiving goods and preparing documents sometimes also creates many limitations for the company Because the company depends on the forwarder, it cannot be flexible in terms of time, reducing operational efficiency, affecting the delivery process as well as the business's profits.
Costs include the cost of operating the process and the cost of paying human resources at the company or those involved in implementing the delivery process Some views on advantages and limitations based on cost criteria are:
Most orders are well managed in terms of delivery time and storage time, so costs can be saved a lot Besides, most shipments are guaranteed in terms of implementation costs and create profits for the company In addition, the number of employees is just enough to take care of all stages in the process as well as business operations Therefore, the efficiency in using resources has contributed to the company's more reasonable cost management.
The company has a reasonable calculation of the amount of equipment needed in the office and makes maximum use of its capacity At the same time, focusing on investing in equipment at the factories is necessary to improve production efficiency, reduce unit costs as well as partially overcome time constraints.
Cheer Farm Food JSC costs a lot of money from outsourcing Outsourcing units can provide highly specialized support, but the costs are also quite high Therefore, the company may not compete in terms of price with many competitors in the market
Solutions to improve efficiency in the document preparation process
Based on the advantages and disadvantages as above, I personally have some suggestions on the process of preparing export documents for dried fruit products to
Australia by sea transport at Cheer Fam Food JSC as follows:
Employee training and provision of resources: Create opportunities for documentation employees to participate in training programs and professional courses on import and export to improve employees' knowledge and experience in preparing and processing documents At the same time, promptly update new changes in procedures and document requirements for goods going to other countries, helping businesses stay proactive In addition, documentation staff also need to build closer relationships with officials at the Branches, pay attention to different requirements at the Branches so that the process of preparing documents and documents is quick and can be completed in a shorter time.
Build a more effective communication system: Establish an effective communication system between the parties involved in the document preparation process Besides, clear communication, work assignments and regular updates help avoid delays and ensure everyone is on the same page in terms of perspective, methods, and work processes.
Identify and comply with legal regulations: Master the legal regulations related to dried fruit export and ensure full compliance This includes reviewing the importing country's export regulations, shipping, certification and other requirements As a result, complying with legal regulations helps avoid violations and problems in the document preparation process.
Review and optimize processes periodically: Continuously evaluate document preparation processes to identify delays and areas for improvement Besides, the company should collect opinions from employees participating in the process, suggestions from partners and make appropriate changes to optimize work processes
Through this report, I have presented the process of preparing export documents and specifically illustrated through the case of preparing documents for a shipment of dried fruit to Australia by sea transport at Cheer Farm At the same time, I also analyzed a few issues related to this process, conducting assessments based on the set of criteria of Dumas et al., and proposed some solutions to increase its effectiveness through my personal perspective.
In addition, the report stated the theoretical basis along with definitions, roles, meanings, and main components often found in export documents After that, the report analyzed in more detail the process of preparing documents for dried fruits at Cheer Farm when exported by sea transport It can be seen that, although the process of preparing a set of export documents is only a small stage in the entire process of exporting a certain item to the international market, it plays an important role in the export activities of any enterprise This process helps export businesses ensure the accuracy, completeness and legality of export documents, making business operations effective If errors appear or a complete and accurate set of documents is not provided, businesses may face many problems such as fines, loss of customers, loss of orders, affecting reputation and operations in the future of the business.
Furthermore, focusing on the process of preparing import and export documents also helps businesses minimize legal risks, increase transparency in export activities and ensure that cross-border transactions succeed legally, conveniently and safely Therefore, each business needs to ensure that it prepares, checks and processes export documents meticulously, accurately, on time, and meets all necessary requirements Because the document preparation process, if done well, will also create a competitive advantage and improve export capabilities for businesses in the international market.
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