Chapter 2: Analysis of the reality of delivery and receipt of imported medical equipment by air at
2.3. Reality of forwarding activities at Airseaglobal Joint Stock Company
2.3.1. Service quality
Service quality is highly appreciated by customers when the company always brings great benefits to customers. A typical example is that besides transporting medical equipment by air, for sea freight services, in addition to the current transportation service of raw materials, which is now quite developed, the company is oriented to development, develop retail shipping services. Since the company's customers are mainly small and medium enterprises, the company can penetrate and exploit this market more deeply. The company directly contacts partner shipping lines to collect small, odd shipments into one container and then transport. Thanks to the transportation and collection of retail goods, irseаglobal brings great benefits to customers such as saving costs and saving time.
Focusing on improving service quality, the company's service quality has improved over the years and increased markedly. This is a plus point of Airseaglobal in perfecting the freight forwarding process.
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46 Table 2. 4: The proportion of quality goods delivered by Airseaglobal Joint Stock
Company
Year 2018 2019 2020
Proportion of quality goods 88,5% 90,3% 95,6%
(Source: Airseaglobal Sales Department) The company always tries to continuously improve service quality. However, the coordination between the business departments, customer service staff and the documentation department still occurs in some cases that need to be overcome: After the shipment has been loaded on the plane and transported away, the customer requested the voucher department to send Debit but because the employee was absent and could not be contacted or because the sales staff could not get the price from the Pricing department in the head office, the customer rated the company's service as slow. Therefore, the case where the company's customers go to work at another company still happens.
2.3.2. Prices of delivery services
The company always focuses on offering the most competitive prices in the market, in order to attract customers but also ensure revenue for the company.
Prices of some forwarding services of the company: The price of international shipping usually depends on the shipment to have a specific price. Customs clearance price:
• Hanoi: 800,000 VND, in case of inspection, 200,000 VND more
• Hai Phong and Ho Chi Minh: 1,100,000 VND, additional 500,000 VND in case of inspection
The domestic shipping price is quite cheap, for example, from Noi Bai warehouse to Hanoi city center, the price is 450,000 VND for a 1.25 ton vehicle excluding VAT and prohibited road fees, while some companies accept the cost of transportation from 500,000 VND to 600,000 VND. The company also often adjusts the price that best suits the company's strategy of enhancing competition with industry competitors. The price in each mode of transport, international shipping price, domestic transport price are always adjusted
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47 appropriately for customers. For sea freight, the company often offers low prices to customers because sea freight has very fierce competition. For example, shipping rates from Shanghai, China to Cat Lai port: 1USD/CBM (<3CBM); 5USD/CBM (3-5CBM);
10USD/CBM (5-10CBM).
Air freight service is a transportation service that brings great profit to the company.
The cost of air transport is much higher than that of other transportation industries, due to the cost of aircraft, large discount costs, large fuel consumption, and small tonnage.
However, due to the nature of goods transported by air, they are all goods of great value, which require fast transit time, so the profits are also very large. On average, for each 100kg shipping order, the company will have a profit of 100 USD, the difference between the input price of the foreign agent and the selling price to the customer (Report on revenue of the Vietnam National Corporation, 2019). Transport by air is also very low risk and the company always has staff in charge to closely monitor the shipment progress to update customers, thereby gaining the trust and confidence of customers.
The company is focusing on medical equipment import services, providing all services to import medical equipment such as: Medical equipment classification service, eligibility declaration production, business conditions, circulation, services for making import and transportation permits. Therefore, for customers who use many services, the company always has a preferential price, reducing about 500,000 - 1,000,000 for customers using the package.
2.3.3. The company's freight forwarding volume
Table 2. 5: Freight forwarding volume of Airseaglobal Joint Stock Company from 2018 to 2020
Unit: Tons
Year 2018 2019 2020
Exports 50.367 71.985 98.672,6
Imports 135.980 162.332 189.660
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48 (Source: Airseaglobal Sales Department) From the above table, we can see that, in general, the volume of goods delivered and delivered by the company has increased over the years. The average growth rate of delivery volume from 2018 to 2020 is 25.2%. The volume of freight forwarding has increased rapidly in recent years, firstly due to the expanding market, the increasing demand for freight forwarding. The second is that the company has increasingly improved service quality, so more and more customers come to the company.
In the company's freight forwarding structure, imports always dominate, the proportion of imported goods and services is almost double that of exports. This is also due to the characteristics of our country's international trade, which is mainly a trade deficit and the company is also focusing on import services rather than exports. The company's main delivery products are: Medical equipment, cosmetics, functional foods, machinery and equipment... and especially priority is given to the delivery and delivery of medical equipment.
The company mainly performs freight forwarding by air. The company delivers goods at all warehouses in Noi Bai: NTCS, ALS, ACS warehouses; express delivery warehouses in Noi Bai; Courier My Dinh.
2.3.4. The company's diversification of import and export freight forwarding services 2.3.4.1. The service of loading and unloading goods
The service of loading and unloading the goods of Airseaglobal has not really developed, mainly outsourced and is spontaneous. For some shipments of not too large volume at airports such as Noi Bai International Airport or Tan Son Nhat International Airport, the company mainly uses direct cargo handling services at the port. , at the warehouse. In addition, for large and bulky shipments such as goods transported by sea at Hai Phong and Cat Lai ports, the company outsources the service of loading and unloading goods at the port, which can be from the company, loading and unloading personnel, depending on the condition and type of goods. Currently, the company mainly provides cargo handling services during transit: loading, unloading, unloading for trucks and containers of all kinds. The service of loading and unloading goods of the company is not
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49 currently profitable for the company, but only supporting other transportation services, in order to provide customers with the most complete service. Although not bringing direct profits to the company, the cargo handling service plays an important role in ensuring the smooth and efficient transportation process. Fast, scientific and time-saving loading and unloading of goods is an important factor in saving transportation time and minimizing costs incurred.
2.3.4.2. Warehousing and storage services
Warehousing and storage services of Singapore have not really developed, warehouses almost still use the warehouses available at airports and seaports to store customers' goods. Although still providing warehousing services to customers, the company has not yet controlled this segment, still depends entirely on policies and costs at warehouses at airports and seaports. This is also an area where the company is not really strong and still lags behind major competitors in the market.
2.3.4.3. Transportation agency service
The company provides transportation agency services that act as a bridge between the shipper and the carrier, both as an agent of the shipper and as an agent of the carrier.
The company is responsible for carrying out necessary activities to take care and protect the rights and legitimate interests of the trustee (customer), to comply with the requests and instructions of the trustee, promptly Notify the trustee of the event related to the entrusted work, accurately calculate the related revenues and expenditures. Airseaglobal is a bridge between customers, which are mainly professional customers, and carriers such as garages, shipping lines, airlines, as well as air cargo transportation, providing full services package about the entire process of transportation and delivery of goods to the shipper. Transport agency services also include customs clearance agency activities, and this is one of the competitive advantages that the company's management determines to focus on development and expansion. Customs procedures in particular and administrative procedures of the country in general are still inadequate, quite cumbersome and take a long time to complete, while not every profession can afford to set up a specialized agency
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50 responsible for customs clearance, customs clearance for import and export goods, especially for small and medium-sized companies.
2.3.4.4. Other ancillary services
Currently, a number of other additional services at the company can include the service of applying for specialized licenses for import and export goods such as applying for import permits, classifying, making quality announcements, circulating medical equipment In addition, the company also supports and advises customers to solve a number of problems arising in the process of customs related procedures such as post-clearance inspection of import and export goods, tax refund, tax payment, and fines. As a result, the company is increasingly trusted by customers for quality services as well as professional ability.
2.3.5. Factors affecting freight forwarding activities at Airseaglobal Joint Stock Company
2.3.5.1. Group of External business factors
➢ Political and legal factors:
This is an important factor affecting freight forwarding activities. If the state has good policies, it will promote the development of freight forwarding activities, on the contrary, it will inhibit it. When it comes to political and legal factors, we are not just talking about policies related to transportation or delivery. The mechanism here includes all policies related to import and export activities in general. The Vietnamese government has introduced many policies to facilitate import and export activities, thereby creating a source of goods for forwarding activities. Some of the policies can be mentioned as:
Export promotion policy: Vietnam is a trade deficit country when the volume of goods imported into Vietnam is larger than the export output. Therefore, in order to balance between export and import turnover, the state has had policies to reduce export tax to stimulate enterprises to export goods to other countrie.
Customs policy: If in the past, the customs party would help the goods owner to declare customs, now the responsibility for customs declaration belongs to the goods
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51 owner. This makes the customs declaration service very developed, and the person who is most proficient in this area is the forwarder. Since then, the position of the forwarder has been increasingly enhanced.
➢ Socio-economic factors:
In the trend of globalization, the dependence between countries is increasing, so each fluctuation of the socio-economic situation abroad has certain effects on economic activities in the country. The field of import-export activities is the field of direct relations with entities abroad, subject to the influence and influence of factors abroad, so it is even more sensitive. Any change in import-export policies, inflation, unemployment or economic growth and recession... of other countries will affect import-export activities of import- export enterprises in our country.
Since joining the Association of Southeast Asian Nations (ASEAN) or the World Trade Organization (WTO), Vietnam's import and export volume has started to have strong growth, thereby creating many opportunities for export and import association for companies doing freight forwarding services to develop.
➢ Infrastructure factor:
Good infrastructure is an indispensable factor to contribute to promoting import and export activities. Infrastructure includes: roads, wharves, transportation systems, information systems, banking systems, post and telecommunications, etc. have a great influence on import and export activities. If these activities are modern, it will promote import and export efficiency, on the contrary, it will inhibit the import and export process.
➢ Technological factors:
Today, science and technology affects all socio-economic fields and brings many benefits, in import and export it also brings high efficiency. Thanks to the development of the post and telecommunications system, foreign trade enterprises can talk directly with customers via telex, fax, telegram, etc., reducing travel costs, promoting import and export activities. Helping traders capture information about market movements accurately and
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52 timely. Besides, thanks to import and export, Vietnamese enterprises are exposed to advanced technological achievements in the world, replacing and renewing technology in manufacturing enterprises. Science and technology also have an impact on areas such as freight transport, professional industries in banking, etc. These are also factors affecting import and export activities.
➢ Competition in the forwarding service industry:
The level of competition between enterprises in the same industry directly affects the supply and demand of each enterprise's products, affects the selling price, the speed of product consumption, etc. thus affecting the efficiency of each business. In the current market mechanism in our country, in most fields, production and business lines with high profits are being watched by many other businesses and are willing to invest in that field if without interference from the government. Therefore, forcing enterprises in industries with high profit margins to create barriers to new entry by fully exploiting the unique advantages of enterprises, by setting prices appropriately and expanding market domination.
➢ Customer factor:
Customers are an extremely important issue and are paid special attention by businesses. If the company's product is produced without people or is not widely accepted by consumers, the enterprise cannot proceed with production. Population density, income level, consumer psychology and preferences... of customers greatly affect the output and price of manufactured products of enterprises, affecting the competitiveness of enterprises, thus affecting the quality of their products and services, and then affecting the business performance.
2.3.5.2. Group of Internal Business Factors
➢ Business strategy of the enterprise:
Business strategy plays a very important role for the existence and development of every business. The right business strategy will create a good direction for the business, the business strategy can be considered as a guideline to guide the business in the right direction. Since 2016, Airseaglobal Joint Stock Company has shaped its own business
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53 strategy to target customers importing medical equipment, providing necessary services for them to attract more potential customers to contribute to improving competitiveness in the import and export forwarding market and realize long-term and sustainable development goals
➢ System of technical facilities of the enterprise:
The company is headquartered in Hanoi and has branches in Hai Phong, Da Nang and Ho Chi Minh City, which helps the company reach more customers across the country and be more proactive in delivery goods in these areas. Equipment at each office such as desks, chairs, office tools are imported from Korea and Japan as well as big domestic brands such as Hoa Phat, Xuan Hoa,... The machines are optimally equipped to meet the job requirements and achieve the highest efficiency. The company's warehouse is mainly for storing, gathering and distributing goods to customers. Currently, the company only has a 700m2 warehouse in Soc Son district - Hanoi and has the following equipment:
Table 2. 6: Equipment in stock of Airseaglobal JSC Diesel Forklift Quantity 4 Type 5 tons
Hand pallet
truck Quantity 5 Type 1,5 tons
Pallets Quantity 270
- Wood material:
Size 1000x1000x135 (mm): 70 pcs Size 1219x1000x140 (mm): 90 pcs - Plastic material:
Size 1000x1000x135 (mm): 60 pcs Size 1219x1000x140 (mm): 50 pcs
Racking Quantity 3
150kg Scales Quantity 2 1-3 tons Scales Quantity 1 Surveillance
camera Quantity 4 Outside: 2 Inside: 2
(Source: Airseaglobal accounting department)
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54 It can be seen that the company's warehouse is located near Noi Bai airport and has a small scale and little equipment because the company mainly makes imported goods and when the goods are finished, they will also be delivered directly to customer's warehouse.
In some cases, when there are many goods delivered to the same area, they will be transferred to the company's warehouse to facilitate the distribution of goods to customers, saving transportation costs.
➢ Human Resources:
Airseaglobal's human resources are mostly young people, which makes it easy for the company to grasp new trends, access technology and learn quickly, thereby increasing its competitiveness in the market. On the contrary, this is also a disadvantage when the experience of the staff is not much. As a company with a young age compared to other competitors in the market, it is very necessary for people with a lot of experience in the field to direct and lead young people.
Table 2. 7: Number of employees of the company by age
N/O Age
(as of 2020)
Number of workers
1 18-25 41
2 25-32 25
3 32-39 7
4 39-45 3
5 Over 45 2
Total 88
(Source: Airseaglobal accounting department)
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➢ Investment capital:
Capital is the main source to help the company maintain its business activities, including import and export logistics. According to the company's financial statements, in 2020 the company's capital will reach VND 157,033 billion, of which 20.22 billion companies have used for the purposes of operation and maintenance of the company, the rest is money goes to invest and reinvest in production.
Table 2. 8: Total capital of the company
Unit: Billion VND
N/O Activities Amount of money
1 Total equity 95,288
2 Total liabilities 61,745
Total 157,033
(Source: Airseaglobal accounting department) Table 2. 9: Purpose of using capital of the company
Unit: Billion VND
N/O Activities Amount of
money
1 Pay for labor 9,36
2 Marketing 1,7
3 Pay for office and warehouse rental fees 1,56 4 Purchase and maintenance of materials and
equipment
0,24
5 Employee Activities 0,85
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56 6 Expenses for electricity, water,
telecommunications, Internet,…
1,28
7 Development plan 5,23
Total 20,22
(Source: Airseaglobal accounting department) It can be seen that the amount of capital that the company uses to pay employees accounts for the largest proportion because the company's main products are products and services. The company has also spent 25.87% of its capital to invest in long-term development plans such as market research, staff training, etc. Next is marketing expenses, which is a very important activity in business, especially in the field of forwarding when there are many businesses focusing on this segment, in 2020 the company paid only 1.7 billion dong, equivalent to 8.41% of capital. In general, the company's use of capital is relatively good and reasonable.
Figure 2. 5: The percentage of capital used by the company for operations 2.3.6. The results of the company's freight forwarding activities
46.29%, 46%
8.41%, 9%
7.72%, 8%
1.19%, 1%
4.20%, 4%
6.33%, 6%
25.87%, 26%
Pay for labor
Marketing
Pay for office and warehouse rental fees
Purchase and maintenance of materials and equipment Employee Activities
Expenses for electricity, water, telecommunications, Internet,…
Development plan
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57 2.3.6.1. Output of goods delivered
Table 2. 10: Total volume of imported and exported goods transported by air Unit: Tons
Year 2016 2017 2018 2019 2020
Total volume delivered 4.400 3.082 5.207 4.890 4.507 Delivery of export goods 2.300 1.662 4.007 2.690 1.900 Delivery of import
goods
2.100 1.420 1.200 2.200 2.607
(Source: Airseaglobal accounting department) In 2016, the Company started implementing its market expansion plan and initially had relationships with about 17 air freight forwarders in the world such as: TRANSLINK, SINO TRANSPORT. CO, PIONNEER EXPRESS, GATEWAY EXPRESS... most of these firms are large, reputable firms in the forwarding market. It is thanks to these relationships that the revenue from air freight forwarding services of AIRSEAGLOBAL has increased despite the decrease in freight production. The decrease in volume of goods delivered by air at AIRSEAGLOBAL in 2017 is because during this time the company has just started to move into its own niche market of medical goods importers, so there are not many customers in the country. This market also does not have many potential customers. But at this same time, AIRSEAGLOBAL has come up with the right solutions, so the company not only increased its revenue in 2018 but also increased its delivery volume in 2019.
2018 is the year that the Company's total air freight forwarding volume increases significantly, so does the profit: The company has signed a large number of door-to-door delivery contracts. Moreover, the Company has a good relationship with foreign and domestic customers, so the relationship of the Company is increasingly expanded and diversified such as: Garments, leather shoes, handicrafts, frozen agricultural products, seafood, high-tech goods, machinery and equipment of export processing companies located in industrial zones of Vietnam.
In 2019-2020, the total output as well as the profit earned from the Company's air
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