Recommendation to improve freight forwarding process of imported cargoes in tung bach export import and transport services trading company

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME:KIEU PHUC HIEP DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company HAI PHONG – 2015 MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME:KIEU PHUC HIEP CLASS : GMA-02 DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company Supervisor: Hoang Bao Trung Division: Basic Economics Faculty: Economics HAI PHONG – 2015 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company PREFACE Intership is very important with students to interact the knowledge they have learnt at school and hands-on experience Besides, intership is a good chance for students to visit places they might not ever visit on their own Many scientists affirm that intership is very important and necessary to students to have a new experience and learn how to use what they are learning in the real situations Students are able to gain all experience beyond reading and can see elements by their eyes instead of reading about it in books and believing what they are told because it’s in print With intership, student knows clearly and exactly how to a work, then they can draw the real-work knowledge for themselves and can be successful in their business after finishing education Moreover, not only learning but also practicing, students will feel more confident about their abilities and can work more efficiently It is also the opportunity for students to make a great combination of learning and fun; it will make the outside classes more interesting and more working Intership can provide entertainment for students; and it can make students more focus back in the classroom It is better if students have chance to practice all the knowledge they have learnt in the educational process; and intership helps to make it become true This is an useful and important part to help students complete the working abilities in the future And furthermore, intership can change the way students consider and look at education and the way they recognize their communication skills In conclusion, intership is indispensable part in the educational process, it helps students improve the knowledge they have learnt and perfect all the skills and abilities It is absolutely a new experience for students and it will make the success of students in the future As a student of Vietnam Maritime University (VIMARU) and has the passion in maritime field, I chose Tung Bach Export Import And Transport Services Trading Company as my intership company Along with the history, an interesting development process as well as the specialization in work, I believe that this is the best choice for me Hai Phong, September 30th, 2015 Student Kieu Phuc Hiep i KIEU PHUC HIEP – GMA-02 Page i Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company ACKNOWLEDGEMENT During the process of doing my research, I am thankful for the all people that helped me finish my dissertation First of all, I would like to express my gratitude to my supervisor Mr Hoang Bao Trung for his guidance and valuable suggestion during my training time as well as the processing of this dissertation I cannot perform my dissertation correctly without his advice Secondly, I’m grateful to the staffs of Tung Bach Export Import And Transport Services Trading Company for their enthusiastic assistance, instructions and advices during my training time Lastly, I also would like to thank my parents and my friends for their support and encourage both in mentally and physically in that time Adding more, because of limited knowledge and time in the process of completion, shortcomings cannot be avoided so the helpful advices from teachers and readers are warmly welcome i KIEU PHUC HIEP – GMA-02 Page ii Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company LIST OF TABLES TABLE 2.1: Business result in 2013 (Unit: Million VNĐ) TABLE 2.2: Business result in 2014 (Unit: Million VNĐ) TABLE 2.3: Business result in first quarters of 2015 (Unit: Million VNĐ) i KIEU PHUC HIEP – GMA-02 Page iii Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company LIST OF FIGURES FIGURE 2.1: Organization system of Tung Bach Company FIGURE 2.2: Business Results of Tung Bach Company in the 11 consecutive quarters FIGURE 2.3: Business results of Tung Bach company in 2013 and 2014 FIGURE 2.4: Business Results of Tung Bach Company in the first quarters of 2013, 2014, 2015 FIGURE 2.5: Process of imported FCL goods FIGURE 2.6: Customs clearance process i KIEU PHUC HIEP – GMA-02 Page iv Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company TABLE OF CONTENT Preface i Acknowledgement ii List of tables iii List of figures iv Introduction Chapter I: Foundation of freight forwarding 1.1.Freight forwarding and operation 1.1.1 Foundation of freight forwarding 1.1.2 Enterprises engaged in freight forwarding 1.1.3 Legal basic, rules of freight forwarding 1.1.4 Types of freight forwarding 1.2 Freight forwarder foundation and duties in the international trade scenario 1.2.1 Foundation of freight forwarder 1.2.2 Role, duties and powers of freight forwarder 1.3 Freight forwarding process 1.3.1 Duties of parties involved in freight forwarding process 1.3.2 Shipping goods methods .10 1.3.3 Criterion for evaluating the freight forwarding process of imported FCL cargoes……………………………………………………………………… 11 1.4 Essential documents in freight forwarding cargoes 12 1.4.1 Bill of lading (B/L) .12 1.4.2 Certificate of origin (C/O) 12 1.4.3 Commercial invoice 12 1.4.4 Packing list 13 i KIEU PHUC HIEP – GMA-02 Page v Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company Chapter II: Forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company 14 2.1 Introduction of Tung Bach Export Import And Transport Services Trading Company 14 2.1.1 Background of the company .14 2.1.2 Mission, function and core values of Tung Bach company 15 2.1.3 Organization .16 2.1.4 Personnel 18 2.1.5 Facility 19 2.1.6 Functions of Tung Bach Export Import And Transport Services Trading Company .19 2.1.7 Analysis of business result of Tung Bach Export Import And Transport Services Trading Company during the period from 2013 to 2015……………21 2.2 Freight forwarding process of imported FCL cargoes in Tung Bach Export Import And Transport Services Trading Company 25 2.2.1 Negotiate and sign the contract 25 2.2.2 Receive and check the documents from importers .27 2.2.3 Receive notification of arrival of goods 27 2.2.4 Exchange B/L and take D/O at shipping agent 27 2.2.5 Carry out customs clearance for the import goods .27 2.2.6 Exchange D/O for delivery note and pick up goods 29 2.2.7 Deliver containers to the imported warehouse .30 2.3Evaluation the freight forwarding process of imported FCL cargoes at Tung Bach Company……………………………………………………………… 30 Chapter III: Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company 34 3.1General evaluation of Tung Bach company 34 3.1.1 Advantages 33 3.1.2 Disadvantages .35 i KIEU PHUC HIEP – GMA-02 Page vi Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company 3.2 Goals and directions for Tung Bach company in the future 36 3.2.1 General solutions for the company 37 3.2.2 Solutions for infrastructure 38 3.2.3 Solutions for human resources 39 3.3 Recommendation of the company to improve freight forwarding process 39 3.3.1 Recommendation for reducing cost of providing services 39 3.3.2 Complete online business capabilities 40 3.3.3 Participate in professional associations organizations 40 3.3.4 Closely cooperate on information……………………………………….41 3.3.5 Creat a hightly professional style in serving customers 42 Conclusion 43 Reference 44 i KIEU PHUC HIEP – GMA-02 Page vii Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company INTRODUCTION Necessity Transportation is the life-blood of the economy, transport development will motivate other economic sectors develop In the era of modernization and globalization today, transportation plays a very important role, especially maritime transport Thanks to marine transportation, the economic sector of countries can link to each other, close the gaps on geographical space, reducing significantly production cost as well as product prices, creating big profits not only for a certain country but also for regions and even the world In international trade, maritime transport plays an extremely important role According to the International Maritime Organization (IMO), “Maritime transport is essential to the world’s economy as over 90% of the world’s trade is carried by sea and it is, by far, the most cost-effective way to move goods and raw materials around the world” (IMO) Therefore, shipping becomes one of the most potentail business serviecs in Vietnam recently, and has developed more service segments to serve better for customers Along with the development of maritime industry, freight forwarding services also attract more attention and become one of the indispensable services of all the shipping companies During practice at Tung Bach Export Import And Transport Services Trading Company, along with the knowledge I have learned in school, I noticed that freight forwarding isas the core of all foreign trading activities Enterprises want to achieve good results, obtain much profit required to perform well the process of freight forwarding cargoes Standing in front of this trend, Tung Bach Export Import And Transport Services Trading Company, as well as countless other businesses, need to prepare a good knowledge, professionalism and quality of service to meet the high demands of our customers, especially with freight forwardingprocess of imported cargoes of the company - one of the key services Understanding the importance of this issue, I chose topic “Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company” as my dissertation’s topic Research object Research object of the dissertation is the process of freight forwarding imported cargoes at Tung Bach Import Export And Transport Services Trading Company Besides, the research also gave an assessment of the business situation of company in terms of logistic and freight forwarding in recent years Thereby can evaluate the strengths and weaknesses in freight forwarding services, and then come up with solutions to improve the quality of service and meet the customers’ needs which is suitable with the current situation i KIEU PHUC HIEP – GMA-02 Page Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company Figure 2.6: Customs clearance process 2.2.6 Exchange D/O for delivery note and pick up goods After completing the above steps, the forwarding staff go to the warehouse or port to change the order They need to bring: - D/O of the shipping line: original The borrowing container note if the shipments are FCL (Full container load) The forwarding staff submits them to the employee of the port office and pays costs He also has to provide the license plates of the container truck used to carry the container Then the port office’s employee will give the forwarding staff the delivery note and Equipment interchange receipt (EIR) for the container After that, the staff come to the Customs of the warehouse (port) and the gate Customs office to check delivery notes and customs declarations The Customs officer will stamp the EIR and the declarations The staff will bring EIR and customs declaration to the Control department of the port At there the forwarding staff can ask the employee of the Control department to find the location of the container And then the forwarding staff call the container forklift driver to come to the location, carry the container and put it on trailer of the container truck 2.2.7 Deliver containers to the imported warehouse The driver drives the truck with the shipment or containers to the warehouse of importer and gives them the customs declaration of shipment Bringing goods to the warehouse at the notified time to the shippers so they can prepare to handle the shipment or containers Forwarding staffs also have to ask shippers about the time to withdraw all the goods from container, so the driver can take the empty container back to the container yard (CY) The driver takes the empty containers to the location (it is often the port or depot) which is written in the borrowing container note At there, the driver will go to the port office to perform the procedures of returning the container The representatives of the shipping line at the port will confirm the returning the empty containers with the returning container note After giving back the container to the container yard at port and receiving the returning note, the forwarding staff come back to the shipping line office At there, he show the borrowing container note and the returning note to the office staff of the shipping line After that he can receive the deposit which he had paid to borrow the container 2.3 Evaluation the freight forwarding process of imported FCL cargoes in Tung Bach Company 2.3.1 Timing i KIEU PHUC HIEP – GMA-02 Page 30 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company In terms of this indicator, the company has done quite well when the process takes place in an average of days: Before about days of the arrival of goods, the company receives the data and papers which provide information of cargoes, and forwarder starts to perform the first step And after days, the cargoes are transported to importer’s warehouse and the trucking department is responsible for implementing the last step There are some cases that, the cargoes are on the red line, so it takes about or days more to complete the customs clerance Therefore, it causes the waste of both time and cost, causing serious consequences However, as the company has carefully prepared the papers as well as the scrutiny of goods that the company takes responsible, so the case of goods in the red line is very rare In terms of timing, vehicle’s fleet of the company also caused certain delay, but this delay is negligible Due to the malfunctioning of the machine so the process of transporting the goods from the port to the warehouse sometimes delayed about to hours for the repair time It can be seen that, the period of delaying time is not too long, so not influence too much the process of freight forwarding and not cause big losses for the parties 2.3.2 Cost As the data showed about business results of Tung Bach Export Import And Transport Services Trading Company from 2013 to 2015, it can be seen that: Along with the significant increase in revenue and tax, the cost for providing services also rose gradually and different among years Although the cost included different activities such as agent or for training crew, the cost for providing freight forwarding services contributed a remarkable part in the whole amount of money spent On the other hand, in the period shown, the cost followed an upward trend and there also had the fluctuations in figures among 11 quarters This change caused by several reasons:  Distance of transport Distance of transport is considered a basic factor affecting the cost Transport costs may vary depending on a number of volatility expense such as Volatility expense are directly proportional with variation of transportation distance such as cost of raw materials, direct labor costs, storage costs, road fees, etc When transport distance is greater, volatility expense also rises leading to the increase in total forwarding cost According to formula: Shipping cost = Volattility expense + fixed cost However, fixed costs such as purchasing vehicles costs, machinery depreciation costs, maintenance machinery and transport vehicles cost are not affected by tranport distance, so the total of shipping cost does not increase too much Therefore, distance of transport contribute a part of cost for providing services  Infrastructure sources i KIEU PHUC HIEP – GMA-02 Page 31 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company Facilities of transport enterprises are mainly the means of transport and warehouse, a small part belongs to the technical equipments used at the company's office In terms of means of transport, due to the company's fleet are not provided adequate means to meet the large commodity needs of customers, so the vehicles must operate with large capacity and frequently , leading to degradation quickly and need regular maintenance Therefore, a considerable amount of money for maintenance vehicles results in the increases of services’s cost On the other hand, a significant shortage of the company is that not have warehouse in case of storing goods, therefore the warehouse rented by the other party As a consequence, the cost of providing services also increase and even taking times leading to the increase in incurred  Human resources Today, due to the application of science and technology in the field of transport and standards in goods information between the importer, exporter and between institutions related commercial shipments, it requires employees must be professional, and have high skill in using computer and foreign language, expertise in container transport in the logistics chain The knowledge and skills that will help them to perform professional expertise of the assigned tasks, reduce job tasks and transit time, increase the ability to handle unusual situations occur, leading to saving in service costs 2.3.3 Safety during the transportation of cargoes This is the process the company implemented in earnest and in fact, there is no errors occurred in this evaluation criterion Despite some delays of truck, the cargoes are shipped to warehouses in the day agreed between the two parties before Furthermore, the goods are intact, container seals are intact and there is no movement or rearrangement of cargoes which does not allow This has created the company's reputation in the freight forwarding market 2.3.4 Efficient use of human resources This might be the primary conceren issue of Tung Bach Company Lack of customer care department and there consists of only forwarders, so companies have difficulty in resolving the same time a large volume of work, sometimes leading to delays in the implementation of freight forwarding process Moreover, forwarding staff have to simultaneously perform the paperwork for many different companies in many different places, as a consequence, it is very time consuming to move between destinations and also prone to errors Within the company, the lack of coherence between departments also cause delays in the implementation of the process of forwarding While documents from planning department has not moved to the forwarding department, the staff can not i KIEU PHUC HIEP – GMA-02 Page 32 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company implement the paperwork tasks, entail trucking department is inable to transport cargoes to importer’s warehouse, leads the interruption in freight forwarding process of the company, may causes the cost incurred by the company to bear  General evaluation of freight forwarding services: Although there are some shortcomings in the freight forwarding process of imported FCL cargoes which must be improved, in general, Tung Bach company is ongoing and planning well for this process to ensure the safety of goods for customers as well as the accuracy, saving for the company By the professional development of forwarders and human resources situation, the company will enhance its reputation and sales, profitability in future i KIEU PHUC HIEP – GMA-02 Page 33 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company CHAPTER III: RECOMMENDATION TO IMPROVE FREIGHT FORWARDING PROCESS OF IMPORTED CARGOES IN TUNG BACH EXPORT IMPORT AND TRANSPORT SERVICES TRADING COMPANY 3.1General evaluation of Tung Bach Company 3.1.1 Advantages Since the day of establishment, revenue as well as profit of Tung Bach Export Import And Transport Services Trading Company has been increasing constantly, this means that the business of the company has tended to grow In which, it can be easily seen that, logistic services, in particular, the freight forwarding FCL services contributed a huge part to the success of both profit and reputation of the company It also illustrates that the company's strategy is suitable with the changes of the economic situation in the current era of the country and the world as well During four years of operation, company has achieved certain success, enhance reputation and position of company in maritime industry That has helped the company attract more customers, gaining higher profits On the other hand, the completion of import mechanism and macro-economic policies has encouraged exporting such as: exchange rate policy, tariff policy, credit funds Along with the improvement of customs procedures, the development of freight forwarding services has been improved and more effective In addition, the business of freight forwarding are favorable thanks to the following factors: - - - i The energetic ethusiasm of the management and staff in forwarding department helps to perform forwarding services quickly Each staff has professional qualifications in freight forwarding industry, so they are capable to resolve dynamically any rising situation in the stages of freight forwarding in the absence of director Therefore, the implementation process of delivery is not affected and kept progress as planned The harmony and unity among employees and departments helps the freight forwarding process is performed quickly from preparing documents and culmunating in delivering goods The leadership in freight forwarding field of the company always listen and gather the comments as well as encourage the initiative of subordinates The KIEU PHUC HIEP – GMA-02 Page 34 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company - help and urging of them help forwarding department completes all the tasks in time and limit the risks as much as possible The company has drawn a lot of valuable and practiacal experience in imported goods procedure The company has created for itself a solid position in the market, implemented many import contracts under the fiduciary for clients 3.1.2 Disadvantages Besides the aforementioned basic identificable advantages, the company still exists several worrying difficulties  On capital: When comparing with state-own companies as well as foreign-capital companies, Tung Bach Company as small and medium-sized enterprise (SME) has much smaller scale, the financial resources are not really strong Thus the work of freight forwarding have more restrictions on capital when making big deals and there is also a noticable difficulty when performing profitable contracts Also, capital for renovation is not much, lead to the working difficulties for the employees of the company and affect the transport process  On market: Tung Bach Company does not comply with the import and export market, the market now that the company entrusted import and export is mainly in Asia, but most are still regional Southeast Asia because companies not have enough potential as well as opportunity to penetrate other major markets such as the Americas and Eastern Europe  On customer: The company's customers are mainly traditional customers which have done business with the company since its inception thus bringing stable profit to the company However, due to the changes in market conditions, the figure for clients tends to decrease; therefore, the company needs to take measures to entice or attract new customers  On infrastructures: Transport infrastructure as well as facilities has been focused, but still backward, so that the link in the shipping process was interrupted For example, about the vehicles fleet, vehicles has been used for a long time, so the quality is not good as the previous time; sometimes, they are broken on transport routine i KIEU PHUC HIEP – GMA-02 Page 35 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company Because of having no CFS, Tung Bach Company has faced with many difficulties providing full services for customers, led to the volume of imported and exported LCL cargoes as well as benefit from this service does not too much Lack of specialized Customer Care department: Customer care department is extremely important in order to show the professional of the company which is in business services sector, and also represents the respect and concern of the company to customers This shortage will be a huge loss for the company in attracting customers to use the company's services as well as taking timely and completely customer information  On human resources: Due to the shortage in human resources, departments have no clearly differentiation of management as well as functions Moreover, the company needs qualified staff, but combining them into a good team is more important And it depends very much on how director organize and manage their company The company has no functional marketing room served activities for whole company, only to people who are responsible for marketing in each functional department Therfore, the company lack of a comprehensive marketing strategy: forwarding marketing activities are passive relying on agents, not actively seek and exploit the freight forwarding market In terms of forwarding department, there consists of only staff which are responsible for the whole activities of logistics; as a consequence, it is hard to meet the demand of all customers and lead to the over load of work with forwarders 3.2 Goals and directions for Tung Bach Company in the future Freight forwarding services are open markets for states and are able to bring a big profit to companies Vietnam is no exception when in conditions of economic integration today, the demand for import and export of goods is growing fast Look at the situation of Tung Bach Export Import And Transport Services Trading Company, during nearly years of operation in the maritime industry, the company has performed good first step in terms of entering a potential market, shown in the rise in the business activities of the company And especially, the profit of the company is mainly contributed by the profit from freight forwarding services; therefore, Tung Bach Company needs to highly concentrated on pointing out the goals and a clear mandate in order to develop the company in the future It is obvious that, freight forwarding services is a seasonal activity, are great influenced by different factors like volume of cargoes or weather So, the company must have a certain and large number of customers to avoid a significant reduction in figures of cargoes that the company deals with in a period of time To this, Tung Bach Company has to design a strategy for completing the process in services i KIEU PHUC HIEP – GMA-02 Page 36 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company of the company as well as minimizing the cost to offer a competitive price in comparison with other rivals In addition, along with the high customers’ demand, the company has to put more efforts into pleasing customers in all aspects such as complete quickly and accurately the paperwork and processes, complete the customer care services, etc On the other hand, builing a relationship with other freight forwarding companies is an important factor to help the company gain more knowledge and profit in implementing freight forwarding services About workflow, the company has met a certain number of difficulties when being incapable of implementing smoothly the steps in a process, which leads to consequences in terms of time and money for the company, affecting the overall development of the company To solve this problem, the company should measure strict solutionsfor each stage of work, to obtain effective work and unity among individuals and departments of the company, create a professional working lines, achieve efficiency in providing services to clients On the other hand, upgrading facilities and infrastructure also necessary to complete the process of the company Imported and exported FCL caroges counts for a significant proportion profit of the company, while LCL services only cover a small part that processes and steps more complicated; so, in the next period of time, the company tends to thrive to provide full FCL services, promoting the company's strengths to gain more profit and expand market to not only Asia but also other regions all over the world.With the goals and objectives, the company must be more efforts in developing a comprehensive company, especially in terms of freightforwarding services and logistics to achieve success To achieve these objectives, Tung Bach Company needs to take specific measurements: 3.2.1 General solutions for the company  Concerning the problem of capital, with limited capital, in order to save maximum cost to use for the operation of logistics operations, the company must offer solutions to reduce cost: - Creating relationships with shipping lines and seeking direct customers: To reduce cost, the company should offer prices to suit with each customer, demonstrate a competitive advantage compared with competitors in the same field Implementing this requires the company to reduce costs to a minimum by creating relationships with carriers to get preferential rates to suit each different route Besides, finding direct customers also help companies reduce costs significantly - Reducing the cost of business management: Personnel management helps increase the company's profits Therefore, the recruitment of personnel has to fit and correspond with company’s revenue At the same time, focus on training skilled professional staff, high sense of responsibility to each employee can take on more responsibility for their work i KIEU PHUC HIEP – GMA-02 Page 37 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company - Besides, searching for investments in domestic and abroad is a necessary step to solve the problem of capital for the company  Solutions for market Nowadays, in the fierce competition in freight forwarding market, to survive and as well as improve market share, company needs to develop their own market This is an effective measure to achieve the profitability, strengthening and enhancing the position of the company in maritime industry Therefore, the company will not depend too much on fluctuations of any single market - - - Firstly, the company needs to retain loyal customers in order to not to lose market share To so, the company has to provide good quality services, often care about clients and order preferential rates of services On the other hand, attracting new customers to expand market is very important Because every market has different characteristics of economy, society, legality, culture and customary This is a huge impact to the business environment, consumer sentiment, which greatly affected the market expansion of the company So, the company should have clearly defined steps when entering a new market, then must conduct a thorough research to minimize the risks that may occur According to formula: Revenue = P(price) x Q(quantity), the company has to consider carefully to develop company’s strategy In the fiere competition of forwarding servcies, besides the quality of services, price is as the most important factor to attract more and more customers Especially with new clients who want to use the services of company, it is necessary to offer a low rate of price in comparison with other freight forwarding companies in the region; however, this price level has to fit with financial situations and ensure that the company still remain profitability to continue to operate effectively This helps the company entices customers that regularly use another company’s services to Tung Bach Company So, by reducing the P indicator, the company will gain more in Q; put the consideration for a long time, this strategy makes to gain more amount of revenue of company 3.2.2 Solutions for infrastructure Upgrades office equipment and open Customer Care department: - - i The company should open Customer care department to provide a convenient and comfortable for both the customer care staff of the company and for customers Furthermore, this work also demonstrates the company's professional with the company in the services fieldas Bach Tung Retrofit some machinery and equipment to replace outdated types to ensure the best working environment for staff, especially with the work of freight forwarding which has to deal with many kinds of different papers and require the accuracy, advanced technology is fundamental condition to help forwarding staff quickly receive the data and information from customers KIEU PHUC HIEP – GMA-02 Page 38 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company - Advanced devices should be fitted as high-speed internet or wireless phone for easy communication between staff within the company or with employees and customers Uprades equipment serving for freight forwarding tasks: The means to serve the transportation and delivery should be particularly concerned: - - Trucks which are responsible for transporting goods to the shippers used on a regular basis, running on various routes, including the long route.Therefore, the trucks should be regular maintenance, inspection and replacement of spare parts to ensure safety in transportation, avoiding unnecessary risks Having no CFS is a big disadvantage for the company, resulting in the inability to provide full service to customers, increase the cost of transport Therefore,the company needs to develop CFS to avoid possible losses, gain more profit and customer satisfaction 3.2.3 Solutions for human resources This is the key and long-term issue of the company, which requires leadership have to very focus So the company needs to have proper investment policy for this issue: - - - - i Along with the development of the maritime sector, the new services are developed and requirements of customers also increased In case the company has not enough staff in charge of freight forwarding, they need to recruit new staff Noting that additional force must have strong qualifications in terms of freight forwarding servicesas well as foreign language in order to provide efficient logistics operations of the company For staff working at the company, the board should have the academic program and regular training to help staff can update the processes, changes in the freight forwarding industry, thereby they can apply precisely and quickly in the freight forwarding process of the company, creating high working efficiency More importantly, remuneration for staff is considered one of the most important factors, especially with forwarders The characteristic of freight forwarding work is to regularly move between the company, shipping lines and ports, consuming a lot of energy and even being dangers of driving in the region as much containers as Port area Besides, they have to work with very high frequencies, with the huge figure for paperwork needed to be solved, can cause stress in the work process So treatment regime as well as high reward is necessaryto motivate freight forwarders and also help leadership keep professional workforce working for long-term However, it is noted that, the remuneration for employees of the company is necessary but must be consistent with the cost and capital of the company, so not too much impact on revenue which can result in difficuilties in operational process and business KIEU PHUC HIEP – GMA-02 Page 39 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company 3.3 Recommendation of the company to improve freight forwarding process Besides all the aforementioned disadvantages and the respective solutions for Tung Bach Company, there are some recommendations in order to make better of a freight forwarding company 3.3.1 Recommendation for reducing cost of providing services As mentioned above in part 2.3.2, there consists of several reasons that affected negatively the cost of providing services, including distance of transport, infrastructure and human resources In which, with transport distance, there has no any solution to solve it In fact, the increase in the distance or the fuel price are external effects which can not be changed by the company, but on those field, the revenue collected will be proportional to the increase in prices On the other hand, the problem of infrastructure or human resources can improve by the changes in the company (as mentioned in part 3.2.3 and 3.2.4) More importantly, nowadays, there are more services which help the process of transportation operates smoothly and reduce services cost as well 3PL is the party provides overall solutions for logistics services for customers, they often take on a portion, or all of the stages of the supply chain For a company without CFS as Bach Tung, using 3PL services is one of the best current solution Because investing in building warehouses and buy vehicles, the cost will be very high, but the exploitation performance is only 30 - 50% per day Moreover, the investment in long-distance container vehicles, or the satellite warehouses in the neighborhood to regulate sources that exploitation productivity is low because these areas have low rate in terms of consumption, leading to a waste of resources and capital Using services of professional companies will help the work on the logistics goes smoothly, reducing the "switch button" in the operating system, could exploit the resources of forwarding service providers with flexible solutions 3.3.2 Complete online business capabilities E-commerce is a growing trend in the world trade due to its outstanding properties E-commerce allows the company to recognize the information, the new text was adopted, the requirements of the customer about service standards and prices, from which the company can adjust the business plan E-commerce helps the company to promote services and find business partners as quickly as possible, at the lowest cost To have more partners and establish business relationship, the company must regularly update the web page, post new information about services Also, this method can help the company easier to contact with customers throught internet The company needs to enhanced advertising on sites of international trade because it is a huge market with great potential For some well-known sites that have high business efficiency and have popularity with customers, the company should register for membership fees, which will help expandingbusiness i KIEU PHUC HIEP – GMA-02 Page 40 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company opportunities because majority online customers nowadays are very seriously in considering reputation and financial capability of partners 3.3.3 Participate in professional associations organizations The participation in freight forwarding companieshelps the company to capture timely information, update the regulations and policies of the state as well as personal preferences for members of the associations Participating in the organizations also helps the company reduce business risks, get a higher position Also, friendly and lively environment helps the compnay boldly propose business ideas, difficult problems and get useful contributions from other members This is also a good chance for enterprises to exchange experience in the field of freight forwarding 3.3.4 Closely cooperate on information between departments in company and with clients At the moment, although collaboration among departments has certain rigor, there still exist some problems such as: there has no specialized department which is responsible for customer care, therefore,the provision of information to forwarding department is still slow, failure in meeting the demand of suplyying information continuously and rapidly On the other hand, forwarding department are still low in providing necessary bills for accounting department, leading to the difficulties in taking back debts Tung Bach Company should verify the problems in the operation of the departments related to the implementation of the contract of carriage, and making plan, reorganization of coordination between departments The company should actively acquire information from customers to provide timely to forwarding department in order to avoid the passive situation at work  Develop Customer care department: It is necessary to develop a department which is specialized in cutomer care This department is the most important to obtain the close link between clients and departments of company They are responsible for collecting customers’s information and transfer them to different deparments in the company to deal with timely, especially forwarding department because it is the main part in the process of forwarding On the other hand, Customer care staff have to contact frequenlty to customers to catch the newest information and the changes during freight forwarding process to get the best preparation  For Forwarding department: Forwarding department needs to quickly capture information about customers and send feedback timely for clients Besides, forwarders has to frequently contact and check the progress of the freight forwarding When incidents and i KIEU PHUC HIEP – GMA-02 Page 41 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company malfunctionsof the activities during transportation occur, forwarders need to take measures timely to adjust More importantly, forwarding staff need to conduct and save acquisitions of payment documents of a shipment for the accounting department  For financial accounting department: Carefully check the payment documents before issuing bank Accounting department must constantly urging forwarding department to deliverpayment documents topromptly report liabilities to director Accounting department has to regularly informed of the customer's debts to forwarding department If there is any erroron payment documents, financial accounting department must contact with forwarding department for timely adjustment 3.3.5 Creat a hightly professional style in serving customers Tung Bach Import Export And Transport Services Trading Company is a company working in the service sector, so the company has to show the professionalism with the goal and slogan of the company is to always respect customers Companies need to build credibility in the business, in order to maintain the trust of customers, avoid unnecessary disputes, constantly improve the quality of customer services Actively cooperate with other companies in freight forwarding services to tighten colleague, restrict arbitrarily competition which can affect negatively to both sides i KIEU PHUC HIEP – GMA-02 Page 42 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company CONCLUSION Transportation in general and maritime transportation in particular play an important role in the economy, it is considered as the motivation for development of economy as well as the main mode of transport for international trade In Vietnam, transportation and freight forwarding services have a long history of development, but the level and pace of development are low, not to commensurate with the sea potential of country Nowadays, Vietnam has a lot of companies and corporations in freight forwarding industry with different scales Despite of having many difficulties in funding and organizing, companies are gradually overcome and affirm their position Tung Bach Export Import And Tranport Services Trading Company is a freight forwarding company, though newly established, the company has experienced significant growth, contribute to the general development trend of the economy in general and transportation industry in particular During my trainingtime at company, I have found that working processes partly reflect the professionalism and diversity Especially in the proceess of freight forwarding services, there has been the classification between imported and exported goods, between imported and exported FCL and imported and exported LCL cargoes This has proved a change towards more complete in every procedure of Vietnam enterprises to meet the diverse needs of domestic transportation as well as international transportation However, besides that, the lack of funds and vehicles to be active in the whole process of imported and exported goods is a limitation for the development The advantages and disadvantages have been expressed in process of imported FCL cargoes - a process that I have analyzed during my at Tung Bach Company I have mentioned all the contents that I have learnt and collected from practicingat Tung Bach Export Import And Tranport Services Trading Company Once again, I would like to thank to the guide teachers, the help of company’ director and staffs, Vietnam Maritime University, International School of Education for facilitating me to complete the field trip and this report Thank you very much! i KIEU PHUC HIEP – GMA-02 Page 43 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company REFERENCE Difference between FCL and LCL (2015, 10) Retrieved from http://howtoexportimport.com/: http://howtoexportimport.com/Differencebetween-FCL-and-LCL-290.aspx FIATA (n.d.) FIATA model rules for freight forwarding services IMO (n.d.) IMO profile Retrieved https://business.un.org/en/entities/13 i KIEU PHUC HIEP – GMA-02 from business.un.org: Page 44 ... Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company Chapter II: Forwarding process of imported cargoes in. .. 18 Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company Being a small company ,Tung Bach Export Import And Transport. .. And Transport Services Trading Company CHAPTER II :FORWARDING PROCESS OF IMPORTED CARGOES IN TUNG BACH EXPORT IMPORT AND TRANSPORT SERVICES TRADING COMPANY 2.1 Introduction of Tung Bach Export Import