Solutions to enhance the quality of ocean freight at DB schenker vietnam co LTD in the globalization context

CADEMY OF POLICY & DEVELOPMEN The International School of Economie & Einance 0O0 Thesis: SOLUTIONS TO ENHANCE THE QUALITY OF OCEAN FREIGHT AT DB SCHENKER VIETNAM co LTD IN THE GLOBALIZATION CONTEXT Instructor : Ph.D Pham My Hang Phuong Student : Nguyên Ngoe Huy Hoang Schoolyear : 2014-2018 Class :CLC 5.1 Eaculty : I.S.E.F Major : Externaỉ Econonùc Student code : 5053106014 CONTENT ACKNOWLEDGEMENTS This report would never have been possible without the consistent support and assistance of the people whom I approached during the various stages of writing this report Firstly, I would like to express my heartfelt gratitude to my academic supervisor Ms Hang Phuong Lecturer, Academy of Policy and Development, for her valuable advice, encouragement, direction, and assistance Writing this report would have been impossible without her guidance I am extremely grateíul to Ms Bui Thanh Nhan, Supervisor, and every staff of Ocean Freight Export Departmentfor, their valuable time and expert insight into the various components of this report And finally, departments; I heartily Hanoi Branch, thankful DB toaintemship Schenker each and Vietnam every Co.Ltd, who staff know has of various directly without indirectly helped me during my I would like toofthem that or their support there would have lot difference inperson this task INTRODUCTION Back ground XXI century is the era of globalization and strong intemational economic integration Countries all over the world have a strong connection with each other in many aspects, especially in economics and culture International trade with its important role increasingly diverse and strong development, followed by the demand for transport, warehousing and storage of goods growing rapidly In that trend, the logistics Service sector has become one of the most highly regarded and developed sectors Vietnam is no exception In 2005, when the regulations on logistics in the Commercial Law were in place, Vietnamese logistics began to ílourish By 2017, the logistics industry is playing an important role in the process of economic integration and development in Vietnam, with the scale of us $ 22-25 billion / year With a íavorable business environment and a strategic position in the world's most important transportation route, high growth opportunities promise to develop the logistics market However, the logistics industry still faces many difficulties such as Vietnam's infrastructure does not meet the demand for transportation of increasingly diverse and rich goods, as well as the Vietnamese legal framework is not complete with many coníerences The number of departments is overlapping, which makes it difficult to carry out import and export procedures These íầctors are the main obstacles to the development of logistics industry in Vietnam Thereíồre, the logistics industry needs to have a proper view on logistics in Vietnam to have reasonable Solutions, take advantage of opportunities to promote development DB Schenker Vietnam Co., Ltd is one of the íastest growing logistics Services companies with Solutions to provide Services that meet the needs of a comprehensive clientele at home and abroad With offices in Ho Chi Minh City, Hanoi, Hai Phong, and freight Services, warehouses are being invested by the technology company as well as modem equipment to help build trust Give customers the quality of Service of the company These íactors help the company to conílrm its position in the Vietnamese market By being practiced the profession is leamed on the school chair at the company I find in practice a lot more than the leamed theory Therefore, my dissertation on "Solutions to enhance quality of ocean freight at DB Schenker Vietnam Co.Ltd in the globalization context" will show the lessons leamed during her work with DB Schenker Vietnam With this thesis, I hope to have a glimpse of the company's shipping Services in particular, as well as a certain part of the Vietnamese logistics industry in general However, with limited knowledge and lack of experience, I can not fully articulate the theoretical and practical issues related to logistics Services I would like to receive the comments of teachers, all the brothers of DB Schenker Vietnam Research objective - Research Question: What are the Solutions to enhance quality of ocean freight at DB Schenker VietNam in the globalization context? - General Objectives: Analyze the company to find Solutions - Specitic objective: o Review ocean freight and framework o Apply framework to analysis o From results, propose suitable Solutions to enhance quality of ocean freight at DB Schenker VietNam in the globalization context Research object The object of research is the ocean freight activities at DB Schenker Vietnam Research Scope - Time limited: 2011-2016 - Venue limited: Vietnam Research methods - Literature Review - Data Analysis Research structure Extemal Introduction and Conclusion, the topic has been devided to Chapter: Chapter I: LITERATURE REVIEW ABOUT OCEAN TRANSPORTTATION Chapter IE DB SCHENKER VIETNAM CO.LTD AND THE OCEAN EREIGHT ACTIVITIES OF THE COMPANY Chapter III RECOMMENDATIONS AND SOLUTIONS List of Eigures Figure 1: The scheme of DB Schenker Co.Ltd ‘s management organization in Vietnam32 LIST OE ABBREVIATIONS ASEAN Association of Southeast Asian Nations ADB Asia Development Bank TANGO Transport Application for Air and Ocean Freight Network and Global Operations Co.Ltd Company, Limited ECL Full Container Load LCL Less-Than-Container Load GDP Gross Domestic Product WTO World Trade Organization Chapter I: LITERATURE REVIEW ABOUT OCEAN TRANSPORTTATION 1.1 Overview 1.1.1 Concept, role of ocean íreight Services a The concept of forwarding Service ❖ The concept According to the International Federation of Freight Forwarders Associations (FIATA), forwarding Services means Services of any kind relating to the carriage (períồrmed by single mode or multimodal transport means), consolidation, storage, handling, packing or distribution of the Goods as well as ancillary and advisory Services in connection therewith, including but not limited to customs and íĩscal matters, declaring the Goods for official purposes, procuring Insurance of the Goods and collecting or procuring payment or documents relating to the Goods.( FIATA, 2015) According to the Commercial Law of Vietnam, merchandise exchanging is a Commercial activity whereby the freight forwarders receive from shipper, transport, storage, paperwork and other Services related to delivery to addressee under trust of owners, transporters or other forwarders In short, forwarding is assemblage of Services and procedures which related to the transport process in order to carry goods from the shipper to the consignee Forwarders can those Services directly or via agents and the third party Services providers ❖ Characteristics of forwarding Service: As a type of Service, forwarding Service also has common features of Service Service is the intangible goods so there is no uniform quality assessment Standard, can not be stored in warehouse, producing and consumption take place simultaneously, the quality of Services depends on the perception of the people who are served - Distinctive of forwarding Service: The freight forwarding Service does not create physical Products, it only makes the object change position in space, not the technical impact to change the object, but the delivery loading has a positive impact on the development of production and improvement of people's lives Passive: The Service depends on the demand of the customer, the carrier's regulations, the legal and regulatory constraints of the govemment (the exporting country, the importing country, the third country) Seasonality: Forwarding Services serve for export and import activities, thereíồre it depends greatly on the volume of import and export goods The export and import activities are seasonal, logistics activities are also iníluenced by seasonality In addition, paperwork, brokerage, billing, Service providers also carry out other Services such as consolidation, dividing, loading and unloading In order to complete the tasks as expected, those are depended much on Technical facilities and experience of the forwarder - Requirement of forwarding Service The freight forwarding Service does not have qualitative criteria for quality evaluation, but it also has speciílc requirements that the forwarder must meet the needs of the customer Some of the requirements of the freight forwarding Service include: The delivery of goods must be quick and fast, showing on the time during good are being transported from the place of delivery to the place of receipt, the time of loading and unloading, counting, reducing the delivery time As a result, the forwarding agent must grasp the technical process, the type of goods, the schedule of the ship and the reasonable arrangement of the vehicle of transport Safe delivery: This is an important requirement to ensure the interests of the owner and the carrier High accuracy is the main íầctor determine the quality and the level of completion of work, including the exact quantity, quality, actual and actual situation of goods owners and brands Accurate delivery will minimize the degree of misalignment, loss of goods Ensure the lowest cost: reduce delivery costs as a means of effective competition between the forwarders In order to so, they have to make proper investment in material facilities, build and complete norms, waste standards and train professional staff b Forwarders ❖ Concept In the context of globalization and the development of new forms of transport in the past decades, the freight goods from the seller to the buyer has to go through more than one mode of transport with export, import procedures and other related procedures Thus, the forwarder is responsible for arranging all procedural issues and modes of transport to delivery goods from one country to another in a reasonable manner and minimize costs The Services rendered by the forwarder not only cover traditional basic work such as packing, goods inspection, freight forwarding, but also providing more proíessional Services such as offer proíessional advice selection of transportation routes, transportation of goods, customs clearance, packing of goods, etc There is no uniform deíĩnition of an intemationally accepted forwarder, it is generally understood by the forwarder or the forwarding business to be the forwarder According to FIATA, "the freight forwarder is the worrier for the cargo to be transported under a ílduciary contract and acting for the beneíĩt of the íĩduciary The freight forwarder also carries out all work related to forwarding contracts such as storage, transshipment, customs clearance and inspection " The forwarder may be the owner of the cargo (when the cargo owner himself takes over his / her cargo), the ship-owner (when the ship-owner performs the delivery Service on behalf of the cargo owner), the loading and unloading company warehouse, proíessional forwarder or any other person who has registered for the freight forwarding business According to the Commercial Law of Vietnam, goods delivery Service providers are traders having certiíĩcates of registration of goods forwarding Services From the above definitions we can draw a comment: for jobs that require higher skills was a major challenge for most íirms, with 70-80% of managerial and technical applicants reported as being underqualiíĩed - Thereíồre, the ADB suggests Vietnam prioritize three sets of initiatives toward strengthening its universities, and technical and vocational education and training System by expanding access, improving quality, and streamlining govemance - The bank emphasizes closing the country’s widening skills gap is key to remaining attractive to íồreign investors and sustaining growth 3.1.2 - New international Trend: a Blockchain in Logistics - Logistics is often considered the lifeblood of the modem world, with an estimated 90% of world trade carried out by the intemational shipping industry every year - But the logistics behind global trade is highly complex as it involves many parties often with conílicting interests and priorities as well as the use of different Systems to track shipments Therefore, achieving new efficiencies in trade logistics is likely to have signiíicant impact on the global economy According to one estimate from the World Economic Forum, reducing supply Chain barriers to trade could increase global gross domestic product (GDP) by nearly 5% and global trade by 15% - Blockchain technology can help alleviate many of the írictions in global trade logistics including procurement, transportation management, track and trace, customs collaboration, and trade tinance - With over 50,000 merchant ships involved in the global shipping industry and multiple customs authorities regulating the passage of freight, a major area of focus for efficiency gains is ocean freight Blockchain technology has huge potential to optimize the cost as well as time associated with trade documentation and administrative Processing for ocean freight shipments One example that highlights the complexities behind ocean freight today is the estimate that a simple shipment of reírigerated goods from East Africa to Europe can go through nearly 30 people and organizations, with more than 200 different interactions and Communications among these parties - To unlock efficiency in ocean freight, Maersk and IBM have started a venture to establish a global blockchain-based System for digitizing trade workflows and endto-end shipment tracking The System allows each stakeholder in the supply Chain to view the progress of goods through the supply Chain, understanding where a Container is in transit Stakeholders can also see the status of customs documents, and can view bills of lading and other data Blockchain technology ensures secure data exchange and a tamper-proof repository for this documentation After tests in 2016, in 2017, Maersk and IBM announced a partnership for a cross-border supply Chain solution on blockchain The solution is to manage, track and provide transparency of various paper work within ocean freight supply chains Fast forward to íanuary of this year and thepartnership evolved into a joint venture to develop a global trade digitization platíồrm The partnership will commercialize and scale their Solutions to a broader group of global corporations Since the announcement, Agility Logistics announced it would join the venture as the first freight forwarder - Meanwhile, other ocean carriers are experimenting with blockchain In November 2017, Zim, along with Sparx Logistics and Wave Ltd piloted paperless Bills-of-Lading based on blockchain technology Zim’s CIO noted “While we are still in the process of evaluating the technology, we are coníĩdent that this type of forwardlooking ideas will advance our industry as a whole towards a more efficient and modem phase.” - Paciíĩc International Lines (PIL) collaborated with PSA International and IBM Singapore on a blockchain-based trial to track and trace cargo movement According to Ship Technology, the trial was able to achieve a transparent and reliable multimodal logistics capacity booking, as well as the regulatory-compliant execution of the multimodal logistics capacity booking process PIL said,” We as a company believe the wider application of blockchain across the global logistics and shipping businesses will lead to much greater operating efficiencies, security and transparency.” - According to Adriana Diener, Global Freight & Logistics Lead at Accenture, the proven value of this project is surpassing expectations: “Using blockchain to replace the traditional bill of lading documentation to ship goods will drive millions of dollars in process efficiency and operational cost reduction beneíĩts across the supply Chain for multiple parties in the trade ecosystem including shippers, consignees, carriers, forwarders,ports, customs agencies, banks, and Insurance companies.” b The 4.0 technology in Logistic - The idea that the world is subject to industrial revolutions is well known The íirst industrial revolution, invention of steam engine, that started in the middle of nineteenth century was followed by the second industrial revolution at the end of nineteenth century and the beginning of the twentieth century mainly caused be the wide use of electricity and combustion engines We are witnessing the third industrial revolution that basically will cause the world will enter ecological post-coal era saving us from the climatic catastrophe - Now we are witnessing also dawning of the forth industrial revolution Fourth industrial revolution (4ir) presumably will happen around the middle of the twenty first century causing that the world will became intelligent on the basis of enormous increase of computing power - In logistic industry, it is deemed that those changes will lead to smart ships and smart marine transport and the íĩrst indications of those changes are already visible - But what could be the main impact of 4ir in the shipping world? In shipping world w rapid development of satellite communication and development of Time Division Multiple Access networks and this actually allows unlimited on line communication between ships at the ocean with shore base and allows to transíer rapidly and cheaply increasing amount of data (Big data) from ships to shore offices and reverse - The main consequence of this would be development of smart ships that includes autonomous ships or unmanned ships This may be the main íeature of the 4ir The idea of building smart ships is not new This idea was discussed about thirty years ago, but at that time needed technology was not available Now, it appears, that required technology is already in our hands, nevertheless there may be some important problems to be solved - According to Marine Transport and the Fourth Industrial Revolution (Lech Kobylinsky,2016), smart ships are deílned as ships where the ship is: - Unmanned, autonomous, where human operator is replaced by software Controls taking action themselves but with remote supervision and emergency control from the shorestation - Unmanned, remotely controlled from the shore station - Autonomous, but emergency control with small crew onboard for inspections and - 3.2 Solutions 3.2.1 Technology Solutions - Continuing to promote the advantages of applying the software to the work process - The effective use of software Schenker TANGGO has brought a lot of revenue and proíĩts for DB Schenker Vietnam in particular and DB Schenker in the world court in general Thereíồre, the application and improvement of the software System based on the advantages and overcome some disadvantages arising is still very interested in the company - Update, apply the new trend of logistics industry in the world: Block Chain - DB Schenker owns high-quality IT staff so it is easy to approach and build the software System to keep up with the trend of the 4.0 digitization technology In the best case it is possible to develop on the existing TANGO software System so staff can easily handle the work In the worse case, a parallel System can be built with the TANGO System - Apply modem technology in mining management - Today information technology System has an important role For organizations and providing Services to customers, the application of Computer software allows the company to detect weaknesses in the whole cycle of goods flow, strict control of flow of goods It removes the storage time at the load points Thereíồre, application and development of modem technology in the management and exploitation of transportation Services will create a very íầvorable conditions and improve the efficiency of operating the logistics System of DB Schenker Vietnam 3.2.2 Strategy Solutions - Developing the company's key logistics Services - Currently, the logistics industry in Vietnam is developing strongly, leading companies with strong and abundant ílnancial resources, high quality human resources such as APL Logistics, Maersk Logistics and NYK Logistics Thereíồre DB Schenker Vietnam should not invest in spreading Services but must actively invest in its key Service sector is shipping Services With the shipping Service, the company needs to actively upgrade its íleet, along with modem loading and unloading equipment to reduce costs and Service costs in order to meet the needs of its customers an increase - In addition, multimodal transport Service in which the sea is the mainstream is also a Service that needs to be íồcused company development interest to better meet the needs of customers At present, multi-modal transportation is an advanced form of transportation that is widely used in the region and in the world The trend of global integration, strong economic integration along with the impact of Container transport technology and information technology is accelerating the multimodal transport In a transportation process there is always a very close relationship between production, transport, commodity management, and distribution markets that depend on each other rather than just one mode of transport Multimodal transportation ensures the delivery System from the manufacturer to the consumer effectively at the lowest price 3.2.3 - Cost Solutions In the future, freight rates are still an important íầctor affecting the business performance of enterprises in the logistics industry, competitive environment as well as comparison of freight rates among enterprises that currently supply Service delivery in the market has shown that Service charges greatly affect the customers of the company Thereíồre, the company should control and monitor the cost of Services to make reasonable increase or decrease rates by: - Encourage customers who are more involved in import-export and delivery with the company and become loyal customers of the company for a long time At the same time, offer more preíerential policies on rates, create more opportunities for customers - As for new customers, íĩnding the most reasonable rates to be able to compete with the same industry and make new customers become loyal customers with the company 3.2.4 Human resouces Solutions - Training and enhancing human resources - Human resources are the most important factor in the formation and development of the company, because if the human resources develop well, the company will create skilled staff, proíessional meet all the strict requirements slot of the customer - To traiĩi the professional staff, enthusiastic, responsible in the work requires the management board must the following: - o From the beginning of the selection of employees to the company, the employees to be recruited must have a certain level depending on the job position requires employees to have the sense of responsibility, the ability to communicate - o In the process of working the company must always create conditions for employees to work in the most comfortable environment, giving them a Creative environment As in the office work primarily to hear and call customers, not have to travel much documents, the company should cover the carpet in the office so that employees in the office can travel The feet are comíồrtable and should be planted with some small bonsai pots that give the staff a sense of harmony with nature - o The management of the company must be aware of the employee, provide opportunities for improvement as well as reasonable incentives to encourage motivated employees to work - - In recent years, the company has opened more branches at home and abroad Thereíồre, it is required to employ staff as well as abundant staff to serve the business activities of the company Currently the company has 600 employees and in order to meet the needs and bring the company into a more íồrmal operation, this year the number of employees will increase to about 650 employees and the next year will increase half - To improve the level as well as to look at the work of employees effectively, the company boss must regularly check by checking out unexpected work to see employees have to follow the schedule that the company set out or not From there the company offers rewarding Solutions in the right place to fix - The quality of human resources is also the advantage of the company, thereíồre, the company needs to invest more qualiíled staff than the competition It's not just the economics or the technician that even the employees must understand the business of Service activities, know how to best meet the needs of customers - In order to improve the solidarity among the staffs in the company as well as the friendliness between the departments together, the company in recent years has organized domestic and íồreign travel (Cat Ba _ Hai Phong, Nha Trang - Quy Nhon ) and organize events in the company so that you can see the enthusiasm and thoughtfulness that the company has for the employees Let the staff feel comíồrtable being a member of DB Schenker - Staffing needs to pay attention to the factors that shape the quality and professionalism of the staff because the right person is the right job to create a love of work and passion in the workplace , resulting in high productivity - Focus on the development of young human resources by young human resources have the advantage of access to new knowledge, capable of sensitivity 3.2.5 Legal solution - Updated regulations, rules of maritime Vietnam as well as the world - Shipping is a Service sector that is carried out between many entities around the world and, in addition to the general rules applied worldwide, each country has its own rules and regulations shipping Thereíồre, the company always needs to update and apply soon the new standards are issued to avoid the handling of unlawful offenses DB Schenker Vietnam Co., Ltd should pay special attention to Vietnam Maritime Law 2015 promulgated on November 25, 2015 and officially applied on July 1, In addition, the company also needs to pay attention to the laws of some related industries such as laws on trade, import and export 3.3 Limitations and room for íurther research - My thesis is based on the current situation of the company as well as the situation in Vietnam and the world today and may not be suitable in the future - In the future, for short time or long time, the Products of the 4.0 technology such as AI ( artiílcial intelligence), blockchain is becoming the Megatrend Unmanned, autonomous ships will be used to delivery goods over the world The delivery cargos and their documentation will be managed by block Chain without intervention of human All of them may be make my thesis becomeinvalid, and my Solutions are not suitable to apply into DB Schenker But with my information, knowledge and experience, I can’t reseach this megatrend now So for the better evaluate, other research must have the exact situation of this technology or the estimate of experts If i have change to that, i will continue my research for the better valuation 60 - CONCLUSION Ocean transport is not only a huge source of income, but also has an important role, closely related to the vital competition of importers and exporters in our country For the national economy, shipping is an important part of the logistics industry, which take an indispensable role in the production, delivery and distribution of goods, which is essential for economic growth to ensure the macro stability of the country - Over time, Vietnam has recognized the importance of maritime transport, especially after 2007, Vietnam joined the WTO and many new free trade agreements such as VKFTA and EVFTA The opening of the economy, the development of intemational trade, the development of this sector is more and more govemment interest and business enterprises in the íĩeld of logistics is also established more and more In the process, the logistics industry in Vietnam has achieved initial encouraging results - With a rapidly growing trade sector that reached $ 400 billion by 2017, ocean shipping is expected to thrive Shipping is an important link in the logistics System Improving the efficiency of this Service with the active and effective participation of logistics enterprises is the key to the success of the economy - price Thereíồre, Vietnam Co., development of thenecessary shipping Service DB Schenker the development context ofLtd of integration itsin is very to promote the business Services and reasonable tothe customers increasingly professional withof quality translation - REFERENCES DB Schenker Vietnam Co.Ltd intemal documentation DB Schenker Vietnam’s Financial Report 2011 - 2016 Logistics and International Transports Textbook Intemationnal Accounting Textbook Strategy Management textbook Marine Transport and the Fourth Industrial Revolution (Lech Kobylinsky,2016) TheComparativeMethod-Frozenandsearchable (David Collier, 1993) ADB Annual Report 2017 OBJECT-BASED IMAGE ANALYSIS: STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) (G.J Hay, G Castilla) 10 Iittps://www.dbschenker.com 11 Iittps://www.investopedia.com/terms/s/swot.asp ... the rate of change, the growth rate of the indicators and the basis for comparison is that of another object at the same time in considering the correlation - Conditions to compare the indicators... supervise the loading of containers into the Container of the carrier or collector After the Containercustoms sealed, the shipper completes the procedure for loading the Container onto the vessel... suitable Solutions to enhance quality of ocean freight at DB Schenker VietNam in the globalization context Research object The object of research is the ocean freight activities at DB Schenker Vietnam