CHAPTER 1: GENERAL THEORETICAL BASIS ON LOGISTICS
1.4. Factors affecting the quality of logistics services
1.4.1.1. Economic environment
The world economic environment has a significant impact on the Vietnamese economy in general and the logistics service industry in particular. Currently, the world's economic situation is affected by the epidemic, leading to the logistics industry being significantly affected.
According to a study by the Central Institute for Economic Management. In 2020, the global economy will face many difficulties and challenges due to the impact of the Covid-19 pandemic. The Covid-19 pandemic has disrupted supply chains, narrowed both aggregate supply and aggregate demand, and increased financial risks, bringing the world economy into a downward spiral.
The epidemic situation still tends to be complicated and unpredictable in many countries and regions (such as Europe, America, India...). According to the World Bank (WB), the world economy will shrink by 4.3% in 2020.
The Covid-19 pandemic, which broke out at the end of January 2020, caused heavy economic, cultural, social and human life losses around the world.
The pandemic has put heavy pressure on global production capacity and supply chains, and it has also opened up new avenues for the logistics industry
to grow. The transportation and warehousing industry is strongly affected during the Covid period. According to the Ministry of Transport, the initial loss of stopping routes of Vietnamese airlines is about VND 30,000 billion in revenue (equivalent to a decrease of 60% over the same period), revenue of the railway and road industry decreased by over 20 billion VND.
1.4.1.2. Political and legal environment
Logistics or any economic activity operates on the basis of national and international legal systems. In parallel with the development of Logistics, the international and national legal system related to this business also has new changes and is increasingly complete. Many international treaties, regional agreements and a number of international practices related to shipping, warehousing, insurance, customs procedures, dispute settlement ... have been born to support for the operation of the logistics industry around the world.
The current system of legal documents in Vietnam related to Logistics activities: Commercial Law (2005); Law on Customs (2014); Law on Import and Export Tax (2016); The Tax Administration Law (2019… and other current documents such as Decrees and Circulars detailing the laws. In addition, there are Decisions and Official Letters providing specific instructions when there are arising cases, questions need to be answered.
1.4.1.3. Infrastructure system for Logistics activities
The rapid development of international trade as well as of logistics activities poses a requirement that there is a need for a solid infrastructure system so that economic activities can take place safely. most complete and most consequential. In fact, in the world today, it has been and is increasingly perfecting the necessary basic conditions and foundations for Logistics activities. Infrastructure for Logistics activities includes: seaport system, road transport infrastructure, railway, waterway, pipeline... At the same time, gateway ports combined with international transshipment have been established economy in the North and South regions.
Regarding transport routes, Vietnam has established 32 shipping routes, of which 25 are international and 07 domestic. In addition to intra-Asia routes, the Northern region has operated 2 routes to North America; The South has formed 16 long-distance train routes to North America and Europe, outperforming Southeast Asian countries (only after Malaysia and Singapore). On the other hand, 44 public navigation channels have been put into operation, 34 specialized navigational channels, 94 lighthouses stretching from Quang Ninh to Kien Giang, 32 radio stations stretching from Mong Cai to Ha Tien and a receiver system. receiving, transmitting, providing identification and tracking information for ships and boats (LRIT) and VTS systems installed at major seaports to effectively support the management and monitoring of ship positions;
supervising and managing maritime activities in seaport waters….
1.4.1.4. Other objective factors
Firstly, social culture is a fast-acting and sensitive factor for businesses.
In addition to the general standards of a country or nation, it also has its own standards of each region and of many different classes. Enterprises can rely on this to create an advantage in developing the quality of their Logistics services and avoid unwanted impacts from the market. The sociocultural points to pay attention to are:
1) Perspectives on ethics, aesthetics, profession, lifestyle;
2) Traditional customs;
3) Social concerns and priorities;
4) Level of education and awareness.
Secondly, Logistics costs include: Transportation costs - account for one- third to two-thirds of the cost of circulation and distribution; opportunity cost of capital the minimum rate of return that a company earns when capital is not invested in inventory for other activities; and costs of goods preservation, including: Cost of renting warehouses, preserving goods, bringing goods in and
out of warehouses, damaged goods, insurance for goods; Cost of customs clearance for the shipment….
Thirdly, the existing competitors in the industry will help businesses to constantly improve their service quality to win customer satisfaction when using the service. Thus, this is also a factor affecting the quality of logistics services of enterprises. Thus, factors outside the enterprise are very large and have many impacts on the quality of logistics services of enterprises. Therefore, businesses need to build for themselves a complete and up-to-date external information system, through which analysis helps businesses make good use of external opportunities to improve the quality of their Logistics services.
1.4.2. Subjective factors
1.4.2.1. Enterprise's human resources
Logistics is a very hot growing industry with an annual growth rate of over 10% and contributes about 5% to the national GDP. It is undeniable that this is an industry with great growth potential. However, to arouse that potential, it is necessary to solve the problem of the lack of human resources of the industry. Human resources are also a decisive factor in the success or failure of logistics services. Although modern machines and technology were born, it is undeniable that the role and importance of people in management, administration and implementation is undeniable.
According to information from the Vietnam Logistics Research and Development Institute, in the next 3 years, on average, logistics service enterprises need 18,000 more employees; manufacturing, trading and service enterprises need more than one million employees with expertise in Logistics.
According to estimates by the Vietnam Logistics Association (VIFFAS), about 140 member companies now have a total of about 4,000 employees. This is a professional force, not to mention about 4,000 - 5,000 semi-professionals.
According to VIFFAS, the supply of labor for the Logistics industry only meets about 40% of the demand. Logistics forwarding and operating logistics is a
highly professional technology, so human resources operating in this field need to be systematically trained and fully equipped with knowledge like international forwarders. But in fact, most of the logistics service companies in Vietnam today confirm the shortage of highly qualified human resources.
Human resources are trained from many different sources. The management team is usually the key staff assigned to Logistics companies.
This team is being trained and retrained to meet management needs. Most of them lack business knowledge and experience, are rarely updated with new knowledge, and have unsatisfactory leadership and management styles.
Logistics human resources are both lacking and weak. Research data shows that Vietnam's logistics human resources are not only lacking in quantity but also weak in quality. In particular, highly qualified human resources at the management level are also seriously lacking. Survey results of the Institute for Research and Development of Ho Chi Minh City showed that 53.3% of enterprises lacked staff with professional qualifications and logistics knowledge; 5.3% of enterprises have to retrain employees and only 6.7% of enterprises are satisfied with the expertise of employees.
1.4.2.2. General perception of Logistics
As is known, Logistics in the world was born very early, so far, the perception of this industry has changed and improved, in line with the development of the global economy. If before, Logistics was only applied in military fields, with a narrow meaning in logistics, but now, awareness of Logistics as well as the importance of Logistics for the entire economy fact has actually been seriously and properly studied. Now, almost every economy in the world understands Logistics as the meaning of management (Management) of the physical distribution system between production business units in society.
The interest of economic experts for logistics activities is also growing. This is reflected in the fact that every year there are many specialized documents, books, and technical articles analyzing logistics-related issues in
each country, region and the world. Thanks to that, the awareness of all economic sectors about Logistics is increasingly enhanced. However, to further develop Logistics, it also requires better research and understanding of the needs of the market in this new period. Moreover, not any country or organization has the right overview of Logistics.
Markets where Logistics has not really developed are in dire need of a complete change in the perception of this industry.
1.4.2.3. Other subjective factors
In addition to the main factors above, there are also many other factors of Logistics services such as markets, customers, competition between
businesses,... but they are all one of the important links important to create the success of each Logistics service. Time is one of the criteria affecting the quality of Logistics services. With the increasing development of information technology, time is increasingly focused and is one of the first factors
affecting the quality of Logistics services. Any business that operates must map out the plans for the transportation of goods to be accurate on time so as not to affect the customer's plan. Moreover, transportation time is closely related to the problem of logistics costs of enterprises.
Safety of goods transported: The goods transported are diverse, there are items that must be specially preserved. For each specific type of cargo, it is necessary to have different modes of transportation to minimize the loss. In some cases, units also have to buy insurance for goods with the aim of
minimizing risks and increasing the safety of goods and products. Order accuracy: Order accuracy indicates the entire order including the correct product name, correct quantity, correct quality, specification,..
All of the above factors indicate whether the company has the ability to react quickly, flexibly and promptly when necessary, and can meet the needs of customers quickly and promptly through solving problems. Resolve customer inquiries, diversify and available types of services, quality of procedures as well as quality of information.