Recommendations to improve the freight forwarding service for importing FCL cargoes at dong tai global logistics and trading co ,ltd

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: LA THI MINH DUYEN DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIO

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: LA THI MINH DUYEN

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVE THE FREIGHT

FORWARDING SERVICES FOR IMPORTING FCL CARGOES

AT DONG TAI GLOBAL LOGISTICS AND TRADING CO.,LTD

HAI PHONG – 2015

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: LA THI MINH DUYEN

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVE THE FREIGHT

FORWARDING SERVICES FOR IMPORTING FCL CARGOES

AT DONG TAI GLOBAL LOGISTICS AND TRADING CO.,LTD

Supervisor: Doan Trong Hieu

Division: Economics of International Trade

Faculty: Economics

HAI PHONG – 2015

i

PREFACE

This Dissertation is a description of my 2-month- internship which occur in September and October in 2015 During 2 months, I have chance to witness the real work of a logistic company named Dong Tai Logistics and Trading Co.,Ltd My topic “Recommendations to improve freight forwarding service for importing FCL cargoes at Dong Tai Global Logistics and Trading Co.,Ltd” is really useful for me because it helps me to enhance my knowledge about freight forwarding service in general and importing service for FCL cargoes in particular Further, this is an opportunity for me to take part in professional working condition In Global Studies and Maritime Affairs curriculum, the students are supposed to study International Logistics subject which is closely related to this topic, therefore, this knowledge in practices is extremely important to monitor the topic

This dissertation includes three chapters:

 Chapter 1: LITERATURE REVIEW OF FREIGHT FORWARDING SERVICE

 Chapter 2: THE CURRENT STATUS OF FREIGHT FORWARDING SERVICES FOR IMPORTING FCL CARGOES AT DONG TAI LOGISTICS AND TRADING CO.,LTD

 Chapter 3: RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF THE FREIGHT FORWARDING SERVICES FOR IMPORTING FCL CARGOES

AT DONG TAI GLOBAL TRADING COM.,LTD

I declare that this report is my own unaided work It has not been submitted before If violated, I am solely responsible for and bear the punishments

of the Institution and University

Student Name and Signature

La Thi Minh Duyen

ACKNOWLEGEMENT

Firstly, I would like to thank all lecturers at VietNam Maritime University for teaching me during the time I study at university Secondly, I would like to express my sincere gratitude to my advisor M.S Doan Trong Hieu for the continuous support of my dissertation and related research, for his patience, motivation, and immense knowledge His guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for my study

Thirdly, I deeply thank Director - Mr Do Viet Thanh and the help of all staffs in Dong Tai Global Logistics and Trading Co., Ltd who have created best conditions for me to complete this topic

Above all, I thank my family and friends for all the encouragements they gave to me during this study Special thanks to all respondents for giving me answers to my questionnaires and to those who gave extra supports in making my work have a better quality

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TABLE OF CONTENTS

PREFACE i

ACKNOWLEGEMENT ii

LIST OF ABBREVIATIONS vi

LIST OF TABLES vii

LIST OF FIGURES viii

INTRODUCTION 1

DISSERTATION METHODOLOGY 1

DISSERTATION SCOPE 2

TIME DURATION 2

RESEARCH RESULT 2

CHAPTER 1: LITERATURE REVIEW OF FREIGHT FORWARDING SERVICE 3

1.1 Theoretical basis of freight forwarding service 3

1.1.1 Definition of freight forwarding service and freight forwarder 3

1.1.2 Commercial role of freight forwarder 3

1.1.3 Freight forwarder obligations and rights 5

1.1.4 Related documents in freight forwarding services for importing FCL

cargoes 6

1.1.5 Relationship of freight forwarder with other parties 8

1.2 Legal basis framework 9

1.2.1 National law 9

1.2.2 International law 9

1.3 Assessment theory of forwarding services for importing FCL cargoes 9

1.3.1 Full container loaded cargoes 9

1.3.2 General freight forwarding process for importing cargoes by ocean 10

1.3.3 Service quality assessment framework 11

1.3.4 Relationship between service quality and customer satisfaction 14

CHAPTER 2: THE CURRENT STATUS OF FREIGHT FORWARDING SERVICES FOR IMPORTING FCL CARGOES AT DONG TAI CO.,LTD 15

2.1 General information about Dong Tai Co.,Ltd 15

2.1.1 Company background 15

2.1.2 Brief development history 16

2.1.3 Organizational structure 17

2.1.4 Main services 19

2.1.5 Company Infrastructure and equipment 23

2.1.6 Company workforce 23

2.1.7 Company performance 24

2.2 Forwarding service for importing FCL cargoes of Dong Tai Global 27

2.2.1 Sales process 27

2.2.2 Freight forwarding order of steps for importing FCL cargoes 29

2.3 Assessing forwarding service for importing FCL cargoes at Dong Tai Global 35

2.3.1 Reliability 37

2.3.2 Assurance 38

2.3.3 Tangibles 40

2.3.4 Empathy 41

2.3.5 Responsiveness 42

2.3.6 Price 43

2.3.7 General assessment of freight forwarding service for importing FCL cargoes at Dong Tai Global 44

CHAPTER 3: RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF THE FREIGHT FORWARDING SERVICES FOR IMPORTING FCL CARGOES AT DONG TAI GLOBAL TRADING COM.,LTD 46

3.1 Create a standard and detail process for importing FCL freight forwarding service 46

3.1.1 Adding step for “Checking documents received from importer” 46

3.1.2 Adding “Arrange Transportation Agencies” after “Prepare Documents” step 46

3.1.3 Adding “Complete daily report” step into the forwarding process 47

3.2 Improving quality of facilities and the application of information technology 49

3.2.1 Ensuring basic requirements in warehouse system 49

3.2.2 Applying information technology in freight forwarding activities 49

3.3 Paying attention at the quality of human resources 50

3.3.1 Focusing in recruitment 50

3.3.2 Investing in training course for staff 50

3.3.3 Creating motivation for staffs 51

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3.4 Specializing in customer service and market expansion to optimize

Empathy and Responsiveness level 51

3.4.1 Establishing a specialized Marketing Department 51

3.4.2 Promoting marketing activities strategy 52

CONCLUSION 54

APPENDICES 55

Bibliography 56

LIST OF ABBREVIATIONS

FIATA International Federation of Freight Forwarders Associations INCOTERMS International Commercial Terms

NVOCC Non-Vessel Operating Common Carrier

VNACCS Vietnam Automated Cargo Clearance System

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LIST OF TABLES

Table 1: 5 Factors Of Rater Model – Service Quality Dimensions 13 Table 2: Quantity And Qualification Of Officers In Dong Tai Global 24 Table 3: Business Result Of Dong Tai Global Logistics From 2010 To 2014 26 Table 4: Dividing Work Tasks Of Dong Tai Global Staffs In FCL Import Shipment 39 Table 5: Price Quotes To Customer With Minimum Profit Of FCL Shipment And Inland Service Of Dong Tai Global 44 Table 6: Summary Of Strengths And Weaknesses Of Freight Forwarding Service For Importing FCL Cargoes At Dong Tai Global Based On 6 Dimensions 45 Table 7: Estimated Time For Each Step Of Recommended Process 47

LIST OF FIGURES

Figure 1: Relationship Among Freight Forwarder With Other Parties 8

Figure 2: Organizational Structure Of Dong Tai Global 17

Figure 3: Revenue, Cost And Profit Before Tax Of Dong Tai Global 27

Figure 4: Sales Process At Dong Tai Global 27

Figure 5: Detailed Forwarding Order Of Steps For Importing FCL Cargoes 30

Figure 6: Customer Satisfaction Toward Import Forwarding Service For FCL Shipment At Dong Tai Global (On Scale From 1 To 5) 36

Figure 7: Clients Satisfaction Level Toward Reliability‟s Criteria 37

Figure 8: Clients Satisfaction Level Toward Tangibles‟ Criteria 40

Figure 9: Clients Satisfaction Level Toward Empathy‟s Criteria 41

Figure 10: Criteria For Selecting Freight Forwarder Service Supplier 43

Figure 11: Completed Recommend Import Forwarding Process For FCL Shipments 48

1

INTRODUCTION

In the process of integration with other countries from every corner of the world, associated with their impact of globalization process and trade liberalization, Ocean Shipping industry has achieved strong development both in quality and scale Therefore, freight forwarding has played an important role in expanding trade by obtaining efficient and economic modes of transport It creates flavor conditions to ensure that both export and products may timely reach final destinations and helps

to transport goods efficiently from sellers to the end consumers This national industry is young in Vietnam, but it has contributed to the improvement of the country‟s payment balance by assisting promotion related to export and giving support to the Carriers& Insurers Being aware of this high demand of market, Dong Tai global logistics and trading Co., Ltd was established and operated in the field ofglobal freight and transportation services To develop company in long term, Dong Tai global logistics and trading Co., Ltd has raised consensus towards young employee, especially, employees who graduated from university Besides, Dong Tai global logitics and trading Co., Ltd has provided conditions to help students have a successful internship and chances to work in the real environment

Every year, Vietnam Maritime University gives student conditions to internship in enterprises Students have opportunities to apply the knowledge of major which was taught at university During my internship in Dong Tai global logistics and trading Co.,Ltd - an enterprise providing full array of global freight and transportation services, in which its working style and environment is suitable with my trained major I have opportunities to learn about not only real freight forwarding modal but also discipline in the workplace In this dissertation, I would like to present the freight forwarding services for importing FCL cargoes, focusing

on transportation activities through sea freight and inland trucking From analyzing the strengths and weaknesses of Dong Tai Co., Ltd, some recommendations are proposed to improve freight forwarding service for imported FCL cargoes in Dong Tai Co., Ltd

data aggregated: from customer surveys and data provided by the company to identify current status, analyze and assess the quality of import FCL cargoes forwarding services of the company

Statistical methods are also applied to given statistics in this dissertation The data is collected including revenues, expenses, profits, salaries from accounting department of Dong Tai Global

Logical methods point out various dimension and criteria to assess FCL import forwarding performance at Dong Tai Global

Observation method is applied during my 2-month-internship period, giving statistics on the number of FCL importing shipments being delayed

DISSERTATION SCOPE

The dissertation is implemented so as to analysis and evaluate current status

of importing FCL cargoes at Dong Tai Global The dissertation concentrates on service quality based on customer feedback, detail steps of sales and freight forwarding process for understanding the real activities Additionally, this Dissertation also gives some recommendations to improve the efficiency of FCL import forwarding service

TIME DURATION

The dissertation‟s statistics, survey results and clients‟ comments are collected within 2 month During this period, I had chance to work, study and gain actual knowledge, experience to complete this dissertation

RESEARCH RESULT

This dissertation aims to demonstrate freight forwarding service for importing FCL cargoes of Dong Tai Global This dissertation provides an analysis of advantages and disadvantages of the import freight forwarding service based on 6 dimensions then some recommendations are given based on those point

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CHAPTER 1: LITERATURE REVIEW OF FREIGHT

FORWARDING SERVICE 1.1 Theoretical basis of freight forwarding service

1.1.1 Definition of freight forwarding service and freight forwarder

According to definition of (FIATA, 2004) Freight Forwarding and Logistic Services means “services of any kind relating to the carriage (performed by single mode or multimodal transport means), consolidation, storage, handling, packing or distribution of the Goods as well as ancillary and advisory services in connection therewith, including but not limited to customs and fiscal matters, declaring the Goods for official purposes, procuring insurance of the Goods and collecting or procuring payment or documents relating to the Goods Freight Forwarding Services also include logistical services with modern information and communication technology in connection with the carriage, handling or storage of the Goods, and total supply chain management These services can be tailored to meet the flexible application of the services provided”

According to ( Vietnam Commercial Law, 2005), Freight Forwarding and Logistics services are “commercial activities whereby traders organize the performance of one or many jobs including reception, transportation, warehousing, yard storage of cargoes, completion of customs procedures and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking, delivery of goods, or other services related to goods according to agreements with customers in order to enjoy service charges.”

In short, freight forwarding is the overall management of the way resources are obtained, moved to the locations and stored where they are in need

1.1.2 Commercial role of freight forwarder

Commercial role of freight forwarder is regulated in forwarder law ( Mandy Verena Rigtering, Capetown) They are:

Transshipment

Transshipment is a fundamental feature of modern container operations Due

to high cost of operation, container ships with large volume usually serve „hub ports‟ The transportation from hub port to regional ports is mostly coordinated by

shipping lines to operators of vessels This involves booking on a transshipment vessel, unloading, discharging, sorting, loading and distribution of the cargo to various importers Transshipment agents mostly operate as agent for the shipper, consignee or freight forwarder

Packing, warehousing and distribution

The freight forwarder arrange service for warehousing, packing and distributing the cargo He keeps goods in warehouse before exporting, subsequent to import meanwhile awaiting distribution or transportation The freight forwarder can operate his own warehouse and provide listed above services as principal to the shipper and freight forwarders, or play role as an agent in obtaining service from independent contractors for his clients The fact is that freight forwarder does not own his warehouse, which does not mean that he provides the service as agent Carriage term in contracts may include storage services before and after discharging the cargo, waiting custom clearance

Documentation and customs clearance

The freight forwarder provides all required documentation for the import and export regarding to customs and legal requirements and terms in commercial sales contract He is considered as an agent on behalf of his customer

Arranging cargo insurance

Freight forwarders are not supposed to be cargo underwriters, but may arrange cargo insurance and service fee, as agents for their clients In fact, it is helpful for a freight forwarder to recommend his customer to procure insurance covering for cargo on a basis The selling of such services like insurance, for further commission is a traditional income source for freight forwarders

Payment of freight and local taxes

Playing role as agent of consignee, the freight forwarder influences payment

of freight to the carrier and local taxes on behalf of his clients to avoid delays

Transport arrangements

After the customer decide their route and mode of transportation, freight forwarder books space on ship and dispatches the goods Based on classic role,

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freight forwarder will then arrange carriage contracts and establishes relationships among his customers and the carrier Furthermore, he will pay freight charges, packing, custom clearance, insurance and charges customers an amount of fee - a proportion of total expenses

Cargo Consolidation and multimodal transport

The cargo consolidation service is one of the critical functions of today freight forwarders The container operators offer an integrated movement of using multimodal instead of using unimodal transport modes The freight forwarder collects cargo from different shippers or freight forwarders, and combines goods for shipment and distribution to the receivers in the destination place

1.1.3 Freight forwarder obligations and rights

According to (General Freight Forwarder's conditions of Association of Logistics and Freight Forwarding, 2005) forwarder obligations and rights are:

Obligations

The freight forwarder bear responsible for procuring for the customers the transportation of goods on customers‟ account but under his name from original to destination place

- To take transport of consignments at destination port or deliver stored consignment in keeper‟s warehouse, if he is trusted with tasks regulated in terms of freight forwarding contract

- To fulfill his duties which arises out of the freight forwarding contract with professional manner, taking care to satisfy the interests of the clients

- To take care of cargoes and warn the clients of any obvious incorrectness of his instructions

- To assess and perform inspection in term of goods quantity as well quality delivered during the period of time transport to the carrier that was provided and agreed with clients; inform the clients whether the consignment or cargoes are under threat of damage

Rights

The freight forwarders have their own rights to demand a reasonable advance and benefits from the clients to cover costs related to the performance of the

contract in freight forwarding service

- To demand the necessary compensation and reasonable incurred costs in connection with the performance of freight forwarding contract; additionally, to request compensation for expenses which were spent effectively while performing his tasks

- To ask clients to correct missing or incorrect information, or supplement incomplete instructions; and to request correct data in relation with the contents of the consignment

1.1.4 Related documents in freight forwarding services for importing FCL cargoes

International Ocean Freight Bill of Lading

Bill of lading is one of the most critical documents in shipping industry It is

a document presenting the receipt of goods by shipper‟s agent or carrier and the transportation contract of goods for shipment That is usually issued by individual engaged in transporting or forwarding

House Bill of Lading

B/L is issued by freight forwarder to a consignor as a receipt for the cargoes being transported with other cargo as one shipment (usually as a FCL) The B/L of carrier indicates the forwarder as the consignor, and the name

of forwarder's agent at destination port as the receiver Even though it is not a complete title document, a house B/L has the same legal status as to that of a normal B/L If no specifically forbidden, it has capability of being negotiated and accepted

by the bank of importer for payment under a letter of credit

Master Bill of Lading

A schedule of costs for services rendered issued by a ship's master or another carrier official, and which documents that certain products were received on board as cargo for shipment to a particular place and to be delivered to the stated receiver

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Commercial invoice

The commercial invoice is authorized document between the provider and the customer which describes sold cargoes, and the total volume to customer The commercial invoice is one of the primary documents used by customs officials in the progress of determination of customs duties

Pro forma Invoice

A brief invoice sent by exporter to an importer in advance of a shipment

It notes the type and volume of cargoes, their value, and other essential information such as weight and charges Pro forma invoices are commonly used as initial invoices with quotation, or for purposes of customs clearance in import They are different from a normal invoice which is not required for payment

Certificate of Origin

A Certificate of Origin (CO) is an essential international commercial document verifying that cargoes in a specific export shipment are wholly achieved, produced, processed in a particular nation

Certificate of Insurance

A document issued by an insurance company which is used to confirm the presence of insurance under particular conditions regarding to listed individuals Specifically, this document records the information of effective date of policy, type

of purchased insurance coverage, liability kinds and amount of money need to

pay

Cargo manifest

Cargo manifests listed all the particulars of the goods loaded on a vessel, for official and administrative purposes

Arrival Notice

Notice sent by a carrier or shipping agency to the receiver (and to the notify party, if any) to inform about the arrival time of shipment, number of packages, description of goods, weight and charges (if any)…

Delivery Order

A Delivery Order is a document from a exporter, a shipper, or an owner

of freight which orders the release of the transportation of cargo to another party

1.1.5 Relationship of freight forwarder with other parties

Figure 1: Relationship Among Freight Forwarder With Oth er Parties

Import – Export Control Organization Import – Export License Organization, Customs, Quadrant Organization Tax Control Organization

Commercial Chamber……

Freight Forwarder

Forwarder Agent Port - Carrier, Bank, Shipping agent,

Warehouse, Insurance Company, Inspection Organization……

2005 also revised Maritime Code 1990, making VietNam maritime law gradually appropriate with international law Simultaneously, with the birth of Maritime Code, Laws associated to Airway, Road, Rail, Inland Waterway, Customs, Insurance were born In 2006, VN officially recognized Convention which contained favorable conditions for ships to enter ports (FAL-65) Decree 140/2007 also adjusted Logistics Activities and Decree 87/2009/ND-CP about the multimodal transport are important legal basis that influences logistics and freight forwarding services in Viet Nam

1.2.2 International law

The first international law regulates forwarding service is Vienna Convention for International Trade in 1980 The Convention for transportation such as the International Convention to unify rules on Bill of Lading signed at Brussels on August 25th 1924, which is also known as the Hague Rules This Convention has two amendments, the first one was the Visby Protocol named in 1968 in Visby and the second amendment was in 1979, called the SDR Protocol The second law is the United Nation Convention on the carriage of goods by sea, signed in Hamburg in

1978 Another well-known international regulation is Incoterm 2010 - standard interpretation of trade term in International Chamber of Commerce This basis defines the right, risk and obligation clearly between consignee and consigner in international trade

1.3 Assessment theory of forwarding services for importing FCL cargoes

1.3.1 Full container loaded cargoes

FCL is the abbreviation for "Full Container Load" which is commonly used

in international shipping industry In international shipping, this term describes an ocean freight service, designed for international ocean freight shipments of cargo

where international shipper has exclusive use of entire ocean freight container ( for example 20 foot or 40 foot container )

1.3.2 General freight forwarding process for importing cargoes by ocean

Step 1: Prepare the documents

The consignor must prepare the following types of documents:

- Business registration license

- License of import ( with import code of company)

- License or import quotas

Step 2: Open the L/C

The consignee need to calculate the period of time to open L/C to avoid the lose of capital (if L/C is opened too soon) or incurring the charges for L/C ( if L/C

is open too late) The consignee must apply for opening L/C and make deposit at the bank The bank will decide the total amount of deposit money need to be prepaid Depending on the Incoterm agreed between two parties before, the consignor might perform the following steps:

Step 3: Charter mean of transport

- Tramp ship: Buyer contacts the carrier to book the ship

- Liner ship: Buyer must contact to the ship owner for details about routes and shipping cost

Step 4: Insure the goods

After receiving notice of delivery, the consignees will immediately contact the insurance company to insure their cargoes

Step 5: Receive a set of documents

The consignees directly receives required documents from the seller or the bank and wait for the notice of delivery to carry out customs clearance and receive their goods

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Step 6: Customs clearance

- Open and submit customs declaration form

- Deliver goods to the specific place for customs inspection

- Pay tax

Step 7: Receive the goods

Bring the original bill of lading to the carrier to get D/O Bring D/O to port:

- For bulk cargo: supervise the unloading from the vessel; sign the report on receipt of cargo, deliver goods to the buyer at desired location

- For container:

FCL cargo: receive directly from container yard

LCL cargo: depending on the location the freight forwarder chose to release the goods, the buyer will come and receive

1.3.3 Service quality assessment framework

Service quality definition

According to Parasuraman, Zeithaml and Berry (1985), service quality is defined as how well a provided service adapts and conforms to the client's expectations Service business operators often assess the service quality provided to clients in order to improve delivered service, to quickly identify and solve the problems, and to better assess client satisfaction

Crolin and Tailor (1992) suggest that customer satisfaction should be evaluated in short period, and quality of service must be assessed according to the attitude of customer service in long run

Quality assessment modal for service – RATER (SERVQUAL)

The evaluation model service quality or customer satisfaction considered service is a set of attributes as well as the underlying explicit and not a discrete structure Regarding to quality of service, the most popular scale is SERVQUAL (service quality) carried out by VA Zeithaml Parasuraman and Leonard L Berry,

which is also known as RATER to easily memorize the first letter on 5 criteria ( standing for: Reliability- Assurance- Tangibles- Empathy- Responsiveness) SERVQUAL represents service quality as the differences between client's expectations for service offering and the client's perceptions of service received, requiring respondents to answer questions about both their expectations and their perceptions related to:

Reliability: ability to perform the chartered service accurately and dependably

Assurance: Courtesy and knowledge of employees and their ability to inspire

confidence and trust to clients

Tangibility: The physical images or representations of a service

Empathy: caring individualized attention the servicer operator provides to its

customers

Responsiveness: willingness to support customers and provide prompt service

The table Shows detailed dimension and its criteria related to measure quality service

Besides 5 factors of RATER, customer satisfaction is also directly impacted

by Price factor The price fairness influences the customer satisfaction in a positive

way but the perceived price fairness can be negatively affected by the customer‟s vulnerability (Herrmann, Xia, Monroe & Huber, 2007) The customer perceives the price according to the quality whose result end up in dissatisfaction or satisfaction (Oliver, 1997) Price reasonability also plays a critical role in creating customer satisfaction The reason of customer turning to any other service providers is the price reasonability from where they get it (Imran, Safwan, Rehman, Afzal, Ali, & Ali, 2010).The unreliable and unreasonable pricing policy effect the customer satisfaction negatively Customer demands good quality products at a reasonable price which they can afford service/ product easily and if any firm offers this to the clients it will build long term relation with customers Therefore, Price is an important dimension that should also be concerned

13 Table 1: 5 Factors Of Rater Model – Service Quality Dimensions

1.3.4 Relationship between service quality and customer satisfaction

Quality of service and satisfaction, two different concepts but has a close relationship together in research on services (Parasuraman & CTG, 1988) The study of (Cronin & Taylor, 1992) showed that service quality is the cause of satisfaction The reason is quality relates to the service offering, meanwhile client‟s satisfaction can only be measured after using service Therefore, when using the service, if customers perceive high-quality services, they would be satisfied with If customers receive low quality service, the dissatisfaction will appear Therefore, customers play a very important role in service However, when it comes to assessing service, service providers usually confuse 2 concepts "service quality" and

"customer satisfaction"

However, according to the researchers, these are two different concepts Service quality focused on specific components of service offering Meanwhile, satisfaction is a general concept measuring their satisfaction as a service consumer

In another definition, customer satisfaction is how products or services supplied meet or surpass a customer‟s expectation To assess satisfaction, customers should have the experience to product/ service offered Most researchers agree that assessment is the result of a process of comparison The rating is based on cognitive processes in which customers compare their previous expectations with what they really get from the product/service Customers who are satisfied is considered as has actual results that meet or exceed their expectations Similarly, if expectation is higher than actual results will lead to dissatisfaction

Generally in service activities, whether referring to aspects of quality of service other level of customer satisfaction, the requirements that manager need to raise consideration is how to draw the gap between customer expectations and the company's ability to conform client‟s expectation

DONGSUE LOGISTICS CO.,LTD

- Head office: Dongsue Logistics Co.,Ltd

- Address : Room 302, Dongyang BLDG, 89-20, Seosomunro, Jung-gu Seoul, Korea

DONG TAI GLOBAL LOGISTICS AND TRADING CO.,LTD

- Address: Room 202-204, Tasaco Building, Nguyen Binh Khiem street, Hai

An, Hai Phong, Viet Nam

- Tel: (84) 313 979356/ 357/ 595/ 351 - Fax: (84) 313

979494

- Website: www.dongtaiglobal.com.vn

- Director: Do Viet Thanh

- Tax number: 02010119508

- Initial chartered capital: 1.5 billion VND

Dong Tai Global currently has 4 offices in Vietnam, including:

- Hai Phong Office: RM 202-204 Tasaco Building, KM 104+200 Nguyen Binh Khiem, Hai An, Hai Phong

- Ha Noi Office: RM 1601 Thanh Cong Building, 57 Lang Ha, Ba Dinh, Ha Noi

- Noi Bai Office: RM314, NTS Building, Noi Bai International Airport, Soc Son, Ha Noi

- Hồ Chí Minh City Office: 5th floor, C2 Thuy Loi Apartment 301, D1Street, Ward 25, BinhThanh District, HCM city

2.1.2 Brief development history

According to information pubished by (Dong Tai Global, 2014), Dong Tai

Global Logistics and Trading Co., LTD was established on December 21, 2009

- Business Registration No 0201019508, registered in the Department of Planning and Investment of Hai Phong city, with tax code 0201019508, initial chartered capital is VND 1.5 billion, the representative is Mr Do Viet Thanh

- Before 2009, Dong Tai Global is a representative office of Dongsuero Company in Haiphong, and at the same time, Dong Tai set up branch in Ho Chi Minh City

- In 2009, Dong Tai Global Company was officially established, and became

an agent of Dongsuero In 2009, at established time, head office of Dong Tai Global

is located at room 202-204 of Tasaco Building, Nguyen Binh Khiem Street, Hai An District, Hai Phong City

- In 2010, Dong Tai Global became a credit member of Vietnam Chamber of Commerce and Industry of Vietnam (VCCI)

- In 2014, along with the development, Dong Tai Global oriented its markets with world trends, Dong Tai Global extended its operation to many warehouses, port and depot at Dinh Vu - Hai Phong, an international gateway of Vietnam, coordinate trading partners around the world

2.1.3 Organizational structure

Figure 2: Organizational Structure of Dong Tai Global

( Source: Dong Tai Global Human Resources Department)

HAI PHONG OFFICE

Chief Executive Officer

Warehouse operation

Delivery order Exchange

Import Document

Custom Declaration Operation

Logistics Documents

Operation Logistics Documents

Import Accountant

Export Accountant

Chief Accountant

Logistics Accountant

Export Department

In charge of all procedures to ensure the process of exporting goods to destination location based on customer‟s need and binding agreement Dong Tai play role as a Shipper - an authorized representative of Consignor, a Forwarder – an authorized representative to carry out the whole process of sending goods to Consignee, a NVOCC or a CFS

Import Department

Bear responsible for Consignee, receiving Bill of Lading, all necessary documents from Consignor and Customs Declaration Deliver the goods directly to customers or release cargo at CFS Import department has responsible for:

- Negotiate with commodity suppliers, exchange information about freight forwarding process

- Find and generate sources of goods, carriers to carry out forwarding process

- Deal, prepare and coordinate with company authority to sign commercial invoice and forwarding contracts with customers

- Contact with carrier party: Shipping Lines, Forwarders, Multi-modal transporter for booking shipments and domestic transportation

- Arrange international payment

- Print import license at destination port in Hai Phong, register to check quality inspection of goods

- Carry out customs clearance and transport goods

Logistics Department

- Negotiate with commodity suppliers, exchange information about freight

forwarding process

- Find and generate sources of goods, carriers to carry out forwarding process

- Deal, prepare and coordinate with company authority to sign commercial invoice and forwarding contracts with customers

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- Contact with carrier party: Shipping Lines, Forwarders, Multi-modal transporter… for booking shipments and domestics transportation

- Arrange international payment

- Print import license at destination port in Hai Phong, register to check quality inspection of goods

- Carry out customs clearance and transport goods

- Conduct legal procedures to contact relevant authorities

Accounting Department

- Inspect and directly in charge of finance situation of company, including daily income and expense

- Inspect input and output invoices

- Report monthly, quarterly and annually to Tax Department

- Set up payment plan for service provider and shipping charges for carriers

- Set up business statement report monthly, quarterly and annually to Board of

- Freight Forwarding

As a forwarder, Dong Tai book client‟s cargo, arrange pickup, delivery, and manage documentation, regardless to point of origin or destination With valuable experience, Dong Tai facilitate forwarding process according to customer‟s specifications and the requirements from import and export countries

- FCL (Full Container Load)

Known as one of Haiphong Port leading Non-Vessel Operating Common Carriers, Dong Tai have good carrier relationships to offer departures frequently at competitive levels for FCL shipments from major ports all over the world

Air Freight Services

Dong Tai Global has provided time-definite international and domestic air freight services to satisfy customers since 2009

- International Air Freight

Dong Tai company offer cost-effective and efficient International Air Cargo Transportation Services include: Consolidated Air, Priority Air, Worldwide Charters

Further, Dong Tai Global also provides Delivery Options include: Door excluding duties/taxes, Door-to-Airport, Door-to-Door including duties/taxes The company is able to access to an international service network, offering full service at point of origin and destination, assisting with international document requirements

Door-to Domestic Air Freight

At present, Dong Tai supports freight forwarding service from Northern areas of Vietnam to major seaports at Haiphong and airports in Hanoi, and transport bulk cargo to Northern locations with competitive cost All of Dong Tai transport trucks are equipped GPS system to follow the process of customers‟ cargoes with maximum speed and with most security

Company drivers and staffs have been trained to reach professional skill standard, contributing to meet customers‟ requirements and keep stable, then face the fierce competition among potential domestic transport competitors

CFS

Dong Tai Global also specializes in CFS and warehousing where its skilled staffs have controlled inventory completely and undertaken all tasks relating to storing cargo Warehouses are designed to offer customers flexible handling of any cargo, whether short term or long term storage

Not only that, the company also owns container-freight station (CSF) which has the capacity to store one stop cargo like wind turbines, containers… Furthermore, to avoid the risk of damages to cargo during transportation period, Dong Tai offers lashing and securing solutions Overall, Warehousing & CFS provides the following functions:

- Stuffing and stripping of containers, railway wagons, trailers

- Handling and consolidation cargo

- Reloading cargo from one means of transportation to another

- Lashing and packing cargo

- Bonded warehouse (both import and export storage)

- Short term and long term storage

- Raw material storage

- Air cargo storage

- Pallet sales and wrapping of pallet goods

Consolidation

- Consolidation of LCL Cargo to world-wide destinations

Dong Tai Global has great experience in consoling LCL from various shipper‟s and from world-wide destinations To the shipper with small or minimum cargo also could export to any point of destination in the world Dong Tai are also taking LCL consolidation for destinations over the world of any quantity reworked

at transshipment ports, then cargo will be converted directly to the final destinations with all other cargo already consolidated by hub port coordinator

Export freight for LCL shipments is at a competitive level and transshipment time are much faster than other competitors

- De-consol : (De-stuffing / distribution of import LCL cargo into Korea) Dong Tai have its own infrastructure for manifesting, landing, de-stuffing and distributing LCL cargo to consignee The company also has license called consol license at Korean ports

Other services

Beside core above sector, clients will also be supported free advice service related to tax, legal, auditing and accounting, which is considered as added value for customers Dong Tai also has time commitment for Customs clearance: only 2 working days after receiving all prepared documents Dong Tai Global serve all type of customs clearance:

- Import, Export

- Hai Phong port, Noi Bai airport

- Industrial parks in the North of Vietnam

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- Export tax, advice import with a suitable HS code for customers

2.1.5 Company Infrastructure and equipment

Warehouse area

The total area for CFS warehouse is 13.400 m2, for bonded warehouse is 31.100m2 with 2.000m2 new warehouse which is currently signed leasing contract with ¾ total area for exporting and ¼ for importing activities

Equipment for handling goods in warehouse and yard

At the present, Dong Tai has 15 hand pallet trucks, each truck is able to handle 1 pallet with volume 2 cube meter in 10 minutes which help to facilitate loading and unloading process Besides, there are

- Forklift truck ( 2,5 ton – 5 ton): 3 units

- Reach Stacker ( 41 – 45 ton): 2 units

- Front forklift ( 7 - 9 ton) : 3 units

- 15 tractors and 20 chassis

Repair workshop

Dong Tai has a maintenance and repair workshop with the total area about

450 m2 Throughput capacity per day is:

- Maintenance Level 1: 4 container truck/day

- Maintenance Level 2: 2 container truck/day

All repair and maintenance activities are taken place in this area

Office

Dong tai office in Hai Phong is located on the 2nd floor in TASACO Building with 100m2, comprising of 4 rooms equipped by facilities and necessary machine for management and operation

2.1.6 Company workforce