Recommendation to improve the ocean freight forwarding process for import FCL cargoes in GSC co , ltd

VIETNAM MARITIME UNIVERSITY NGUYEN THI QUYEN DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATION TO IMPROVE THE OCEAN FREIGHT FORWARDING PROCESS FOR IMPORT FCL CARGOES IN

VIETNAM MARITIME UNIVERSITY

NGUYEN THI QUYEN

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATION TO IMPROVE THE OCEAN FREIGHT FORWARDING PROCESS FOR IMPORT FCL CARGOES IN GOLDEN STAR INVESTMENT TRADING AND LOGISTICS

COMPANY LIMITED

HAI PHONG – 2015

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATION TO IMPROVE THE OCEAN FREIGHT FORWARDING PROCESS FOR IMPORT FCL CARGOES IN GOLDEN STAR INVESTMENT TRADING AND LOGISTICS

PREFACE

In the context of globalization as currently, in order to build a wealthy and developed country, the process of imported and exported cargoes plays an important role Because it ensures the exchange of goods with the country around the world, effectively exploit the potential resources in the country, promote economic growth; raise the level of technology and the restructuring of domestic industries; create jobs, raise incomes, improve living conditions for citizens Besides, when referring to import and export activities,international freight forwarding is one of the most important activities They cannot separate and have a consistent relationship with each other The rapid increase in scale and speed of export-import operations is main reason that make the developed strongly freight forwarding activity in both width and depth in recent years, especially ocean freight forwarding

The biggest advantage of international transportation by sea is able to transport

a large amount of cargoes with the low cost, compared to other modes of transport Because human beings take advantage of natural water surface and just have to invest

in build port and channel system, not much as other transport sectors The second strong point, if in the long distance as from Asia to Europe or America…, the speed of ocean transport is only slower than the speed of air transport The reason is the ship acts continuously without a break, even in bad weather conditions that any other means

of transport cannot operate Moreover, because of freight across the ocean, so the vessel can choose the shortest route to go straight from one country to another without waste time to wait or make procedures in the intermediate country Consequently, international transport by sea holds a special important position in transport goods in the world

Additionally, joining in most of freight activities is the forwarder They are organizer; bring goods quickly and efficiently from production place to consumption place Therefore, the freight forwarder plays an increasingly positive role in the development of international trade in every country

In the period internship time at Golden Star Investment Trading and Logistics Company Limited (GSC Co., Ltd), I have chance to research and practice the process

of freight forwarding for importing cargoes From what have learned in the last time, I would like to choose the topic: “Recommendation to improve the ocean freight forwarding process for importFCL cargoes in Golden Star Investment Trading and Logistics Company Limited” for my dissertation

The dissertation has structured as follows:

Chapter I: Foundation of freight forwarding process for import FCL cargoes

Chapter II: Evaluation ofthe ocean freight forwarding process for import FCL cargoes in Golden Star Investment Trading and Logistics Co., Ltd

Chapter III: Recommendation to improve the ocean freight forwarding process for import FCL cargoes in Golden Star Investment Trading and Logistics Co., Ltd

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

Nguyen ThiQuyen

Quyen

However, with limited knowledge and time, my dissertation does not avoid certainly shortcomings Therefore, I would like to receive suggestions, comments evaluations from teachers as well as from the company

I sincerely thank you!

TABLE OF CONTENTS

PREFACE i

ACKNOWLEDGEMENT iii

TABLE OF CONTENTS iv

LIST OF SYMBOLS AND ABBREVIATIONS vii

LIST OF TABLES ix

LIST OF FIGURES x

INTRODUCTION 1

1 Necessity 1

2 Research Object 1

3 Research Scope 2

4 Research Findings 2

5 Research methodology 2

CHAPTER I: FOUNDATION OF FREIGHT FORWARDING PROCESS FOR IMPORT FCL CARGOES 3

1.1 Overview of freight forwarding 3

1.1.1 The theoretical foundation 3

1.1.2 The legal basis of freight forwarding 9

1.2 Process of freight forwarding for import FCL cargoes 11

1.2.1 Definition of FCL 11

1.2.2 Process of freight forwarding for import FCL cargoes 12

1.2.3 Related parties in forwarding process 12

CHAPTER II EVALUATION OF THE OCEAN FREIGHT FORWARDING PROCESS FOR IMPORT FCL CARGOES IN GSC CO., LTD 14

2.1 The overview of GSC Co., Ltd 14

2.1.1 Basic information of GSC Co., Ltd 14

2.1.2 The structure of organization 16

2.1.3 The scope of activities 18

2.1.4 Core values 18

2.1.5 The capacity of the company 19

2.1.6 Management software system - SMF 19

2.1.7 Human resources 20

2.1.8 The result of business operation 21

2.1.9 The result of ocean freight forwarding activities for import FCL cargoes 23

2.1.10 Advantages and disadvantages of business activities of the company 25

2.2 The process of the ocean freight forwarding for import FCL cargoes in GSC Co., Ltd .27

2.2.1 Process 27

2.2.2 Explain the process 27

2.2.3 Time of the process 38

2.3 Evaluation of the ocean freight forwarding process for import FCL cargoes of GSC Co., Ltd 38

2.3.1 Advantages 38

2.3.2 Disadvantages 40

CHAPTER III RECOMMENDATION TO IMPROVE THE OCEAN FREIGHT FORWARDING PROCESS FOR IMPORT FCL CARGOES IN GSC CO., LTD 42

3.1 Development prospect of the country 42

3.2 Development direction of the company 42

3.2.1 The mission 43

3.2.2 The vision 43

3.3 Recommendation to improve the ocean freight forwarding process for import FCL in GSC Co., Ltd 43

3.3.1 To the company 44

3.3.1.1 Solution 1: Invest means of transport, infrastructure and warehousing 44

3.3.1.2 Solution 2: Improve human resources 45

3.3.1.3 Solution 3: Shorten the forwarding time and minimize costs 46

3.3.1.4 Solution 4: Improve the quality of forwarding services 47

3.3.1.5 Solution 5: Check containers when importing containers 49

3.3.2 To the government 50

CONCLUSION 53

BIBLIOGRAPHY 54

APPENDICES 56

LIST OF SYMBOLS AND ABBREVIATIONS

GSC Golden Star Investment Trading and Logistics Company Limited

FCL Full Container Load

LCL Less than Container Load

FIATA International Federation of Freight Forwarders Associations

CLECAT The European Association for Forwarding, Transport, Logistic and

Customs Services

ICD Inland Container Depot

D/O Delivery Order

L/C Letter of Credit

B/L Bill of Lading

C/O Certificate of Origin

EIR Equipment Interchange Receipt

ISBP International Standard Banking Practice

UCP The Uniform Customs and Practice

EU European Union

SMF System ManagementFreight Forwarding

VAT Value Added Tax

WTO World Trade Organization

EMS Express Mail Service

ETD Expected Time Departure

ETA Expected Time Arrival

THC Terminal Handling Charge

CIC Container Imbalance Charge

CY Container Yard

VNACCS Vietnam Automated Cargo Clearance System

VCIS Vietnam Customs Intelligence Information System

LIST OF FIGURES

Figure 1.1: The relationship between forwarder and related parties 13 Figure 2.1: Organizational chart 16 Figure 2.2: Chart of business results of the company period Sept 2013- 2015 21 Figure 2.3: Chart of presenting import markets of GSC in 3 quarters firstly in 2015 24 Figure 2.4: The process of ocean freight forwarding for import FCL cargoes at GSC

Co., Ltd 27 Figure 2.5: The process of cargo clearance for import cargoes 33

INTRODUCTION

1 Necessity

The water surface accounts for ¾ the earth surface with about 158 countries adjacent to the sea Marine transportation has been developing quickly It occupies 95% volume of cargoes on the international trade market

In addition, Vietnam has more than 3,000 kilometers of coastline as well as many large and small ports, so Vietnam ocean freight forwarding has significant advantages It has proved that ocean freight forwarding is more effective than others freight forwarding Volume and value goods through seaports and inland waterways account for large proportion - about 80% of the total volume of goods in international trade (voer, 2014).Besides, in the process of economic integration in the world, the international freight forwarding activities in our country has a very significant sense It contributes to accumulating foreign currency, simplifying documents, customs procedures and other legal procedures From that, they could facilitate to increase considerable the ability of competitive goods, speed up the exchange of export - import cargoes to other countries around the world and contribute to developing the country's economy

However, because importing activities have abundant with many different economic sectors and services, so freight forwarding companies has faced difficulties

as lack of professional staff, lack of extensive knowledge of documentation requirements,regulations, transportation costs, banking practices that lead to inefficiency in importing process Hence, researching to improvethe freight forwarding servicefor importcargoes is necessary for GSC to create competition in domestic as well as global market

2 Research Object

Searching and evaluating activities freight forwarding in GSC Co., Ltd in order

to find out the current existence Then, propose the solutions to solve these problems as well as improve the efficiency of business operations of the company

3 Research Scope

The company provides various services of freight forwarding However, the main scope of this dissertation is research on theocean freight forwarding processfor import FCL cargoes in Golden Star Investment Trading and Logistics Company Limited.This research isbased on collecting and analyzing data of the company from

2013 to 2014

4 Research Findings

The dissertation researches on the ocean freight forwarding processfor import FCL cargoes in GSC Through this, I will evaluate the process, find out strengths and weaknesses in order to give some recommendations to improve the process of importing cargoes as well as efficiency of forwarding activity, contribute to the development of the company

5 Research methodology

The internship at Golden Star Investment Trading and Logistics Company Limited has given me a chance to practice import-export forwarding process I have learnt valuable knowledge as well as experience related to freight forwarding In order

to do this dissertation, I have used some research methods as following:

- Participation: for better understanding the export-forwarding process, I physically and fully participated in the daily activities of the company Particularly, I have chance to go to shipping lines such as Sinokor, Wanhai, Maersk, NYK…

- Interviews: consult opinion of instructor and the staff of the company

- Observation: observe things that cannot easily show out such as attitudes of staffs

- Data collection: collecting related documents to support the dissertation during the internship, including contracts, packing lists, invoices, customs procedures, bill of lading, booking note and so on

CHAPTER I: FOUNDATION OF FREIGHT FORWARDING

PROCESS FOR IMPORT FCL CARGOES 1.1 Overview of freight forwarding

1.1.1 The theoretical foundation

a Freight forwarding

 Definition of freight forwarding

According to International Federation of Freight Forwarders Associations (FIATA):

“Freight Forwarding Services mean services of any kind relating to the carriage, 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.”(FIATA, 1997)

On October 29, 2004, FIATA and CLECAT (the European Association for Forwarding, Transport, Logistic and Customs Services), have adopted an official description of “freight forwarding and logistics services”:

“Freight Forwarding and Logistic Services mean services of any kind relating to the carriage (performed by single mode or multi-modal 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 FreightForwarding Services also include logistical services with modern information and communication technology in connection with the carriage, handling orstorage of the Goods, and de facto total supply chain management These services

can be tailored to meet the flexible application of the services provided.” (FIATASecretariat, 2004)

In Vietnam, Vietnam Commercial Law has defined the concept of goods forwarding services of traders clearly in article 163 of section 10 in 1997 with the similar content of FIATA

“Goods forwarding service is a commercial act whereby the forwarder receives goods from the sender, arranges transportation and storage, and completes the paperwork and other related services for the delivery of goods to the recipient as authorized by the goods owner, the carrier or another forwarder (hereinafter referred to

as the customer)” (VietnamCommercialLaw, 1997) The objective of the forwarder is

to meet the needs of the mandator with the highest efficiency

To sum up, freight forwarding is the co-ordination and shipment of goods from one place to another place by rail, road, air or sea… by single mode or multi-modal transport means

 Scope of freight forwarding activities

- On behalf of the exporter/shipper:

 Choose the route, mode of transport and the suitable carrier; provide schedule send/ receive the goods to the trustee

 Save freight rate that the carrier selected

 Receive goods and issue relevant documents such as the forwarder‟s certificate of receipt, the forwarder‟s certificate of transport…

 Study the regulation of the letter of credit and the government which apply to the shipment in the export country, the import country as well as transit countries; prepare all the necessary documents

 Pack the goods, pay attention to the route, the mode of transport, the nature of goods

 Arrange warehousing of goods (if necessary)

 Weigh, measure and draw goods code

 Advise the shipper about insurance, if required, can buy insurance for them

 Transport the goods to the port, make customs clearance, the related documentations and deliver the goods to the carrier

 Pay fees and other charges including freight

 Prepare bill of lading and take the signed bill of lading from the carrier

 Arrange for transshipment on the route (if necessary)

 Monitor the movement of goods through contact with the carrier and the forwarder's agents at the goods received place

 Assist the consignor in complaining, if having any loss or damage goods

- On behalf of the importer/consignee:

 Monitor transport cargoes

 Receive and check all related documents to transportation

 Receive from the carrier and if necessary, can pay transport fees

 Arrange customs clearance; pay duties and other charges to the customs and other public authorities

 Arrange warehousing of goods (if necessary)

 Delivery goods to the consignee after customs clearance

 Assist the consignee in complaining to the carrier, if having any loss or damage goods

 Assist the consignee in warehousing and distribution of goods

- The special freight forwarding services:

 Transport oversized goods, overweight goods, construction goods

 Transport special goods as live animals, foods, clothes…

 Help the seller advertisement, open exhibition in foreign countries

- Other services: notify customers about consumer demand, the competitive situation,and changes in politics, culture, and the state's policy about export-import operations

b Freight forwarder

 Definition of freight forwarder

Individuals or organizations who offer the freight forwarding service, authorizing by the competent state agency called the freight forwarder The freight forwarder is a commercial intermediary They act on behalf of the exporter, importer, individuals or other companies to organize and transport cargoes safety with the highest economic efficiency and the most reasonable costs

According to FIATA, “Freight Forwarder means the person concluding a contract of freight forwarding services with a customer.” (FIATA, 1997)

Vietnam Commercial Law also gives the definition in article 164 of section 10,

“A forwarder is a trader having a business registration certificate for forwarding services” (VietnamCommercialLaw, 1997)

 The role of freight forwarder

The forwarder could undertake many different functions in providing services to customers.They may be the shipper, the carrier and the consignee at the same time or also may take on a unique responsibility The forwarder can perform the following basic functions:

- Customs broker: the forwarder or any legal trustee units must complete customs procedures for goods before importing or exporting

- Transshipment and on-carriage: support and undertake the transshipment or transit cargoes in a third country

- Warehousing:

 If goods have to store, the forwarder will co-ordinate with the department

to select place and storage methods most effective

 In this case, the forwarder can exploit their storage facilities or hire warehouse from other contracts The forwarder has performed all warehouse functions of the client and has set up own distribution network

- Consolidate/ Groupage: The forwarder collects LCL shipments at different areas then gather into FCL shipments in order to create the most favorable conditions for the shipper and the carrier The forwarder becomes the carrier for LCL owners and the owner for the carrier actually

- Carrier: The forwarder could become the carrier They sign directly transport contract with the shipper and fully responsible for the transportation of goods

- Multimodal Transport Operator: The carrier offers transport services throughout door-to-door This person is responsible for the goods during transport process

It is clear that the forwarder plays an important role in the process of transport

In other words, they are the architect in transportation sector because they have the ability to organize carrier services in the best way, the safest and the best saving However, in order to become a good forwarder, we need a firm foundation about professional knowledge, legal knowledge as well as international conventions

 The right and obligation of the forwarder

In article 167, section 10 about goods forwarding services of Vietnam Commercial Law, a forwarder shall have the following rights and obligations:

1 To be entitled to remuneration and other reasonable income;

2 To fulfill all his/her/its obligations in accordance with the contract;

3 To depart from the instructions of the customer during the performance of the contract for a plausible reason and in the interests of the customer, provided that the customer must be notified thereof immediately;

4 To notify the customer immediately for further instructions of the cases where, after the contract has been signed, the instructions of the customer cannot be followed in whole or in part;

5 To perform his/her/its obligations within a reasonable period of time if there is in the contract no agreement on specific time limit for the performance of the obligations to the customer

(VietnamCommercialLaw, 1997)

 Liability of the forwarder

- In article 169, a forwarder shall not be liable for damage and loss caused in the following cases:

 Due to the customer or his/her/its authorized person is at fault;

 It has strictly complied with the instructions of the customer or the person authorized by the customer;

 The customer wrongly packs and marks the goods;

 Due to the customer or the person authorized by the customer loads and unloads the goods;

 Due to the goods are defective;

 Due to there is a strike;

 The force majeure events occur

A forwarder shall not be liable for the loss of profits which the customer should have earned if not for the delayed delivery or the delivery to the wrong address through

no fault of the forwarder, unless otherwise provided for by law

- In article 170, the limited liability of the forwarder:

1 The liability of a forwarder shall not exceed the value of the goods, unless otherwise agreed upon by the parties in the contract in any cases

2 A forwarder shall not be exempt from liability if he/she/it fails to disprove his/her/its fault for the loss, damage, or delayed delivery of goods

3 The damage is calculated based on the value of goods stated in invoices and other amounts substantiated by proper vouchers If the value of goods is not stated in the invoices, damages shall be calculated on the basis of the market value of that type of goods at the time when and the location where the goods are delivered to the customer

If a market price is not available, the normal price of goods of the same type and quality shall apply

4 A forwarder shall not be liable in the following cases:

 The forwarder does not receive any notice of complaint within 14 days from the date of delivery of goods, excluding Sundays and public holidays;

 The forwarder does not receive any written notice of any lawsuit instituted at a court or an arbitration body within 9 months from the date of delivery of goods

(VietnamCommercialLaw, 1997)

1.1.2 The legal basis of freight forwarding

 Vietnamese legal basis

The forwarding services (logistic services) has regulated by numerous legal documents in many fields:

- Vietnam Commercial Law in 1997 (from article 163 to article 171)

 Article 163: Goods forwarding services of traders

 Article 164: Forwarders

 Article 165: Forwarding contracts

 Article 166: Undertaking to transport goods

 Article 167: Rights and obligations of forwarders

 Article 168: Rights and obligations of customers

 Article 169: Liability exemption

 Article 170: Limited liability

 Article 171: The right to withhold and dispose of goods

- Vietnam Commercial Law in 2005 (from article 233 to article 240)

 Article 233: Logistic services

 Article 234: Conditions for logistic service provision

 Article 235: Rights and obligations of traders providing logistic services

 Article 236: Rights and obligations of customers

 Article 237: Liability exemption for traders providing logistic services

 Article 238: Limitation to liability

 Article 239: The right to withhold and dispose of goods

 Article 240: Obligations of traders providing logistic services when withholding goods

- Maritime Code in 2005: from article 74 to article 97 contains regulations about the rights and obligations of the carrier, liability of the carrier and the content relates to documents in the carriage process by sea, the period of complaint

- Some other specialized laws, such as Road Traffic Law in 2005, Business Law

in 2005, Customs Law in 2005

- Some related decrees:

 Decree of Government No 140/2007/ND-CP of providing detailed regulations on the Commercial Law regarding conditions for engaging in logistic services business and limitations on liability of logistic services business entities

 Decree No 115/2007/ ND-CP of the Government dated May5, 2007: business conditions about maritime transport services

 Decree No 87/2009/ ND-CP dated October 29, 2009 about multimodal transport

 Circular No.172/2010/TT-BTC dated November 2, 2010 guiding collection rates, collection regulations, remittance, management and use

of customs fees

 Circular No 128/2013/TT-BTC of September 10, 2013, on customs procedures, customs supervision and inspection; export tax, import tax, and administration of tax on exported goods and imported goods

 International legal basis

- Vienna Conventionin 1980: The United Nations Convention on Contracts for the International Sale of Goods

- Hague Rules in 1924 and Protocols in 1968 and 1979: contain provision about time and responsibility of the carrier, the responsible basis, obligations and rights of the carrier and announce losses and complaint time

- The Hamburg Rules in 1978 are a set of rules governing the international shipment of goods, resulting from the United Nations International Convention

on the Carriage of Goods by Sea adopted in Hamburg on 31 March 1978 It came into force on 1 November 1992

- Rotterdam Rules in 2010: the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea

1.2 Process of freight forwarding for import FCL cargoes

1.2.1 Definition of FCL

FCL is an abbreviation for Full Container Load FCL term uses in ocean freight services, describing as shipping full container from one place to another FCL usually associates between one shipper and one consignee

FCL usually brings lower cost than equivalent size and weight of cargoes This way is the most optimized than others

The shipper and the consignee are responsible for a full container even that container is full cargoes or not

1.2.2 Process of freight forwarding for import FCL cargoes

- When receiving Arrival Notice, the forwarder brings original B/L and letter of introduction to shipping lines in order to take D/O;

- The forwarder brings D/O and the document to make the customs procedures for goods and register verification (if have to check goods) The forwarder may suggest putting the container on consignee warehouse or ICD (Inland Container Depot) to check customs, but must pay container boxes on time otherwise, you must be charged;

- After completing customs procedures, the forwarder must bring the entire documents along with D/O to the ship management office at the port to confirm D/O;

- Take goods delivery note and receive goods

1.2.3 Related parties in forwarding process

Figure 1.1: The relationship between forwarder and related parties

The forwarder

PortShipper

CHAPTER II EVALUATION OF THE OCEAN FREIGHT FORWARDING PROCESS FOR IMPORT FCL CARGOES IN

GSC CO., LTD 2.1 The overview of GSC Co., Ltd

2.1.1 Basic information of GSC Co., Ltd

- Name in English: Golden Star Investment Trading and Logistics Company Limited

- Name in Vietnamese: Côngtytráchnhiệmhữuhạnđầutưthươngmạivàtiếpvận Sao Vàng

- Abbreviation name: GSC CO., LTD

- Transaction name: GSC CO., LTD

- Logo:

- Website: www.gscvn.com.vn

- Business registered address: No 91, Dong Cac Street, O Cho Dua Ward, Dong

Da District, Hanoi City

- Head Office: VITRANCO Building, 6th Floor, No 1A-A1, Thai Thinh Street, Lang Ha Ward, Dong Da District, Hanoi City

- Telephone: (84.4) 35135407

- Fax: (84.4) 3 5135410

- Email: hanoi@gscvn.com.vn

- Tax code: 0106302931

- Account number: 55706368 in Vietnam Prosperity Bank (VP Bank) – KinhDo Branch

- Business license: 0106302931

- Director: Mrs Nguyen Hai Yen

- Branches: Haiphong and Ho Chi Minh City

* Haiphong Branch Office:

- Address: 8thFloor, 7B Tran Hung Dao Street, Hoang Van Thu Ward, Hong Bang District, Haiphong City

- Telephone: (84.31) 3 515585

Fax: (84.31) 3 515586

- Email: haiphong@gscvn.com.vn

- Director: Mrs Le ThiHuongGiang

* Ho Chi Minh Branch Office:

- Address: 3rd Floor, No 143-145 PhanXich Long Street, Ward 7, PhuNhuan District, Ho Chi Minh City

In the early days, the company had faced many difficulties due to the low capital, the limited facilities, lack of human resources who actually have experience in freight forwarding business However, thanks to the founder‟s enthusiasm and their experience on the fields of forwarding, logistics and trading, they have been seen both the strong points and weak points of these industries in Vietnam and in the world They have tended to consult the best solutions to the local enterprises, as well as the overseas enterprises located in Viet Nam Therefore, they can consider and decide the most

suitable ways for their development As an actual result, only two years later, they have become strong company and gained a good reputation in business

Currently, GSC is very self-confident and become the professional provider about multi-modal transportation, customs brokerage, logistics, trading, consulting related to import and export cargoes or the payment procedures concerning banking for the local and overseas agents The staffs are enthusiastic, well trained, have certification of IATA (International Air Transport Association) and customs brokers GSC has also certified ISO 9001:2008 In addition, GSC is a secured member

of the Global Logistics Networks - they have agents chain all over the world GSC is also a member of some organizations as CLN (Centennial Logistics Network), VCCI (Vietnam Champers Commerce and Industry) and W3PLN (Worldwide 3PL Network).Thanks to its, GSC has some typical customers, such as CITECO (Germany), FPT, TOYODA GOSEI, BAROTEX (Barotex Vietnam Investment and Trading JSC), VIGLACERA…

2.1.2 The structure of organization

Organizational structure has quite small scale The current number of employees

is six people They have distributed into departments: documentation department, sales department, operation department and accounting department

Figure 2.1: Organizational chart

Director

Documentation

Department

Sales Department

Operation Department

Accounting Department

- Director:

 The person who has the highest power of the company

 Be responsible for controlling all business activities under the law

 Directly managing, organizing and directing staff to implement plans of the company

 Promulgating regulations on management of the internal company

 Recruiting and dismissing employees

 Taking care of staff„s interests

- Documentation Department:

 Receiving and checking the documents of the customers, make documents according to requiring of the customer, such as Invoice, Packing list, C/O

- Sales Department:

 Seeking for potential customers

 Contacting and providing services to the customers of the company

 Promoting the company services

 Consulting and answering the customer's questions

 Regularly updated information to clients/agents about their shipments are performing

- Accounting Department:

 Be responsible for financial management of the company, including salary, profit and loss

 Making invoices and controlling about expenditure payment procedures

of the company, the customer liabilities and the payment to the bank

2.1.3The scope of activities

GSC with their motion: "fast, safe and effective" has created a certain position

in the following main fields:

- GSC provides forwarding services, internal and international transport services

by air, sea, road, rail, multi-modal transport

- GSC is an agent of customs procedures service for import-export companies, forwarding companies, logistics companies

- GSC offers free consulting for the forwarding, logistics and import-export companies – local and overseas about payment transactions through banks, forwarding operations, import and export

- GSC focuses on training the human resources so that they can develop the local enterprises in their own ways and get their own reputation in local and international markets

- GSC creates an active working environment for the university students and graduates They can register to work as trainees and are subject to the strict supervision of the much-experienced predecessors If they perform well, they have chances to become their officers

2.1.4 Core values

From formation to put into operation, the leaders of the company always manage GSC under four core values:

1 Respect: Colleagues, Customers, Partners

2 Prosperity: GSC always care about staff's life

3 Transparency: GSC operates based on public, transparent and clear policies and regulations

4 Compliance: law and regulations of the company

With the aim of:

 Providing customers the best service with reasonable price and transit time

 Updating information about regular, quick and timely goods schedule

2.1.5The capacity of the company

- Professional staff has trained on controlling documents, L/C (letters of credit) and ISBP (International Standard Banking Practice), UCP (The Uniform Customs and Practice) and customs brokers

- The current major market of GSC are:

 Agent of level 2 of VN-OZ-KE of HAN - ICN line and HAN - NRT line

 International transport contract by sea with EU line of NYK shipping line; with Japan line of Sinokor shipping line

 Provide customs and forwarding services in Hanoi, Haiphong and Ho Chi Minh City for direct customers and forwarding companies like QC Logistics, Focus shipping

- GSC has been granted ISO 9001: 2008

- GSC has selected as the exclusive partner of Izmic Company Limited - 1/100 leading companies of Japan about import-export cargoes

2.1.6Management software system- SMF

SMF is the intelligent software for the logistics industry SMF is capable of covering the processes:

- Booking

- Tracking cargoes schedule

- Declaring online tax

- Submitting electronic manifest

- Storing a huge amounts of information about clients and goods

- Sending notice of arrival

- Releasing the command or authorized consignee

- Releasing the air waybill or bill of lading

2.1.7Human resources

- Director: 1 person

- Documentation department: 1 person

- Sales department: 1 person

- Operation department: 3 person

- Accounting department: 1 person

All staffs graduated from the university, in which some people have Bachelor‟s degrees in economics from Vietnam Maritime University They have the high sense of responsibility for the working and regulations of the company Every year, the company has organized travelling to encourage employees Besides, the company also receives trainees so that they have a chance to experience real knowledge From that, they could help the company complete more working

The staff works from Monday to Saturday morning Working hours in the day is from 8:00 am to 5:00 p.m., the lunch break hour is from 12:00 to 14:00 Employees are insured and the holiday is under the regime of the state

2.1.8The result of business operation

Table 2.1: Business results September in 2013 – September 2015

(Unit: thousand dongs)

Enterprise income tax 158 084 169 320

Profit after tax 632 337 677 280

(Source: Accounting Department)

Figure 2.2: Chart of business results of the company period Sept 2013- 2015

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Sept 2013 - 2014

Sept 2014 - 2015

Business Results (Sept 2013 - 2015)

Profit Cost Revenue

The bar chart provided reveals the results of business of GSC from September in

2013 to September in 2015 It is apparent that all indicators increase steadily over the years

Although in period between September in 2013 and 2015, the economy faced many difficulties, revenue is growingly Revenue reached about 2 billion in September

2013 and over 2.1 billion in September 2015.The company‟s revenue increased significantly is owing to some reasons Firstly, the economic situation in our country had recovery trends back The demand of import and export cargoes increased leading

to the demand of freight forwarding services increased In early 2015, along with the old customers, the company also signed contracts with some new customers.Secondly, the staff is increasingly professional and high sense of responsibility The contract had completed timely This has increased the company's reputation and the customer's trust Thirdly is the mechanism of state management The government has issued many policies to facilitate export-import operations, as applying tax rate of 0% for exports, innovating in Customs Law, Tax Law for import and export, VAT law Finally, the company has given the more effective policy to take advantage of equipment, resources and relationships to attract more customers

The company‟s cost was also a slight climb year by year (from over 1.2 billion

to approximately 1.3 billion) The reason is the company must invest the modern equipment to serve customers according to global trends Besides, the number of contracts increased, leading to the implementation costs also raised In addition, because demands of freight forwarding services increased along with the economic recovery, the company does not meet the demand for transportation and increased services price is the cause of increased costs Moreover, freight prices have become the main competitive tools among forwarding companies Most companies are self regulated the service prices based on costs and level of general price in the market Therefore, the price often changes under periods and depend on each company This is also due to the state has not yet had a specific regulation on a level of general price in this sector On the other hand, our country's logistics industry is relatively young compared with the developed countries and spontaneously Business developed in the quantity but having the difference in level, the price is unstable in different times, leading to the severe competition