Recommendation to improve freight forwarding process of imported cargoes in tung bach export import and transport services trading company

VIETNAM MARITIME UNIVERSITYSTUDENT NAME: KIEU PHUC HIEP DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS Recommendation to improve freight forwarding process of imported cargoes in Tung

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: KIEU PHUC HIEP

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport

Services Trading Company

HAI PHONG – 2015

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: KIEU PHUC HIEP

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading

Company

Supervisor: Hoang Bao Trung

HAI PHONG – 2015

Intership is very important with students to interact the knowledge they havelearnt at school and hands-on experience Besides, intership is a good chance forstudents to visit places they might not ever visit on their own

Many scientists affirm that intership is very important and necessary to students

to have a new experience and learn how to use what they are learning in the realsituations Students are able to gain all experience beyond reading and can seeelements by their eyes instead of reading about it in books and believing what theyare told because it’s in print

With intership, student knows clearly and exactly how to do a work, then theycan draw the real-work knowledge for themselves and can be successful in theirbusiness after finishing education Moreover, not only learning but also practicing,students will feel more confident about their abilities and can work more efficiently

It is also the opportunity for students to make a great combination of learningand fun; it will make the outside classes more interesting and more working.Intership can provide entertainment for students; and it can make students morefocus back in the classroom

It is better if students have chance to practice all the knowledge they have learnt

in the educational process; and intership helps to make it become true This is anuseful and important part to help students complete the working abilities in thefuture And furthermore, intership can change the way students consider and look ateducation and the way they recognize their communication skills

In conclusion, intership is indispensable part in the educational process, it helpsstudents improve the knowledge they have learnt and perfect all the skills andabilities It is absolutely a new experience for students and it will make the success

of students in the future

As a student of Vietnam Maritime University (VIMARU) and has the passion inmaritime field, I chose Tung Bach Export Import And Transport Services TradingCompany as my intership company Along with the history, an interestingdevelopment process as well as the specialization in work, I believe that this is thebest choice for me

Hai Phong, September 30th, 2015 Student

Kieu Phuc Hiep

Lastly, I also would like to thank my parents and my friends for their supportand encourage both in mentally and physically in that time.

Adding more, because of limited knowledge and time in the process ofcompletion, shortcomings cannot be avoided so the helpful advices from teachersand readers are warmly welcome

LIST OF TABLES

TABLE 2.1: Business result in 2013 (Unit: Million VNĐ)

TABLE 2.2: Business result in 2014 (Unit: Million VNĐ)

TABLE 2.3: Business result in first 3 quarters of 2015 (Unit: Million VNĐ)

LIST OF FIGURES

FIGURE 2.1: Organization system of Tung Bach Company

FIGURE 2.2: Business Results of Tung Bach Company in the 11 consecutivequarters

FIGURE 2.3: Business results of Tung Bach company in 2013 and 2014

FIGURE 2.4: Business Results of Tung Bach Company in the first 3 quarters of

2013, 2014, 2015

FIGURE 2.5: Process of imported FCL goods

FIGURE 2.6: Customs clearance process

TABLE OF CONTENT

Preface i

Acknowledgement ii

List of tables iii

List of figures iv

Introduction 1

Chapter I: Foundation of freight forwarding 3

1.1 Freight forwarding and operation 3

1.1.1 Foundation of freight forwarding 3

1.1.2 Enterprises engaged in freight forwarding 3

1.1.3 Legal basic, rules of freight forwarding 4

1.1.4 Types of freight forwarding 5

1.2 Freight forwarder foundation and duties in the international trade scenario 6

1.2.1 Foundation of freight forwarder 6

1.2.2 Role, duties and powers of freight forwarder 7

1.3 Freight forwarding process 9

1.3.1 Duties of parties involved in freight forwarding process 9

1.3.2 Shipping goods methods 10

1.3.3 Criterion for evaluating the freight forwarding process of imported FCL cargoes……… 11

1.4 Essential documents in freight forwarding cargoes 12

1.4.1 Bill of lading (B/L) 12

1.4.2 Certificate of origin (C/O) 12

1.4.3 Commercial invoice 12

1.4.4 Packing list 13

Chapter II: Forwarding process of imported cargoes in Tung Bach Export Import

And Transport Services Trading Company 14

2.1 Introduction of Tung Bach Export Import And Transport Services Trading Company 14

2.1.1 Background of the company 14

2.1.2 Mission, function and core values of Tung Bach company 15

2.1.3 Organization 16

2.1.4 Personnel 18

2.1.5 Facility 19

2.1.6 Functions of Tung Bach Export Import And Transport Services Trading Company 19

2.1.7 Analysis of business result of Tung Bach Export Import And Transport Services Trading Company during the period from 2013 to 2015………21

2.2 Freight forwarding process of imported FCL cargoes in Tung Bach Export Import And Transport Services Trading Company 25

2.2.1 Negotiate and sign the contract 25

2.2.2 Receive and check the documents from importers 27

2.2.3 Receive notification of arrival of goods 27

2.2.4 Exchange B/L and take D/O at shipping agent 27

2.2.5 Carry out customs clearance for the import goods 27

2.2.6 Exchange D/O for delivery note and pick up goods 29

2.2.7 Deliver containers to the imported warehouse 30

2.3Evaluation the freight forwarding process of imported FCL cargoes at Tung Bach Company……… 30

Chapter III: Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export Import And Transport Services Trading Company 34

3.1 General evaluation of Tung Bach company 34

3.1.1 Advantages 33

3.1.2 Disadvantages 35

3.2 Goals and directions for Tung Bach company in the future 36

3.2.1 General solutions for the company 37

3.2.2 Solutions for infrastructure 38

3.2.3 Solutions for human resources 39

3.3 Recommendation of the company to improve freight forwarding process 39

3.3.1 Recommendation for reducing cost of providing services 39

3.3.2 Complete online business capabilities 40

3.3.3 Participate in professional associations organizations 40

3.3.4 Closely cooperate on information……….41

3.3.5 Creat a hightly professional style in serving customers 42

Conclusion 43

Reference 44

Necessity

Transportation is the life-blood of the economy, transport development willmotivate other economic sectors develop In the era of modernization andglobalization today, transportation plays a very important role, especially maritimetransport Thanks to marine transportation, the economic sector of countries can link

to each other, close the gaps on geographical space, reducing significantlyproduction cost as well as product prices, creating big profits not only for a certaincountry but also for regions and even the world

In international trade, maritime transport plays an extremely important role.According to the International Maritime Organization (IMO), “Maritime transport isessential to the world’s economy as over 90% of the world’s trade is carried by seaand it is, by far, the most cost-effective way to move goods and raw materialsaround the world” [CITATION IMO \y \t \l 1033 ] Therefore, shipping becomes one ofthe most potentail business serviecs in Vietnam recently, and has developed moreservice segments to serve better for customers

Along with the development of maritime industry, freight forwarding servicesalso attract more attention and become one of the indispensable services of all theshipping companies During practice at Tung Bach Export Import And TransportServices Trading Company, along with the knowledge I have learned in school, Inoticed that freight forwarding is as the core of all foreign trading activities.Enterprises want to achieve good results, obtain much profit required to performwell the process of freight forwarding cargoes Standing in front of this trend, TungBach Export Import And Transport Services Trading Company, as well as countlessother businesses, need to prepare a good knowledge, professionalism and quality ofservice to meet the high demands of our customers, especially with freightforwarding process of imported cargoes of the company - one of the key services.Understanding the importance of this issue, I chose topic “Recommendation toimprove freight forwarding process of imported cargoes in Tung Bach ExportImport And Transport Services Trading Company” as my dissertation’s topic

Research object

Research object of the dissertation is the process of freight forwarding importedcargoes at Tung Bach Import Export And Transport Services Trading Company.Besides, the research also gave an assessment of the business situation of company

in terms of logistic and freight forwarding in recent years Thereby can evaluate thestrengths and weaknesses in freight forwarding services, and then come up withsolutions to improve the quality of service and meet the customers’ needs which issuitable with the current situation

Research Scope

Due to the limitation of time and knowledge; therefore, the research scope is:

- Location: Tung Bach Import Export And Transport Services Trading

Company in Hai Phong

- Research field: Freight forwarding services

- Research space: the foundation, development and business operation of

intership company, evaluation the process of freight forwarding importedcargoes; recommendation based on strengths and weaknesses of the processimplementation during the training time at company

- Research time: from 2012 to 2015

Research findings

During the time as a trainee at Tung Bach Import Export And Transport ServicesTrading Company, figures and data are provided by the accounting department ofthe company Besides, in a month working as a freight forwarder, the knowledgegained through mostly from working practical, and a part was from the experienceand the guidance of staff in the company

On the other hand, information as well as some knowledge and concepts to bemined from trusted sources on the Internet to help get more complete study

During the training time at Tung Bach Company, as a forwarder, I realized somenoticable internal problems of freight forwarding process of the company whichaffect the efficiency of the whole process Along with my experience and the help

of the company’s staffs, I have come up with several recommendations to improvefreight forwarding process to improve profitability and reputation of Tung BachCompany

CHAPTER I: FOUNDATION OF FREIGHT FORWARDING

1.1.1 Foundation of Freight forwarding

Outstanding feature of international trade is that buyers and sellers are indifferent countries After signing the contract, the sellers will deliver the goods,which means that goods are transported from one country to other countries To letthe transportation process perform completely, it requires a series of activitiesrelated to the shipping process including packaging, storage, transfer goods to theport, implement the shipping procedures, handling goods, and reach recipients According to FIATA, “Freight forwarding services means services of any kindrelating to the carriage, consolidation, storage, handling, packing or distribution ofthe goods as well as ancillary and advisory services in connection therewith,including but not limited to customs and fiscal matters, declaring the goods forofficial purposes, procuring insurance of the goods and collecting or procuringpayment or documents relating to the goods” [ CITATION FIA \l 1033 ]

According to Article 163 of the Vietnam Commercial Law, issued on May 23rd,

1997, freight forwarding services are as commercial practices, whereby freightforwarders receive goods from sender, and then organize transport, storage,warehousing, do paperwork and other services related to delivery to the recipientunder the mandate of shippers, carriers or other people who do freight forwardingservices

Briefly, freight forwarding is a set of operations and processes related to theimplementation of transport to ship goods from the shipper (consignor) to thedestination (consignee) Forwarders can make the service either directly or through

an agent and hire the services of other third parties

1.1.2 Enterprises engaged in freight forwarding

According to the government decree on the conditions for maritime servicebusiness, issued on March 19th, 2001 (effective after 15 days from the date ofsigning), enterprises have following registered business lines can engage in foreigntrade freight forwarding

1.1.2.1 Agency services for sea transport

Agency services for sea transport is service to perform the following tasks underthe entrustment of goods owners:

- Organizing and carrying out works which support transport process, freight

forwarding, transportation of passengers and baggage on the basis of contract

of carriage by sea or multimodal transportation contract

- Rental sea transport means, handling facilities, warehouses, wharves, jetties

and other specialized maritime equipment

- Working as container agent

- Resolving other matters as authorized

1.1.2.2 Maritime brokerage services

Maritime brokerage service is a service implemented the following tasks:

- Being a broker in marine contracting

- Being a broker in signing other contracts relating to maritime activities

required by trustees in each specific contract

- Being a broker in signing chartering contract, purchasing ships contract,

towage contract, leasing and crew contract

1.1.2.3 Cargo tallying services

Cargo tallying service is service responsible for tallying/counting the actualquantity of goods upon delivery or with the ship or other means under theentrustment of the shipper, consignee or carrier

1.1.2.4 Cargo handling services

Cargo handling services at ports perform work of loading and unloading ofgoods at the port according to the technological process of loading and unloading ofeach certain commodities

1.1.3 Legal basic, rules of freight forwarding

Freight forwarding of export and import should be based on a legal basis, as theinternational law (924 International Convention for the Unification of Certain Rules

of Law relating to Bills of Lading and Protocol of Signature, 1978 United NationsConvention on the Carriage of Goods by Sea, 1980 United Nations Convention onContracts for the International Sale of Goods…), the legal documents of Vietnamregarding freight forwarding, commercial contract types and letters of credit (L/C),

to ensure the rights of goods owners

The State of Vietnam has issued many legal documents relating to transport,freight forwarding as 330CP decree and Maritime Code 1990, Decision No.2073/QDGT dated 6-10-1991 of Ministers Ministry of transport and postal The currenttext stipulates the principles of freight forwarding at Vietnamese Port as following:

- The delivery of goods at the port is conducted by port, based on contracts

signed by the shipper, or his delegate (forwarding company) with Port

- If cargoes are not stored at port, goods owners or his delegate can dirrectly

work with carrier (ships) Thus, shippers must settle directly with the ship,only make agreement with port about handling locations, handling fees andother incurred costs

- Cargo handling services within the port are implemented by port If the

goods owners want to take the means and workers into the ports for loading

and unloading goods, owners must make a deal with the port and pay therelevant fees for the Port

- When being delegated to receive goods from ships, Port will use the same

method with both 2 process: receipt and delivery

- The consignee must produce the valid documents, certifying the right to

receive goods and must receive continuous in a given period of time

- Port is not responsible for the goods when they have been taken out of the

warehouse, yard

1.1.4 Types of freight forwarding

1.1.4.1 Services on behalf of the shipper (exporter)

Forwarders with the specific agreement will help their customers (exporters) all

of the following:

- Choose transport routes

- Rent packing place following the request of the carrier

- Deliver and issue the relevant documents

- Search the conditions of the letter of credit (L/C) and other documents of

government legislation relating to carrying goods of exporting country,importing countries, including the transit countries, as well as prepare thenecessary documents

- Packaged goods (except when goods are packed before delivering to the

recipient)

- Advice to exporters on the importance of cargo insurance

- Prepare warehouse for storing goods, weighing goods (if necessary)

- Transport goods to ports, conducted through the procedures of fees in

customs supervision area, port authorities and then deliver to the exporter

- Receive B/L from the carrier, then deliver to the exporters

- Monitor the movement of goods to the port of destination by contacting the

carrier or forwarding agent abroad

- Note about the loss or damage to goods (if any)

- Help the exporters in the complaint for damages, loss or damage of goods

1.1.4.2 Services on behalf of the consignee (importer)

Forwarders with the specific agreement will help their customers (exporters) all

of the following:

- Monitor the movement of goods in case the importer is responsible for

shipping costs

- Receive and examine all documents relating to the carriage of goods

- Merchandise from carriers

- Prepare documents and pay the fee for customs supervision, as well as other

related fees

- Prepare transit inventory if necessary

- Deliver goods to the importer

- Help the importers in the complaint for damages, loss of cargo

1.1.4.3 Other services

In addition to the above services, the forwarder also provide other services asrequested by the customer as consolidation service, advising customers on newmarkets, competitive situation, the export strategy, the appropriate deliveryconditions

1.1.4.4 Specially freight forwarding services

Freight forwarders usually take the responsibility with vast variety of goods such

as finished products, dry goods, semi-finished products and other miscellaneouscommodities exchanged in international trade These kind of goods are frequentlytransported by 2 above ways (Services on behalf of the shipper and Services onbehalf of the consignee); however, according to customer demand, freight forwarderalso can do other services related to special merchandise and some may specialize

in doing above services Special cargoes such as:

 Shipping goods for the project

This work is mainly related to transport machinery, heavy equipment tobuild major projects such as airports, chemical plants, power plants,refineries from the place of production to the construction site Themovement of goods should be carefully planned to ensure the delivery ontime and may have to use heavy cranes, over-sized truck, special types ofvessels This is a specialized field of logistics

 Overseas exhibition

Freight forwarders are usually assigned by exhibition organizer fortransporting cargoes to the exhibition place in other countries Freightforwarders must comply with the special instructions of the exhibitionorganizer on transport means, the specific location of customs procedures atdestination, and the documents required

1.2 Freight forwarder foundation and duties in the international trade

1.2.1 Foundation of freight forwarder

According to FIATA (freight exports curriculum - ASS Prof., Dr Hoang Van

Chau), a freight forwarder is who endeavored goods tranported under trust contractand act for the benefit of the trustee that this freight forwarder is not a carrier.Freight forwarders also undertake all the work related to delivery contract such as:preservation, storage, transshipment, customs procedures, goods inspection

According to Article 164 Vietnam Commercial Law, freight forwarder is traderwho has certificate of business registration of forwarding service Freight forwardermight be:

- Owners: when the owners take the responsibility of forwarding activities

with their owner goods

- Shipowners: when shipowners behalf shippers perform forwarding tasks

- Agents, handling companies or warehouse, professional freight forwarder or

any other person have a business registration in freight forwarding service

In short, freight forwarder who is operating under trustee contract, to protect theinterests of shippers Freight forwarders are responsible for transporting goods butnot necessarily a carrier, freight forwarder only perform actions within thedelegation of shippers

1.2.2 Role, duties and powers of freight forwarder

1.2.2.1 Role of freight forwarder

The development of freight forwarding industry led to the development of theinfrastructure system, especially infrastructure projects directly serving freightforwarding such as ports, roads, rivers, railways, airports…

Freight forwarders are both multi-modal carrier and organizer, the “architect” oftransport Freight forwarders are responsible for choosing the means of transport,the proper transport, proper roads effectively stands out the most economical

Along with the development of international trade and technological progress inthe transportation industry, nowadays, freight forwarding companies play importantrole in international transport

They not only take the responsibility for customs clearance or charterer but alsoprovide full service to the whole process of transportation and distribution of goods

In detail, freight forwarding companies have done the following functions:

- Customs brokers: freight forwarding companies on behalf of the exporter or

importer to declare complete customs procedures or customs broker

- Agent: companies are entrusted by shipper or carrier to perform various tasks

such as receiving, shipping, storage following the contract

country, freight forwarding companies are responsible for completing thenecessary formalities for goods to the final destination

- Warehousing: in the case of goods to be stored prior to export or import,

freight forwarding companies will take care of it by their own means or hireother party and even distribute goods if necessary

- Consolidator: in transport goods by container, consolidation is indispensable

to turn LCL (less than container load) into FCL (full container load)

- Carrier: forwarding companies sign the contract with shippers and be in

charge of transporting goods from one place to another place Companies areconsidered as contracting carrier if they signed the contract withouttransportation; and if they directly transport goods, they are considered asperforming carrier

- Multimodal Transport Operator – MTO: provide transportation services went

smoothly, also known as door to door services MTO is actually the carrier usually carrier under contract and be responsible for goods

-1.2.2.2 Obligations and powers of freight forwarder

Obligations and powers of freight forwarder specified in Article 167 in VietnamCommercial Law:

1 Enjoy service charges and other reasonable expenses

2 Fully implement obligations under the contract

3 During the performance of contracts, if any plausible reason for the benefit ofclients, freight forwarder can do other than the customer's instructions, but toimmediately notify the customer unless agreement

4 After signing the contract, in case of if any failure to implement a part orwhole of the customer's instructions, they must immediately notify thecustomer for additional indications

5 In case no agreement on a specific period fulfill the obligations to customers,they must perform their duties in a reasonable limit

6 To undertake the freight forwarding tasks, they must comply with the lawand practices of specialized transport

1.2.2.3 Liability of freight forwarder

Article 70 of Vietnam Commercial Law regulates the liability of freightforwarder as follow:

- Liability of freight forwarder in any case should not exceed the value of

goods; unless the parties make agreement in the contract

- Freight forwarders are not exempt from liability if they can not prove that

loss, damage or delay in delivery is not caused by theirs fault

- Compensation is calculated on the basis of the value of goods on the bill and

other amounts have valid documents If the bill does not have value of goods,compensation is calculated based on the value of goods at the place and timethey are delivered to customers at market prices; if there is no market price,the amount of compensation is calculated according to the price of goods atthe same kind and quality

- Freight forwarders are not responsible in the following cases:

 Freight forwarders do not receive notice of appeal within 14 days ofdelivery, excluding Sundays and holidays

 Do not receive notice in writing of the defendant of the court within aperiod of 9 months from the date of delivery

1.2.2.4 Liability exemption of freight forwarder

According to Article 169 of Vietnam Commercial Law, freight forwarders arenot responsible for loss, damage or incurred in the following cases

- Due to the fault of customer or the customer's authorization

- Forwarders have to comply with the instructions of the customer or the

customer's authorization

- Customer packages and coding incorrectly

- By errors of commodity

- Due to the strike

- Force majeure cases

1.3 Freight forwarding process

1.3.1 Duties of parties involved in freight forwarding process

1.3.1.1 Duties of Port

- Contracting of handling, delivery, preservation and storage of goods with

shippers

- Loading exported goods into ships and unloading imported goods from ships

- Prepare necessary documents in order to protect the rights of foreign shippers

- Deliver imported goods to domestic shippers on behalf of importers

- Perform handling, shipping, storage and preservation of goods in port areas

- Take the responsibility for cargo damage caused by Port during process of

transportation, handling

- Take the responsible for the loss and damage of goods storaged at Port and

pay compensation to shippers if any valid records and if the Port does notprove that they have no fault

- Port is not responsible for the goods in the following cases:

 Once goods removed from Port yard or warehouse

 Goods are still inside the pack, the seals still intact

 The code of goods wrong or unclear (leading to confusion or loss)1.3.1.2 Duties of shippers

- Sign the entrusted forwarding contract with port in case of goods go through

the Port

- Conduct freight forwarding procedure

- Make the contract of handling, tranportation, preservation and storage of

goods with Port

- Provide Port information about goods and ships

- Provide Port necessary documents to perform forwarding process

- Monitor forwarding process to solve inccured problems

- Set necessary documents during the process of forwarding to complaints

involved parties

- Pay the fees for Port

1.3.1.3 Duties of customs

- Conduct custom procedures, perform the inspection, supervision with

imported exported goods and ships

- Ensure the implementation the processes of State of export and import, the

export tax, the import tax…

- Undertake measures to detect, prevent, investigate and handle acts of

smuggling, trade fraud or illegal transportation of goods, foreign exchange,Vietnamese currency through port

1.3.2 Shipping goods methods

1.3.2.1 Full Container Loaded (FCL)

With FCL, if an exporter has goods in one full container load, he books an FCL(Full Container Load) to contain his cargo, it means that the container owns by oneshipper “In an FCL owned by one shipper, the cargo in the container need not havefully loaded cargo in the container Let the cargo be half loaded or quarter loadedcontainer, if booked by one shipper under one shipment, the said shipment is calledFCL shipment”[ CITATION Dif15 \l 1033 ]

FCL includes common goods such as 20’/40’/40 HC…

When sales FCL goods, it is necessary to notice following points:

- Check if any handle agents at destination port

- Check with customers the method of paying fee whether collect or prepaid

- Check at least 3 carriers with the destination port as the main port to ensure

the best rate Advise customers on related services such as: customsclearance, packaging, transportation, inspection…

1.3.2.2 Less than Container Loaded (LCL)

With LCL, if a shipper does not have enough goods to contain in a full container,

he arranges with a consolidator to book his cargo The consolidator will arrange afull loaded container (FCL) with a main shipping carrier, and collect moreshipments of other shippers to hold in one full container It means that this fullloaded container (FCL) now does not belong to only one shipper The freightforwarder takes the responsible for sorting out differnt goods of different shippers tothe right transhipment place or final destination, avoid the confusion in the process

of transporting goods Once goods are shipped to the right destination, eachconsignee will collect their shipments differently and pay for the different charge ifany

When sales LCL goods, it is necessary to notice following points:

- Check if any handle agents at destination port

- Check with customers the method of paying fee whether collect or prepaid

- Check at least 3 co-loaders to ensure the best rate for the whole process of

shipping

- Advise customers on related services such as: custom clearance, packaging,

domestic transportation, forwarding method at destination port

1.3.2.3 Combination method (FCL/LCL and LCL/FCL)

This method is a combination between 2 different method: LCL and FCL Itdepends on specific conditions, shippers can make a deal with carrier to perform thebetter way of transportation

When delivering goods by combination method, responsibilities of shippers andcarriers also change to adapt the situation

1.3.3 Criterion for evaluating the freight forwarding process of imported FCL

cargoes

1.3.3.1 Timing

In freight forwarding industry, timing is a criteria which is considered as one ofthe most important factors to evaluate process Implementation time must be statedwithin the expected time mentioned in the contract has been signed earlier to avoidadditional costs and referendum As usual, a process of freight forwarding will becompleted in an average of 3 days, except in cases customs ramification is to the redline, time will take an additional 2 to 3 days To ensure good operation time, thedepartments in freight forwarding companies required the close cooperation in order

to timely and quickly process of necessary documents and data for the forwardingactivities in ports and customs area

Time has also been influenced by the transportation of goods from the ports tothe importer's warehouse During this process, it can occurs several incidents oftruck machines as well as several accidents causes delays in getting container towarehouse

1.3.3.2 Safety during the transportation of cargoes

Safety should be considered carefully because it affects the reputation of freightforwarding companies as well as affects the importers What should be concernedmost is about the safety in the process of transporting container by vehicle’s fleet.Sometimes technical errors or accidents are inevitable, but it will impact the time ofusing products of the importers, even causing undue damage, influence seriouslyproblems for both sides Therefore, vehicle’s fleets of companies should have strongexperience in the transport of long distance and vans should be checked regularly inorder to minimize accident probability

1.3.3.3 Efficient use of human resources

In order to perform a complete freight forwarding process, requiring theinvolvement of many different departments such as the accounting departmentwhich is responsible for calculating the costs of forwarding, forwarding department

is solving the papers and referendum, trucking department will arrive cargoes to the

final destination Thus, the link between human resources between departments isvery important, and the amount of manpower needed to maneuver is also a matter ofconcern.

Depending on the amount of paperwork that must be treated and the volume ofwork, the staffs are not so many to avoid redundancy in terms of manpower,however, the staff are also not too few which leads to overload of employees as well

as delays in business operations

1.4 Essential documents in freight forwarding cargoes

Bill of lading is set when the shipper requests ship owner transport goods fromone place to other places by sending booking note If the carrier agrees to transportgoods, they will issue a bill of lading to the consignor, that means all theresponsibilities to transport goods belong to ship owner

1.4.2 Certificate of origin (C/O)

C/O is a paper on the place of production of goods This document is necessaryfor the customs authorities to apply the tax preferential regime according to statepolicies It is also important for the monitoring of quotas, reflecting the quality ofgoods because local characteristics and production conditions affect the quality ofgoods

C/O is set after completing customs formalities, the goods have been loaded andgot the original bill of lading C/O is issued by the Commerce and Industrydepartment, on the basis of the manufacturer's declaration C/O can be also issued

by manufacturers to certify the origin of goods The records needed to obtain C/Oincluding:

as: quantity of goods, description of goods, purchasing price, country of origin,transport cost, etc Setting commercial invoice based on contract between 2 partiesand packing list

1.4.4 Packing list

Packing list is a declaration of all goods contained in a shipment Packing list isrequired when packing goods Packing slips placed in containers so that buyers caneasily find, also can be placed in a bag attached to the outside of the packaging Packing list includes name of seller and buyer, name of goods, contract number,number of L/C, name of ship, date of loading, port of loading, port of unloading, thenumber of shipments, cargo weight, the volume of shipments, the containernumber Packing list is very useful for the verification of goods

CHAPTER II: FORWARDING PROCESS OF IMPORTED CARGOES IN TUNG BACH EXPORT IMPORT AND TRANSPORT SERVICES TRADING COMPANY

2.1 Introduction of Tung Bach Export Import And Transport Services Trading Company

2.1.1 Background of the company

Tung Bach Export Import And Transport Services Trading Company – which islocated at room 101, first floor, The New Petrolimex Building, 441 Da Nang street,Dong Hai I ward, Hai An district, Haiphong city, Vietnam - is the new company inForwarding industry, but the company has experienced rapid and strong growth inrecent years

Tung Bach Export Import And Transport Services Trading Company wasestablished and started to operate on March 22nd 2012 Since the day ofestablishment, company has been pursuing the spirit of being very client-orientedand providing comprehensive services Especially, company has offered tailor-madeservice and professional suggestions to meet customers’ satisfaction on logisticsaspects

As a limited company, at the beginning, Tung Bach Company was facing withmany difficulties in competing with the older shipping companies which areavailable on the long-standing reputation Besides, as a small and start-up business,the company also faced difficulties in administration management and risk-controlability which were not truly effective, documents and workflow were not reallysynchronized However, along with an understanding of the transport market as well

as a smart business strategy, the company has achieved initial development

Up to now, after 4 years of operating, Tung Bach Export Import And TransportServices Trading Company is an independent organization, qualified legal,independent accounting business, able to open a bank account and use the seal asprescribed by state

Business scope of the company is very wide, including 33 different industries(according to business registration) However, company is only specializing inproviding high quality shipping services such as shipping agent, supplycrewmember, transport, forwarding services and logistics The company isstrengthen its ties in different shipping companies in the area such as China,Taiwan, Japan, Korea, Singapore and even other regions like European countries tocope up the needs of customers across Asia The company also provides customers

in both the quality of services and competative prices in terms of general services

On the other hand, the company’s reputation as a reliable, creative supplier is built

by experience and extensive knowledge in the field of Shipping Services andForwarding

2.1.2 Mission, function and core values of Tung Bach Company

2.1.2.1 Mission

To be viable in a competitive environment, the company has taken the basictasks ahead as follows:

- Do the research and implement business types which are suitable for

Vietnamese law as well as international law with scientific measures appliedinternational rules

- Continuously improve quality of service, bring to customers the best choice

when using the services of the company

- Expand domestic and foreign markets, expand business scale, aggressive

penetrate new potential market

- To be a trustworthy, devoted, and sincere partner

- To have well-trained, professional, and customer-oriented staffs

2.1.2.2 Core values

- Customer service: Tung Bach Export Import And Transport Services

Trading Company provides customers with high-class service, always knowthat customers expect to deliver safely, timely, and reliable services.Surpassing customers’ expectations helps the company achieves success All

of the company moves and all of company’ plans originate from customers’needs Finally, the company always respect commitments and protectprestige

- Integrity: The company bases its business on integrity, ethicality, passion,

and responsibility

- Technology: Tung Bach Export Import And Transport Services Trading

Company is always mindful of applying modern technology to offercustomers and partners with convenience and efficiency

Core Value

Customer service

Integrity

TechnologyBest

people

- Best people: The company creates a friendly, disciplined, and creative

working environment Moreover, company concentrates on improving

employees’ skills, and overvalue contributions of staff to the company’s

success Customers can enjoy employees’ sense of service, responsiveness,

and professionalism

2.1.2.3 Function

- The company operates with many different business lines but mostly focus

on three main lines: Freight forwarding services, marine services and crew

manning

- Provide serivces and labor (seafarers) matching with international standards

or as requested by customers

- Create business and services resources for the company, ensure the quality of

equipment, renovate facilities, and expand business activities

- Invest and expand business scope, co-operate with state-owned companies

and non-state owned company to improve and mobilize import and export

services

2.1.3 Organization

The organization of management system of the company includes 6 functional

departments which advise executives, manage and organize business, take care of

living conditions for staffs and employees of company

Figur 2.1: Organization system of Tung Bach Company

(Source: Planning department)

- Director: accountable for operating general activities of company,

constructing company’s development strategy On the other hands, director

also monitors activities and performance, capacity of individual parts More

Director

Trucking Dept

Planning Department

Financial Accounting Department

Technical means Dept equipment, Sale Dept.:

supplies and goods

Sale 1 Sale 2

Crew

Dept

ForwardingDept

importantly, director has to take care about human factors; for example:develop training plan for new employees, develop customer market andlayout work for departments and individuals.

- Financial Accounting Department:

 Work out financial plans, balance expenditure of each department,make weekly financial reports to Director to adjust in time

 Take charge of personnel policies such as insurance, labor contracts,oil supplies and pricing for customers

 Supervise transporting activities in distance, dispatch and paymentsrelating to means and technique

 Make tax reports and tax return in accordance of current law

 Consult the CEO financial issues

 Report operation status of vehicles

- Planning Department:

 Plan transporting schedules, make daily report of transportation status

 Supervise drivers and transportations

 Take responsibility of transporting capacity

- Technical means Department:

 Take charge of technical problems and ship mending

 Monitor the technical status to plan repairing and maintenancequarterly, annually in accordance with regulations of the Registryagency

 Regularly update information from the Registry agency, notify therelevant department and resolve the requirements of the Registryoffice in time after inspection

 Organize and implement proper plans in system preservation,maintenance and repair of company vehicles

 Directly monitor vehicle repairing and maintenance;

 Review and evaluate the effectiveness of technical options; proposeadditional measures, adjust processes and technical norms

 Control the technical parts to ensure vehicle operation safety and urgepreparation of car parts to be maintained on time

 Evaluate the norm fuel and lubricant consumption

 Handle the technical report from the vehicle, inspect machine,equipment, review and evaluate to ensure vehicle operation safety,