How to recapture lost customers at avergreen shipping agency (vietnam)

The author of this paper who has ever spent the working time at the Evergreen shipping Agency Viet Nam EGV; has a bit of experience in this shipping field and decides to choose the subje

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

NGUYEN THI PHUONG TRINH

HOW TO RECAPTURE LOST CUSTOMERS AT EVERGREEN

SHIPPING AGENCY (VIETNAM)

ID: 22130086

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: PROF NGUYEN THI MAI TRANG

Ho Chi Minh City – Year 2016

EXECUTIVE SUMMARY

Suppose that the shipping industry is a potential & challenge field in Viet Nam which we need to explore and develop the service quality more strongly & fruitfully The author of this paper who has ever spent the working time at the Evergreen shipping Agency (Viet Nam) (EGV); has a bit of experience in this shipping field and decides to choose the subject of thesis relating to this field with hoping that the thesis can help the company to realize the organization problem and find the suitable solution to improve service quality better to gain the top position in the shipping industry The author has a chance to contact with many departments in EGV and decides to focus mainly on the business department because the author was learned that business department is the most important department to help to bring to the profit for the wholly company Recently, the author is informed that business department needs to be improved because its performance is too bad During researching, the author finds that business department is facing with the

main problem: Lost accounts leading to cargo lifting decreased too much during

the first quarter of 2016 First, the author discovers the causes and effects of the problem There are many causes leading to lost account of EGV and the author proceeds to survey, evaluate and gives the conclusion of the most important cause which affects strongly to EGV’s lifting falling The main cause is regarding to rate issue which salesperson in charge can’t match suppliers’ request Many accounts were lost or stopped using EGV’s service to move to other competitors who can meet their expectation However, the main cause which is stated here is still un-clear that needs to investigate deeper to find out the real problem and the author

continues to do the second survey in next step and find that the real cause is the failure of customer retention With the increase in the pressure of external threats in

an unpredictable and uncertain market circumstance, liner shipping companies have

to make clear strategies to survive The result of a study intends that EGV still have many occasions to adjust and improve in the strategic decision-making on business problem in maintenance and improvement of customer retention Once the business problem and its most important causes have been identified and validated, a solution can be designed There are two solutions given to discuss as below:

Solution 1: Freight adjustment to meet customer’s expectation (direct solution)

Solution 2: Developing a system for measuring the performance of a sales department (indirect solution through human resource aspect)

The author evaluates and makes a comparison to choose the best suitable solution Suppose that once internal support system is improved effectively, EGV has many chances to attract customers towards the service more and more So, the second solution is chosen the best one for project-oriented evaluation In order to help the readers to understand more details and take this paper as the sample to make a reference for the similar organization situation in the shipping industry Through this paper, the author will present, analyze, evaluate the symptomatic phenomena of a specific problem of the project throughout the whole process and give valuable comments for the organization

HOW TO RECAPTURE LOST CUSTOMERS AT

EVERGREEN SHIPPING AGENCY (VIETNAM)

ABBREVIATION & NOTES

ACKNOWLEGEMENT

I/ COMPANY INTRODUCTION 7

II/ PROBLEM IDENTIFICATION 9

III/ EXPLORATION OF POTENTIAL SOLUTIONS FOR THE PROBLEM 35

IV/ IDENTIFICATION / ACTION PLAN 46

V/ CONCLUSION 50

VI/ SUPPORTING INFORMATION 51

REFERENCES 55

APPENDIX 60 RESEARCH TRANSCRIPTS

CUSTOMER SATISFACTION SURVEY TEMPLATE

ABBREVIATION & NOTES

2M: container shipping industry alliance between Maersk (MSK) and MSC

BCC: Business Controlling Center

B/L: Bill of lading

CEM: prefers to the main service to Europe

EGL: Evergreen line (group)

EGV: Evergreen Viet Nam

FOB & CNF: payment term under collect and prepaid respectively

Global NOVCCs and Tender A/C(s): a/c(s) belongs to these groups considered as

KPI: Key Performance Indicators

NE2: prefers to the new direct service to Europe which hasn’t still exploited by EGV

NLRDM/DEHBG/GBFLX/FRLHV/GRPIR: main ports of WB service

NVOCC: stands for Non-Vessel Owning Common Carrier NVOCC operation

comprises of sales, stuffing and transport of the containers to gateway ports

O3: Ocean three alliances of three members USAC, CSCL and CMA

POL: port of loading

SUP-PSN: Humane Resource department

WBD: West Bound department (for long haul section consist of two trades: Europe

(EUR) and Mediterranean (MED)

ACKNOWLEGEMENT

I thank the anonymous reviewer for the valuable comments during doing the researching Further, I am indebted to my supervisor, Prof Nguyen Thi Mai Trang for productive comments that led to improvements in this paper Finally, I sincerely thank the support from my colleagues and managers at Evergreen Viet Nam to help

me so much in the data collection and contribute the valuable knowledge in the shipping industry If there are not the great supports from you, the author can’t finish this paper effectively and usefully

I/ COMPANY INTRODUCTION

Evergreen Line is ranked in Top 10 of 100 carriers having the best service in the shipping industry in the world during over the past 40 years As one of Taiwan’s most recognized global brands, Evergreen Line will maintain all of the services currently operated and develop new trades to meet worldwide customer demands Evergreen Line serves over 240 locations around the world in Asia, America, Europe, the Middle East, Australia and Africa Evergreen is well respected in the shipping industry with a reputation for providing customer-focused solutions, a quality-through-excellence approach and continual innovation It is also

an industry leader in the use of information technology and e-commerce to manage the entire cargo process Evergreen Shipping Agency (Viet Nam) was established in

2002 as the agent for Evergreen Line in Viet Nam Currently, Evergreen Viet Nam

has Head Office in Ho Chi Minh City, 2 sub- agents (Da Nang, Quy Nhon), and 2 branch offices in Ha Noi and Hai Phong with totally over 200 employees Each year, EGV celebrates 2 times to review and evaluate the performance of ports of loading POL(s) in area According to EGV lifting statistics of 2012-2014, VNHCM office is main one holding largely lifting with 75% per total lifting of EGV So, this study will concentrate on VNHCM office to review and evaluate service quality at the beginning 6 months of 2015 when we were learned that its performance is on alert

Faced with more and more competitive market in shipping & logistics field, building and maintaining a good relationship with customers is essential to long-term business survival Known that business department of the company is the most

important section to distribute on increasing total revenue yearly In business department, we are divided into 3 separated departments: BIZ-IAS (short haul section), BIZ-LHS (long haul section) & BIZ-IMP (import section) (Figure 1)

EVERGREEN VIETNAM‘S SALES ORGANIZATION CHART

FIGURE 1: Evergreen VIETNAM’s Sales Organization Chart

IAS Manager LHS Manager IMP Manager

II/ PROBLEM INDENTIFICATION

To check the validity of the problem statement, the factual information has to

be collected The secondary data collection is the step in the process The

empirical analysis of the business problem must be given Through monthly/weekly

management meetings, West Bound group (WBD) belongs to BIZ-LHS section is

targeted and reported about the bad situation during the beginning 6 months of 2015 when the lifting always goes down and no signal to increase back Prior to this period, from 2012 to 2014, WBD often gained good performance (see table1); however, the data in Table 2 conveyed the impression that total transportation expenditures have exhibited a declining trend since the beginning period of 2015, decreasing 25% lifting compared with the same time in 2012, down 27% compared with 2013 and kept going down 16% compared with 2014 With hoping that WB group will maintain the top position in shipping industry as before ( see Table 3) and overcome the difficult situations to gain the better result, an attempt to search for potential antecedents that have high power to explain customer’s satisfaction and loyalty towards services

Table 1: WBD lifting performance 2012-2014

(Source: 2012-2014 OLAP report in EGV business department)

Table 2: WBD lifting performance of 6 months period at beginning of 2012-2015

WDB

JAN TO JUNE 2012 JAN TO JUNE 2013 JAN TO JUNE 2014 JAN TO JUNE 2015

TARGET ACTUAL % TARGET ACTUAL % TARGET ACTUAL % TARGET ACTUAL %

EUR 2,550 2,500 98% 2,550 2,550 100% 2,700 2,600 96% 2,700 2,050 76%

MED 1,200 1,220 102% 1,200 1,250 104% 1,800 1,450 81% 1,800 1,300 72%

TOTAL 3,750 3,720 99% 3,750 3,800 101% 4,500 4,050 90% 4,500 3,350 74%

(Source: 2012-1015 OLAP report in EGV business department)

*Target and Actual are calculated per TEU

*EUR & MED: Export cargo to North European & Mediterranean area

Figure 2: Chart of WBD lifting

Table 3: Top Carriers for WB_2014 versus 100 carriers in the world

(Source: Carriers data)

►CAUSE AND EFFECT

The first qualitative research

In Evergreen Viet Nam, West Bound group is defined as a controlling &

managing group of export shipments to European ports including North

Europe and Mediterranean West Bound team is controlled by 1 salesperson

outside and 1 salesperson inside in BIZ-LHS section and other related departments such as Customer service (CSD-TFC): 1 staff and Document department (CSD-

TOTAL

EP2): 1 staff As a researcher, the writer of this study has a chance to collect secondary data (see table 1 &2) and have an interview with 10 customers and persons in charge (P.I.C) in this department including 2 assistant managers (AM):

Ms Tracy and Ms Olivia; 1 Deputy Manager (DM): Ms Judie, and 1 Deputy

Junior Vice President (DJVP): Mr Elton to find out the diagnosis of the problem

1/The main question was given to interview 10 customers and the feedback was as below:

- The researcher: What reasons do you give for choosing the most

preferred shipping line?

Table 4: Responses of 10 customers

Company name Interviewee Position Feedback/Comments Main

reason GOTO

Mr Vinh Salesman Our customer doesn’t accept

your offered rate due to it is far from their expectation

equipment

Service quality

FM GLOBAL

LOGISTICS

CO., LTD

Ms Oanh Salesman Suitable freight rate is always

the best option so that we choose

Document procedure

Rate issue

DMG

LOGISTICST

CO., LTD

Mr Hai Salesman Your offered rate is not satisfied,

it is far from our expectation

issue

Document procedure

2/The main question was given to interview 02 sales in charge and 02 head persons

of EGV-WBD and the feedback was as below:

- The researcher: What factors do you think to affect to your lifting

falling?

Table 5: Responses of 04 employees at EGV-WBD

Interviewee Position Feedback/comment Main issue

Ms Tracy Assistant Manager We lost account due to

freight issue and long t/s time

Lost account

Ms Olivia Assistant Manager Affected by devaluation

of EUR vs USD currency; besides that our customers complain that our offered rate is higher than our competitorslost account

Lost account

Ms Judie Deputy Manager Rate is high, t/s time is

not good vs our competitors lost account Almost sales

in charge can’t gain the target monthly

Lost account

Mr Elton DJVP We exploit the bigger

container ships to enlarge capacity to load more cargo; however, the current market rate

is too competitive while

we can’t satisfy with the rate as per customer’s

requestpercentage sales is weak monthly

Sales performance weakness

In order to make a selection, the above problem mess needs to be represented Therefore, the information gained during the intake and orientation has

to be structured and conveniently presented An effective format for this is a

cause-and-effect tree, in which the more symptomatic phenomena are positioned on the

right side of the diagram and the causes on the left side Its main function helps to select a problem from the problem mess that will be considered as business problem

in the phases of the problem solving cycle

Figure3: Cause and Effect map of lifting falling

Selecting a business problem at the extreme right-hand side of the effect tree normally increases the relevance of the study, but decreases its feasibility As services provided by the carriers in the market are rather similar, for customers, the switching cost is not high which has intensified the competition in the market The carriers have to wage a price war to retain its customers and to maintain its market share According to Alphaliner (2005), Liner shipping companies have a high upfront investment in fleets, technical equipment and intangible assets In recent years, with market demand and an improved technology,

Lifting falling / small profit margins

bigger ships have become main stream in market Hence, the resale value of old and small ships has dropped tremendously Therefore, the products liner shipping companies provide is little lower the degree of differentiation and high barriers to exit because of high sunk costs, which leads to fierce price competition, especially when market is stagnant Because of high upfront investment, fierce competition and high bunker price in recent time, lowering cost of operations is becoming very important for liner shipping companies Just as suppliers wish to maximize profits, buyers wish to minimize the price they pay which lead to the decrease of profit margin in major markets (see figure 3) According to this stream, EGV has also enlarged capacity to load more cargo for WB trade by exploiting the bigger vessels, unfortunately the market is stagnant due to devaluation of EURO versus USD currency leading to low import demand of buyers in European area in this period (Anaraki1, 2013) According to salesperson in charge of this trade, it seems that EGV-BIZ/WBD can’t match with the market rate Besides that, its service quality is not evaluated well because of un-stability of sailing schedule leading to long transit time which can’t satisfy customer’s expectation against their competitors All these precedents can make customer retention threatened and WBD can face with losing their customers In example presented in Figure 3, as the consequences, the performance that was ultimately at stake was the profit margin of the service However, if this is chosen as the problem, a very broad range of causes has to be considered, relating to capacity, cost policy, market competences, documentary procedure and transit time Furthermore, the actual diagnosis will probably uncover many causes that are not yet represented in the tree So, before the problem of

WBD is defined, we will investigate and validate the above causes and then selecting the actual diagnosis of the problem The purpose of the research is to empirically investigate the organization problems and select the type of the problem which causing the negative impact on lifting falling in WBD Once the business problem and its most important causes have been identified and validated, a solution can be designed

►VALIDATION OF CAUSES

Collecting primary data

Table 2 presented that percentage of sales (below 80%) didn’t meet an

aspiration level during the beginning 6 months of 2015 Ms Judie, deputy manager

of EGV-WBD, said that almost Salespersons in charge can’t gain the target in the past 6 months While Ms Olivia, salesperson in charge of WBD, shared that she met many difficulties in attracting company’s customer (even that customers used to support for EGV as a regular account) towards the WB service because she received much customer’s feedback about long transit time of the service and high rate while rate items can fall down at the bottom level in the market, she said But, EGV-WBD can’t follow as the market rate level Besides that, through many sales

reports in weekly meeting of WBD, they are also presented that due to devaluation

of EURO versus USD currency leading to low import demand of buyers due to

higher cost Export turnover in Q1 in 2015 is -10.7% Suspend Export shipment

(Anaraki1, 2013) However, according to Mr Elton, a DJVP of BIZ-LHS,

concluded that the devaluation of EUR is a general statement in the market and EGV can’t do anything to change this event It isn’t a real reason to cause this

falling in EGV, it is just an additional factor to make an affect to lifting falling In

order to promote lifting and find the solution to improve the service, he suggested to review global NOVCC and Tender accounts (A/Cs) list, and also requested to send evaluation memory paper to all potential customers to appreciate consumer’s satisfaction and loyalty toward services and find which most appropriate factor should be targeted and oriented towards relevant problems/causes and possible strategic consequences in organization By this way, the researcher used this report resume of customer contribution as primary data to evaluate and identify the supporting ratio of existing customers towards EGV-WBD in the market share The outcome is below:

Table 6: Summary of Global NOVCCs and Tender A/C(s) Review

AC NAME

2013 (TEU)

2014 (TEU)

6 MONTHS 2015 (TEU)

VS MARKET (%)

Table 6 shows that the lifting of Top accounts is gradually falling down in

this period For example, K & N account booked only 3TEU during 6 months of

2015 that was falling so much compared with the previous 2013 & 2014 and it had

total lifting 0% per the market share The case of DHL also was the same situation Others were decreased so much Yang et al, 2013, the empirical results showed that

the five best feasible solutions providing service value that meet customer

requirements consist of “advantageous port logistics operating costs; “international

port policy; “port logistics operation efficiency; “high-quality logistics facilities;

and “professional logistics skills” Evaluation on lifting statistics of customer

contribution, collection of customers’ feedback of above top accounts and combined

with 10 customer’s interview result (table 4, page12), the researcher found that the

problem of lost accounts may come from direct 4 consequences for customer

service quality: transit time, freight rate, document handling, equipment

demand and quality These antecedents are represented and analyzed clearly to

evaluate customers’ attitude about the firm service to make long-term decision in

using EGV-WBD service

The second qualitative research

Again, to check the validity of the problem statement, factual information

has to be collected Sometimes it is straightforward to validate the problem The

author of this research focused on the above problems that WBD failed to meet

service level agreement (SLAs) causing to lost account The researcher continued to

do an in depth-interview with questionnaires table to collect more information and

to ensure that the real problem executed correctly (see in appendix II.) Basing on

the result of a survey of satisfaction evaluation towards EGV/WBD service with

220 customers (who use directly this service including: 55 direct shippers (exporters)/suppliers and 165 forwarders– NVOCC) and we have the below outcome:

Table 7: The significance of different factors in making decision in using the EGV service

Equipment availability and quality 90% 8% 2%

(Source: The author’s statistic outcome of customer satisfaction survey template)

According to the above results (Table 7), analysis of these findings by the respondent’s role in transport choice decisions discovered minimal difference between those actively involved and those who are less involved in progress They presented the results of an empirical study involving a single decision evaluated by multiple participants (larger and smaller shippers, international freight forwarders)

in global trade Evaluation for each item is analyzed and evaluated in detail as below:

1 Freight rate

The higher is the ratio of “dissatisfied”, proving that the more strongly the transport choice decision is affected by that factor Respondents indicated that competitive port charges is the most important factor in service selection with 65%

in carrier selection concerning to the suitable freight rate and throughput determination from the perspective of shippers

In order to exemplify for the above mentioned issue, we have a personal interview with Mr.Tri, a sale Manager of SDV logistics Co and Ms Loan, a Pricing Manager of Schenker logistics Co., which were two of top accounts represented in Table 4, less supported EGV in recent time and recommended that although they were the regular accounts supporting EGV for the past many years and preferred to use EGV service; however, in six months of the beginning of 2015, more than their 2/3 of direct customers switched to MSC or OOCL instead due to more competitive rate and only under 1/3 of direct customers kept to use EGV service for the previous long-term relationship In additional, some of the accounts warned that EGV should have a review to make a change in next time if EGV wouldn’t like to lose more customers Another case, the interviewer contacted with

Mr Hai, a salesperson presented for DMG LOGISTICS CO., LTD –a new account under CIF term having export cargo to North Europe ports, to find the respond from his company towards WBD service He said that his company agreed to book with EGV for the first time in March as a potential business with hoping to receive

a good support in long-term; however, they just began to switch their next orders to MSC due to freight rate was more competitive and more attractive in such way Or,

GOTO LOGISTICS VIETNAM CO., LTD with volume 20TUE per month, total volume of 2014 was over 200TEU Their normal routing 4p(s) is VNHCM/VNHPP/MYPTP/DEHBG At the beginning of 2015, their volume was decreased gradually due to rate issue In April, they asked the offered rate

$450/2SD with valid April 30 instead of $700 valid in Mar as the prior notice Sales

in charge applied to have approval for this deal, but WBD only can offer rate $550

at least GOTO has switched their orders to MSC which can meet their requested rate at this time It shows that if the complaint is not dealt properly, the client may

resolve this dissonant state by lowering his view of the firm and deciding that the

firm’s capabilities are not good (Bolton, R.N et al, (2000) The end result is to

discontinue business with the firm and switch to a new service provider

Clearly, the consequences of these actions are not good for the service provider

as they lose business According to sales section’s report, Mr Elton also affirmed

that rate issue is the most important factor in service provider selection He

mentioned on whether EGV can drop prices to match with the market price or not when WBD’s offered rate is always higher than market rate from $50-$100/TEU

According to Alphaliner (2015), a title of carrier activities newsletter, mentioned

that declining freight rate trend has been exacerbated by weak cargo demand growth, especially in the European markets as carriers failed in their repeated monthly general rate increase (GRI) attempts on the Asia-Europe route

Although target prices are crucial, findings of the research (Table 7, p20) indicated that there are 5% for some special cases It means that clients can accept

to pay higher freight cost if EGV-WBD can arrange their shipment on the faster

service to meet the delivery time For example, a case of AOM LOGISTICS CO., LTD agreed to book with the offered rate $650 valid in June with big stable volume 20TEU per voyage together with the requested schedule of 25days to NLRDM (Rotterdam) to meet the delivery time for fashion exhibition cargo In order to meet the special case, EGV-WDB agreed to set up the special routing on NE2 service instead of on CEM (the normal routing) as a new routing to arrange this special order; certainly, the offered rate is higher than usual and negotiated successfully already However, such cases are not regular because customers need have the fixed schedule plan and big volume (usually volume is requested above 20 TEU and more) and guarantee the ex-loading done without failure to avoid the extra cost/penalty incurred & charged by carrier Limitation isn’t preferred because this

is the period of the power of buyers Competition exists all the day They can choose another carrier which doesn’t have to apply this rule, but still having a good rate and better transit time to meet their demand Thus, basing on the above analysis through data collection and interviews, we find that freight issue is a crucial factor which affected strongly in carrier selection EGV-WBD can maintain the long-term relationship with their customer throughput determination from the perspective of shippers regarding to this issue

2 Transit time

Another factor relating to selection the carrier service suppliers, it is the transportation time Relating to the service quality, containerization has also facilitated ‘just in time’ (JIT) production through its improved schedule reliability, low costs, high security and faster transportation time (Mary C.H.et al, 2000) Container shipping lines have developed or at least aimed to develop liner services networks characterized by low operating costs, high frequencies, fast transit times, and both tight and reliable voyage schedules (Notteboom, 2006).With a growing complexity in global transport networks, managing the factor time in the design and operation of liner services is not an easy task Time is money Lost minutes result in lost dollars for shipping lines and their clients In the competitive market place faced by shipping lines every dollar counts (Notteboom, 2006)

From the beginning of 2015, EGV-WBD had some changes in port rotation leading to longer transit time Looking at Table 8 below, we find that transit time of EGV-WBD is not good compared with other competitors and this is also the second crucial important issue which EGV-WBD are facing now beside of freight rate issue

Table 8: Transit time comparison btw EGV-WBD & Competitors (G6, 2M, O3)

Unit: day

APL, HAPAG -LLOYD, HMM, MOL, NYK, OOCL

2M

MSK+ MSC

O3

USAC + CSCL + CMA

EGV

EVERGREEN VIETNAM

(Source: EGVL schedule + Lines schedule/ transit time)

Offering short transit time is a competitive factor in liner shipping, in particular when the goods involved are time sensitive Typical examples are perishable goods and consumer goods with a short life cycle or elevated economic/technical depreciation (fashion, computers, etc ) An extra day at sea creates opportunity costs linked to fixed capital and could lower the economic value

of the goods concerned Mr Hoang, a sale manager of Global Start logistics

company, who booked via EGV-WBD to export to FRLHV under FOB term, has told that they switched their orders to MSK due to better and shorter transit time

with 27 days to FRLHV (LE Havre) because they must follow strictly delivery time

to match with their L/C open unless they wanted their contract broken Although this VIP account used to support EGV-WBD before, EGV-WBD officially lost account in the past time because transit time of EGV-WBD to FRLHV now is 33days longer 7days than the competitor MSC For long transit time, the causing is

related to feeder’s serious delay consecutively leading to misconnection with main vessel adding more 7 days into original schedule Schedule sailing is clearly unstable during the past 6 months For example, we have routing for export cargo as following: VNHCM-MYPTP-NLRDM, Feeder VMI/BALTIC STRAIT 0198-054S- which is arranged on CEM service to connect with main vessel THALASA AVRA0845-008W at MYPTP to delivery port - Rotterdam, NL Total days: 26 days (see Table 8, p.25) However, VMI delayed her sailing day till 6 days causing to misconnection with CEM/THALASAAVRA0845-008W leading to total day up to

34 days Almost customers complained so much due to this issue and some didn’t

agree to book via EGV-WBD service anymore

Clearly, if a client was relatively contented with the service, they will keep supporting to use the service of the firm However, when the service rendered is imperfect or unsatisfactory, clients will have a comparison among transportation providers and which the most important service attractiveness seems to be in accordance with shipping line selection The firm's positioning of transportation cost center, revenue center, or strategic component - will impact how it selects which mode to use, but also which carrier(s) within a mode Timeliness in pickup and delivery, responsiveness to service failures, and competitiveness of current rates

and charges are the primary factors considered by the cost center firms The strategic component positioning is noted for having the most comprehensive set of factors and involved process for modal and carrier selection (Mary and Manrodt, 2000)

3 Other items/symptoms which can affect decision of service selection

Some characteristics of shipping lines, which also affect decisions of service

selection, are described in table 7 (p.20) Such as, booking releasing time is sometimes slow causing to the delay in picking up container or B/L releasing is

also slow and a lot of mistakes in typing documents causing to lose much time to

update and correct it leading to submit late documents to concerned parties Some

customers didn’t satisfy with this lateness and complained too much For example, a case of LIGENTIA company complained that when they submitted booking request

to customer service department and it took a half of day to receive the booking releasing while they can receive booking releasing from others carrier within 10-20 minutes after submitting on website As the result, this lateness made them to be unable to pick up container in due time as planned and lost their time to handle

timely the related documents Or, for equipment availability and quality;

sometimes, EGV-WBD also received some complaints from customer about the shortage of equipment which caused exporters to be worried about stuffing cargo in time However, such situation happened not too often and EGV can recover to meet the customer’s demand soon after that Checking with other carriers such OOCL, MSC, APL, such situation also happened at the providers However, the

respondent’s result (see table 7, p.20) showed that below 20% of “dissatisfied” of these items is not sufficient to prove that they are real problems or decisive factors

in making decision towards using EGV service But, to make a progress in serving customer better and gain on wholly satisfaction and loyalty of customers in using

WB service, EGV-WBD should take time to review and build working team more effectively to meet the expectation of customers

In conclusion, basing on findings on literature and interviews, the outcome of factors causing capacity performance problem of WBD service during the past 6

months proved that lost account is the central problem which decreases the firm’s

operation performance and threatens the mission of the organization (to be lead in

it’s the field) The survey also indicated that Cost and Time are two most

important antecedents causing to lost account Koi Yu Ng (2006) mentioned that

survey results show that respondents still regard monetary cost and time efficiency

as important factors in deciding port attractiveness Mary, C.H et al (200) affirmed that timeliness and current competitive cost are two most factors in carrier selection Therefore, the high freight rate and long transit time are proposed as the main causes in this project However, due to the research limitation and the author only concentrate on the most important factor which needs to be discussed with the principal, as principals are ultimately responsible for the business problems addressed in field problem solving (FPS) project, and there have the ultimate say in the problem definition Through the result of the research at Table 7, p.20 and above

evaluation and analysis; Freight issue is chosen as a main cause that is defined

and explored solution directions for business central problem: lost account

However, the question is given and discussed here again why EGV-WDB can’t match the freight rate against the customer’s expectation Findings indicated that freight issue is a main cause impacted directly to lost customers problem of WBD However, freight rate is not an end itself and cannot be considered as a performance indicator for the company as such So, the researcher had an interview again with persons in charge in business department to find out the root cause of this problem

The third qualitative research

As above analysis of “freight issue” (see page 21), the clients discontinue

business with the firm and switch to a new service provider because WBD can’t

match the expected rate Meantime, the fierce rate competition is happening day

by day but salesperson in charge of WDB can’t report the market situation timely causing to the lateness of updating the market rate to the authorized party – Business Center Controlling (BCC) which can authorize to decide the ideal rate to the client We had an in-depth interview (see appendix I) again with Ms Tracy and

Mr Olivia who are salespersons in charge of the WBD department to find out the consequences of this lateness Ms Olivia, a senior salesperson, said that she usually had to work at home to fulfill the report with the given deadline because her department has only 2 staffs in charge for the whole WB service controlling and

both Central and North office for general sales reports Her daily work was

overload that she had to do many paper works at working time and there was really

no enough time to visit customer outside to bring back the market information to update the market rate to BCC for consideration timely & effectively to meet the

customers’ expectation Take the specific example of the case of GOTO LOGISTICS

VIETNAM CO., LTD (take an example in p.22), GOTO commented that there are many carriers attack us to gain the competitive advantageous, they are very aggressive and have quick feedback what we need to support timely and positively

As soon as they know that EGV can’t satisfy the requested rate, MSC attack us and accept the rate which we request Why do we choose MSC? First, they kept closely contacting us daily to get the updated information although they knew that your carrier was a priority one which we did business before Second, they matched with our requested rate as soon as your company rejected our request One day after that, we received feedback from salesperson in charge that EGV-WBD agreed with the requested rate However, the feedback was too late to re-take this order Ms Tracy in charge of this business said that she was too busy with her daily paper report and didn’t enough time to visit the customer to understand more about them Thinking that this was a regular account and supposing that the requested rate can’t meet, she delayed the response She need finish the urgent daily report in advance Moreover, she also didn’t have enough information to report to BCC to persuade them for more support to maintain this account Until, she received their feedback that they switched this business to MSC and reported to BCC to re-gain

this account However, it is too late! It shows that salesperson lacked of skill in

persuading the potential account and promoting customer retention If she became more aggressive and more skillful in this case, she can negotiate well with customer

to extend the approval time to validate the contract Truly, EGV-WBD hasn’t

celebrated any training course of sales skill for many years Ms Tracy, sale in

charge of WBD, said that she worked at EGV-WBD for 3 years; however, she didn’t get any training request to update her skill to support for the job All was based on the experience of the seniors; even that, it was also limited because there

was no time enough for sharing knowledge together effectively As a result, the

percentage of sales is not good (Table 2, p.10) and her monthly evaluation result was often bad although she tried a lot during her working time After the analysis of individual incidents, a cross-cause analysis was executed The result of the analysis

was identification of four interrelated categories of causes: overload manpower of

sales in charge, environmental pressure, lack of sales skill and respondent’s

breakdown Four categories are interactive factors in the internal support

machinery; so, we can group them into a main factor “service performance” to

evaluate and find out the suitable solution to improve it profitably Thus, to achieve

the organization’s goals, a manager needs to understand and effectively orchestrate the internal support mechanisms that are required to sell the products or provide the services of the organization (James & Graham, 4thed.) Once EGV-WBD can’t overcome the difficulty situation to improve “service performance”, it brings to the bad outcome and affects to establishment and enhancement of customer retention Rust, R.T and Zahorik, A.J (1993), Customer retention implies a long-term commitment on the part of the customer and the firm Positive effect of service quality is on the establishment and enhancement of long-term customer relationships (Bolton at al., 2000) Long-term business relationships are beneficial

to shipper& carriers (Bolton at al., 2000) If failure of perceptive factors, shippers discontinue to do business with carriers and the firm lost the customers Thus,

failure of customer retention is the most important cause leading to lost customer of the firm threatened

Figure 4: Final structure model of cause and effect of EGV-WBD performance

Both the literature review and the interview confirmed freight issue and failure of customer retention are two factors affected to lost account of this firm The findings indicate that both affected very strongly to the lost account problem of EGV-WBD which need to find suitable solution to improve the service Furthermore, we found that these factors are not only strongly related to customers’ affective commitment, but also directly related to their behavioral intentions This is an important contribution to existing research on service quality The findings confirm the positive effect that has been frequently found between service quality and customers’ stay intentions (Zeithaml et al., 1996)

LOST ACCOUNTS

Freight issue Un-satisfied rate with

Lateness of updating the market rate

Respondent’s

Breakdown