(Luận văn HV chính sách và phát triển) improving the quality of logistics services at vinalines logistics joint stock company

18 CHAPTER 2: SITUATION OF LOGISTICS SERVICE QUALITY AT VINALINES LOGISTICS VIETNAM JOINT STOCK COMPANY .... Logistics service business situation of Vinalines Logistics Vietnam Joint St

ACADEMY OF POLICY AND DEVELOPMENT

Hà Nội, June 2021

THANKFUL

The first thank you to the school for creating conditions for our students

to study well, helping us in each subject, cultivating specialized knowledge useful for our future path Then, I would also like to thank Ms.Nguyen Thi Thuy Linh, thank you during the internship report for enthusiastically explaining and guiding us, answering all questions and correcting the mistakes

we made and she tried her best to help little by little to make your report more complete

Finally, I would like to express my sincere thanks to the internship's help from Logistics Sales Manager Dinh Viet Ha, Mr Nguyen Dinh Thinh and Ms

Mai Thanh Thuy, every day they work, they also help us try to improve ourselves along with useful sharing about both specialized knowledge of Logistics and work experience Thank you, during these 2 months, for teaching

me many things that I cannot learn in class The lessons learned during the working process are always shared with us Thank you for the help of the brothers and sisters in the company, for your answers to my questions about the company, for the subject I am studying To make such a complete report, is the full help of Logistics Manager Dinh Viet Ha, along with the team of brothers and sisters in the company department, is the dedicated explanation of Ms

Nguyen Thi Thuy Linh Thank you so much!

CONTENTS

HEADING 1

2 Research purpose and tasks 2

2.1 Research purposes 2

2.2 Research mission 2

3 Object and scope of research 2

3.1 Research object 2

3.2 Research scope 3

4 Research Methodology 3

5 Structure of the thesis 3

CHAPTER 1: GENERAL THEORETICAL BASIS ON LOGISTICS SERVICE QUALITY 4

1.1 Overview of Logistics services 4

1.2 Overview of the quality of Logistics services 13

1.3 The meaning of improving the quality of Logistics services 16

1.4 Factors affecting the quality of logistics services 18

CHAPTER 2: SITUATION OF LOGISTICS SERVICE QUALITY AT VINALINES LOGISTICS VIETNAM JOINT STOCK COMPANY 24

2.1 General introduction about Vinalines Logistics Vietnam Joint Stock Company 24

2.2 Factors affecting the quality of Logistics services of Vinalines Logistics Vietnam Joint Stock Company 35

2.3 Logistics service business situation of Vinalines Logistics Vietnam Joint Stock Company in the period of 2018 - 2020 43

2.4 Actual situation of logistics service quality at Vinalines Logistics Joint Stock Company 52

2.5 Overall assessment of logistics service quality at Vinalines Logistics Vietnam Joint Stock Company 64

CHAPTER 3: SOME SOLUTIONS TO ENHANCE THE QUALITY OF LOGISTICS SERVICES AT VINALINES LOGISTICS JOINT STOCK COMPANY 72

3.1 Opportunities and challenges for Vinalines Logistics Company 72

3.2 Orientation to improve the quality of Logistics services at Vinalines Logistics Joint Stock Company in 2021 and in the future 74

3.3 Some solutions to improve the quality of Logistics services at Vinalines Logistics Joint Stock Company in the coming time 77

3.4 Some recommendations to the State and related parties (Customs,

Ministry of Transport) 86

CONCLUDE 90

REFERENCES 91

SCHEDULE 93

LIST OF TABLES

Table 2.1: Table of business results over the years 2018-2020 of

Vinalines Logistics Company

Table 2.2: Length of streets in Vietnam

Table 2.3: Statistics of personnel at Vinalines Logistics Joint Stock Company

Table 2.4: Profit from logistics service business

Table 2.5: Profit from logistics service business breakdown by market structure

Table 2.7: Some indicators of VIMC's logistics business results

Table 2.8: Scale of reliability

Table 2.9: Scale of responsiveness

Table 2.10: Scale of assurance ability

Table 2.11: Scale of empathy

Table 2.12: Scale of tangible media

Table 2.13: Overall satisfaction scale

Table 2.14: Response scale

Table 2.15: Customer survey questionnaire about the company's service quality

LIST OF CHAPTERS

Figure 1.2: Rater service quality measurement criteria

Figure 2.1: Flowchart of Billion factory's production process

Figure 2.2: Organization chart of Vinalines Logistics Vietnam Joint Stock Company

Graph 2.3: Percentage of revenue by business method

Graph 2.4: Proportion of revenue by market structure

Graph 2.5: Customer satisfaction on reliability of the company VIMC

Graph 2.6: Level of customer satisfaction with the response of VIMC Company

Graph 2.7: Customer satisfaction on the assurance factor of VIMC

Graph 2.8: Level of customer satisfaction on the empathy factor of VIMC

Graph 2.9: Customer's evaluation of VIMC's tangible element

Graph 2.10: Overall assessment of customers about the Company's Logistics service quality Logistics

LIST OF ABBREVIATIONS ONLY

CCL: Cold Chain Logistics CFS: Container Freight station Fee CIF: Cost, Insurance and Freight

eDO: electronic Delivery Orders

ePort: electronic Ports

ESCAP: Economic and Social Commission for Asia and Pacific

GDP: Gross Domes Profit ICD: Inland Container Depot ISO: International Organisation for Standardisation JSC: Joint Stock Company

MTO: Multimodal Transport Operator PL: Party Logistics

TEU: Twenty-foot Equivalent Units U.S: United State

UNCTAD: United Nations Conference on Trade and Development VHL: Vinalines Honda Logistics

VIFFAS: Vietnam Logistics Association VIMC: Vietnam Maritime Corporation VLA: Vietnam Logistics Business Association VLHL: Vinalines Hoa Lac Logistics

WB: World Bank WTO: World Trade Organization

HEADING

1 Urgency of the research topic

According to Vietnam's commitment timeline when it joined the World Trade Organization (WTO), firms with 100 percent foreign capital have been allowed to enter the domestic logistics sector to provide warehousing and freight agency services as of January 11, 2014 This is a significant challenge for local firms, as foreign firms have long been involved in providing package logistics services using cutting-edge technology, innovative management practices, and substantial experience Meanwhile, the majority of Vietnam's logistics firms today serve only as satellite service providers for foreign logistics firms Many firms still limit themselves to delivering basic and single products and services like transportation, warehousing, customs clearing, and

so on, but they lack high-value services In fact, with a limited range of logistical services, our companies can only cover around a fourth of market demand (Cafef.vn, 2010)

Logistics has emerged as a potential service business in Vietnam, with

an average annual growth rate of 20% to 25%, contributing significantly to the country's economic development Facing development opportunities and strong competition challenges from foreign enterprises, Vietnamese logistics service enterprises have been constantly improving their competitiveness, through infrastructure investment, application of information technology, human resource training and development of new services, as well as strengthening service management capacity

Aiming to become one of the leading professional logistics service providers in Vietnam, Vinalines Logistics Joint Stock Company has been focusing on investing in infrastructure development at key hubs, such as Hai Phong Room, Lao Cai, Ho Chi Minh City and towards expanding and diversifying types of logistics services Currently, in addition to constantly improving and perfecting the services that the Company is available, Vinalines

has also provided a number of new services, such as warehouse storage, freight transportation, with the purpose of to successfully develop the logistics service chain However, so far, these services still have many limitations, have not brought expected profits and have not met all the needs of customers

Therefore, I chose to research the topic "Improving the quality of logistics services at Vinalines Logistics Joint Stock Company" to determine the current status of logistics services of the Company On that basis, some solutions are proposed to promote the strengths as well as overcome the remaining limitations in the Company's operations

2 Research purpose and tasks

2.1 Research purposes

On the basis of analyzing the current situation of logistics service quality

at JSC Part of Vinalines Logistics, the thesis proposes solutions to complete and improve the quality of logistics services at Vinalines Logistics Joint Stock Company

(iii) Proposing solutions to improve the quality of logistics services in the company Vinalines Logistics Joint Stock Company in the coming years

3 Object and scope of research

3.1 Research object

Quality of logistics services at Vinalines Logistics Joint Stock Company

3.2 Research scope

Time range: Statistical data and surveys for research were collected from

2018 to the end of 2020 Vision of specific solutions to 2030

Spatial scope: The topic focuses on in-depth research on the quality of logistics services at Vinalines Logistics Joint Stock Company

4 Research Methodology

Using dialectical methods, methods of information collection, statistics, analysis, comparison and contrast, actual survey, synthesis, to clarify the content

of analysis Primary data was collected by survey method

5 Structure of the thesis

In addition to the introduction and conclusion, the thesis has three chapters:

Chapter 1: General theoretical basis of logistics service quality Chapter 2: The quality of Logistics services at Vinalines Logistics Vietnam Joint Stock Company

Chapter 3: Some solutions to improve the quality of Logistics services at

Vianlines Logistics Vietnam Joint Stock Company in the future

CHAPTER 1: GENERAL THEORETICAL BASIS ON LOGISTICS

SERVICE QUALITY 1.1 Overview of Logistics services

1.1.1 Logistics service concept

Logistics is a Greek term that refers to the process of distribution and scientific management, which includes planning, organizing, implementing, and controlling the movement of goods and services from the point of origin

of production to the hands of the final consumer at the lowest possible cost, ensuring that the social production process runs smoothly and continuously and meets all of the needs of customers

Today, Logistics has been present in many different fields of the economy, they quickly develop and create the success of many famous companies and corporations in the world Before the 1950s, logistics work was merely a single functional activity While areas such as marketing and production management have made great strides, logistics management has not been effectively formed The rapid development of technology and management of the twentieth century has created a new development step, which can be considered as the renaissance of logistics

Logistics has progressed through three stages, according to the Economic and Social Commission for Asia and the Pacific (ESCAP):

The development stage of the physical distribution system: In the late 60s and 70s of the twentieth century, Logistics was the activity of providing physical production (also known as Output Logistics) Output logistics is the systematic management of activities related to ensuring the effective supply of products and goods to customers

The development phase of the Logistics system: In the 80s and 90s of the twentieth century, Logistics was a combination of two input stages (material supply) and output (product consumption) to save costs and increase efficiency

Logistics management stage (Supply chain management): This is the development stage of Logistics at the end of the twentieth century

There are many different concepts of Logistics in the world and are built based on the industry and research purpose of Logistics services However, some key concepts can be stated as follows:

Logistics is the process of planning, selecting the optimal option to implement the management and control of movement and storage in the most cost-effective and shortest time in terms of raw materials, semi-finished products and materials finished product, as well as the corresponding information from pre-production until the goods reach the final consumer to satisfy the customer's request (U.S Logistics Regulatory Commission)

Logistics is the efficient and cost-effective process of planning, implementing, and controlling the flow and storage of raw materials, inventory, finished goods, and related information from the point of origin to the point of consumption, for the purpose of satisfying customer requirements (American Logistics Board-1988)

Logistics is the activity of managing the movement of materials through the stages of storage, production of products to consumers at the request of customers (International training course on multimodal transport and Logistics Manager, Foreign Trade University, October 2002)

In Vietnam, according to Article 233 of the Commercial Law 2005:

Logistics services are business operations in which traders organize to do one

or more tasks, such as receiving, transporting, storing, and handling goods

Customs clearance, additional documentation, client consultation, packaging, labelling, delivery, or any goods-related services agreed upon with the customer for a fee

In a broad sense, logistics services are commercial operations that include

a series of services that are organized and scientifically managed in relation to

the stages of production, distribution, circulation, and consumption in the economy production in a social setting (Dang Dinh Dao, 2012)

Logistics services, in a broad sense, are commercial activities that combine shipping, forwarding, warehousing, customs, customer consultation, and other services linked to commodities into a single package A reasonable and scientific method for ensuring effective distribution and circulation of goods while meeting client needs (Dang Dinh Dao, 2012)

1.1.2 Some characteristics and classification of Logistics services

1.1.2.1 General characteristics of logistics services Firstly, Logistics supports the activities of businesses Logistics supports

the entire operation of the business, even when the product exits the enterprise's production line and reaches the consumer The movement and storage of incoming materials and semi-finished goods are also managed by logistics, which aids corporate operations

Secondly, Logistics is the synthesis of business activities on three

aspects: Survival Logistics, Operational Logistics and System Logistics, specifically:

(i) Survival logistics is related to the basic needs of life Survival logistics, as the name suggests, comes from the survival instinct of people, meeting the essential needs of people: what is needed, how much is needed, when is needed and where is needed Survival logistics is the essence and foundation of logistics activities in general;

(ii) Operational logistics is a new development of survival logistics and

is associated with the entire process and production system of the enterprise's products Logistics activities are concerned with the movement and storage of input materials into, through and out of the enterprise, entering the distribution channels before reaching the final consumer;

(iii) System logistics helps to keep the system running The elements of system logistics include machinery and equipment, human resources, technology, factory infrastructure, etc

Survival logistics, operations and systems are closely related, creating the basis for the formation of a complete logistics system

Thirdly, Logistics is a highly developed, complete freight forwarding

service that is inherently attached to and part of Logistics services Along with its development, Logistics has diversified the concept of traditional freight forwarding From just acting on behalf of customers to perform discrete stages such as chartering, storing freight, preparing goods, packing, recycling, clearing customs procedures, etc., to providing full service from warehouse to delivery warehouse From acting as an agent, the trustee becomes a main subject in transportation and forwarding activities with customers, responsible for the sources of governing law Today, to be able to perform their duties, the forwarder must manage a synchronous system from forwarding to transportation, supplying raw materials for production and business, preserving goods in the warehouse, distribute goods at the right place, at the right time, use electronic information to track, check, etc Thus, the freight forwarder becomes a logistics service provider

Fourthly, Logistics is the complete development of multimodal transport

services Previously, items were transported in the form of retail goods from the exporting country to the importing country via a variety of modes of transportation, increasing the risk of loss and requiring the shipper to sign numerous contracts with multiple parties various carriers whose liability is restricted to the route or service they provide When multimodal transportation was first introduced, the shipper just had to sign one contract with the multimodal transport company (MTO) Even though he is not the actual carrier, the MTO will be responsible for managing the complete transportation of goods

from receipt to delivery using a single transport document As a result, the MTO

in this case is a logistics service provider

1.1.2.2 Classification of Logistics Services

Logistics services include many different stages, related to many activities of enterprises, so there are different ways to classify Logistics services Below are some common criteria used to classify logistics services

a) By field of activity:

Classified by field of activity, Logistics is divided into 4 types:

(i) Logistics in the field of production and business is part of the supply chain, aiming to effectively plan, execute and control, ensuring availability, accuracy and efficiency for these activities

(ii) Military logistics is the planning and integration of all aspects of support for the combat capability of the army and military equipment to ensure readiness, reliability and efficiency

(iii) Event logistics refers to the activities, physical and technical facilities, and personnel required to plan, arrange, and deploy resources for an event to run smoothly and successfully

(iv) The operations of obtaining, programming, and managing facilities/assets, people, and materials to support and maintain service processes or services business activities are referred to as service logistics

b) According to the form of Logistics activities:

Classification according to the form of operation, Logistics is classified into 5 groups:

(i) 1PL: First-party logistics, also known as Self-Supplied Logistics, is the person who supplies the goods, usually the consignor or consignee

(ii) 2PL: Second party logistics is a company that provides services for a single activity in the logistics chain, usually an actual carrier, such as a shipping line, airline, or truck

(iii) 3PL: Third party logistics or contract logistics As a company that provides total solutions for logistics services to customers, they often take care

of part or all of the stages of the supply chain For example, on behalf of customers to carry out export procedures or customs clearance procedures and transport goods to the specified location

(iv) 4PL: Fourth-party logistics also known as Distribution Chain Logistics A 4PL is a company that pools its resources, capabilities, and technologies with those of other companies to create, implement, and operate entire supply chain solutions

(v) 5PL: Fifth-party logistics is a company that designs, perfects and restructures the supply chains of 3PLs and 4PLs to ensure continuous information flow as well as increase efficiency in total control supply chain to satisfy all the needs of the chain members 5PLs are development companies for e-commerce

(ii) Distribution service providers: As companies providing warehousing services…

(iii) Cargo service providers: Customs brokerage companies, forwarding companies…

(iv) Specialized logistics service providers: Information technology companies, telecommunications companies…

d) According to financial ability:

Classified by financial capacity, Logistics services include 2 types of companies as follows:

(i) Companies that own real assets separate transport fleets, warehouses and use them to manage all or part of Logistics activities for their customers

(ii) Logistics Companies that do not own assets act as an integrator of Logistics services and most of the services are outsourced They may have to hire a means of transport, a warehouse, a yard, etc

e) According to the implementation process:

Classification according to the implementation process, logistics services are classified into 3 types:

(i) Inbound logistics: actions that assure the most efficient supply of raw materials, capital, information, and other inputs for the enterprise's production activities in terms of location, time, and cost

(ii) Output logistics: includes activities to ensure the supply of finished products to customers in an optimal way in terms of location, time and cost in order to meet business objectives

(iii) Reverse logistics: the process of recovering scraps, waste products, by-products and all other elements arising from the production, distribution and consumption processes that may affect the environment for disposal or

recycling

1.1.3 The role of logistics services

Along with the strong development of the world economy in the direction

of globalization and regionalization, logistics services play an increasingly important role shown in the following points:

a) For the economy in general:

Logistics services contribute to market expansion in international trade

The purpose of production is to serve consumption and the problem that most manufacturers are concerned with is consuming the product in the market

Potential markets, both domestic and international, will create development opportunities for manufacturing enterprises, so that manufacturers and businesses always want to dominate and expand the market for their products

However, to do so, it is necessary to have a significant contribution of logistics services Logistics services are the link between goods and markets, ensuring that the relevant requirements are met on time and in the proper place As a result, firms will be able to maximize and extend their market share

In international business, the development of logistics services leads to cost reduction, document completion, and standardization An international commerce transaction, in practice, necessitates a large number of paperwork and documents The cost of paperwork to serve all parts of commercial transactions in the world, according to UN estimates, surpasses 420 billion USD yearly Experts estimate that onerous papers and documentation account for more than 10% of yearly international trade turnover, having a significant impact on trade activity international In international trade, logistics has created a variety of package services that have considerably lowered the costs

of papers and documents

b) For enterprises:

Logistics services help firms improve their management efficiency, lower production costs, and increase their competitiveness According to statistics of a number of research organizations on Logistics, the Logistics Research Institute of America, the cost of Logistics activities accounts for about 10-13% of GDP in developed countries, this figure is in developing countries growth is about 15-20% higher According to a study, logistics activities in the Chinese market grow at an average rate of 33%/year and in Brazil 20%/year It shows that the cost of logistics activities is very large, which means that the formation and development of logistics services is very large Businesses as well as the entire national economy can reduce costs in the logistics chain, which will make the business process more streamlined thanks to the formation and development of logistics services That will contribute to improving the competitiveness of enterprises in the market

Logistics services have the effect of saving and reducing costs in distribution and circulation activities The price of goods in the main market is equal to the price at the place of production plus the cost of circulation The cost of goods circulation, mainly transportation costs, accounts for a large proportion and is a component of the price of goods in the market, especially

in international trade Transportation is an important element of circulation

Transport is responsible for bringing goods to the place of consumption and creating the ability to realize the value and use value of goods In international trade, according to statistics of the United Nations Conference on Trade and Development (UNCTAD), sea freight costs account for an average proportion

of 10% up to 15% at FOB and about 8% to 9% at CIF In which transport is the most important element of the Logistics system, the more modern the transportation system, the more it will save significantly on transportation costs and other costs incurred in the process of circulation According to the Vietnam Logistics Business Association (VLA) - analysis: Of the total logistics costs in our country today, transportation costs account for about 60%, inventory costs 36%, management costs 4% Therefore, reducing logistics costs primarily focuses on reducing transportation costs

Logistics services help transport and forwarding companies boost their business value Transporting, consolidating, storing, loading and unloading, packing, and distributing commodities are all part of freight forwarding services, but logistics services are far broader and more sophisticated pure mode of conveyance In the past, the transport service business only provided customers with single services, but today, due to the development of production and circulation, the details of a product can be made by many countries supply, but conversely, a product can also be distributed and consumed in many countries and different markets, not only in the domestic market Due to that complexity, customers are making more and more requirements for freight forwarders To meet the actual requirements of customers, force them to

innovate, improve and then become a Logistics service provider Obviously, it

is Logistics service that has contributed to increasing the value of the freight forwarding business

1.2 Overview of the quality of Logistics services

1.2.1 Logistics service quality concept

A service is an activity or benefit offered for exchange, which is essentially intangible and does not result in the transfer of ownership

Performance of a service may or may not be tied to a physical product (Philip Kotler 2003) Service quality is a concept that attracts a lot of attention and controversy, researchers have encountered many difficulties in defining and measuring service quality without any consensus (Wisniewski, 2001)

Depending on the research object and the research environment, service quality

is defined in many different ways In the 1982 study, the authors Lehtinen and Lehtinen suggested that service quality must be assessed on two aspects: (1) the service delivery process and (2) the service's outcome Gronroos (1984) also proposed two components of service quality: (1) technical quality, what the customer receives, and (2) functional quality, interpreting the service provided as how Another concept considers service quality as the degree to which a service meets the needs and expectations of customers (Lewis &

Mitchell, 1990; Asubonteng et al., 1996; Wisniewski & Donnelly, 1996)

Author Edvardsson et al (1994) argue that service quality is the service that meets customers' expectations and satisfies their needs

A commonly used definition of service quality, given by Parasuraman et al., is: “Service quality is the difference between consumers' expectations of a service and their perceptions of service on service outcomes” (1988 and 1991)

This is also the concept of service quality used in the thesis Accordingly, the quality of Logistics services is the difference between the customer's expectations of the Logistics service provided by the Company and their perception of the results of the Logistics service

1.2.2 Evaluation of logistics service quality

Logistics service quality in particular and service quality in general can

be assessed through customer satisfaction There are different views on customer satisfaction According to Bachelet (1985-1991) customer satisfaction is defined as an emotional response by customers in response to their experience with a product or service According to Philip Kotler, satisfaction is a person's level of emotional state that results from comparing the results obtained from a product (or output) with that person's expectations

The level of satisfaction depends on the difference between the results received and the expectations, if the actual results are lower than the expectations, the customers are not satisfied, if the actual results match the expectations, the customers will be satisfied If the actual result is higher than the expectation, the customer is very satisfied Customer expectations are formed from shopping experiences, from friends and colleagues, and from seller and competitor information To improve customer satisfaction, businesses need to make additional investments, but at least invest in marketing programs In the competitive landscape, the wisdom of every business is to simply create higher customer satisfaction than the competition This will harmonize the interests of the customer and the profit of the business Anyway, customer satisfaction and satisfaction also have an impact on brand loyalty of manufacturers

However, satisfaction is not sustainable and difficult to quantify The real determinant of customer loyalty is customer value Customer value creates satisfaction - the level of customer satisfaction Businesses need to measure the satisfaction of their customers and those of their direct competitors Maybe through an investigation or posing as a shopper Information about a decrease

in customer satisfaction of an enterprise compared to a competitor's is a foreshadowing of the loss of customers and a decrease in market share in the future It is necessary to establish information channels for customers to

comment or complain Level of complaints cannot be used as a measure of customer satisfaction because most dissatisfaction customers do not complain

The thesis uses the method of assessing the quality of Logistics services according to customers' perception according to 5 RATER criteria as follows:

(Source: Group of authors Zeitham V.A.Parasurama and Leonard L.B, 2003)

Figure 1.2: Rater service quality measurement criteria

1 Reliability: The ability to perform the promised service accurately and

reliably A service can be trusted if it does it right the first time

2 Responsiveness: Respond to customer requests for services and

information in the fastest and most professional manner

3 Assurance: Provide customers with confidence in the capabilities of

the business The qualities of employees that will create trust for customers such as politeness, professionalism, respect for customers, ability to communicate

4 Empathy: Efforts to understand the needs of customers, show concern

and care for each individual customer

Rater

Reliability

Assurance

Tangibles Empathy

Responsiveness

5 Tangibility: Including elements of means, facilities, employee

appearance, equipment used in providing services, documents serving communication

1.3 The meaning of improving the quality of Logistics services

Improving the quality of Logistics services is an urgent and important issue for businesses doing business in the field of Logistics today for the following reasons:

Firstly, high service quality helps increase profits for businesses

Improving the quality of Logistics services will help businesses retain old customers (make them want to cooperate with businesses more times) and convince new customers (potential) This creates a lot of benefits for businesses and helps increase profits through:

(i) Minimizing marketing costs, advertising costs this means minimizing other costs for the company

(ii) Increasing market share and maintaining a high growth rate in customer targets will increase revenue for the company

(iii) Increasing the number of loyal customers for the company is a measure to help promote the reputation of the company's brand - something that every business wishes to achieve in a highly competitive logistics market today

Secondly, increase the competitiveness of enterprises in the market

With a total revenue of 25% of GDP, equivalent to about 25 billion USD, logistics has become an industry with impressive growth rates But now this big piece of cake is going on a series of paradoxes: 80% of the market share is

in the hands of foreign enterprises; Logistics costs in Vietnam are among the highest in the world due to outdated infrastructure; have not yet taken advantage of the advantage of the East Sea gateway to rise to a key position

Improving the quality of Logistics means that enterprises will constantly

improve their weaknesses such as infrastructure and resources, human This will make the business more competitive in a market

In fact, businesses operating in the field of Logistics today have not really focused on improving the quality of their own logistics services Therefore, if

a company knows how to take advantage of opportunities and constantly strive

to improve service quality compared to competitors in the market, the competitiveness of the business will increase That proves that investing in service quality, on the one hand, businesses can increase their ability to retain their existing customers and at the same time attract more new customers without having to spend advertising and marketing costs On the other hand, it

is also a tool to help these businesses increase the selling price of their products while maintaining their prestige, reputation and affirming their position in the market

Thirdly, improving the quality of Logistics services helps to reduce

business costs for businesses

In addition to minimizing marketing costs and advertising costs for businesses, constantly improving service quality is also an effective measure to save business costs in general for this business Guaranteed quality of service reduces the possibility of errors during service delivery That will help:

(i) Minimize the waste of time and costs for inspection and monitoring of service provision;

(ii) Reduce the costs for correcting errors such as: the cost of compensating customers, the cost of dealing with bad public opinion about the business, the cost of handling customer complaints…

High service quality will reduce unreasonable costs of human resources because:

➢ Enterprises that maintain and ensure good service quality will provide employees with a positive working environment Employees tend to stay longer and more loyal to the business As a result, the hotel's labor turnover ratio will

decrease, and the cost of recruiting and re-selecting employees due to frequent disturbances will decrease

➢ Employees will feel proud when working in a reputable and reputable enterprise in the market, they realize that the benefits of the business are closely linked to the interests of each employee In order to affirm and desire to be promoted more at work, employees often self-consciously, regularly improve their professional skills, self-improve the missing aspects to meet the requirements of reality Thus, improving the quality of that Logistics service helps to reduce the costs of training, fostering and training employees for businesses

1.4 Factors affecting the quality of logistics services

1.4.1 Objective factors

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-one-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

CHAPTER 2: SITUATION OF LOGISTICS SERVICE QUALITY

AT VINALINES LOGISTICS VIETNAM JOINT STOCK COMPANY 2.1 General introduction about Vinalines Logistics Vietnam Joint Stock Company

2.1.1 General information about the Company

According to Vietnamese legislation, Vinalines Logistics Vietnam Joint Stock Company has legal status The Company is allowed to function in line with the Law on Enterprises, as well as other applicable legal regulations and the Company's Charter Vinalines Logistics is a company that specializes in logistics Vietnam Joint Stock Company is a subsidiary of Vietnam National Shipping Lines that exercises the Subsidiary's rights and obligations in line with the terms of Vietnam National Shipping Lines' charter of organization and operation

+ Abbreviated name: VIMC

- Company headquarters: Room 405 4th Floor, Ocean Park Building, No

1 Dao Duy Anh, Phuong Mai Ward, Dong Da District, Hanoi

2.1.2 The process of formation and development of the Company:

2.1.2.1 Formation process

Currently, our country has about 3000 enterprises operating in the field

of Logistics, which is quite a large number, but in fact, most of them are still small and very small businesses This leads to limitations in human resources, capital, technology, etc Currently, Vietnam does not have many enterprises capable of organizing and operating the entire process in this field

✓ With the status and characteristics as above and based on current legal bases such as:

✓ Commercial Law No 36/2005/QH11 passed by the 11th National Assembly at the 7th session on June 14, 2005

✓ Investment Law No 59/2005/QH11, approved by the 11th National Assembly at the 8th session on November 29, 2005

✓ Enterprise Law No 60/2005/QH11 passed by the 8th National Assembly Xi session on November 29, 2005

✓ Other documents stipulating conditions for inland port business (ICD), multimodal transport, bonded warehouses

On August 3, 2007 at Vietnam National Shipping Lines, On the basis of

a general meeting of shareholders held on the establishment of Vinalines Logistics Vietnam Joint Stock Company, Vianlines Logistics Vietnam Joint Stock Company was approved to be founded under the Department of Planning's business registration certificate No 0102345275 and Investment of Hanoi on August 10, 2007, with a charter capital of 158,000,000,000 VND (One hundred and fifty eight billion VND)

The company was established for the following purposes:

Firstly, Vinalines Logistics will serve as a focal point for connecting and

bringing together member companies engaged in logistics activities to form a logistics network of Vietnam National Shipping Lines that is strong enough to compete in the global marketplace, actively supporting the policy of occupying, transporting and exploiting domestic containers, mastering the market

Simultaneously, engage with overseas partners to construct a network of operations in nations in the region such as Hong Kong, Taiwan, Singapore, China, and Thailand, as well as penetrate developed markets such as Europe, Japan, and the United States

Secondly, the Company implements the policy of not competing with

member companies of the Corporation, but the main activity is investment and development of infrastructure at key focal points

2.1.2.2 Development process

As for 2021, Vinalines Logistics Vietnam Joint Stock Company has 14 years of experience in the Logistics industry Here are some development stages of Vinalines Logistics Joint Stock Company until now:

❖ August 10, 2007: Established Vinalines Logistics Vietnam Joint Stock Company

❖ 2008: Established a branch in Hai Phong and a branch in Quang Ninh

❖ 2009: Established Ho Chi Minh Branch and Representative Office in Mong Cai

❖ 2010: Established Lao Cai branch - Inland port (ICD Lao Cai)

❖ 2011: Established representative offices in: Noi Bai, Lang Son, Cao Bang

❖ 2012: Connecting the national railway to the Lao Cai ICD Inland Port and establishing a joint venture company named Vinalines Honda Logistics (VHL)

❖ 2013: Deploying shipping agency activities to sign a contract with CCL Shipping Agency (Vietnam) Co., Ltd

❖ May 2014: Established a freight forwarding team in Ha Tinh

❖ September 18, 2015: The company was officially listed for trading on UPCOM with the reference price of the stock of 12,600 VND

❖ 2016: Obtained a quality management certificate according to ISO 9001-2008 and established a freight forwarding team of Texhong - Mong Cai factory cluster

❖ 2017: Received Government flags for excellent units in emulation movement and 10th anniversary of construction and development

❖ 2018: Joint venture with Happy Land Viet Nhat to cooperate in investment in Cai Lan Port administrative service area and establish a joint venture company, Vinalines Hoa Lac Logistics Joint Stock Company (VLHL)

❖ In 2019: Receiving 16.2ha of warehouses at Dinh Vu Industrial Park

of Vietnam National Shipping Lines for Vinalines Logistics - Hai Phong Branch for management and exploitation

❖ In 2021, at the time of this research, the company is completing the necessary procedures and papers to change its name to VIMC Logistics Vietnam Joint Stock Company It is expected that by early June 2021, all legal documents related to the company's name change will be completed

2.1.3 Company's field of business

a) Business areas of the Company

- Services of Logistics;

- Cargo handling;

- Delivery of domestic goods, import-export goods;

- Shipping agency services;

- Container agency services;

- Marine brokerage services;

- Goods counting service;

- Transport agency services by sea, road, railway, air;

- Import and export of goods, commercial brokerage, buying and selling agents, and consignment of goods are some of the services available;

- Entrusting services and receiving investment entrustment;

- Customers receive advice on transportation, distribution, storage, and other goods-related services;

- Leasing specialized equipment and vehicles for loading, unloading, conserving, and transporting products;

Vinalines Logistics is investing in the logistics industry to expand its multimodal transport services

b) The main logistics services provided by the Company

• Airline and shipping agency field

As a subsidiary of Vietnam National Shipping Lines, the Company is focusing on investing in Logistics services to develop multimodal transport services Thanks to that, with the Company's Logistics services, customers can get the best benefits anywhere in the world With a large network of air and sea service agents in Vietnam Vinalines Logistics Vietnam Joint Stock Company will provide customers with many choices such as sea, road and air with the best service In addition, the Company also has close relationships with agents providing multimodal transport services, ensuring to serve customers with

"door to door" transportation services around the globe High quality and competitive freight As a Logistics service provider, the Company can transport goods to anywhere according to the requirements of customers

• Road transport sector:

With a team of well-trained and experienced drivers and operators in the field of domestic transportation, the Company is ready to provide

customers with high quality, professional and efficient transportation services fruit With a system of rich means of transport, a representative system

connecting North-Central-South and a team of experienced and enthusiastic staff and drivers, currently the Company is providing transportation products

inland transportation such as: North-South freight transportation; border transportation in the Northern region Transport distribution goods from warehouse to warehouse or from warehouse to agents and distributors

Besides, there is always a team of professional and experienced logistics staff

in container transportation, especially super-heavy goods

• Customs brokerage and value-added services Coming to Vinalines Logistics Vietnam, customers can be served many types of services such as: Import, Export, Brokerage, Customs declaration , in addition, the Company also provides accompanying services, such as: Shipping

agency, Container agent, Maritime brokerage, Freight forwarding to meet the increasing requirements of customers for Logistics services

• Inland port operation and warehousing business With a team of professional staff, fully equipped with knowledge and experience in transportation, the company is building warehouses in Cai Lan, Mong Cai, Dinh Vu, Lao Cai, Vinh Phuc Warehouses This facility can fully meet the technical standards and requirements for storage of goods and containers

of all kinds, and the Company also invests in building and synchronously exploiting CFS bulk warehouses, bonded warehouses, and centers distribution of goods in these areas In addition, with a professional trucking team, the Company can transport Containers to industrial zones in Vietnam

• Investment sector The company is continuing to distribute capital in a reasonable manner in many fields such as: Container repair and leasing, financial investment With that investment, the Company ensures that customers will receive the best benefits In the future, the Company will continue to invest in the fleet to complete the large-scale transport fleet to meet the transportation needs of the region as well

as across the country For more than 10 years of operation, Vinalines Logistics has supported and advised thousands of import-export businesses across the country Major export items include: garments, raw materials for processing goods for industrial parks, export processing zones, etc Imported products mainly include: raw materials All of them are for the production and business

of the factory, for projects such as wind power projects In addition, Vinalines Logistics still provides logistics services for other individual businesses

All work from consulting, providing solutions, giving quotes, are directly exchanged, directly worked with customers, to ensure the fastest, accurate information to customers most accurate Avoid misinformation when working through many intermediaries When receiving orders, Vinalines Logistics always comply with customer requirements, discuss with customers

to come up with the most optimal solution to save costs, transport and distribution for customers, in order to satisfy satisfy customer requirements

For each order, Vinalines Logistics has different processes to suit each item, as well as to meet the requirements of customers Below is an example of the shipping process for Vinalines Logistics' Billion factory

(Source from Sales Department)

Figure 2.1: Flowchart of Billion factory's production process

Receive shipment records from customers

Check the information to get the shipping line order, electronic customs

declaration

Make payment procedures for shipping lines

Receive delivery plan from Customer

Declare Eport- pay lifting fees for ports

Procedures for making orders and towing goods at the port

Delivery at Billion factory

Lower the empty shell

Send payment records to customers and reconcile shipping-pay with freight

Send payment records to customers and for shipping- pay with freight

2.1.4 The organizational structure of the company

(Source: Office of Administration)

Figure 2.2: Organization chart of Vinalines Logistics Vietnam Joint

- Decide on solutions for market development, marketing and technology;

- To decide on the organizational structure, internal management regulations of the Company, to decide on the establishment of subsidiaries, to establish branches and representative offices, and to contribute capital and purchase shares of other enterprises;

- To decide on the strategy, The Company's medium-term development plan and yearly business plan;

Administrative Council

Board of manager

Financial Accounting

Business Department

Human Resouces Department

Logistics DepartmentControl Board

- Appointment and dismissal, dismissal, contract signing, contract termination with the management board;

✓ Board of Directors The Board of Directors in the Company is the General Director and Deputy General Director

- The General Director appointed by the Board of Directors is the person who runs the daily business of the Company on the basis of his powers and duties as prescribed as follows:

+ Decide on pay and allowances (if any) for Company employees, including managers who are appointed by the Board of Directors

+ Without the approval of the Board of Directors, to make decisions about the Company's daily operations, to appoint, remove from duty, and remove managerial positions

+ Recruiting, hiring and arranging labor use;

+ Search for jobs for the Company;

+ Decide on business contracts;

+ Manage all assets of the Company;

+ To take responsibility before the Board of Directors, the General Meeting of Shareholders and the law for mistakes that cause damage to the Company

✓ Finance and Accounting Department The Finance and Accounting Department's functions and responsibilities include advising the General Director on asset and capital management in order

to meet production and business requirements in compliance with the law

Timely advice on the company's capital preservation and development

✓ Investment & Market Development Department

Is a department with functions in the field of investment, implementation, management of investment, preparation of documents and completion of investment procedures for market development Research and

develop domestic and foreign markets to expand production and business activities of the Company and its affiliated branches Act as the focal point for drafting the Company's medium and long-term investment and development strategy

✓ Sales Department The functions and duties of the sales department include: Advising the General Director in signing domestic and foreign freight contracts Do consulting services for customers about transportation; directly in charge of the rental of vehicles and specialized equipment for loading, unloading, preserving, and transporting goods Doing transport services, goods counting services, container agency services, maritime brokerage services

✓ Chamber of Commerce & Logistics Service Develop logistics strategies, business strategies and market strategies, customer policies with the Company Researching and understanding domestic and foreign markets, transactions to capture logistics and import-export requirements, temporary import for re-export, border transfer

✓ Administration Department The administrative organization department is the office that advises the General Director of the Company on the organization of the production and business apparatus, the implementation of labor and salary, benefits, regimes and policies of the State, prevention of fire, explosion, military, self-defense, emulation, commendation, discipline and administrative work, training and retraining of staff

2.1.5 Company development goals and strategies

(i) Become a leading supplier in Vietnam in providing Logistics services for domestic and foreign enterprises

(ii) Corporate reputation is the most important asset of the Company;

(iii) Professional ethics is the most important virtue of employees;