IMPROVING CUSTOMER SATISFACTION OF AIR FREIGHT FORWARDING SERVICE QUALITY – A CASE IN ACT MULTINATIONAL TRANSPORTATION LOGISTICS CO., LTD

IMPROVING CUSTOMER SATISFACTION OF AIR FREIGHT FORWARDING SERVICE QUALITY – A CASE IN ACT MULTINATIONAL TRANSPORTATION LOGISTICS CO., LTD Logistics is a new and emerge field in Vietnam despite their enormous profit and contribution to the development of this country. Although there has been a numerous local logistics companies, it still cannot meet the customer’s demand. Therefore, service quality plays an important role in rating the logistics company as well as gaining new customer and maintaining the loyal ones. However, service quality is hard to evaluate, especially the new field such as logistics and freight forwarding. Therefore, SERVQUAL model, the popular tools to assess, is based on five factors: responsiveness, reliability, empathy, tangibles and assurance. Quantitative method was applied by sending survey via Email for logistics companies, who are the loyal and frequent ACT’s customers. The questionnaire are set by rating by scale from one to five according to the level of satisfaction. 55 responses were collected after two month. The result has shown some weakness of the service provided by ACT. From there, enhancing the knowledge and skills of professional staff, together with the connection of technology and 4.0 Industrial Revolution, is the prior to the solutions in order to improve the effectiveness of air freight forwarding in ACT in particular and economy development of Vietnam in general. Key words: Freight forwarding, customer satisfaction, service quality, SERVQUAL model

STATE BANK OF VIETNAM BANKING ACADEMY Faculty of Foreign Languages  GRADUATION THESIS IMPROVING CUSTOMER SATISFACTION OF AIR FREIGHT FORWARDING SERVICE QUALITY – A CASE IN ACT MULTINATIONAL TRANSPORTATION LOGISTICS CO., LTD Student : Academic Year : 2015 - 2019 Hanoi, May 2019 DECLARATION I hereby declare that I am sole author of this Bachelor thesis “Improving customer satisfaction of air freight forwarding service quality – A case in ACT Multinational Transportation Logistics Co., Ltd.” The data, statistics and information reported in this thesis is the result of my own work and I have not used any sources other than those listed in bibliography I further declare that I have not submitted this thesis in any institution in order to obtain the degree Hanoi, May 2019 Signature Chu Mai Huong ACKNOWLEDGEMENT This thesis research the customer satisfaction of air freight forwarding services from 2016 to the early four months in 2019 at ACT Multinational Transportation Co, Ltd Throughout the dissertation, I have received a huge of inspiration and assistance I would like to thank my supervisor, Mr Ngo Tung Anh, the dedicated lecturer of Faculty of Foreign Languages Department, for his encouragement and invaluable expertise in formulating of the research topic and giving the supportive recommendations I would also like to give special thanks to my colleagues at ACT Logistics Company for their helpful collaboration All their supports are precious guidance and made this time memorable I would like to acknowledge the supportive participants in the online survey Those response to the whole questionnaires and sharing their valuable experiences greatly help me complete my dissertation I hereby express my gratitude to all 76 customers of ACT and 55 respondents for their full supportive answer With their passionate support, the validation survey could not have been conducted In addition, I would like to thank my family, especially my grandmother for her continuous encouragement and valuable guidance Besides, thanks to my close classmates, who were of great support in finding the topic and advising the survey questions TABLE OF CONTENTS LIST OF TABLES Table 1: The route from HAN with ASIA LIST OF FIGURES LIST OF ABBRIVIATIONS LCL less than container load FCL full container load FRT Freighter Aircraft PAX Passenger Aircraft MAWB Master Airway Bill HAWB House Airway Bill Co Company Ltd Limited AMS Automated Manifest System VNACCS Vietnam Automated Cargo And Port Consolidated System HS Code Harmonized System Codes IATA International Air Transport Association LIST OF APPENDIXES APPENDIX 1: ACT’s business report from 2016 – 2019 APPENDIX 2: ACT Planning Development Research, 2016 APPENDIX 3: ACT customer satisfaction levels questionnaire survey APPENDIX 4: ACT customer satisfaction levels survey’s result ABSTRACT Logistics is a new and emerge field in Vietnam despite their enormous profit and contribution to the development of this country Although there has been a numerous local logistics companies, it still cannot meet the customer’s demand Therefore, service quality plays an important role in rating the logistics company as well as gaining new customer and maintaining the loyal ones However, service quality is hard to evaluate, especially the new field such as logistics and freight forwarding Therefore, SERVQUAL model, the popular tools to assess, is based on five factors: responsiveness, reliability, empathy, tangibles and assurance Quantitative method was applied by sending survey via Email for logistics companies, who are the loyal and frequent ACT’s customers The questionnaire are set by rating by scale from one to five according to the level of satisfaction 55 responses were collected after two month The result has shown some weakness of the service provided by ACT From there, enhancing the knowledge and skills of professional staff, together with the connection of technology and 4.0 Industrial Revolution, is the prior to the solutions in order to improve the effectiveness of air freight forwarding in ACT in particular and economy development of Vietnam in general Key words: Freight forwarding, customer satisfaction, service quality, SERVQUAL model CHAPTER 1: INTRODUCTORY STATEMENT 1.1 Background of the study The 21st century has seen a dramatic fall in trade barriers, intensive globalization, and rapid growth in international trade Companies of all sizes are seeking to take advantage of opportunities in this new world economy, and Vietnam is no exception Together with the development of several innovative modes of transportation recently, international transportation system plays an increasingly crucial role Along with the economic growth, import and export activities creates more opportunities in the forwarding industry’s development In recent years, logistics and supply chain management have strongly developed because of the rapidly increasing import and export activities However, the international transportation is not as simple as domestic transportation Freight forwarding, by itself, is a process, a chain management of international logistics and the forwarders on behalf of carrier having responsibility to deliver the commodity to predefined destination Many forwarding companies have been established, specializing in providing customs clearance services, warehousing services, trucking services and customs brokerage services In order to achieve effective business result, the employees must master the logistics professional qualification, affreightment (renting a ship), customs procedures, etc However, it seems that this provided services not meet the customer requirement and satisfaction Therefore, measuring customer satisfaction is a good way to evaluate the quality of these service Throughout the Internship period at ACT Multinational Transportation Logistics Co., Ltd, together with the support of the staffs in the company, especially the dedicated guidance of the lecturer Ngo Tung Anh, I have decided to choose this title " Improving customer satisfaction of air freight forwarding service quality – A case in ACT Multinational Transportation Logistics Co., Ltd " as my graduation thesis 1.2 Objectives of the study The broad objective was to study the satisfaction levels of the ACT’s customer about air forwarding service quality The specific objective of the study were: • To measure the levels of satisfaction about the provided services • To determine which model and factors are used to evaluate the services • To determine which services are mostly used and highly satisfied by the customers 1.3 Significance of the study The result of the study will be of great benefit to the following: ACT LOGISTICS COMPANY The data and statistics are collected on the behavior of customers toward the provided service of ACT This result enable the company to improve the air freight forwarding quality and the human resource The gathered data help ACT understand the requirement and satisfaction in order to plan and upgrade suitable services FORWARDER The result of the study will help the forwarder evaluate the quality of services provided by ACT, especially the ACT’s customers The forwarder might have more choices to use ACT’s services Besides, it is an opportunity to gain the new customers STUDENTS This study will provide the information about the theoretical background of air freight forwarding and logistics field Also, this research evaluate the service quality in every aspects of five factors of SERQUAL model The data gathered will also be a valuable source to help the other students 1.4 Scope and delimitation of the study This thesis will focus on measuring and evaluating the customer satisfaction of ACT’s service Due to time constraints, this graduation thesis is limited to just mentioning the process of air freight forwarding without mentioning any other means of transportation Besides, the thesis focuses only on exporting goods rather than procedures for imported goods This topic uses the document and information of the ACT Company within three years to refer to exporting goods of the company (from 2015 to the early four months of 2019) 1.5 Definition of terms  Forwarder A freight forwarder is a business, acts as an intermediary, receiving the goods of the shippers, or consolidating multiple cargo into larger shipments, then hiring carriers (shipping lines, airlines) to transport from the starting point to the final destination  Consolidator A freight consolidator is an operator who uses the carrier as a vehicle He groups a small of commodities from a range of individual exporters into a full container of 10 The government should implement e-booking system to speed up the procedures Investing modern equipment such as X-ray also help shorten the waiting time and avoid cargo offload 5.3.2 Recommendation for the Enterprise Recommendation should be presented based on the support of ACT’s customers and my own opinion For the readers to understand, the recommendation will be proposed b five factors of SERVQUAL mode analyzed in chapter Reliability Factors Trustworthiness is the top priority of the enterprise, especially in-service sector; however, this factor has average-rated level The main goal of logistics is known as “right quantity of right products in the right location at the right time” Hence, the enterprise always improves their standards to provide excellent service and remain the image trustworthy  “Provide on-time delivery” help customer delivers the goods accurately and reduces the extra cost It is helpful to move the cargo from the exporters’ warehouse to the airport in time Moreover, this factor is medium rated, so keeping the punctual delivery commitment is a good way to assure the promise In the high season, such as Christmas and Luna New Years’ occasion, the forwarder must make allotment soon to assure the cargo will be delivered on time  In addition, there should be double check every step of the process, especially in documentation procedure, which was the most complained service of ACT A staff must continue improve professional knowledge as well as soft skills to deal with accidents Accurate documentation will speed up the whole logistics process and gain trust from customers  The customer service department inform the departure information daily so that the customers follow the progress of receiving the cargo and update to their 54 customers “Track and trace”, therefore, is a crucial tool for the company to gain the information of cargo It is so convenient to help both sides easily keep update and save time Responsiveness Factor General, the responsive factor is quite highly appreciated by ACT’s customer However, the factor “Be willing to solve trouble” was rated as the weakest one, to make the customers satisfied, ACT should take more actions to gradually develop the quickly problem - solving services Paper working culture is still a major concern affecting the “problem-solving skills” rating The staffs always ask for permission from the related parties and wait response through the paperwork instead directly solving it by themselves if the trouble not too big Besides, the late response to customer results from the late response from the airlines The airline should be improved the information technology systems, especially the e – booking and e – tracing in order to update the departure timely and efficiently The e - tracking system helps trace quickly, accurately and systematically so that it reduces warehouse storage charge Assurance Factor The assurance factor has high voting rate of satisfaction However, it is still ranging at a medium rate It basically results from the weak internal force The enterprise should raise assurance by concentrating on human resources and the connection with other airlines  Human resources • Enterprises should pay more attention to the new staffs right after recruitment for the development of long-term human resources Besides, the new staffs 55 should work as an Internship and be examined every month Also, the enterprise should open intensive training to improve skills and evaluate every staff • Organizational culture also motivate staff determine the goal orientation and promotion opportunities Furthermore, corporate culture also creates close relationships between staffs and manager Therefore, the company should build corporate culture for the employees feel like a real member of the enterprise  Have connections with other airlines The enterprises set up close relationship between the logistics business as well as airlines for mutual benefit and development Besides, maintaining the relationship with other airlines to be provided the reasonable rate Empathy Factor The empathy factor mainly depends on how well the staff performs The customers are satisfied with the friendliness and warmth of communication So, if the enterprise wants to improve the quality, some specific actions are introduced • Motivate employees: It is important to motivate the employees, especially the ones who are expertise in logistics field That help them realize that they have work hard, which can help them develop their future career orientation • Train and coach employees: As mentioned in the last chapter, the employees must master both specializations and soft skills to satisfy customer Therefore, organizing training course help employees better know the importance of customer service In addition, the employees must always be gentle, considerate, courteous and professional if the enterprise want to create a long-term sustainable development • Good policy: Having a good policy may create long term relationship with customers, especially in the high season, reducing rate for the cargo more than +1000 kgs might bring good impression for customers 56 5.4 Limitation of the research This study has several limitations that must be solved Firstly, the total respondents in this survey was 76, which was not large sample to make conclusions The research may be completed if hundreds of answers contribute to the research, but due to the limit of time conduction Secondly, most companies were SMEs and only a few large firms over ten-year establishment joined in survey It can be implied that the small business are willing to support the research than the large one In addition, still some respondents did not answer the two questions and 9, the open-ended ones However, almost the participants gave contributive answers, which helped find out the real problems that ACT face to give the suitable solutions 5.5 Suggestions for further research The study has still some limitations that have not been solved The further studies would choose larger sample and wider scale to better give accurate result In addition, the scales and backgrounds of the logistics companies should be more balanced between large-sized enterprises and SMEs enterprises Furthermore, if combining a qualitative and quantitative methodology, the study will gain more varied and deeper results For instance, direct interviews with respondents will find out more specific problems and gain more detailed recommendations, which is much better than some short answers written on the Internet 57 BIBLIOGRAPHY BOOKS Gulati, PM, 2009, Research Management: Fundamental and Applied Research, Global India Publications, p.42 Article 163, Vietnam Commercial Law (1997), Constitution of the Socialist Republic of Vietnam Kotler, P and Scheff, J., 1997 Standing Room Only: Strategies for Marketing the Performing Arts Massachusetts: Harvard Business Press Gronröos Christian (1988), "Marketing Services: The Case of the Missing Product", Journal of Business and Industrial Marketing, Vol 13, N° 4, pp 322338 Parasuraman.A, V.A Zeithaml, & Leonard.L Berry (1985), A Conceptual model of service quality and its implication for future research, Journal of marketing Juran, J and Godfrey, A., 1998 Juran’s quality handbook New York: McGrawHill Parasuraman, A, Zeithaml, VA, Berry, LL, 1985, “A Conceptual Model of Service Quality and its implications for Future Research”, Journal of Marketing Parasuraman, A, Berry, LL & Zeithaml, VA, 1991, “Understanding Customer Expectations of Service”, Sloan Management Review, Issue: 32(3) The Government Decree 57 / CP, Constitution of the Socialist Republic of Vietnam 10 The Decree No 125/2017 / ND-CP, Constitution of the Socialist Republic of Vietnam WEBSITE www.actlogistics.vn https://www.questionpro.com/blog/quantitative-research/ http://vinanet.vn/ 58 APPENDIXES From: accountinghan01@actlogistics.vn 14:56 5/6/2019 To: chumaihuong2106@gmail.com Dear Hương, Do vấn đề bảo mật thông tin, chị tiết lộ cho em chi tiết kết kinh doanh công ty Chị gửi em tổng doanh thu chi phí ACT năm qua Hy vọng giúp em hồn thiện khóa luận Chị cảm ơn! KẾT QUẢ KINH DOANH CỦA ACT tháng đầu 2016 2017 2018 Doanh thu 15,290 35,870 47,920 8,100 Lợi nhuận 2,900 7,650 10,560 1,630 năm 2019 Thanks & Best regards Ms Nhung Accountant ********************************************************************* ACT Multinational Transportation Logistics Company Limited Add: Unit 8+9, 9th Floor, TNR Tower, 54A Nguyen Chi Thanh Street, Lang Thuong Ward, Dong Da District, Ha Noi, Viet Nam Email: accountinghan01@actlogistics.vn 59 Website: www.actlogistics.vn Tel: +8424 3722 6565 / 3723 6565 / 3728 6565 Airline Flights Route OZ734 HAN-ICN OZ952 HAN-ICN Asiana Cargo Airline OZ384 HAN-ICN OZ956 HAN-ICN TG561 HAN-BKK Thai Cargo Airline TG565 HAN-BKK VN330 HAN-KIX VN310 HAN-NRT VN346 HAN-NGO VN416 HAN-ICN Vietnam Airline VN426 HAN-PUS VN530 HAN-PVG VN506 HAN-CAN VN552 HAN-HKG Hong Kong Airline RH318 HAN-HKG AK513 HAN-KUL Air Asia Airline AK517 HAN-KUL Air Incheon Airline KJ512 HAN-ICN SQ0175 HAN-SIN Singapore Airline TQ0301 HAN-SIN Planning Development Research, 2016 60 ACT QUESTIONNAIRE SURVEY “Dear Our Valued Customers, I am senior student from Banking Academy I am now working as an Internship at ACT MULTINATIONAL TRASPORTATION LOGISTICS COMPANY LIMITED I am doing my graduation thesis project by conducting survey on customer satisfaction in ACT Logistics Company The survey help understand the customer satisfaction elements, which is based on from ACT customers’ view All the information required 61 by this questionnaire would be used for academic research propose only Please kindly answer the questions honestly, accurately and accordingly Thank you and best regards, Chu Mai Huong” ACT CUSTOMER SATISFACTION LEVEL QUESTIONNAIRE SURVEY Part 1: Background Gender:  Male  Female Age:  Under 25  25 –  over 40 Department:  Sale Department  Customer Service Department  Documentation Department  Business Plan Department  Other How long have you been a customer of ACT Company?  Under year  – years  – years  Over years 62 40 What is your company specified in?  Forwarder  Import – export Company  Airline  Other What kind of services of ACT that you use? (you can choose more than one)  Cargo Handling  Documentation support  Cargo weighting support  Customs Clearance Please kindly help us answer the following questions about customer satisfaction at ACT Logistics Company Please set up your satisfaction degree by circling the number that follow these sentences: – Strongly Satisfied – Satisfied – Neutral – Dissatisfied – Strongly Dissatisfied No Statement Satisfaction Agree Level 63 Reliability Factors ACT provide on – time delivery ACT solve the trouble quickly when the cargo is offload ACT serves professionally and accurately ACT handle the cargo as scheduled 5 ACT is available when customers want to be served Responsiveness Factors ACT provide fast and accurate services ACT’s staffs serve you quickly ACT’s staffs are willing to give advices on 5 5 services ACT’s staffs are willing to solve the trouble when the cargo is offload 10 ACT keeps tracing and informs the flight departed to the customer on time 11 ACT’s staffs are willing to resolve when there are errors in documentation Assurance Factors 12 ACT’s staffs are friendly and helpful 13 ACT’s staffs have a deep understanding about support ACT’s staffs always pay attention to the 5 aviation services 14 ACT’s staffs are willing to documentations 15 customers 16 It is comfortable when using ACT’s services 64 Empathy Factors 17 ACT arranges suitable working time for customers 18 ACT have good customer support policy 19 ACT’s staffs listen and provide on – demand service 20 ACT’s are always available even in the holiday 21 ACT gives you the best services 5 Customer Satisfaction Factors 22 Customers are satisfied with ACT service quality (operating time, excellent service) 23 Customers are satisfied with ACT’s price 24 Customers are satisfied with payment time 25 Customers are satisfied with making debit note on time Could you please list some specific troubles when dealing with ACT? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… Could you please kindly give some suggestions to improve ACT’s service quality? …………………………………………………………………………………………… …………………………………………………………………………………………… 65 …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… **** Thank you so much for your support! **** ACT customer satisfaction levels survey’s result Gender Age Department Type of company 5.Service Usage Male Female Under 25 25-40 Over 40 Sales Customer Service Documentation Business Plan Other Forwarder Import- Export Company Airline Other Handling Documentation Support Weighting 66 23 32 16 17 23 20 15 10 34 10 11 42 51 55 Customs Clearance Satisfaction Level Factor Strongly Satisfied Reliability Factors On – time delivery 11 Solve problem Serve accurately 10 Handle as scheduled 12 Be available 11 Responsiveness Factors Provide fast service 27 Serve quickly 31 Be willing to give advice 21 Be willing to solve 29 trouble Keep tracing 35 Be willing to support 28 docs Empathy Factors Arrange suitable 30 working time Provide support policy 25 Provide on – demand 30 service Be available on holiday 26 Receive the best service 20 Assurance Factors Have helpful staffs Have knowledge about 11 service Support Docs Take care of customer 10 Be comfortable to co 16 operate Customer Satisfaction Factors Satisfied with ACT’s 29 services Satisfied with ACT’s 35 price Satisfied with ACT’s 14 payment time 23 Satisfie d Neutra l Dissatifie d Strongly Dissatisfied 24 10 30 28 17 10 19 10 25 12 5 18 21 23 20 1 0 1 20 17 10 0 0 15 10 25 19 0 14 19 15 1 11 15 27 25 3 13 20 12 21 21 21 2 20 20 0 21 12 67 Satisfied with ACT’s debit note making 18 68 24 ... Vietnam Airline HAN – PVG VN530 Vietnam Airline HAN - HKG RH318 Hongkong Airline HAN – KUL AK517 Air Asia Airline HAN – ICN KJ512 Air Incheon Airline HAN – SIN TQ0301 Singapore Airline (Source: ACT. ..DECLARATION I hereby declare that I am sole author of this Bachelor thesis Improving customer satisfaction of air freight forwarding service quality – A case in ACT Multinational Transportation. .. title " Improving customer satisfaction of air freight forwarding service quality – A case in ACT Multinational Transportation Logistics Co., Ltd " as my graduation thesis 1.2 Objectives of the