Recommendations to enhance e customs declaration service quality at viet khai one member limited company

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: LE THI THAO HIEN DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS TO ENHANCE E-CUSTOMS DECLARAION SERVICE QUALITY OF VIET KHAI ONE MEMBER LIMITED COMPANY HAI PHONG – 2015 MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: LE THI THAO HIEN CLASS: GMA02 ID: 50063 DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS TO ENHANCE E-CUSTOMS DECLARAION SERVICE QUALITY OF VIET KHAI ONE MEMBER LIMITED COMPANY Supervisor: Vu Thi Thu Hang Division: Global Studies and Maritime Affairs Faculty: Economics HAI PHONG – 2015 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company PREFACE I declare that this report is my own unaided work It has not been submitted before If violated, I am solely responsible for and bear the punishments of the Institution and University Student Name and Signature Le ThiThaoHien Le ThiThaoHien GMA02 Page ii Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company ACKNOWLEGEMENT Firstly, I would like to express my sincere gratitude to my advisor Vu Thi Thu Hang for the continuous support of my study and related research, for her patience, motivation, and immense knowledge Her guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for my study Le ThiThaoHien GMA02 Page iii Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company TABLE OF CONTENTS PREFACE ii ACKNOWLEGEMENT iii LIST OF ABBREVIATION vi LIST OF FIGURES vii LIST OF TABLES viii INTRODUCTION CHAPTER I: THEORETICAL FOUNDATION .3 1.1 Literature review 1.1.1 Customs declaration 1.1.2 Service .3 1.1.3 Service quality 1.1.4 Service quality measurement 1.1.5 Introduction to ECUS5 12 1.2 Research methodology 13 1.2.1 Research framework 13 1.2.2 Research approach 14 1.2.3 Variable measurement 16 1.2.4 Questionaire design 17 CHAPTER II: OVERVIEW OF VIET KHAI ONE MEMBER LIMITED COMPANY 18 2.1 General information of Viet Khai One member Limited Company 18 2.2 The foundation of Viet Khai One member Limited Company 18 2.3 The structure of Viet Khai One member Limited Company 19 2.3.1 Organizational Chart 19 2.3.2 Functions and responsibilities of each department 19 Le ThiThaoHien GMA02 Page iv Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company 2.4 Services of Viet Khai One member Limited Company 20 2.5 Customs declaration via ECUS5 20 2.5.1 Documents for customs declaration via ECUS5 20 2.5.2 Procedure of performing e-customs services 22 CHAPTER III: RECOMMENDATIONS TO ENHANCE E-CUSTOMS DECLARATION SERVICE QUALITY IN VIET KHAI ONE MEMBER LIMITED COMPANY 30 3.1 Evaluation 30 3.1.1 Description of study sampling 30 3.1.2 Cronbach alpha analysis with service quality scales 31 3.1.3 Research results 34 3.2 Analyzing priorities 36 3.2.1 REL3: Provide service at the time promised 37 3.2.2 REL4: The declaration is performed right the first time 38 3.2.3 EMP3: Employees provide personal attention 38 3.2.4 EMP4: Convenient operating hours 38 3.3 Recommendations 39 3.3.1 REL3: Provide service at the time promised 39 3.3.2 REL4: The declaration is performed right the first time 39 3.3.3 EMP3: Employees provide personal attention 40 3.3.4 EMP4: Convenient operating hours 40 CONCLUSION 41 REFERENCES 42 APPENDIX - QUESTIONNAIRES 43 Le ThiThaoHien GMA02 Page v Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company LIST OF ABBREVIATION ECUS5 Electronic Customs Services (Version 5) VNACCS Vietnam Automated Cargo Clearance System VCIS Vietnam Customs Intelligence System L/C Letter of Credit C/O Certificate of Origin HS The Harmonized Commodity Description and Coding System I-P matrix Important – Performance matrix UN / LOCODE United Nations Code for Trade and Transport Locations Le ThiThaoHien GMA02 Page vi Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company LIST OF FIGURES Figure 1.1 Importance – Performance Matrix 11 Figure 1.2 Research Framework 14 Figure 2.1: Organizational chart of Viet Khai One member Limited Company 19 Figure 2.2: Process of performing e-customs services in Viet Khai 22 Figure 3.1 Importance – Performance Matrix 36 Le ThiThaoHien GMA02 Page vii Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company LIST OF TABLES Table 3.1 Descriptive statistics results on characteristics of subjects interviewed 30 Table 3.2 Cronbach alpha Analytical results for the scale of customer satisfaction when using services at Viet Khai Company 31 Table 3.3 Statistics of observed variables and Cronbach alpha coefficient of the scale components for e-customs service quality at Viet Khai one member limited company 32 Table 3.4: Result of SERVQUAL and IF 34 Le ThiThaoHien GMA02 Page viii Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company INTRODUCTION Necessity E-customs service is not a new kind of service since it has been in the market for more than five years as the first version of e-customs software was introduced in 2009 Throughout the period, e-customs process has been standardized and simplified to encourage companies change from paper works to electronic work However, because of rapidly changes in e-customs software, companies needs to take time to update, master and comply with newest version as well as laws and regulations That is reason why the implementation of the customs services and freight forwarding are not always smooth It is also important to notice that the customs procedures is a stage when fulfilling contracts of customers, so when this stage is not performing well, it will affect the whole process of implementation of the contract In addition, it also results in bad consequences: waste of time, additional expenses, slow customs declaration, slow delivery of cargoes to the customer; even, it can affect the reputation of the company with clients and customs authorities… therefore, it is no exaggeration to say that it is important to thoroughly implement customs services and freight forwarding for company During the time being a trainee in Viet Khai One Member Limited Company, I found out it is necessary to reevaluate e-customs services after a period of implementing new software ECUS5 Therefore, I decided to choose topic: “Recommendations to enhance e-customs declaration service quality in Viet Khai One Member Limited Company” to be the topic for my dissertation Research Object This paper will measures the e-customs service quality in Viet Khai Company and find some prioritized factors that needs to be improved Research Scope This paper focus only on the e-customs service in Viet Khai Company and use data in 2015 Le Thi Thao Hien GMA02 Page Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company The above table shows the number of customers interviewed, male customers accounted for 62.4%, female accounting for 37.6% Regarding age, there are 34 people (33.7%) under the age of 30, 46 people ages from 30 to 50 years old (accounting for 45.5%), with 15 people aged over 50, accounted for 14.9% Through the survey, we see the number of frequent and perennial customers transactingwith Viet Khaione member limitedcompany is not high, only account for about 14.9% of customer From the above results, the sample covering the overall characteristics, the analysis results can represent the overall study 3.1.2 Cronbachalpha analysis with service qualityscales The researcher obtainsresults of observedvariableamountandalphacoefficients of components of the measurementafterexcludingtrash variables described in Table 3.2 ResultsafterCronbachalphacoefficient analysis indicates the scaleforecustoms service quality of Viet Khaione member limited company is measuredby 18observed variables for five componentscomparedwith the original design of 22 variables (4 TAN variables, REL variables, RES variables, ASS variables and EMP variables) I have the followingcomments: When running Cronbachalphaanalysis,TAN variable,REL1 variable, RES1 variableand EMP5 variablewerenotsatisfactory willbeeliminated in the analysis (< 0.4) These variables Table 3.2 Cronbach alpha Analytical results for the scale of customer satisfaction when using services at Viet Khai Company Observed variable TAN1 TAN2 TAN3 TAN4 Scale average if exclude variable 10.6931 10.2574 10.3168 10.2574 Scale variance if Total variable exclude correlation variable TANGIBLES 3.095 394 3.333 589 3.519 607 3.573 553 Alpha if exclude variable 723 724 714 742 Alpha =.780 RELIABILITY Le Thi Thao Hien GMA02 Page 31 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company REL1 REL2 REL3 REL4 REL5 12.0000 12.1584 12.8020 12.6535 12.4455 9.020 8.115 6.720 6.369 7.070 333 531 714 773 727 854 807 752 731 750 RESPONSIVENESS 4.686 488 4.655 592 4.127 629 3.733 712 794 748 726 680 10.2178 10.0297 9.8317 10.1089 ASSURANCE 3.572 684 3.649 718 3.801 676 3.878 664 807 792 810 815 12.9010 12.6535 12.7624 12.6931 12.6337 EMPATHY 5.610 722 5.949 781 5.663 788 6.495 618 7.094 368 788 775 769 817 882 Alpha =.820 RES1 RES2 RES3 RES4 9.3366 9.3069 9.5743 9.7426 Alpha =.792 ASS1 ASS2 ASS3 ASS4 Alpha = 847 EMP1 EMP2 EMP3 EMP4 EMP5 Alpha = 842 (Source: SPSS Output) Cronbachalphacoefficient of the concept scale "customer satisfactionwith the quality of e-customs services" with dimensions of high alphavalue Moreover, variations of thisscale have a totalvariablecorrelationcoefficient greater than 0.4 (minimum is 0.531) in table 3.3 Table 3.3 Statistics of observed variables and Cronbach alpha coefficient of the scale components for e-customs service quality at Viet Khai one member limited company Scale component Tangibles Le Thi Thao Hien GMA02 Number of observed variables Initial After 4 Cronbach alpha Initial After 780 780 Page 32 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company Reliability 820 854 Responsiveness 792 794 Assurance 4 847 847 Empathy 842 882 (Source: ISPS Output) Le Thi Thao Hien GMA02 Page 33 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company 3.1.3 Research results Table 3.4: Result of SERVQUAL and IF Code TAN TAN Dimension Tangibles TAN REL2 REL3 Reliability REL4 REL5 RES2 RES3 Responsiveness RES4 ASS1 Assurance Questions Perception Rank Expectation Visually appealing 3.58 4.31 physical facilities Professional appearance of 3.52 3.87 employees Visually appealing 3.58 3.27 materials Sincere interest in 3.36 3.29 solving problems Provide services at the 2.71 18 4.01 time promised Services are performed 2.86 17 3.73 right the first time Insist on error free 3.07 14 2.90 records Provides prompt 3.35 2.72 services Always willing to help 3.08 13 2.94 Never too busy to respond to service 2.91 16 3.01 requests Employee behavior 3.18 11 3.24 Le Thi Thao Hien GMA02 Rank SERVQUAL Rank IF Rank -0.72 16 -0.1678 16 -0.35 11 -0.0895 11 11 0.32 0.0970 10 0.07 0.0211 -1.30 18 -0.3235 18 -0.87 17 -0.2334 17 17 0.17 0.0580 18 0.62 0.2291 16 0.14 0.0471 14 -0.10 -0.0329 12 -0.06 -0.0183 Page 34 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company ASS2 ASS3 ASS4 EMP EMP EMP EMP Empathy instills confidence Customers feel secure in their transactions Employees are consistently courteous Employees have the knowledge to answer questions Provides individual attention Has the best interest of the customers at heart Employees provide personal attention Has convenient operating hours 3.37 3.98 -0.61 15 -0.1542 15 3.56 3.73 -0.17 10 -0.0451 10 3.29 3.67 -0.39 12 -0.1051 12 3.01 15 2.97 15 0.04 0.0133 3.26 3.03 13 0.23 0.0752 3.15 12 3.54 -0.40 13 -0.1117 13 3.22 10 3.69 -0.48 14 -0.1287 14 (Source: Data Output) Le Thi Thao Hien GMA02 Page 35 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company 3.2 Analyzing priorities Figure 3.1 Importance – Performance Matrix (Source: ISPS Output) For aforementioned analysis, there are four primary issues that company should improve to meet the expectation and requirements of customers In which, two factors belong to reliability dimension and the left ones are in empathy dimension REL3: Provide service at the time promised REL4: Service are performed right at the first time EMP3: Employees provide personal attention Le Thi Thao Hien GMA02 Page 36 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company EMP 4: Convenient operating hours In order to resolve these problems, they should be analyzed, after that suitable suggestions and recommendations will be offered 3.2.1 REL3: Provide service at the time promised Regarding to the problem of providing service at the time promised The customers‟ expectation is 4.01, ranking the second while its perception is only 2.71, ranking 18th, the lowest one with the gap of -1.30, ranking the lowest position among 18 variables also It is obvious that this factor is important to customers; however, company‟s performance dissatisfies them There is a fact that in any industry especially in logistics industry, which electronic customs is a part of it, time is money It means that time factor is extremely critical since any time-consuming issue at any stage will definitely result in the whole activity chain of logistics and supply chain management, costing directly to enterprises Therefore, it is no exaggeration to say that the matter of not providing service at the time promised is unacceptable There are numerous reasons behind that  As observed in internship period, the research found out the problem of time management They took advantage of going out for collecting delivery order at shipping lines in order to personal business It resulted in settling business tardily in terms of customs clearance, which needs collected documents for declaration  In rush period, the numbers of employees cannot control the volume of tasks There are too many orders simultaneously being obstacles for them to cope with thoroughly  As the fact that, electronic customs uses software to declare and send to customs office via the Internet Nonetheless, sometimes the internet is instable, affecting significantly to the speed of performing work In addition, occasionally networks in the customs office is disconnected or overloaded  In some cases, there are also fault of customers when sending related documents late, influencing to shortage of information to declare customs Le Thi Thao Hien GMA02 Page 37 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company 3.2.2REL4: The declaration is performed right the first time The customers‟ perception is 2.86, ranking 17th while its expectation is 3.75, ranking the fifth The gap score is (-0.87), ranking 17th also, indicating that customers are not satisfied with this factor As mentioned before, Viet Khai has designed a process to perform e-customs service for limiting errors before giving declaration results to customers However, in reality, 48 out of 542 declarations were not free of errors before official registration There are some problems that hinder the process:  Employees of company not database this has been created from the previous declarations Therefore, they spend a lot of time on the declaration that has documents containing more than 100 items (often take more than 30-60 minutes compared to other documents) Additionally, they sometimes make mistakes in “Cargo description” tab (19 cases)  Although customs declaration has thoroughly been checked before registration mistake still occurred because of negligence  Some employees of company have to explore, learn and gather additional documentation from colleagues, websites and books, newspapers, magazines by themselves As a result, they used incorrect information for tax code, HS code… 3.2.3 EMP3: Employees provide personal attention The expectation of customers is 3.54 while customers‟ perception is 3.15, resulting the gap of -0.40 This problem probably is caused by the attitude of employees when interacting with customers They just complete their task without warmly welcome and and proper attention to customers in terms of social manner 3.2.4 EMP4: Convenient operating hours The performance score of this element is 3.22 meanwhile the importance of it is 3.69 with the gap of -0.48, ranking the fourth Obviously, there is not significant discrepancy in terms of operating hours in the comparison of perception and expectation of service quality The main reason hinder that is sometimes in emergency situation, customers need to work out of working hours of the company while the company‟s service hours is just from a.m to p.m without shift Le Thi Thao Hien GMA02 Page 38 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company 3.3 Recommendations 3.3.1 REL3: Provide service at the time promised  Strict time management to freight forwarder who collect delivery order at shipping lines for document completion for customs clearance  Giving bonus and incentives to employees in rush time to encourage them perform effectively and complete the task as much and soon as possible  In case of losing connection via the internet (Wi-Fi), there should be back up plan for continuing performing, DCOM 3G for example  Thoroughly interacting and exchange needed information with customers in case of late needed documents 3.3.2 REL4: The declaration is performed right the first time  Using database which was already created from the previous declarations inside ECUS5 is important Thanks to the database, company will reduce errors when doing the declaration for the same shipment For example, it saves time in searching the HS code, proactively resolve problems quickly Looking up the records of old declaration is also important because employees can learn from old mistakes and using information of old declaration for the new one instead of typing old text again  Company should encourage all employees to enroll in training and retraining courses to improve their ability, and get familiar to any forms in e-customs procedures  Improving foreign language skills for staff is also very important so that they can understand the documents received from customers It is essential to know the information about the shipment (model, weight, power lifting ) from the documents They can limit errors in the declaration just by knowing to submit the right information during the declaration process  Staff should use official information from import and export tariffs or use information from official website of customs authorities (http://www.customs.gov.vn/SitePages/Tariff.aspx) Le Thi Thao Hien GMA02 Page 39 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company  Company should continue to adopt policies to encourage their employees to work with a sense of responsibility and high motivation 3.3.3 EMP3: Employees provide personal attention The company should offer the awards “Employee of the month” which is based on the feedbacks of customers with high bonus and incentive to encourage them perform customers care better 3.3.4 EMP4: Convenient operating hours In terms of operating hours, it is unnecessary to increase the numbers of employees for operating 24/7 (24 hours a day, days a week) since the frequency of emergencies problems is not high therefore, hiring more staff is not effective regarding to financial issue Moreover, as being discussed before, the main reasons for almost problems in service quality of Viet Khai One Member Limited Company is the factor of human It is understandable, since the characteristics of service, human play a vital role in maintaining and developing service with the best quality to serve customers Therefore, some recommendation in terms of human resources should be offered Le Thi Thao Hien GMA02 Page 40 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company CONCLUSION The purpose of this study is to evaluate the e-customs service quality and find some limitations in e-customs service in Viet Khai Company In order to find those issues, the author has used RATER model and I-P matrix to evaluate feedbacks from customers Although Viet Khai Company has achieved some accomplishment to provide better service to customers, there are still some existing limitations that need to overcome Findings also show that customers expected more than what they perceive in the ecustoms services of company Overall negative score indicates that customers expectation was not meet hence the company must strive hard to improve most of dimensions of service quality in order to bring higher service quality and customer satisfaction At the end, I give some suggestions for Viet Khai for prioritized factors extracted the I-P matrix Those prioritized factors areREL3: Provide service at the time promised, REL4: Service are performed right at the first time, EMP3: Employees provide personal attention, EMP 4: Convenient operating hours Le Thi Thao Hien GMA02 Page 41 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company REFERENCES ECUS5-VNACCS manual (2014) thaison.vn Kotler, P (2003) Marketing Management.New Jersey, United Nation of America PARASURAMAN, A., Zeithaml, V A and Berry, L L (1985) A conceptual model of service quality and its implications for future research.Journal of Marketing, 49, 41-50 PARASURAMAN, A., Zeithaml, V A., Berry, L L (1988) SERVQUAL: a multiple-item scale for measuring consumer perception of service quality Journal of Retailing, 64, 12-4 GRONROOS, C (1983) Strategic Management and Marketing in the Service Sector Marketing Science Institute, Boston GRÖNROOS, C (1990) Services Management and Marketing: Managing the Moments of Truth in Service Competition Lexington Books, MA Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company APPENDIX - QUESTIONNAIRES Questionnaires About our e-customs service after using ECUS5 Company name:……………………………………………………… Question 1:You have performed the transaction at Viet Khai Less than year From year to years Over years Question2: Please let know your age : Under 30 years old From 30 years and under 50 years of age Over 50 years old Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company Question 3: Please tell your gender: Female Male Question 4: (1) Least important/ satisfactory (5) Most important/ satisfactory Put a cross (X) on your choice of answer No 10 11 12 Modern looking equipment Visually appealing physical facilities Professional appearance of employees Visually appealing materials Act according to promises Sincere interest in solving problems Provide services at the time promised Services are performed right the first time Insist on error free records Informs exactly when services will be provided Provides prompt services Always willing to help Expectations Perceptions How important is this item Level of satisfaction with to you this item 5 5 5 5 5 5 5 5 5 5 5 5 5 Recommendations to enhance e-customs declaration service quality at Viet Khai one member limited company 13 14 15 16 17 18 19 20 21 22 Never too busy to respond to service requests Employee behavior instills confidence Customers feel secure in their transactions Employees are consistently courteous Employees have the knowledge to answer questions Provides individual attention Has the best interest of the customers at heart Employees provide personal attention Has convenient operating hours Employees understand the needs of their customers 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 Other comments: ……………………………………………………………………………………………………………………………… …….…………… …………………………………………………………………………………………………………… ……….…………………………… ……………………………………………………………………………………………… Thank you for your support! ... ThiThaoHien GMA02 Page iv Recommendations to enhance e- customs declaration service quality at Viet Khai one member limited company 2.4 Services of Viet Khai One member Limited Company 20 2.5 Customs. .. necessary to reevaluate e- customs services after a period of implementing new software ECUS5 Therefore, I decided to choose topic: Recommendations to enhance e- customs declaration service quality. .. the process Le Thi Thao Hien GMA02 Page Recommendations to enhance e- customs declaration service quality at Viet Khai one member limited company providing service to customers Service providers