Solutions for improving process of exchange LCL shipment in TICO international corporation

Method of shipping by container When cargo is load into container for sea transportation, it is divided in 2 kinds LCL Less Than Container Load cargo, meaning that the goods are not load

PART 1: INTRODUCTION

1 Rational

In the past, ocean freight is popular for shipping mass and heavy cargo in fardistance through continents between companies But nowadays, when e-commerce is developed in globalization era, people are being boosted to buygoods from others countries Personal effects are often in small volume, which

is suitable for shipping by air transportation but now when the demand is toohigh, sea carriers are focus on LCL shipment to serve small volume shipmentwith low rate than air method

In addition, Vietnam is a potential market for foreign investor and consignee,because labor rate is lower than other Asia countries and product is in good rateand quality Therefore, many consignees are hunt cargo from Vietnam,moreover, many factories are moving from China to Vietnam because of tradewar between China and USA and Covid In some countries’ opinion, Vietnamhas stable political and controlling well Covid Vietnam government areplanning to receive new FDI wave, beside, logistics activities are beingimproved to support foreign investment

TICO International Corporation, a Vietnam forwarding company, will beeffected directly by this new trend, therefore, they have to improve their LCLshipment service To deal with this problem, study of “Solutions for improving

process of exchange LCL shipment in TICO International Corporation” is chose

2 Object of study

Object of the study is process of exchange LCL shipment in TICO InternationalCorporation

3 Aim and mission of study

Aim of the study is recommendation of solutions for improving process of exchange LCL shipment in TICO International Corporation There are missionsfor reach this aim:

-Provide knowledge that relevant to the process of exchange LCL shipment in TICO International Corporation

- Analysis situation of the process of exchange LCL shipment in TICO

International Corporation

- Recommend solution to improve the process of exchange LCL shipment in TICO International Corporation

4 Range of study

According to space, my study focus on the process of exchange LCL shipment

in TICO International Corporation

According to time, my study analysis situation and data from 2017 to 2019 and provide some forecast from some reliable source for future

5 Method of study

On my study, the methods were used are:

- Statistics: list data from TICO company source

- Comparison: compare different shipping method to find out the suitable

- Analysis: from these two method, I analysis the situation, find out advantage and disadvantage

-Forecast: base on the past and recently situation of TICO company and world,forecast future trend to make suitable solution

6 Design of study

There are 3 parts and 3 chapter in the part 2, which is the main part as below:PART 1: INTRODUCTION

PART 2: DEVELOPMENT

CHAPTER 1: Theoretical background

CHAPTER 2: Analysis LCL ocean shipment exchange situation in TICOInternational Corporation

CHAPTER 3: Solution

PART 3: CONCLUSION

Chapter 1: Theoretical background.

Definition: Ocean transportation is one of the common modes of transportinggoods, using appropriate means of transport and infrastructure to meet cargo

activities on the sea In particular, the most commonly used means are cargoships of different load levels, equipment for loading and unloading goods Asfor infrastructure, it is the ports, construction facilities in the port fortransporting goods by sea.

New trend of human transportation:

As at present, the road is no longer the main route that people exploit for cargotransportation activities Along with that, other transport routes are alsoimplemented to provide the most optimal transport solutions, helping eachpackage to be delivered and received safely and effectively

Suitable for each condition and practical requirements to transport eachshipment, one will use the most optimal mode of transport Due to this fact, thecurrent transportation routes hold a particular importance, which will ensurethat each parcel of goods delivered and received takes place efficiently andbrings the highest satisfaction, even though that What are the items,specification of dimensions and load capacity

Roads are no longer the only choice of shippers and transport units, but at thesame time, rail, air and sea are also fully utilized Depending on the deliveryand receipt characteristics of each shipment, what is the demand of the goodsowner that will carry the goods in the best way, ensuring the factors of safety,cost, and transport time Over time, the sea is showing a good shipping route,especially moving large shipments to areas of the country adjacent to the sea Infact, when freight trains have increased, the frequency of traffic between theseas has increased significantly, which supports trade for improving globaleconomies Which cases should we or should we ship by sea? You can refer tothe following cases:

+ When you want to transport huge quantities of goods

+ When you need to ship international goods in

+When the place of delivery and receipt of goods is adjacent to the

sea, a port is available for ships to anchor

(*) Note that the form of sea transport is only possible and should be

applied to non-urgent shipments, without time pressure

1.1.2 Sea importation and exportation

a) Sea

importation

- Definition:

Sea Import means buying goods and services (including investment

goods) from abroad by ocean transportation

Imports are important in two ways Firstly, together with exports, it

forms a country's trade balance Imported goods must be paid with the

equivalent value of exports to maintain a balance in the balance of

payments Second, it is a drawback or a leak from the cycle of

national income, thereby reducing domestic production and income

On the one hand, imports are beneficial because they enable the

country to enjoy the benefits brought about by specialization and

international trade, which means the country buys goods and services

at a lower price than it does itself manufacturing

But on the other hand, as the second point above points out, it is an

obstacle because of the decline in domestic production and income It

is important to maintain a balance between exports and imports

Imports are beneficial when they are paid for by the exports, because

the lost income for imported goods comes back from exports or

capital inflows to invest in the domestic economy

b) Sea exportation:

- Definition:

Comment [user1]: B ỏ toàn b ộ

n ộ i dung c ủ a mục này vì không liên quan trực tiếp đến nội dung đề tài, chỉ giữ lại 2 definition

Merchandise exports are trading activities on an international scale It is not anact of individual trade but a whole system of trading relationships in anorganized trade both inside and outside to sell domestically-made products andgoods to foreign countries with foreign currencies, by promoting thedevelopment of commodity production, changing the stable economic structure,gradually raising people's living standards.

Import-export business is also the first international business activity of anenterprise This activity is continued even if the enterprise has diversified itsbusiness activities

Exports of goods are in the area of goods distribution and circulation of anextended remanufacturing process, with the aim of linking production withconsumption of one country to another

39 m³ volume) container The majority of containers today are variants of the40ft type and hence are 2 TEU 45ft containers are also counted as 2 TEU TwoTEUs are referred to as 1 FEU, or forty-foot equivalent unit These terms ofmeasurement are used equally High containers ("High cube") have a height of9.5ft (2.9 m), while semi-tall containers, used to haul heavy goods, have aheight of 4.25ft (1, 3 m)

Today, about 90% of the goods are packed in containers and loaded onto freighters in clusters More than 200 million containers are shipped annually The widespread use of ISO standard containers has affected the change in transport standards, primarily changing the removable parts of trucks or

exchanging parts into parts of the same size size and shape (although no capacity changes are needed), and it has changed the entire world wide use of transport pallets to accommodate ISO containers or commercial trucks

1.1.4 Method of shipping by container

When cargo is load into container for sea transportation, it is divided in 2 kinds

LCL (Less Than Container Load) cargo, meaning that the goods are not loaded

in one container This term describes the way of transporting goods when thegoods owner does not have enough goods to fully pack a container, but needs to

be combined with some other goods lots

Meanwhile, the service company will combine multiple LCL shipments,arrange, classify and aggregate them into containers, then arrangetransportation from the port of loading to the port of destination This is calledconsolidation And this company is called consolidator

LCL shipment is distinguished from FCL (Full Container Load) cargo, that is, thegoods are fully loaded, without having to be combined with other shipments

Example of LCL: May 10 Garment Company needs to transport 10 CBM

garments from Hai Phong to Canada This shipment is not enough to fill a

20GP container because the volume is over 35 cubic meters, so it should be

paired with some other shipper lots to optimize space and save costs

Of course, unless May 10 is willing to pay for a 20GP container just to send 1/3

of the allowable amount, they will certainly accept to combine with other

shipments to have a reasonable price

And the May 10 company mentioned above are called LCL shipment

1.2.2 Benefits of LCL consolidation services

- For exporters:

+ Reduce transportation costs

+ More convenient when working with a consolidator

+Can be provided door to door service while the carrier does not

provide - For carriers:

+ Save paperwork, costs, time

+ Taking full advantage of the means of transport

+ Not afraid of losing revenue

- For consolidators:

+ Enjoy the difference

+ Enjoy preferential rates

1.2.3 Distinguish between FCL and LCL shipment:

Table 1.2: FCL and LCL comparison

Factor for

comparison

Comment [user2]: D ấ u câu?

1 Volume (CBM or Feet)

2 Shipment security

(All subject owners

want their goods to

be safe when

traveling across the

ocean But not all

and movement that

the goods are often

exposed to, easily

affected during

transport.)

3 Cost

Shipping cost is one

of the main factors

to consider whendeciding whether toship under FCL orLCL Althoughthere are certainprinciples you canfollow, there may be

a gray area in whichFCL decisions withLCL are blurred

4 Rationale

season that lasts from August

to October or Chinese goldenweeks, it is easier to place anLCL shipment than to an FCLshipment

Source: VLA organization

1.3 Stages of handling a LCL shipment

1.3.1 Import LCL shipment process

a) Sale contract

Definition: Sale contract is a written agreement between buyers and sellers in twodifferent countries on the purchase and sale of goods The seller called the exporter,the buyer called the importer

Important and mandatory Terms in the contract:

1 The Seller: The name of the exporting company

2 The Buyer: Name of the importing company

3 Commodity: Description of goods includes:

Quality: Name of goods and quality of goods Quantity: Quantity and weightPrice: Unit price, with commercial terms (CIF, CNF, FOB, etc.)

4 Shipment: Time limit, place of delivery

5 Payment: Method, term of payment (Example: T / T, D / A, L/C, )

In addition, in order to fully contract, ensuring the requirements of the parties, there are other important provisions such as:

1 Packing specifications, and branding

2 Warranty of goods (if any)

3 Force majeure condition

4 Claim: Conditions of appeal 5 Arbitration: Arbitration conditions when a

dispute occurs

6.Other conditions: Other terms agreed upon by the seller and the buyer

Specific content will be changed flexibly to suit the actual needs of the parties

But the basic terms mentioned above are very common and you should refer to

the process of drafting and negotiating contracts with foreign partners

b) Import license

Import License are administrative procedures that require traders to submit

applications or documents on the export and import of goods to the relevant

administrative authority

Imported goods must be approved by a competent authority by licensing

Case 1: No export – import license case is required for ordinary goods or

services with the permission of the agency

Case 2: Export – import licenses are required for goods subject to special

government control For example, to export commodities such as western

medicine, seeds, wood, antiques, explosives, etc., a permit from the ministry is

required

Details of goods subject to export license, as in Decree 187

Applying for a license is important and takes time, so businesses need to be

well prepared

After obtaining a license or for an item that does not require an export license,

you can skip step 2 and move on to the next step

money (such as 30% value of the order), or open a letter of credit (L / C) before the seller completes the production and delivery.

d) Check invoice and documents

Under the signed contract, the importer keeps in touch with the exporter to keeptrack of when the goods are ready to arrange shipping schedules Once thegoods are ready, depending on the specific delivery conditions in the contract,the importer needs to perform some different work steps Here are 3 commonconditions, you can refer to Incoterms

Case 1: Import under Exwork conditions

In this condition, the importer must arrange to receive the goods at the seller'swarehouse (abroad) Then carry out the procedures for transport to the port ofexport, the customs clearance to put the goods on the plane, then make thenecessary documents to import goods to Vietnam

Those steps are usually done through shipping forwarding companies Thisservice company has a foreign head agent and arranges a door-to-door packagefor the importer

So, with this condition, you should find freight forwarding company (freightforwarder) with experience on the route and the type of goods to import Whenworking with them, you need to talk carefully, to make sure both sidesunderstand each other

Below are details of the process according to EXW conditions that the buyermust do or the buyer hires the freight forwarder service:

1 Tell Forwarder the seller information, let their agent abroad contact theseller and arrange the delivery schedule At the same time, you also need toinform the seller of the forwarder information to coordinate

2 Foreign agent of Forwarder arranges trucks to come packing according tothe agreed schedule They then unload goods to the port warehouse and carryout export customs procedures.

3 During this process, the Forwarder will send a draft Bill of Lading foryou and the seller to check first If there is anything wrong, add corrections.After the train runs, Forwarder will issue official B / L If you or the seller needthe original (Original B / L) then they will release the original, otherwise theywill issue the Telex or Surrender version (may cost Telex)

4 Goods loaded onto ships to Vietnam, Forwarder updated the schedule andannounced the ship's arrival date During the cruise, the seller sends the buyer aset of documents as prescribed in the contract Usually they will send thesoftware via email first

Case 2: Import under FOB conditions

In FOB terms, the foreign seller will deliver the goods and complete the exportprocedures for the importing company at the port of loading (also known as theport of export) The importing company will do the job of buying sea freightfrom the port of export to the port of import The importer will buy sea freight

at Freight forwarder or Consol companies

e) Customs clearance

After the goods are loaded on the means of transport, the exporter will makedocuments for the importer After the documents have been carefully checked,the importer will ask the exporter to send the original set of documents orscanned documents to the importer When the goods arrive at the port of entry,usually the goods will be exploited and taken to the CFS warehouse At thistime the importing company will receive a notice of goods arriving at the portfrom the Forwarder agent or Consol ompany

After receiving the notice of goods back, the importer gathers the documents ofthe imported goods to carry out the customs declaration and clearanceprocedures for the goods.

The set of documents for customs clearance procedures includes:

Declaration of results of channelization House Bill or Master Bill Introductionletter Commercial invoice Packing List Notice of goods taking Order of otherdocuments related to common goods such as: Import permit, C / O, D / O, C /

Q, plant quarantine, other documents if any

After the declaration is completed, you take the documents down to meet withthe customs in charge, based on the flow of the declaration, you will beassigned to check the documents or forward them to the customs office ofinspection or deliver them directly to the customs liquidation if it is green

If the green channel meets with the customs office to liquidate the goods, if theyellow channel meets the customs to check the documents, if valid, thedeclaration will be transferred to the liquidated customs If there are doubts,they will be transferred to the customs office for goods inspection, but if thedocuments are not valid, they must declare and prepare valid documents Afterfinishing, if the documents are valid, they will be transferred to customsinspection for goods inspection If the goods are inspected as declared, theywill be entered into the system and liquidated, and the problematic goods will

be handled on a case-by-case basis

After completing the steps of checking documents and checking goods, thespecialized customs officer will enter information into the system, the deliverystaff of the company will check on the customs website to print the barcode.Before printing the bar code for customs clearance, it is necessary to make adelivery note When registering delivery notes, always register the number ofvehicles to pick up the goods When having delivery notes and barcodes, the 16

additional declaration (if any) must be brought to the customs office forliquidation After checking out, the liquidated customs office will close the barcode on the bar code sheet and enter the order to release the shipment to thesystem.

f) Storage in CFS

After the declaration is sealed and signed for supervision, the importer will takethe delivery slip with the bar code to the CFS warehouse to receive the goods.After receiving the goods, hire a means of transportation to transport the goods

to the warehouse and complete the process of taking the goods to enter the portwarehouse

1.3.2 Export LCL shipment process

a) Sale contract

Definition: Sale contract is a written agreement between buyers and sellers in twodifferent countries on the purchase and sale of goods The seller called the exporter,the buyer called the importer

Important and mandatory Terms in the contract:

1 The Seller: The name of the exporting company

2 The Buyer: Name of the importing company

3 Commodity: Description of goods includes:

Quality: Name of goods and quality of goods Quantity: Quantity and weightPrice: Unit price, with commercial terms (CIF, CNF, FOB, etc.)

4 Shipment: Time limit, place of delivery

5 Payment: Method, term of payment (Example: T / T, D / A, L / C, )

In addition, in order to fully contract, ensuring the requirements of the parties, there are other important provisions such as:

1 Packing &

Marking: Packing specifications, and

2.Warranty of goods (if any)

3 Force majeure condition

4 Claim: Conditions of appeal 5 Arbitration: Arbitration conditions when a dispute occurs

6.Other conditions: Other terms agreed upon by the seller and the buyer

Specific content will be changed flexibly to suit the actual needs of the parties But the basic terms mentioned above are very common and you should refer to the process of drafting and negotiating contracts with foreign partners

b) Export license : it’s the same as import license

One of the important contents in exporting goods is payment Paymentproblems often bring high risks to exporters Payment confirmation is one ofthe most important business when organizing the implementation of foreigntrade contracts in accordance with the terms of the contract

This is usually due to the terms and conditions of delivery that determine theobligation, the cost and the risk transfer of goods The chartering duty to theexporter falls under the categories C and D in Incoterm 2000 Basicallyperforming the transportation of the main sector will have to perform thefollowing steps:

1 Contact shipping agent to get information about schedules and rates

2.Select carrier, shipment and registration of goods, hire the necessary servicessuch as loading and unloading hulls

3 Organization of delivery to the carrier, the carrier signed the delivery record

e) Packing and trucking

After getting the Booking note, the company will pack the goods and transport

it to the warehouse as indicated on the Consol Booking note

Note: For retail goods, you need to pack carefully and paste shipping mark onthe package Prepare in advance and submit to the port the confirmationvolume (VGM) Goods need to be lowered before closing time (closing time)otherwise it will be very easy to drop the train (not loaded onto the ship despitethe procedures)

If the goods require specialized inspection (quarantine, fumigation, etc.),samples will be taken in this step

f) Customs clearance

Prepare a set of documents for carrying out export procedures, including: Foreign trade contract, Commercial invoice, packaging letter, VGM and Dropout note (issued by the port when the cargo arrives at the port in step 6 above) Introduction letter

Detailed steps of procedures and customs documents, you can read in thearticle about LCL export-sea customs clearance procedures

After customs clearance, you submit the customs clearance form to theshipping line for them to sign for export with the supervising customs

With the terms of FOB, it is up to the stage of customs clearance for the goods

to be loaded onto the ship as the seller has basically fulfilled his duty If yourcompany exports under C-condition, follow these steps

Send SI to shipping carrier, confirm contents of B / L, receive original B / L (ifany)

After the goods have arrived at the port and finished customs procedures, yousend details as Bill, or Shipping Instruction (SI - Shipping Instruction) toshipping lines before Cut-off Time Ask them for confirmation, to make surethey have received it by the deadline

Based on SI information, the carrier will send a draft Bill of Lading Youshould carefully check, if anything needs additional editing, coordinate withshipping lines to implement soon.

Note: For retail items, customers will receive House Bill of Lading, not themaster bill as FCL goods

g) Other important activity if any

Other steps of the LCL export process:

-Buy insurance, make C / O and other documents required by customers

- Once the bill of lading is available, you should send the voucher packagesoftware early to notify the buyer of the shipment

- At the same time, you proceed to complete the procedure to obtain other documents as prescribed in the contract, such as:

- Marine Insurance Policy Certificate of Origin (CO) Phytosanitary or Phytosanitary Certificate

To ensure accuracy, you should send the draft and the official version of thesoftware to the buyer, so that they can verify it If there is any content thatneeds additional editing, it is better to do it sooner rather than later

h) Send documents to foreign buyers

Once you have a set of documents, you send the seller the original set ofdocuments, according to the number agreed on in the purchase contract It isalso advisable to send them the scan file via email so that they will prepare thenecessary steps for the import process

This is the end of the process of making retail exports by sea (LCL), in terms ofgoods transfer In parallel with this process, the exporter also noted the issue of payment by the customer, also in accordance with the contract Document for

an export LCL shipment:

Table 1.3 Document for an export LCL shipment:

Source: FIATA reference

1.4 Factors that have effect on LCL shipment process

1.4.1 Shipper liability limitation

- The shipper is the first person directly involved with the shipment beingtransported to the destination Specifically, the responsibilities will include thefollowing: The shipper is responsible for taking the container at the port,moving the container to his warehouse to carry out the cargo Usually thisinvolves shippers leasing intermediary services Carrying goods intocontainers In the process of packing goods, the goods owner must ensure andpromise that the goods will not move during transportation or breakage, Packing in containers may be chosen by the owner of the goods at the port, port

or Closed in shippers' own warehouses The shipper in the process of packingthe goods, needs to calculate and be flexible in giving signs and marks aboutthe goods This is to ensure the consignee can easily identify and classifygoods The shipper must directly do the necessary customs clearance At thesame time pay the customs costs as prescribed Shipper performs seal (leadseal) for his container The shipper proceeds to prepare and send the bill oflading (B / L) details to the shipping companies or shipping company (FWD).The shipper is responsible for such costs as THC, loading and unloading, DemDet if incurred

1.4.2 Carrier liability limitation

After the shipper (shipper) has fulfilled his responsibilities, the carrier of theshipping lines or the transport business is the subject that needs to take thefollowing responsibilities, to ensure the goods are transported Transfer to thedestination port in accordance with the procedure As follows:

The carrier performs the declaration and issue the bill of lading to the shipper(shipper) Before sending the bill of lading, it is important to pay attention tothe detailed draft bill, this will help the shipper to check the information on thebill of lading in more detail and more convenient

The carrier is responsible for loading and unloading containers onto the shipcarefully, safely, to ensure everything is stable before the time the ship proceeds

1.4.3 Consignee liability limitation

After receive Arrival note from carrier or forwarding company, the consignee mustensure the preparation of papers, documents, words related to the shipment in acomplete, valid and accurate manner Then proceed to customs clearance to be able

to receive the shipment The consignee is responsible for receiving containers,checking goods and unloading containers to their warehouses After receiving thegoods, the consignee needs to ensure the return of the dragon

container to the shipping line Consignee is responsible for completing chargessuch as container bet fee, D / O fee or Local Charges fee.

In fact, LCL shipments in the same container do not always go to the samedestination port Many times, they are only transported in a same container on acertain route, then again discharge and sorted into other containers (reload)before moving on

This reloading usually takes place at transit ports, such as Singapore, Hamburg,Busan At these ports, LCL cargo from many sources collects and travels tomany other places, so it should be reorganized to optimize space on thecontainer before the next journey to the next destination

At the destination, the recipient must present the consolidation bill of lading toreceive the goods In principle, the consolidator must act as a carrier because he iscommitted to transporting goods from one place to another However, because theconsolidation bill of lading has not been approved by the International Chamber ofCommerce and contains content that is not consistent around the

world, there are bill of lading notes that the collector only acts as an agent(Agent) Therefore, in their operations, consolidators can act as carriers or onlyagents depending on the provisions of the bill of lading they issue If FBLconsolidators (FIATA multimodal transport bill of lading), they will always act

as the carrier

- Consolidator liability limitation:

-When acting as a carrier, the consolidator is not only responsible for the faultybehavior of his employees

-They are responsible for the loss of goods during transportation from the place of receipt to transport to the final destination

-In other words, he is responsible for the damage which occurs when the goodsare still in the care of the actual carrier But in fact many forwarders still do notaccept that responsibility

-They still continue to consider themselves agents and specify this in their bill

of lading Therefore, the Federation of International Freight ForwardersAssociations (FIATA) encourages freight forwarders to use multimodal airwaybill (FBL) to take real responsibility for the goods

and is widely used in multimodal transport and consolidation services

1.4.5 Forwarding company

- Definition

VLA organization (Vietnam Logistics Association) say: “Forwarder or Freight

Forwarder is a Forwarding company or agent By an individual or company that provides freight forwarding services for other individuals or companies Their function is to export goods from the manufacturer - receive the goods to a market

to the final point (According to the transport contract).”

They do not own cargo but acts as an "Expert" in the logistics network to

ensure smooth flow of goods from Shipper to Consignee These service

providers may use a variety of combined transport modes (Multimodal

Transport) Including waterways (IWT & ocean shipping), air, truck of inland transportation and rail A shipment can be shipped in combination with multiplemethods If properly calculated, it is possible to ensure timely delivery and costsavings - Function:

Customers who want to export (import) goods are difficult to access or dealdirectly with the shipping company They need intermediaries as Forwarder tobroker the transport of goods

Forwarders will help reduce costs, because they will find the best shippingroute, method and carrier most suitable for customers, they are also in goodrelationship with carriers (sea line, airline, rail way), trucking service andcustoms in many countries Because of their regular volume, they can make acontract with other services in logistics chain Forwarders plan to arrange manysmall lots to consolidate into pallets or FCL And shipping to the destination,thereby reducing costs for each individual shipper

In addition to arranging transportation, forwarding companies also provideother ancillary services Help customers focus on their production and business.Here are some popular services:

-Customs clearance: The goods owner authorizes the Forwarder to complete the customs declaration file and pay import and export taxes

- Issues related to documents - Bill of lading, certificate of origin, import and export license

- Inventory management, Logistics and supply chain management activities

Furthermore, the Forwarder is also an advisory unit on international trade.Experienced forwarders will give enthusiastic advice to new customers Whenengaging in the field of import and export, goods order or export.

1.5 LCL Shipping method classification: Direct route or Via route

1.5.1 Direct route

It means that the shipment is moved straight from the port of loading to the port

of discharge on a journey, such as from Hai Phong to Busan, meaning thegoods will go from Hai Phong to Busan without having to transfer to anothercontainer at the intermediate port

1.5.2 Via route

via an intermediate port before reaching the destination port, for example fromHai Phong to Mundra India need via via Singapore In Singapore, the goodswill be unloaded and packed into another container or even loaded onto anothervessel before heading to Mundra

Via shipment usually occurs in some cases:

- The shipper does not actually have all the services to the port ofdestination, but only to a transshipment port (ex: Hong Kong), then uses theservice of another party (coload-out) from the transshipment port to the port ofdestination

long distances to the port of destination because the goal is to save costs Forexample, OOCL Logistics company gathers weekly LCL cargo from Hai Phong toCanada, with weeks not enough to container 40 'directly, goods will be

container 20' to Hong Kong At this port, the goods will be packed in 40'

container with other lots (from other places) to go to the destination ports like

Vancouver, Montreal, Toronto

In both cases, the shipper does not have to do any additional procedures, but

still ensures the goods are transported to the destination port Only transit time

will be longer due to reworking procedures at the transshipment port In

addition, the number of times of packing and withdrawing goods into or

increasing the container increases the risks for the goods during operation

Therefore, a common experience when dealing with retail consolidators,

shippers should find out if the consolidation service they are providing is direct

or via one or more other ports

Qualification for a via port

Geographical location:

• Close to major transportation routes

• Intermediate location connecting the vessel and the mother ship

• Connecting domestic goods

For example: Rotterdam port in central Europe, Hong Kong port connecting

Southeast Asia

The infrastructure:

• Must be a deep-water port (> 13.5m) to accommodate large vessels

• Having a large yard for storing containers (CY-container yard)

• Development of public infrastructure, technical infrastructure such as

electricity supply, water supply and drainage, improvement of transportation

systems connecting seaports,

Operate:

• Low operating cost of port

• High port productivity

27

• Professional, reliable

CHAPTER 2: Analysis LCL ocean shipment exchange situation in

TICO International Corporation.

2.1 TICO International profile

Established on 15th Jan 2005

Vietnamese name: Công ty Cổ phần Quốc tế TICO

English name: TICO Logistics – TICO INTL., CORP

Head office:14 floor, Discovery building, 302 Cau Giay District, Hanoi,

Vietnam

Tel: Tel: 84-4 2217 9266/86/ Fax: 84.4 4450 0114

Website: www.ticog.com / Email: info@ticog.com

Hotline: +84.3993 0949

Branches in Hai Phong, Da Nang, Quy Nhon, Ho Chi Minh

Number of employees: 150 people

Member of FIATA, IATA, JCTRANS, WCA organization

Source: TICO International Corporation

Vision: TICO desire to become an integral part of their customer value chainand one of their professional logistics partner They will strive to be the mostcompetitive and professional logistics provider in Vietnam

Mission: Provide customers with top logistics services and become a dynamicforwarder and total logistics’ provider with a global network of effective

overseas agents and alliance partners Turn their advantages into their customercompany strengths and design specific solutions to your requirements

Principle: They would like to bring mutual benefits to their customers and theirstakeholders The most valuable asset that we have is our automatic respondingsystem that resolves business daily Their value every single employee of theirteam who is building our pyramid of sustainability They are professional inevery action

Spirit: Offer perfect and reasonable logistics solutions, seize the businessopportunities with all strength and keep service at top Be always honest andfaithful, thoughtful and creative, teamwork and well communication, diligent,devoted and quick learning.

Relationship: Well supported by Vietnam customs and other related authorities Our relationship with our vendors/suppliers and partners within our industry is vital to our business

Experienced and dynamic teams: Their team is designed to produce flexible solutions to any challenge in combination with acceptable cost and at right approach with high experience and knowledge of Vietnam authorities and regulations They are dedicated to maintain high service standards for

punctually and customer satisfaction and have built good reputation for best quality service Services: TICO provide all services for logistics activities: - Air, ocean freight forwarding

Forwarding service is any type of service relating to the transportation,consolidation, storage, loading, unloading, packaging or distribution of goods

as well as consulting services or related to the above services, including:customs, finance, insurance, payment, collecting documents related to goods.Therefore, air, ocean freight forwarding is related to as above by air and seatransportation such as air craft and ship

- Domestic freight forwarding: trucking, railway transportation

- Door to door service: transport cargo or good from shipper warehouse to consignee warehouse

- Import – Export Custom clearance

- Overland transportation

- Project cargo handling

- Warehousing and distribution: managing warehousing and distribution forcustomers can become a nightmare when there are other aspects of businesswhich demand full attention However, thanks to warehouse and distributionspecialists, TICO have experience in providing warehousing solutions forvarious product companies, such as retail, cargo, textile, shipping, automobileindustries and many more.

- Fairs and exhibition

-Bulk cargo Clearance: Bulk cargoes can be interpreted as buckets, normallynot packed, packed or packed For goods of this type will be directly storedthrough the cargo holds of trucks, trains or ships Bulk cargo refers to unpackedgoods that are transported in bulk as cargoes (Carriage in bulk) such as coal,ore, cereals, petroleum, fertilizer, cement, etc

within the boundary of 1 port arranged and designed specifically for receiving andreceiving container ships, container loading and unloading, forwarding containersfrom the mode of sea transport to other modes of transport Container port is anindispensable technical facility in the entire container transport system, whichshortens the loading and unloading time at the port area, contributes to speedingthe process of transporting and improving economic efficiency

-Temporary Import – Re-export – Transit to China: As the shipping agency inVietnam, TICO is also an active forwarder in handling the shipments temporaryimported re-export, especially to re-export to China TICO is willing to supportall procedures such as pick up the Delivery Order, do the best to solve potentialproblems as the role of consignee in the MBL, give instructions to client to getthrough customs clearance and deliver cargo to any nominated address to re-export

Now they are handling full range services from HKG HPH MONG CAICHINA We have experience in handling special shipments on this route, such

as Reefer/ Used tyres / Plastic Scrap/ Agricultural Products

Reefer shipment is also one of our focuses as they can deposit for carriersconveniently Moreover, they can control it smoothly as a chain business, fullrange In that case, they will charge to client as standard local charges at HPH port

In fact, clients will save more money when they directly work with carriers.Concerning electricity fee for Reefer containers, Detention and Demurrage charges,

we have equipment and socket, plugs, container yards, warehouse

One more strength, they have branch offices at all ports of Vietnam, especially

at Hai Phong city and Hochiminh city So they always keep services at top forreturning or re-export to China at any time

- Depot: TICO has their own depot in main port of Vietnam with details as below:

Name of depot: TICO depot

Location: Ho Chi Minh and Hai Phong port

Design capacity: 4000 TEU

Storage capacity: 23000 meters square

Dealers for: Carriers, Forwarder companies, private

clients Services in depot:

- Container yards: this is the place where our container checkers conduct adamage estimate when a container arrives at the off-dock depot The damage isrepaired in accordance with specifications by our specialist at the workshopequipped with particular equipment

- Service for reefer containers:

* Supplier of Wooden Packaging for exportation

*

Maintenance

repair

of reefer containers 32

* All types of loading and unloading.

* Precooling and assistance in reefer cargo consolidation at depot

* Power socket systems

- All containers included standard and reefer containers are welcome here.Following to full package services: transportation, loading/unloading andpacking, shipside, handling, repairs containers, lifting and storage

* FMC license

“FMC license to provide freight services US routes are a mandatory requirement

but not all businesses can do it A large margin and building a custom price list is the hardest part for a business to get this license.” VLA organization stated.

Currently, there are 19 enterprises registered in Vietnam with FMC license toregister transportation services to the US (NVOCC) A number not muchcompared to several thousand businesses doing business in freight transport inVietnam

The FMC Regulation, which has been applied since May 1999 to the FMC (USFederal Maritime Commission), clearly states that freight transport businessesmust have a license as a cargo intermediary (Ocean TransportationIntermediary-OTI) before starting operation This provision applies to bothexports and imports FMC issues 3 types of licenses for OTI as follows:

+) OTI-NVOCC: This license holder may issue HBL as a "As Carrier" carrierfor their shipments to or from the US All charges and fees applied on the HBL(selling price) for both export and import must be stated in an FMC tariff.NVOCC can sign a service contract (Service Contact) with shipping lines Theonly thing an NVOCC cannot do is charge a commission from the shipping line

as a shipping carrier agent (agent’s ocean carrier) This is one of the most

common forms This license requires a bond of USD 75000 and an additionalUSD 10000 for a branch.

+) OTI-Ocean Freight Forwarder: This licensee can operate as a forwardingcompany in the US or be an agent of NVOCCs, which owns FMC bond and has itsown price list (Tariff) They cannot issue a bill of lading as a carrier and issue aninvoice at the price the carrier provides (no markup) The profits of the OceanFreight Forwarders are just the commission paid by the shipping company orNVOCC and cannot sign a service contract with shipping lines like NVOCC Thislicense requires a bond of USD 50000 and USD 10,000 for a branch

+) OTI-NF: This license holder has the function of the above two types oflicenses and must make two guarantee guarantees as required Retail serviceproviders (Master Consol) use this license in their operations

The above three forms apply to US businessmen In order for a logisticscompany outside the US to exploit goods to or from the US, they do not need

an OTI license but just need to register as an NVOCC with FMC with a pricelist (tariff), deposit (bond) and they will Issue bill of lading for their shipments.NVOCCs outside the US can sign service contracts with shipping lines toprovide transportation services to the US The trust deposit for this type is USD150000

+) NVOCC Tariff (Price list): When the company is approved and licensed byFMC as OTI-NVOCC, it is required to develop a price list specifying the terms

of transportation, prices and The charge will apply on its secondary bill oflading (HBL) This price list is issued and maintained in accordance with FMCregulations This request must be made immediately with a license evenwithout providing services to the customer

MR To Ngoc Phuong (TICO general director) said: “TICO has just already

gotten FMC license in 2020 Before 2020, they need to operate with other

co-loader like Pudong, Seahorse for USA shipment Although they have

ability to export directly to USA now but actually because their

volume is not high and stable, they do not have good rate So that they

still have to need support of co-loader for better quotation.”

However, the number of Vietnam agent having FMC license is very

small, therefore FMC license make them stand out from a thousand

other agents, it’s also an evidence of TICO ability, profession and

expert and experience in Logistics field

2.2 Analysis LCL ocean shipment exchange process in Tico

International Corporation

LCL shipment process concerned on chapter 1 is overall process for

consignee and shipper But, actually, forwarding company will

support shipper and consignee on this process There will be more

than one forwarding company that take part in transporting a

shipment However, each party take care different part of the

transportation, all of this part will build a smooth process

This chapter will focus on forwarding company part, which is from

TICO INTERNATIONAL CORPORATION

2.2.1 Exporting LCL shipment process in TICO international

corporation.

1.2.2 Picture 2.2.1: LCL shipping process flow

35

Comment [user5]: Rút ng ắ n n ộ i dung m ụ c này, chỉ nêu ý chính (các bước thực hiên) còn lại các documents có thể cho ra phụ lục.