Full container load fcl shipment at sotrans logistics situation assessment and recommendations

Definition and modes of container shipping in regard of freight forwarding activity .... In light of the discussions and observations above, the purpose of the thesis entitled “Full cont

VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND BUSINESS

- -

GRADUATION THESIS

Supervisor : Dr Tran Viet Dung Student : Le Danh Lam Class : K59-KTQT-CLC

Hà Nội, 05/2020

FULL CONTAINER LOAD (FCL) SHIPMENT AT SOTRANS

LOGISTICS: SITUATION ASSESSMENT AND

RECOMMENDATIONS

ACKNOWLEDGEMENTSAfter an intensive period of three months, it is my opportunity to show gratitude to all those people who contribute, support and encourage me to complete my graduation thesis I will cherish forever

First of all, I would like to express my sincere thanks to Dr Tran Viet Dung who guides

me in thesis in period of time During the study time, she has helped me in finding materials, repairs and guiding me to find out the best way for me to fulfill all my thesis Moreover, she has encouraged and given me motivation when I met some difficulties A deep understanding of international trade and her experience is a prerequisite to help me gain valuable achievements I could not have imagined having a better advisor and mentor for my thesis

Secondly, I would like to say thank you with my family: my parents My family is a spiritual solid fulcrum, I can desire to fulfill my thesis I wonder how I could do without

my family

Hanoi, 20th April 2020

Author Le Danh Lam

Contents

INTRODUCTION 6

1 Rationales 6

2 Research purpose 7

3 Research objectives 7

4 Research scope of the thesis 7

5 Literature review 8

6 Research methodology 10

7 Research structure 11

CHAPTER 1: THEORETICAL FRAMEWORK ON FCL TRANSPORTATION 12

1.1 Definition of freight container 12

1.2 Definition and modes of container shipping in regard of freight forwarding activity 14

1.3 Advantages and disadvantages of container shipping 15

1.4 Participants related to FCL shipping method process 17

1.5 Factors that have impact on full container load shipping method 18

CHAPTER 2: THE ASSESSMENT ON FCL SHIPMENT IN SOTRANS LOGISTICS 23

2.1 Overview on Sotrans Logistics 23

2.2 Overview on Sotrans Logistics’s Full container shipping 25

2.3 Factors that have impact on FCL shipping of Sotrans Logistics 30

2.3.1 External factors 30

2.3.2 Internal factors 35

CHAPTER 3: RESULTS AND DISCUSSIONS 46

3.1 Opportunities and challenges for full container load shipping at Sotrans Logistics 46

3.2 Recommendations to improve the FCL shipping at Sotrans Logistics 48

CONCLUSION 51

REFERENCES 52

LIST OF ABBREVIATIONS

transportation of goods and commodity

LIST OF FIGURES

1 Chart 2.1 Milestone points of Sotrans Logistics since 1975 24

4 Figure 2.4 Average revenue segment rate (%) among export

values of FCL, LCL, Air Freight at Sotrans Logistics

INTRODUCTION

1 Rationales

Trade liberalization has become a strong tendency in the world and Vietnam has joined the trend for about 34 years After the period of renovation (“Doi moi”

in Vietnamese) in 1986 and attendance of World Trade Organization (WTO) in

2007, Vietnam economy has witnessed a number of achievements Vietnam’s GDP has jumped tenth times from about 26 billion USD in 1986 to about 261 billion USD

in 2019 (World Bank, 2019)

In regard of that impressive growth, international trading activities have always been considered to be an evitable part Total import-export turnover has increased 170th times since Renovation in 1986, increased 37th times since the participation of ASEAN, increased 5th times since WTO joinning and eventually reached approximately 514 billion USD in 2019 (Vietnam Customs Department, 2019) Those crucial turning points have been always strongly supported by logistics system According to Vietnam Logistics Association, the logistics sector has always played an important role in the opening economy scenerio and accounted for approximately 20 percent of total GDP (World Bank, 2018) And FCL transportation method has been proved to made up for about 75 percent of domestic and international commodity traffic (Hai Phong Port Authority’s Report, 2019) Thanks to the significant investment in terms of finance, development policy, human resources, recently FCL shipping has advanced in many ways including quantity, quality and helped Vietnam gain a more remarkable position in the global economy

A great number of Vietnamese logistics enterprises currently face difficulties

in gaining market share in their home market and various fierce competition from foreign rivals which own a great deal of global operating experience and finance capability As a staff member of Sotrans Logistics, I have had many chances to witness the competitors’ heat and gained a glance of practical obstacles which can

be improved and overcome with right orientation While there are by now many well-establised and extensive papers investigating the FCL shipping method, not many researches have been implemented to analyze and provided an updated perspective in the context of international trade as well an overview on Full load container shipping method of enterprises which have annual turnover more than 20 million USD In light of the discussions and observations above, the purpose of the thesis entitled “Full container load (FCL) shipment at Sotrans Logistics: Situation assessment and recommendations" is to systemize numerous important knowledge

on FCL shipping method, analyze the practical situation in terms of advantages, achievements, drawbacks and eventually give recommendations to make progress

in container shipping of Sotrans Logistics company (hereby will be called as Sotrans Logistics) Therefore, it can compete more intensively with both domestic and foreign agents in this field and create more long-term values for Vietnamese economy

2 Research purpose

Assessing the situation of container shipping process at Sotrans Logistics in order to provide an updated aspects and greater insight, therefore there are some recommendations can be made to give directions and make progress in the shipment procedure, help reduce the cost, increase the productivity

3 Research objectives

In this thesis, author focus on answering some key questions which are: What

is the current situation of container shipping procedure in Sotrans Logistics? Which factors can have impact on container shipping process of Sotrans Logistics? Which aspects that Sotrans Logistics need to improve to make progress in full container load shipping process?

4 Research scope of the thesis

The paper employs the dataset of general logistics sector in Vietnam, in the world and Sotrans Logistics’s business statistic figures The range of data set will

be collected in 11 years, from 2008 to 2019 This 11 years period was selected to

make the paper more updated and provide an perspective on real recent situation of container shipping process in Sotrans Logistics, due to the fact that Vietnam joined World Trade Organization (WTO) since 2007 Since then, Vietnam economy has witnessed a significant increase in international trading activities including importing, exporting and the government was forced to adapt various policies of opening Logistics service sector, which has visibly created a fierce competition coming from foreign rivals

5 Literature review

The report of International Maritime IMO in 2018 pointed out that the container shipping industry, accounts for 80% of the worldwide traded good, which results in a growth of port traffic globally by 3% each year Due to the growth in transport demand and port traffic, the container shipping industry is characterized

as being very competitive due to its efficiency and its cost pressure to offer competitive international transportation

In 2009 PhD Le Kinh Vinh published “Improvement on international freight forwarding activities of SaFi Logistics company” The research was conducted by collecting and analyzing a 5 years database from 2004 to 2009 in terms of cargo traffic using Full container load method of SaFi Logistics which owned an approximately 15 million USD annual revenue After ananlyzing the collected data, the author gave some recommendations including making changes in freight segment, spending higher investment in transport facilities, redistributing the workload among human resources, implementation of marketing However, the research did not succeed in pointing out a theoretical base of several factors can have impact on container shipping

In 2012, PhD Nguyen Ngoc Phung conducted a research entitled “Solutions

to improve full container load shipping method of International Freight Bridge Vietnam” After using various practical primary data and secondary data in research methodology, the author gave some recommendations to board of director including

developing higher management level and cargo handling experience of the staffs, implementation of more techniques related to quotation activity

In 2013, Pham Thi Hong Hanh presented a research on Door-to-door ocean shipping, with title “Recommendations for improving Door to door ocean shipping method of Inter Logistics company” By using various research methodology such

as qualitative and quantitative, the author made some conclusions and gave suggestions including: establishment of operating office branches in Vietnam’s potential trade partners, intergration of higher technology in terms of management and operation, implementation of more marketing activity to attract attention of customsers, diversification of customers services and logistics services

The author Nguyen Huu Tu, in 2013, conducted a research entitled

“Orientation and recommendations for international freight forwarding activity in

Me Linh Joint Stock Company” The data was collected by using primary and secondary source, and received analysis including statistic, comparison and classification to gain an overview of business situation and published some valuable recommendations including: organizational structure improvement, marketing plan, diversification of services and increase intergration of technology in operating activities

Recently in 2018 the author Vu Thi Hai conducted a research entitled

“Efficiency mprovement of international freight forwarding operation at Jet Delivery Logistics Vietnam” The data was collected by using primary source from internal staff members and secondary source such as printed publishes, field reports, journals The paper did point out various internal and external factors that have impact on freight forwarding at Jet Delivery Logistics including demand of clients, staff member experience and specialized knowledge, internal communication channel,finance capability Therefore, the author gave some recommendations to improve the operation such as implementation of a more long term marketing plan, human resources management, technology intergration

In 2007, some authors from Harvard Business Reviews conducted a study on how Reputation affect company’s business They concluded that companies with strong positive reputations attract better human resources They are perceived as providing more value, which often allows them to charge a premium Their customers are more loyal and buy broader ranges of products and services They also gave conclusion that most firms do not still manage reputation well in general and know which parts could become a potential risk for their reputation

In 2009, Batarlienė and Jarašūnienė did present that accurate, reliable and quick information provides an opportunity to boost the material flow – materials and goods to be delivered to destination faster Information systems applied in multimodal transportation are diverse and must perform some functions such as: problem identification; enable to coordinate management equipment and perform logistics tasks

Although there are various studies and researches about container shipping

in Vietnam market, number of paper conducting about full container shipping and research specifically about a logistics enterprise that possesses annual revenue more than 20 million USD remains limited Therefore, this study will be conducted to assess the current situtation of the firm and draw some recommendations for company and for policy makers

6 Research methodology

The thesis was implemented by using inherited methods: collecting, synthesizing, analyzing and assessing domestic and foreign materials relating to the content of research, then selecting the document and implementing research topics Furthermore, dialectical materialism, scientific abstractions are also used for comparison and objective analysis of FCL shipping process in which subject was selected to be studied

The analyzing of Sotrans Logistics FCL shipping situation and overall logistics industry in the international economy context includes advantages and

disadvantages of the FCL shipping sector of Sotrans Logistics, assessment of factors that will affect FCL shipment in general and Sotrans Logistics FCL shipping The first step is data collection The task may include contacting the organization that provided the information and proceeded to copy the material Of which, the Ministry of Industry and Trade, the VCCI Center under the Vietnam Chamber of Commerce and Industry, the Vietnam Logistics Association, the General Department of Customs are the research units approached and collected by the researcher Cross the document In addition, data is also collected from public sources Find the latest data on accessible sources such as specialized journals and magazines, both in print and online The list of these documents is listed in the reference section

The second step is to check the data Data collected from various sources is tested against the criteria of accuracy, relevance and timeliness The data are compared and compared for consistency to ensure that the content of the analysis is highly reliable

The final step is to analyze the data Gathering and analyzing target-defined data After aggregation and screening, secondary data is used to form theoretical basis as well as to explore the situation, in order to give recommendations to improve FCL process of Sotrans Logistics

7 Research structure

Chapter 1: THEORETICAL FRAMEWORK

Chapter 2: THE OVERVIEW ON SOTRANS LOGISTICS LOGISTICS’S FCL SHIPPING

Chapter 3: RESULTS AND DISCUSSIONS

CHAPTER 1: THEORETICAL FRAMEWORK ON FCL TRANSPORTATION

1.1 Definition of freight container

According to ISO 668: 1995 (E) standard, freight container is considered to

be a permanent unit and physically strong enough to be suitable for repeated use; especially designed to facilitate the carriage of goods by one or more modes of transport, without intermediate reloading; fitted with transport vehicles permitting its ready handling, particularly when transfer from one mode of transport to another; also designed to be easy in filling and empty cargo inside; having an internal volume

of 1 m3 (35,3ft3) or more

The inventor of the first container is Malcolm Purcell McLean (1913 – 2001) who was an American businessman He was a transport entrepreneur who developed the modern intermodal shipping container, which revolutionized transport and international trade in the second half of the twentieth century Containerization led

to a significant reduction in the cost of freight transportation by eliminating the need for repeated handling of individual pieces of cargo, and also improved reliability, reduced cargo theft, and cut inventory costs by shortening transit time

There are various types of shipping containers serving various purposes to accommodate a variety of goods and main types of shipping container include Dry storage container, Flat rack container, Open top container, Tunnel container, Open side storage container, Double doors container, Refrigerated containers Shipping containers come in different dimension, materials In order to fit the standards of international cargo shipping, each must adhere to maritime safety and reliability standards

Size and type

group code

20 ft x 8 ft x 8

ft

40 ft x 8 ft x 8.6 ft

40 ft x 8 ft x 9.6 ft

45 ft x 8 ft x 9.6 ft

1.2 Definition and modes of container shipping in regard of freight forwarding activity

According to the International Federation of Freight Forwarders Associations (FIATA), the concept of this field is as following: "Freight forwarding

is any service related to transportation, consolidation, warehousing, loading, unloading and closing package or distribution of goods, as well as ancillary services and advice in connection with the foregoing services, including but not limited to customs or financial matters, declaration of goods for those items official destination, buy cargo insurance and collect money or documents relating to the goods.”

Container freight forwarding is a service of transporting goods from the place

of shipment to the place of receiving goods by containers, in which the forwarder (freight forwarder) signs a shipping contract with the goods owner, and also a reciprocal contract with the actual carrier to perform the service

There are several modes of shipping containers as following: Full container loaded shipment (FCL/FCL), Mixed option between FCL and LCL including LCL/FCL and FCL/LCL The terminology LCL means Less than container load

shipping method The reasons behind the existence of various container shipping method are because there are a great deal of enterprises size, product category, products specifications in terms of dimension, characteristic, ways of doing business

as the internal plan For example, if a multi national company from Japan want to distribute raw materials to its various factory branches in Vientam, the method FCL/LCL can be used in this case and vice versal for LCL/FCL

The container sizes vary such as the 20ft, 40 ft and 45ft In fact unit variations can exist within each type of size category, there are dry 20ft container, high 20ft container, refridgerated 20ft container Among all of them, dry storage container is the most commonly used type for shipping acitivity, with different sizes according

to ISO For example, a 20-foot shipping container may look and measure the same outside but may have different cargo handling configuration inside to suit the type

of cargo being handled and ease of off-loading at receiving ports For example, the carrier can add the hanging function for transporting fabric and clothes products more efficiently.

1.3 Advantages and disadvantages of container shipping

The freight container provides a fast transportation at a low cost for actual shipper It can be shipped quickly to the final destination via inland trucking or ocean vessels With the information is detailed on the outside of the container such

as max payload, type of container, gross weight…, it helps simplify the customs

formalities in particular For both the shipper and consignee, containerization also has a significant economic advantage over other means of transporting goods (Dong-Ping Song, 2005, “On cost-efficiency of the global container shipping network”)

Beisde, it is proved to provide a secure means of cargo transport with low energy consumption which help the actual carrier to reduce the cost of operation The container provides great protection to the goods, because once sealed, it’s a physical barrier against bad weather, temperature variations, fire, theft, and impacts during handling The container thus greatly reduces the risks of deterioration, loss, and theft that can be found in ground transport In addition, maritime transport has

a lower energy consumption than other means of cargo transport (Haakon Lindstad, Gunnar S.Eskeland, 2015, Low carbon maritime means of transport)

Lastly, freight container is considered to be versatile, highly flexible means

of transport, therefore freight forwarding agent can make more business profit while maintaining affordable services to clients Because container shipping can be used

to ship a large batch of goods to the other side of the world by using FCL method,

it can also be used to send small goods by using LCL method Freight forwarding agencies can buy the full container freight charges from actual carrier and resell to many other shippers or consignees at a higher rate (Mason, Robert John and Nair, Rawindaran Vnp, 2010, Strategic flexibility capabilities in the container liner shipping sector)

On the other hand, the containerization also include several physical constraints, which involve a certain higher cost Even though the container provides

a certain security to the condition of the goods by protecting them from temperature changes; but fire, and theft, certain physical constraints, such as high temperatures and a lack of ventilation, wind flowing inside the container, can cause damage to the commodity This mode of transport also requires preventing measures such as the desiccation of the packaging and condensation inside the container These preventing measures may lead to more costly special packaging for shipper

The drawback also comes from the characteristics of the merchandise In certain cases, a characteristic limitation of the merchandise may disrupt a container shipping plan The weight, volume, and dimensions of the goods may not correspond to those of a standardized container, and the load may be rejected 1.4 Participants related to FCL shipping method process

In fact, there are four main participants in the full container load shipping process including shipper, consignee, freight forwarder, carrier However, the role

of consignee is considered to be the same as shipper’s in the case of implementing international commercial terms such as EXW or the role of shipper is considered to

be the same as consignee’s in the case of implementing international commercial terms such as DDP

The duties of freight forwaders are to give advises and help clients in actual transporting process and make it more efficiently from the shipper to the consignee Because the freight forwarder’s knowledge of shipping regulations, banking practices, and transportation costs can ease the shipment process Those tasks may include renting warehousing for storage, transporting empty containers to their warehouse or factory to pack goods into containers In addition to the option of packing goods into containers carried out at traditional locations such as warehouses, factories, it is also possible to pack goods at container yards or port terminal Beside , it may include tying goods into specialized parts of containers when using special containers such as flat rack container, marking symbols of goods and transport symbols such as destination country, volume, codes of goods, symbols

of transport safety The forwarding agent’s task is also to fumigate wooden pallets

or wooden containers, such as wooden boxes, inside the container; providing physical and chemical quality inspection results for products that are required to be tested in accordance with the laws of the host country; implementing customs procedures, application for certificate of origin according to export regulations

The practical process of transporting full container load shipment can be described as the flow chart below:

1.5 Factors that have impact on full container load shipping method

FCL shipping process is an international shipping activity so it may get greatly affected by the international scenerios There are various external factors

that may have impact on the full container load shipping process, to name a few

such as global and regional politics, geography, climate change, global and regional

outbreak related to war, diseases, strikes or market competition

Any moderate changes in the economic policy such as money exchange rate, export subsidiary of a country can cause the import or export volume to fluctuate

A protectionist policy may lead to restrict trade between countries by taxing

imported products, thereby pushing consumers to buy domestically Therefore, the

demand for freight forwarding activity such as container shipping must be reduced

and may lead to the loss of business revenues of logistics providers Rising in

currency exchange rate may lead to a more competitive price of goods, therefore it

motivates the export capability and increase the demand of international container

shipping activities

The government policies related to foreign investment in logistics sector may also have great impact on the market, which creates more fierce competition for domestic companies The more crowded the market of container shipping, the more stiff challenges for freight forwarding agents, especially units which own a moderate level of handling experience and for those who are lack of high technology intergration to reduce the operation cost and increase workload efficiency Any fuctuations of economic factors can create both opportunities and challenges for businesses Therefore, freight forwarding agents need to monitor the analysis and forecast of fluctuations to make appropriate decisions for each specific period

Tensions such as war conflict, pirates incidents interrupt trade deals with partners around the world and ultimately obstruct shipping The conflicts make the transit time longer because the ship fleets must wait for safe signal from the port authority to be able to dock into the port The shipowners also have to buy higher value insurance for the ship and other facilities, to maintain the loss of damage as lowest as possible The higher the insurance value, the higher the fee of ocean freight charges, which less motivates shippers to send commodities via ocean route A stable political basis will lead to more both private and public investment in logistics infrastructure such as warehouses, transport road, port equipment because there is

no fear of physical damage coming from war conflicts

The full container shipping is also strongly influenced by weather conditions The natural conditions of each region will create favorable or difficult conditions for container shipping activity and may lead to more or less demand for freight forwarding service This will affect the development opportunities of freight forwarders During the delivery process if the weather is preferable, the goods will

be shipped safely and quickly On the contrast, if the weather is bad, such as floods, storms, earthquakes, strong winds, etc., the risk of goods damage and loss is very high and delays can happen and slower the delivery process, which force consignee

to wait a longer time to receive the cargo

Competition for the container shipping markets creates many challenges for many freight forwarders according to a research entitled “Service quality evaluation

of international freight forwarders: an empirical research in East Asia” presented by Sheng Teng Huang, Emrah Bulut & Okan Duru The reasons are because service providing by freight forwarder seems to be same or similar to one another, along with the increasing number of new entrants Thus, competitive advantage of freight forwarders only based on cheaper price is not enough Enhancing satisfactory customer service becomes strategic and survival issue for forwarders to stay competitive and build sustainability

There are various internal factors of an enterprise that have impact on the service-oriented business generally and impact on container shipping business such

as reputation, company history, development plan, management methods, financial capability, infrastructure, facilities, networking system and supplemental services

Firms with strong and positive reputations have more chance of success in attracting better human resources They are perceived by public as providing more value, which often allows them to charge a higher price than average Their customers are more loyal and buy broader ranges of services Because the market believes that such companies will deliver sustained earnings and future growth, they have higher price-earnings multiples and market values and lower costs of capital (Robert G Eccles , Scott C Newquist and Roland Schatz, Harvard Business Review, 2007) In the perspective of container shipping, a highly reputed enterprise have more natural competitiveness than other rivals Values of commodity which can be fit inside a 20ft or 40ft container is usually high so clients believe that the transport process should be implemented safely by partners who owns good prestige

A clear and right development plan is also source of success for freight forwarding activity in general and for container shipping in particular The plan may include financial, human resources, services supported or infrastructure

improvement The development plan have great impact on how the service quality

is presented Forwarder is a service-oriented industry, and its quality of service is important factor for business success Service quality is a key issue of managerial goal of business to pursue customer satisfaction according to Sheng Teng Huang, Emrah Bulut & Okan Duru within the study named “Service quality evaluation of international freight forwarders: an empirical research in East Asia”

Managerial methods are surely an highly crucial turning point in the container shipping service There are hundreds of information related to each container shipments, such as the type of commodity such as dry, wet, frozen, the size of commodity, the ways of packaging if it is condensed packaged style or flexible with lashing surrounding, name of vessel, port of loading and port of destination, empty container location, booking number, different standard of wooden products fumigation, variable policies of shipments from local authority, date of document closing time, expire date of document submit which also varies among different shipping lines In order to provide an organizable workload for human resource and help them achieve the high level of controlling ability, implementation of management approach should be the top priority, which can boost the long term operation of any freight forwarding service providers in the market

Financial capability is considered to be one of the most important factors for the existence of freight forwarding in general or container shipping in particular The fact that many shipping routes in the world usually takes full month to two months such as route from Vietnam to United States of America, or from Vietnam

to West side of Africa continent and the complexity of internation payment system between shipper and consignee can lead to the late receipt of money for shipper side Therefore, overdue payment is almost a mandatory standard for freight forwaders if they want to keep the customers around and keep them collaborating The overdue

payment depends vastly on how container shipping companies survive in the current market

Infrastructure and facilities are crucial parts of a successful freight forwarding service in general or container shipping in particular There are many types of demand from customers which range from only container shipping to container shipping plus container storage outside of the port, because the demurage fee at the port is usually quite costly compared with local inland storage Having a good basis of infrastructure such as warehouse, container yard help to add more values in the services chain of container shipping companies and help them to come closer to a full supply chain management system, which help to share great burdens

on the shoulders of small and medium shippers or consignees who normally do not own many facilities such as warehouses or container yard

Networking system has been studied via many researches and considered to

be a highly vital factor for the container shipping service success According to International Federation of Freight Forwarders Associations (FIATA), there are numerous important roles of a freight association including harmony of the freight forwarding industry worldwide; represent, promote and protect the interests of the industry by participating as advisors or experts in context of dealing with transportation globally which contains various difference in culture working or operating customs; improve the quality of services provided by freight forwarders

by developing and promoting similar forwarding documents which can help save time and effort, therefore help increase work productivity, standard trading conditions; assist with vocational training for freight forwarders, help to support with liability or insurance problems

CHAPTER 2: THE ASSESSMENT ON FCL SHIPMENT IN SOTRANS

LOGISTICS

2.1 Overview on Sotrans Logistics

South Logistics Join Stock Company (hereby called as Sotrans Logistics) was established in 1975 Main mission of the company at that time was warehousing, inland forwarding of essential products on route South – North, participated into national restructuring after the Vietnam-US war, and fulfill physical support with friend countries Laos and Cambodia In the whole stage of operations, there have been many remarkable ups and downs for the enterprise Centrally planned economy and bureaucratic management mechanism had posed significant difficulties for Company at this time Goods are lack in terms of both quality and quantity Warehouses had been left empty for a long time, both road and water inland freight forwarding activities are less effective Therefore the firm needed to seek for more appropriate business solution In 1992, Sotrans Logistics International Freight Forwarder (now called Sotrans Logistics) was put into operation and officialy create a new name on the international freight map in the world Since then, the firm has joined many logistics related association and organizations to increase the networking and take advantage of the community support It became a proud member of Vietnam Logistics Association since 1996 and a proud member of International Federation of Freight Forwarders Associations (FIATA) in 1997, member of International Air Transport Association (IATA) in

2004 One of the most milestone point for the firm is 2007, the year of organization and re-structuring The firm witnessed the equitization period, transform the owner from the government to various companies namely Indo Trans Logistics Corporation (ITL), The Hanoi Export-Import Company (Geleximco), The State Capital Investment Corporation (SCIC) Since then, the firm continued to expand strongly in the freight forwarding market through services related to FCL, LCL, air, road transport, warehouse, customs broker Between 2014 and 2016, there

re-were some infrastructure improvement related to warehouse and other transport agencies merge In 2018, Sotrans Logistics proudly joined the WCA network, it is the world’s largest and most powerful network of independent freight forwarders, with over 7375 member offices in 190 countries around the world

Chart 2.1 Milestone points of Sotrans Logistics since 1975

Source: Sotrans Logistics Human Resources Deparment

Within FCL, LCL, air shipping method, Sotrans Logistics support routes to

5 continents namely Asia, Africa, America, Oceanic, Europe

Sotrans Logistics owns a strong basis of warehousing service by providing more than 230.000 square meters of general warehouse across Vietnam Its warehouses possess good locations, suitable for storage and distribution of goods and raw materials to Hochiminh City, Hanoi, Da Nang, Can Tho, Binh Duong, Dong Nai, South West provinces and South East provinces

Customer broker service is a key value-added service for Sotrans Logistics

It is the first model customs broker in Vietnam so it can sign and stamp approval of customs declaration on behalf on Customers

The figures present there are total eleven offices across Vietnam located in Hanoi, Hochiminh, Quang Ninh, Ninh Binh, Hai Phong, Ha Tinh, Da Nang, Can Tho, Ben Tre, Tay Ninh, Binh Duong The quantity of area in which Sotrans Logistics own warehouse system is six places including Hanoi, Hochiminh, Dong Nai, Vung Tau, Long An, Can Tho

The manpower quantity of Sotrans Logistics is 324 people, in which male gender consist of 184 people, and the rest 140 people are female The human resources operates in many department namely as following: board of director, customer service deparment, sales deparment, accounting department, human resources department, marketing department, warehouse department, pricing deparment, other office branches

2.2 Overview on Sotrans Logistics’s Full container shipping

Source: Sotrans Logistics Account Deparment, 2008 - 2019

Statistics presents that FCL shipment revenue accounts for about 65 percent

to 68 percent of total annual turnover The major trend is upward since 2008 up to

2019 However, the increase is not always continuous all the time There is a slight decrease from 400 billion dong to about 300 billion dong between 2008 and 2009, which made the growth value became negative upto 100 billion dong And Sotrans Logistics also witnessed a slight reduce in 2010 until 2012, from 420 to 390 billion dong After 2012 upto 2018, the upward trend of revenue is significant, there was a considerable growth from approximately 390 to more than 1200 billion dong revenue for FCL shipments

Source: Sotrans Logistics Account Deparment, 2008 – 2019

The statistics indicates a slight fluctuation of Sotrans Logistics Logistisc FCL sector profit both in value growth and growth rate In 2009, it witnessed a fall upto

10 billion dong from 27 to 17 billion dong, which is quite remarkable Then again there was a reduce from 42 to 30 in 2012 Since 2012, the major trend of profit is

27.64125

17.3089830.2796

40.131 25.455333.60013

56.3312 93.95424105.8988

114.6565 114.342

131.1955

0 20 40 60 80 100 120 140