Current situation and solutions to promote import and export of goods by air at vinatrans company

Company VINATRANS - One of the leading subsidiary companies in thefield of logistics of import and export goods with the support, encouragementfrom the state has been gradually consolida

It is said that freight logistics is an economic sector associated with theDevelopment of a country The development of freight logistics is alwaysAccompanying the country's growth rate That's right By probably FreightLogistics is one of the activities in the flow of circulation Distribution, animportant process of connecting production with consumption and is the masterThe process of social production

For Vietnam since 1986 when the country entered a period of renovation,freight forwarding in general and air freight forwarding in particular have played

an increasingly important role in the development of the country As a youngbusiness sector, it is difficult to compete equally with foreign transportcompanies, so freight forwarding is considered as one of the business fieldsprotected by the State and encouraged to develop development This isespecially evident in the field of freight forwarding by air

Company VINATRANS - One of the leading subsidiary companies in thefield of logistics of import and export goods with the support, encouragementfrom the state has been gradually consolidating and develop their business to beable to best meet the customer requirements, competing to survive, stand firm inthe market economy contributing to the foreign economic activity of the country.Although there have been many attempts to do the business of the deliveryservice aviation import and export goods in VINATRANS has not yet reallyachieve optimum efficiency So what is the reason? AND must take measuresovercome, how to draw experience in the next time?

Being aware of the importance of air freight forwarding activities for thedevelopment of the national economy in general and at VINATRANS inparticular, through a period of time directly studying the business of air freightforwarding business At VINATRANS, I chose the topic: "Current situation andsolutions to promote import and export of goods by air at Vinatrans company”for my graduation thesis with the desire to improve my own practical knowledgeand make a small contribution to the development of the Company.

In addition to the preface and the conclusion, my graduation thesis consists

of 3 chapters:

Chapter I: Overview of air freight forwarding services

Chapter II: Actual situation of forwarding import and export of goodstransported by air at VINATRANS

Chapter III: A number of measures to promote air freight forwardingactivities for import and export at VINATRANS

CHAPTER I: OVERVIEW OF AIR FREIGHT

of civil aviation operations Thanks to the activities of these organizations, theinternational aviation network is unified and synchronized, in order to avoidpossible disputes However, the application of the rules of these organizations isarbitrary because in addition to that application, the national or regional airlinesalso have their own specific provisions of the airline transport shops in thoselocalities

Here are some typical organizations:

1 International Civil Aviation Organization - ICAO

This is a special United Nations agency, established in 1947 to manage theairline's operations in its member states This agency was established on the basis ofthe United Nations Civil Aviation Convention, adopted in 1944 in Chicago

The purpose of ICAO's operational principle is to ensure the development

of safe and orderly international air transport worldwide; recommendsencouraging art aircraft for peaceful purposes; encourage the development ofairways, airports and airlift equipment ; meet the world's transportation needs byair, preventing waste due to unreasonable competition; ensure respect for therights of Contracting States; promote the development of aviation science in allaspects

ICAO's headquarters are located in Montreal, Canada, with representativeoffices in Paris, Dakar, Cairo, Bangkok, Lim a & Mexico Vietnam has been anofficial member of ICAO since 1980.

2 International Air Transport Association - IATA

IATA is a non-governmental organization established in 1945 inLahabana, Cuba The headquarters of the Association is located in Montreal,Canada Members of IATA are of 2 types: Official members and associatemembers Official members include airlines participating in internationalactivities, scheduled business Also affiliated members are domestic airlines ,scheduled business Associated members are not allowed to vote at IATAconferences or forums

The purpose of IATA is to promote safe, regular and for the benefit of theworld's people; encourage trade by air; contribute to promoting the interactionbetween air transport enterprises; close cooperation with ICAO and otherinternational organizations

The General Assembly is the highest authority of IATA, conductingannual meetings IATA Standing Committees include:

- No-load committee

- Technical committee

- Legal committee

- Financial committee

- Aviation medical committee

Each committee consists of several sub-committees and working groups of

a nature permanent or established when needed

3 International Federation of Freight Forwarders Association - FIATA

The International Federation of Freight Forwarders Association,established in 1926, is a non-governmental organization, composed of officialmembers who are international forwarding federations and cooperative memberswhich are individual forwarding companies

FIATA is the world's largest forwarding organization with 40,000forwarding and logistics companies, employing 8-10 million people in 150countries Agencies of the United Nations such as the United Nations Economicand Social Council (ECOSOC), the United Nations Conference on Trade andDevelopment (UNCTAD), the European Commission of the United Nations(EC) and the Economic and Social Commission for Asia and the Pacific(ESCAP) has recognized its global legal status FIATA is also recognized byinternational organizations involved in trade and transport such as theInternational Chamber of Commerce (ICC) as well as the carrier and shipperorganizations

FIATA's main goal is to link and unify the logistics industry around theworld; protect and promote the benefits of forwarders; improve service quality

by developing and improving sample delivery and receipt documents, standardbusiness terms; professional training at the international level; strengthencoordination relationships with shippers and carriers

FIATA's scope of activities is very wide through the activities of a series

of subcommittees such as: Subcommittee on social relations; Legal

subcommittee and insurance documents …

The main types of documents that FIATA can issue include: FIATA FCR(Certificate of receipt of goods from the forwarder); FIATA FCT (Transport

certificate of the consignee); FBL (Bill of Lading of FIATA); FWB; SDC; SIC;FFT …

II CONCEPT OF AIR DELIVERY AND ROLE OF AIR

Freight Forwarding Service, according to the FIATA Model Rules for

Forwarding Services : "is any type of service related to the transportation,

consolidation, warehousing, loading, packaging or distribution of goods and services advisory services related to the above services, including customs, financial matters, insurance, payment, document collection related to goods".

According to the Vietnam Commercial Law 1997, "Freight forwarding is a

commercial act whereby a freight forwarder receives goods from a shipper, organizes transportation, storage, warehousing, carry out paperwork and other related services to deliver goods to the consignee under the consignment of the goods owner, the carrier or other forwarding services (collectively referred to as customers)"- Article 163 of the 1997 Commercial Law.

In general, both the Vietnamese Commercial Law and the FIATA ModelCode define the delivery service in the direction of listing all services relating tothe process of transporting goods from the shipper (the exporter) to Hand of theconsignee (importer) with a range of jobs such as packaging, packaging, storage,

onto ships, and transporting goods along the way , unload the ship and deliver it

to the recipient …

Previously, the delivery could have been done by the shipper, theconsignee or the carrier However, along with the development of internationaltrade, the division of international labor with the increasing level and scale offlower expertise , forwarding has also gradually been specialized byorganizations, trade unions Professional forwarder proceeded and forwarder hasofficially become a "Profession"

Logistics profession in the world was born about 500 years ago In 1552,

at BADILAY, Switzerland, E-VANSAI appeared for the first time theforwarding business and the transportation of goods This company trades veryhigh fees, about 1/3 of the value of the goods Later, the forwarding business wasseparate from transport and trading, gradually being specialized by professionalforwarding organizations and companies

1.2 Forwarder concept

The person dealing in forwarding services is called the Forwarder (FreightForwarder, Forwarding Agent) The forwarder may be the owner of the goods(when he acts on his own to carry out the forwarding of his goods ), the shipowner (when the ship owner acts on behalf of the owner of the goods), loading

or unloading company, a warehouse, a professional freight forwarder or anyother person with a logistic service business

According to the FIATA: "The forwarder is a person who takes care of

the goods being carried under a consignment contract and acts in the interests

of the consignor who is not the person himself The forwarder also undertakes all the work related to the delivery and receipt contract such as preservation, transshipment storage, customs clearance and inspection”.

Defined by ESCAP "The freight forwarder is an agent acting on behalf of

the import-export to perform tasks from simple things such as storage, customs clearance to package services of the whole process of transport and distribution

of goods" This definition emphasizes the main function of the forwarder is to

make reasonable use of the transportation network and types of transport to getthe goods to the correct address

According to the 1997 Vietnam Commercial Law, goods delivery serviceproviders are traders who have business registration for goods delivery andservice services because according to Article 163 of the 1997 VietnamCommercial Law, "Chemical is a commercial act " requires the person whoconducts delivery services to have a business registration certificate and beconsidered a "trader" for engaging in commercial acts

In the past, freight forwarders used to act as agents to perform some tasksentrusted by importers and exporters, such as loading and unloading,warehousing, paperwork, inland transportation and handling payment for

goods…

Along with the development of international trade and scientific andtechnological advances in the transport industry, forwarding services have also beenexpanded The date of delivery plays an important role in international trade andtransportation The forwarder not only does customs procedures, or ships but alsoprovides a full service on the entire process of transport and distribution of goods

In many different countries, freight forwarders are called different names such asCustoms House Agent, Customs Broker, Clearing Agent,

Shipping and Forwarding Agent, Principal Carrier…

2 The concept of air freight forwarding and the role of air freight

forwarders

2.1 The concept of air freight forwarding:

Just like the modes of delivery by sea, rail or road, freight forwarding byair also bears the basic general characteristics of forwarding in general From thedefinition of forwarding as mentioned above, it can be understood that air freightforwarding is a collection of operations related to the air transport process inorder to perform the movement of goods from the place of delivery to the place

of receipt of goods The person performing air freight forwarding services may

be the owner, the airline, the professional freight forwarder or any other person

Currently air freight forwarding is usually provided by air freight agentsand freight forwarders:

+ Air cargo agent: is an intermediary between a carrier (airlines) and acargo owner (exporter or importer) Speaking of air freight agents, it is often calledIATA agent because this is the most standard agent

IATA Air Freight Agent is a forwarding agent registered by theinternational air transport association, appointed and authorized by IATAmember airlines to act on their behalf

+ Air freight forwarder: Is the business of forwarding services air The airfreight forwarder may be an IATA agent or not an IATA agent, the service ofwhich the freight forwarder will mainly provide consolidation services

2.2 The role of air freight forwarder

As noted above, forwarders with basic characteristics play an extremely important role in completing the retention stage distribution of goods, bringing

goods from production to consumption Perform function as a bridge betweeneconomic and trade activities across regions, between domestic and foreign, theforwarder can undertake role as transport agents, customs brokers, as brokers, asfreight transport business, consolidator or dealers multimodal transport business.

In the field of freight forwarding in particular, the role of the delivererreceive specific expression and expertise The forwarder when acting as aviationagents or as delivery air forwarders promote the typical advantages of each type

of service

a The role of airline agent

The airline agent is considered an important link in the relationshipbetween the consignor/the consignee and the airline as well as in shipping Forthe airline, the agency is quite knowledgeable about the situation goods andgoods on demand for goods transported by air of importers With our marketingnetwork, the agents can ensuring relatively regular sources for airlines to be inone' s transport It can be said that the proportion of freight freight by air travelagents are much larger than direct orders to airlines, this density often comes to90% Moreover, as authorized airlines, agents unable to implement, provideservices to senders and ensure delivery for airlines in the package is ready tocarry, this is much more convenient for airlines Also it should be highlightedthat the airlines and the agents join in one the transport program should be seen

as partners in one business, in which cooperation is paramount In fact, thiscollaboration has been existence for many years and continues to remainmaintained This is beneficial for airlines and agents for the purpose providehigh - quality services to senders and recipients row

For the consignor or consignee, the agent is really necessary because the

inherently complicated, requiring qualified operators In addition, airtransportation must follow to very strict rules to ensure safety for flights, whichare not as good as the owner of the airline When consigning your shipment to anairline agent, the shipper can be assured that his shipment will reach the recipient

by the agent who ensures all procedures, services and packaging, storage, routeselection, receipt of documents and even delivery to the recipient becauseagents often have their own network of agents abroad (Companies acting asagents for each other) to ensure full receipt of goods

b The role of the air freight forwarder

As defined, freight forwarders may also be IATA agents or not IATAagents, but they specialize in consolidation services So the role of the air freightforwarder is similar to that of the air freight agent, but adding a number ofconsolidation services such as the consolidation of single of multiple shippersplaces going into whole shipments to send and deliver to recipients at the samedestination So when acting as an air freight forwarder or more specifically aconsolidation service, the forwarder has brought a lot of benefits to the importer,the carrier or more specifically the shipping companies air freight and for airfreight forwarders themselves

when paying to the carrier, it is more convenient to only need to contact theconsolidator instead of a series of carriers Air freight and also enjoy door-to-doortransportation, along with distribution services that airlines do not usually do

- For air carriers: saving paperwork and time by not having to handle oddshipments; make full use of the aircraft's full capacity; No need to worry aboutlosing freight because collectors are responsible for collecting retail shippers

11

- For freight forwarders: enjoy the difference between the total freightcollected at the consolidator and the amount payable to the airline at the lowerfreight rates.

III LEGAL BASIS OF AIR FREIGHT FORWARDING

1 The provisions of law

1.1 International conventions

Logistics of import and export of goods is a very complex activity thatrequires high professionalism Therefore requires the State to have strictregulations to facilitate the application The issue of import and export goodsforwarding has now become a macro strategy of each country, so it needsappropriate investment in technical facilities, people as well as legal documentsapply Moreover, air freight forwarding requires even more accuracy, so the legalrole needs to be more standardized in accordance with international practices

International air freight forwarding is governed by the InternationalConvention on the unification of a number of rules relating to the carriage ofgoods by international air - the Warsaw Convention

The Warsaw Convention was signed on October 12, 1929 ThisConvention has resolved the conflict of laws between countries in air transport

To date, nearly 130 countries around the world have joined or ratified theConvention, and it has become the current major international air transport act.Vietnam joined the Convention on October 11, 1982

The Protocol to amend the Warsaw Convention on September 28, 1955 inthe Hague is called the Hague Protocol

The additional convention to the Warsaw Convention signed in

Convention The 1966 Montreal Agreement Amends the Limits of Liability ofthe 1929 Warsaw Convention

The Montreal 1975 Supplementary Protocols include protocols 1,2,3,4relating to currency replacement for calculating limited liability to pay goldfrancs by special drawing rights (SDR) and amending a number of articles of theWarsaw Convention

According to the Conventions, the scope of the liability of the carrier isfrom the time when the carrier receives the goods for delivery until delivery tothe recipient The fault-based principle of liability means that the carrier isresponsible for the loss, damage, loss, delay of goods in transit unless it isproved that he (the agent, the person employment) have taken all necessaryreasonable measures to prevent the goods from such losses The carrier, on theother hand, will not be liable if the damage occurred as a result of the pilot's fault

in commanding or operating the aircraft and in all other respects that he or hisagent has taken all necessity measures to avoid damage

Limitation of liability of air carriers under the Warsaw Convention is 250Fr/Kg of cargo unless the shipper has declared the value at the time of deliveryand an additional amount if required In this case, the carrier's liability does notexceed the declared amount The supplementary protocols of Montreal 1975changed the limit of liability in SDR to apply to the member countries of the IMFInternational Credit Fund with the equivalent of 17 SDR / kg of goods

1.2 Vietnamese legal documents

a Vietnamese civil aviation law

Vietnam's Civil Aviation Law was passed by the National Assembly onDecember 26, 1991, effective from June 1, 1992, amended and supplemented on

April 20, 1995 There is also an international freight charter issued by the

General Director of Vietnam National Airlines on September 27, 1993

In this law, there are some basic issues relating to the delivery and receipt

- The carrier is not responsible for compensation for loss, deficiency ordamage of cargo during carriage by aircraft unless the damage occurs due to one ofthe following reasons: or inherent defect of the goods, as a result of an act of arrest

or other coercive action of the authorities or a court of goods, of armed

conflict, the fault of the consignor, consignee or of the person escort the sender,the dispatcher to accompany the goods …

- The carrier is liable for damages resulting from delay in transportation if

it is not proved that his staff or agent has taken all measures to avoid damage

The cargo is deemed lost if, after 7 days from the date it should have been delivered, to the place of delivery where the goods did not arrive

- The shipper and the person entitled to receive the cargo or their legal representative have the right to complain and sue the carrier

Before initiating a lawsuit against the carrier for loss of cargo, the personsentitled to lodge a claim or litigate must lodge a claim with the carrier within thefollowing time limit:

 14 days from the date of receipt of cargo in case of shortage ordamage of the cargo chemistry; 21 days from the date of delivery in case of loss ofmerchandise

 21 days from the date on which the right holder has been received

in the case of delay

The carrier must notify the complainant whether or not to accept thecomplaint within 30 days of being complained If the complaint is not accepted

or the time limit is not answered, the complainant has the right to sue Thestatute of limitation for submission of a claim is 1 year from the date the cargowas transported to the destination or from the date the aircraft should havearrived at the destination or from the date on which the carriage was suspended

The Vietnam Commercial Law was passed by the National Assembly onMay 10, 1997 and takes effect on January 1, 1998 In particular, Chapter II,Section 10, from Article 163 to Article 171, specifies the concept, rights andobligations of freight forwarders, cases of exemption, limitation of liability

c Ordinance of economic contracts

Ordinance on Economic Contracts was issued by the State Council onSeptember 25, 1989 Contracts in freight forwarding by air are also a form ofeconomic contracts Therefore, the application of the Ordinance on EconomicContracts in signing delivery contracts is a must Due to the limitations of the

Ordinance on Economic Contracts, in 1997 the Draft Ordinance on NewEconomic Contracts was drafted to reduce the inadequacies of the old ordinance.

d Customs ordinance

Custom ordinance was approved by the State Council on February 20,

1990 and took effect on May 1, 1990 Forwarding of import and export goods isdirectly related to customs procedures, so in addition to strictly complying withthe above-mentioned legal documents, the forwarder must be familiar with theCustoms Ordinance

e Standard business conditions of the Vietnam Forwarding Association

The Vietnam Forwarding Association provides standard businessconditions, including general rules, specific definitions, obligations of theforwarding company, customers' obligations, and proper implementation.contract, general liability and limitation of liability as well as the lien

of goods, claims, litigation …

2 Contract for freight forwarding of import and export

In import and export business, the delivery contract is also recognized as atype of economic contract, so the contract of forwarding of import and exportgoods also has the characteristics of economic contracts According to Article

165 of the Commercial Law 1997: “The contract of goods delivery and receipt is

a contract signed between the goods delivery service provider and the customer

to perform the goods delivery activities specified in Article 163 of this law”.

 The subject of the contract:

The subject of the contract is the parties involved in the contract,completely equal and voluntary to confirm the rights and obligations to eachother

According to the Ordinance on Economic Contracts, contracts on deliveryand receipt of import and export goods are signed between the parties: Legalentities and legal entities; legal entities with individuals having businessregistration as prescribed by law

Therefore, the subject of the freight forwarding contract is the personproviding forwarding services and the customer must be an individual or a legalentity with business registration In addition, freight forwarding serviceproviders must also be traders who have certificates of goods delivery servicebusiness registration

According to the Ordinance on Economic Contracts, contracts forforwarding import and export goods are signed in writing or transactiondocuments: Official dispatch, telegraph, quotation, orders

The contract is considered to be formed and legally effective from the timethe parties have signed the document or since the parties have received thetransaction documents expressing an agreement on all the major provisions ofthe contract, except as otherwise provided by law

The contract of delivery and receipt of import and export goods arespecified by bill of lading

The content of the contract is all the terms agreed by both parties, showingthe rights and obligations of each party Because freight forwarding involvesmany forms such as freight , consignment, freight agent, there are many types of

delivery contracts However, there are basically the main terms of an economic contract:

- Date of signing the contract

- Name, address, account number and bank of each party

- The subject of the contract.: quantity, quantity, conventional value

- Quality, type, specifications, job requirements

- Conditions of delivery

- Remuneration paid for services

- Responsibilities of the parties when en breach of contract

- Contract security measures

- Other agreements

- Validity of the contract

3 Documents commonly used in forwarding import and export goods by air

3.1 For exports

a Cargo documents include

+ Commercial invoice: A basic document of payment stage, a request ofthe seller to ask the buyer to pay the amount stated on the invoice On thecommercial invoice, details about the goods in terms of quantity, quality, price + Detailed list: Is a detailed document of the goods in the package, ark, box or container

b Transport documents: Airway bill (AWB):

AWB is evidence of a transportation contract signed between the ownerand the carrier AWB is made up of 3 different colored originals distributed todifferent people The first green is signed by the shipper for the carrier Thesecond original pink copy signed by both parties in line to the destination and forthe recipient The third blue one for shippers In addition, there are 6 to 11 copiesdistributed to other stakeholders

The shipper is responsible for the correctness of the details of the bill oflading he has declared

The main functions of AWB are as follows:

- Proof of transport contract signed between shipper and carrier

- Proof of airline's return certificate

- As freight bill

- As a certificate of insurance

- As a customs declaration

- As a guide for aviation personnel c Insurance documents:

+ Insurance policy: It is a document issued by insurance organizations covering key terms of the insurance contract

+ Insurance certificate: A document issued by an insurance organization tocertify that a shipment has been insured under the conditions of an insurancecontract

19

+ Quarantine certificate and hygiene certificate

IV AIR CARGO DELIVERY PROCESS

1 Export delivery process

- The exporter delivers the goods to the forwarder together with theshipper's instruction letter so that the forwarder can deliver the goods to the carrierand make a bill of lading

- The forwarder will issue the exporter a certificate of receipt of goods (FCR - Forwarder's certificate of receipt)

- The forwarder will issue the shipping certificate of the forwarder (FCT Forwarder's certificate of transport), if the forwarder is responsible for delivery atthe destination

The forwarder issues a warehouse receipt to the exporter (FWR Forwarder's warehouse receipt) if the goods are stored in the forwarder's warehousebefore sending the goods to the airline

-2 The process of receiving imported goods

Under the authorization of the foreign forwarder or the importer, the agent

or the freight forwarder shall proceed to receive the import goods with thedocuments sent from the exporting country and the documents issued by theexporting country and the importer provided

If only responsible for delivering goods to the importer in the warehouse

or freight station of the airport, after receiving the notice of arrival of the carrier

of the bill of lading, then:

 The forwarder directly to the yard fly received the dossier attached

to the goods

 After revoking the second bill of lading, the freight forwarder and the importer carry out procedures to receive goods at the airport

 If the forwarder is a consolidation agent, he must receive the wholeshipment by the owner bill of lading, then divide the odd cargo to the individualshippers and withdraw the consolidation bill of lading.

+ If the forwarder is responsible for delivering the goods to thedestination, in addition to recovering the number 2 of the master bill of lading orconsolidation bill, the forwarder must also ask the importer to provide thenecessary documents such as paper import permission, detailed list of goods,foreign trade contracts

 The forwarder proceeds to receive goods from the carrier, pay allthe charges collected later, complete the procedures and pay fees to the port ofaviation, customs clearance for goods

 Deliver goods to the importer at the importer's warehouse together with customs and tax notices

 The importer takes delivery of the goods and pays the costs that the forwarder must pay and the delivery fee for the forwarder

These are the most basic steps in the process of import and export of airfreight in general, but in reality, freight forwarding companies can follow theirown steps to suit the situation and the ability of each firm

It can be said that air freight forwarding is an extremely complex servicerequiring high professional knowledge related to many fields and many legalaspects The key issue is how the air freight forwarding business knows how toapply these basic theories to their business practices so that they can gain theircompetitive advantage and gain a foothold in this new market

CHAPTER II: ACTUAL SITUATION OF FORWARDING IMPORT AND EXPORT OF GOODS

TRANSPORTED BY AIR AT VINATRANS

I INTRODUCTION OF THE VINATRANS COMPANY

1 Process of establishment and development of the VINATRANS company

In the Vietnam forwarder market, people mention many names such asVinatrans, Vietrans, Vietfracht or Gemadept In which, they hold a largemarket share and can be considered a "giant" in the forwarding industry.including the names of Vinatrans

VINATRANS, formerly known as Logistics Company of Foreign TradeLogistics Ho Chi Minh City (Vietrans Saigon), is a subsidiary of Foreign TradeLogistics Transport Corporation (Vietrans), established in July 1975 Inaccordance with the process of rearranging State-owned enterprises, on January

18, 1995, the Ministry of Trade decided to transform Ho Chi Minh City ForeignTrade Logistics and Forwarding Company into an independent State-ownedenterprise under the Ministry Commercial, since September 1998, the companyused the trade name VINATRANS Over 30 years of operating in the field offorwarding, VINATRANS has quickly asserted its voice in this new butcompetitive service industry and indeed every stage of development ofVINATRANS is always attached with the maturity of Vietnam's forwardingindustry in general

The development history of VINATRANS Company can be divided into

3 phases as follows:

1.1 From 1975-1985: construction and operation period under the centralizedmechanism

Since the beginning of the 1970s, when the foreign trade and forwardingindustry still had no clear shape of an independent business, all activities werescattered, the technical facilities were poor, backward, and services were notavailable Heavy delivery of proprietary properties, the operation ofVINATRANS (at this time the company's transaction name was Vietrans Saigon)

at that time was extremely difficult Immediately after its establishment, theCompany quickly implemented professional activities, stabilized its apparatus,and strengthened its technical facilities The number of employees from 136 atthe end of 1975 increased to 356 at the end of 1985 This was also the periodwhen the Company fully operated under the subsidy mechanism and wasauthorized to carry out freight forwarding activities import and export targets set

by the Ministry of Foreign Trade annually, at the rates approved by the Ministry,with an average delivery volume of about 2.4 million tons/year However, this isalso a period of time when the life of officials and employees in the Company isvery difficult due to the general economic downturn Subsidized, bureaucraticand centralized management mechanism has significantly reduced the creativity

of employees, partly affecting the operation of the whole Company

In this period, the Company had two outstanding achievements:

- In 1978: Establishing transport department, starting to do import and export container cargo

- 1979: Building 12000m2 warehouse in District 7 of Ho Chi Minh City

1.2 Period 1985-1995: period of comprehensive innovation, development andeffective business

This 10-year journey can be divided into 2 important periods:

a The first 5 years from 1985 - 1990:

Entering in 1985 and especially since the Sixth Party Congress in 1986when the country entered a period of renewal, along with the strongtransformation of the whole country and the logistics industry in Vietnam, this isalso a transition period difficult meeting for the operation of VINATRANSCompany Due to changes in management mechanisms, the Company is nolonger the unit that is the focal point to focus on the delivery of import andexport goods according to the norms, but must follow the authorization of thegoods owner Forwarding volume is only equal to 18% of the same period Thecompany has no agency relationship with foreign partners, no foreign currencyrevenue, life of employees is extremely difficult

In this situation, the Board of Directors focused on discussing and seekingnew directions for the Company The company advocates to change the businessoperations from simple forwarding activities within the border gate toperforming international freight forwarding services; through contact with theestablishment of agency relations with international forwarding companies;improve the quality of the workforce in accordance with the requirements of thenew situation; renovating equipment, means of transport, loading and unloadinginformation, changing the convoy structure from the place of transporting bulkcargoes, with a capacity of 5-7 tons/vehicle to a fleet of specialized containertrucks with a capacity of 20 -25 tons…

b From 1991 - 1995:

This is the period when the company focused on developing new businessdirection that is developing international forwarding business and continuing tomaintain traditional forwarding, deploying to diversify types of services Duringthis time, the company also achieved some important steps such as:

- 1990: Establishment of shipping agent room

- In 1991: Started to provide express delivery service for exhibition and project goods

- 1993: Set up an office at Tan Son Nhat airport

- 1995: Setting up a branch office in Quy Nhon

1.3 From 1995 - 2005: from an independent state-owned enterprise to a ownership and professional corporation

multi-From the very strong development of the company over the years, on18/01/1995 the Ministry of Commerce signed the decision to transfer thelogistics company Ho Chi Minh City under the Ministry of Commerce as a state-owned business Accounting independent, with full legal personality Themechanism of the new management organization has facilitated the companyactively implementing the expansion of the scope of business operations,diversification of ownership and focus on developing facilities

-Year 1996: Set up branch office in Hanoi, Da Nang Establishment ofVINACONSOL cargo and Collection agency division

-Year 1997: combined with Konoike Transportation Group (Japan)invested 2.635 million USD established Vietnam-Japan Transportation JointVenture Company (JAVITRANS)

-Year 1998: establishment of the company branch in Hai Phong Duringthis period the company established a widespread dealer network worldwide,through direct dealer work for seven major shipping carriers, about 100 foreigncarriers, including many leading airlines on top of the world like K &N;Panalpina (Switzerland); Geologistics; Burlington (United States), Jardine (HongKong); Konoike (Japan)

In recent years especially since the years 2000, we have witnessed thebustling atmosphere unprecedented in the field of logistics which is the principalcause of Monopoly is no longer available There has been hundreds offorwarders including national, joint, private, and business companies

The foreign carriers, in which some companies have become really strong,the scale of operation is extremely vast covering and promoting all the functions

of the facility of the person doing service delivery In the same trend, along withincrementally expanding and enhancing its delivery service activities In 2003,VINATRANS conducted the joint stock of 3 parts of the enterprise, affiliatedbranches into 3 joint-stock companies, and the member units established 3 CO.,LTD, together with the foreign partners established 3 foreign labour companies.Thus the current VINATRANS is 1 corporation with the State Enterprise isVINATRANS and 13 member companies are joint stock companies, limitedliability, foreign workers with the total capital about VND 400 billion and morethan 1000 workers nationwide

Business activities include:

- Transiting goods to Laos and Cambodia.

- Making exhibitions and constructions

- Insurance and commercial consulting

2 Technical facilities of VINATRANS company

Along with the expansion and rapid development, VINATRANS alsofocuses on the construction and investment of equipment, facilities, workshops for forwarding business

The warehouse system of VINATRANS includes:

- 40,000m2 warehouse with roof including: Warehouse 196 Ton That Thuyet

Warehouse 131 Ben Van Don

Warehouse 18A Tran Phu

Warehouse Phu My

Warehouse 1650-1652 Pham The Hien

Warehouse Ly Hai

- 50,000 m2 outdoor storage

Cold storage 18 A Tan Thuan Dong, District 7 with a capacity of 2,800 tons

- System of container stations for both air and sea routes including import

The devices support:

- Tractor: 70 pieces (for both container 20 feet and 40 feet)

VINATRANS is now an official member of:

- International Federation of Freight Forwarders Association - FIATA

- International Air Transport Association - IATA

- Vietnam Ship Agent & Brokers Association - VISABA

- Vietnam Chamber of Commerce and Industry - VCCI

- Vietnam Freight Forwarding Association - VIFFAS

Diagram 1: Organization structure of the company

ORGANIZATION STRUCTURE OF THE COMPANY

BOARD OF MANAGER

`

BUSINESS UNIT

- Import Logistics Department

- Warehouse room

- Delivery room

- RCI Dealer room

- Air freight department

- ZIM Dealer department

- HAPPAG - LLOYD dealer

department

- TRIESTINO dealer room

- Exhibition and project

- Project management board

Source: Department of organization and personnel of the company

Therefore, it can be seen that the organizational structure of VINATRANS

is divided into 11 divisions under the business unit and 7 divisions under the

management and service unit In addition, the Company has 4 branches in all

provinces and cities and 9 other member companies of various types such as

joint stock companies, limited liability companies and foreign workers In

particular, the business unit has the business department including:

Sales Department (Sales), Customer Service Division (Customer Service) and

Field Service (Operation)

The specific functions of these operations are as follows:

a Sales:

Responsible for input in business activities, this division performs the

following activities:

- Plan sales and visit customers weekly, set targets for items Spending is achieved monthly, quarterly and yearly.

- Write a report after each meeting with customers

- Coordinate with overseas forwarding network in exploiting information,sourcing goods, exploiting customer lists, instructing agents to approach overseascustomers to make decisions on designated goods

- Answering, solving letters, telex, fax, information relating to customers

- Promote, introduce delivery services of the company such as door service, consolidation service

door-to Create a software program for statistics, make a list of customers to have appropriate policies and regimes

- Based on the evaluation of shipping lines, considering the competitivesituation from time to time to make a price list of VINATRANS and an price list ofancillary services

- Forecasting and proposing suitable marketing solutions

- When the shipment has been designated or agreed by the customer to useVINATRANS's service, form a job file and receive instructions from the owner,transfer the instructions and shipping instructions to Field components (Operation)

The business department consists of 2 groups:

- Documentation team at the office

- Goods handling team

* Documentation team will do the following main tasks:

- Organize the daily delivery schedule, assign specific staff to carry out theassigned shipments to identify the specific shipments

- Checking and supervising all shipments dispatched during the day

- Concentrate, statistic and transfer all the vouchers made in the day to Customer Service

* The goods handling team has the following tasks:

- Carrying out the goods at the places notified by the goods owner in the set letter

- Bringing goods into port warehouses, loading and unloading if required

- Check the status of packaging and packaging

- Check the validity of the documents provided by customers

- Customs declaration

- Measuring and counting in containers

- Contact shipping lines that issue master bills of lading (Master Bin of Lading - MB/L)

- Make house bills of lading (House Bin of Lading - HB/L)

- Making a goods declaration

- Pay storage fee if any

- Check and compare shipping details in MB/L and HB/L based on

carrier's booking and shipping instructions

- Statistics on exported goods in the day, week and month Photo of

waybill and relevant details for record keeping

b Customer Service:

This department is responsible for:

- Returns the information to the sales department and export field site department

- Collaborate with the sales department and the scene to resolve sales information

- Pre-alert or Shipping advice to foreign agent network based on pre-setform and agent list, ensuring the right person in charge and the right departmentduties abroad The contents of the Pre-alert inform the mandatory details about theshipment such as the train, the number of MB/L, HB/L, the payment method, theamount of collection, the sender's name, the recipient and the type of translation.service according to customer requirements

- Return the fax, telex, mail and issues related to export goods delivered bythe head of the department

- Making statistics, recording in the book, making records for export shipments of the day, week and month Keep records of related documents

This department is directly involved in shipping activities as well asfreight forwarding The field division is responsible for operating the escort ofcargo at the beginning and end points of the transport journey

II CURRENT SITUATION OF AIR DELIVERY ACTIVITIES

OF VINATRANS

1 The company's business results in recent years

Table 1: The company’s turnover in the period 2015 - 2019

Unit: million dong

Source : Department of Accounting-General company Vinatrans

With the above data, we have the following chart

Chart 1: The company’s turnover in the period of 2015 - 2019

Turnover in the period 2015-2019

It can be realized that the revenue achieved by VINATRANS groupincreased incessantly In 2010, the total revenue was 11,520 million VND, in

2013 it was 25,244 million VND and in 2014, the revenue suddenly increased to55,066 million VND From 2015 to 2019, we witness a strong growth of totalrevenue with an average of over VND 60 billion However, in 2017, totalVINATRANS only reached 57,239 million VND, a lot of decrease compared to

2016 More specifically, until 2013, the member units of VINATRANS began toget revenue at 3,377 million VND But by 2018 and 2019, the member units haveachieved increasing and higher revenue levels of VINATRANS This proves theoperational efficiency that the member units have achieved thanks to thedynamic than the state-owned VINATRANS According to the accountingdepartment's statistics, within 5 years from 2015 to 2019, VINATRANS and itsmember units have achieved:

Table 2: The company's business results in the period 2015-2019

Unit: million dong

Through the above statistics table, it can be seen that the business profit

that the Company achieved is quite good Although there were fluctuations

between periods, the fluctuation level was not too large, indicating that the

Company has always controlled and quite stable the cost level to help the

average profit margin at 20%

Table 3: Revenue from air freight forwarding

Unit: million dong

Revenue from air 26,070 27,951 22,266 25,571 32,637

freight forwarding

Source: Department of Accounting-General company Vinatrans

Chart 2: Revenue from air forwarding

Thereby, it is easy to see that the revenue from air freight forwarding isconstantly increasing and reaching the highest level in 2019 Although in 2017and 2018, air freight forwarding revenue was not as good as in previous years.Due to the total revenue of the two years has also decreased, but the proportion

of the revenue of the freight forwarding activities has reached an average ofmore than 40% Air freight forwarding, characterized by high freight rates,accounts for a relatively large proportion of total revenue If only considering theHanoi branch of VINATRANS Company, 2017 and 2019 will receive 63% and65% of the total net revenue in 2017 and 2019 This is due to the Hanoi Branch

of VINATRANS company has affirmed its name in the Northern forwardingmarket and is very active in the field of freight forwarding Hanoi Branch isconsidered as the strongest branch of all 4 branches of VINATRANS and isgradually separated independently This is also an encouraging point for theoperation of Vinatrans Hanoi in particular and other members of VINATRANS

in general

2 Actual situation of air freight forwarding in VINATRANS

The advantage that VINATRANS has in air delivery is that the companyhas focused on organizing its own organization in the company of 1 air-freightforwarding department specializing in this activity However, during theoperation process, the freight forwarding department is also responsible forcoordinating with other departments in the Company to conduct businessoperations Speaking of the forwarding of import and export goods by air ofVINATRANS, we have to mention two main operations, namely "ServicesContract" and "Co - load" services

2.1 “Service contract” operation

“Services contract” can be understood as follows: Airlines whenparticipating in the transport market often do not stand directly to offer shippersbecause this will force these carriers to do retail For greater convenience, the airtransport company will through the air freight forwarding service provider toreceive the contract of freight transport air transport company will give thefreight forwarder the lower preferential freight rates when freight directlysoliciting customers to compensate the forwarders or forwarding companies mustcommit to having a sufficient quantity of goods as agreed by the two parties foreach school year Air freight forwarders "wholesale" these "Service Contracts" toforwarders, and then these forwarders conduct retail sales to shippers CurrentlyVINATRANS is using routes of domestic airlines such as Vietnam Airlines,Pacific Airlines and foreign carriers such as Malaysia Airlines (Malaysia), ThaiAirway (Thailand), Korea Airlines (South Korea), AirFrance (France), TigerAirway (Singapore)… Depending on the shipment required to transport toanylocations, the Company will associate with certain airlines to suit the flightroutes to be able to shorten transit time to the lowest level When performing the

"Services Contract" VINATRANS acts as a carrier for transportation, so thecompany is entitled to the rights as well as the responsibilities and obligations ofthe transport carrier as described in Chapter I of this article At the same time thecompany must issue a house bill of lading (House Airwaybill) to the shipper andtake the master bill of lading (Master Airwaybill) from the actual carrier is theairline

2.2 “Co-load” operation

The pricing for the company's services depends on the rates of the airlinesthat the company uses the flight route in reference to the rates of other domesticand foreign forwarders to achieve competitive rates However, as mentionedabove, in order for airlines to reserve preferential freight rates for themselves,VINATRANS must ensure a certain volume of freight which is large enough So

in case there is not enough goods to contact the air carriers directly,VINATRANS must refer to the rates of other forwarding companies If thesecompanies are well-known forwarders, they will always have a large enoughvolume to win preferential rates from the air carriers, so their delivery rates arealways low Based on the rates these forwarding companies provide and the pricewhen VINATRANS directly contacts with the airlines, if higher, the companywill use the services of the forwarding companies or in other words, "resell"services to these companies and eat the price difference This business is called

"Co - load" At the moment, VINATRANS is often associated with well-knownforwarding companies such as Bakglobal (with agents at Mekong Company),Kuehne - Nagel (Germany), Geo logistics (Switzerland), DHL Danzas, Kintetsu(Japan) In which, there are mainly 2 forwarding and Geo logistics and Kintetsucompanies that VINATRANS are acting as agents The products that theCompany makes air-freight forwarding are divided into two main groups:Nomination and Free-hand Designated cargoes are those that are acquiredthrough the efforts of VINATRANS of foreign agents In contrast, self-exploitedgoods are those obtained as a result of offering services to customers ofemployees of the Sales Department of VINATRANS

3 Business process of forwarding air VINATRANS company

3.1 Exporting operations

a For nominated goods (Nomination)

Currently, most of the export contracts that Vietnamese companies signwith foreign partners sell at FOB prices Therefore, the right to choose andappoint forwarding agents is decided by the importer and is usually approvedthrough the provisions of the foreign trade contractor in L/C When collectinginformation related to air-freight shipments (through foreign trade contracts,relationships with customers or cooperating with operators in Vietnam), AgentsVINATRANS contacts customers (importers) to introduce their services anddelivery system, showing them the advantages and economic benefits thatcustomers can get, from That persuades customers to use the Company'sservices

Diagram 2: Export delivery process specified