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 the field of logistics of import and export goods with the support, encouragement from the state has been gradually consoli

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INTRODUCTION

It is said that freight logistics is an economic sector associated with the Development of a country The development of freight logistics is always Accompanying the country's growth rate That's right By probably Freight Logistics is one of the activities in the flow of circulation Distribution, an important process of connecting production with consumption and is the master The 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 young business sector, it is difficult to compete equally with foreign transport companies, so freight forwarding is considered as one of the business fields protected by the State and encouraged to develop development This is especially evident in the field of freight forwarding by air

Company VINATRANS - One of the leading subsidiary companies in the field of logistics of import and export goods with the support, encouragement from the state has been gradually consolidating and develop their business to be able to best meet the customer requirements, competing to survive, stand firm in the market economy contributing to the foreign economic activity of the country Although there have been many attempts to do the business of the delivery service aviation import and export goods in VINATRANS has not yet really achieve optimum efficiency So what is the reason? AND must take measures overcome, how to draw experience in the next time?

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Being aware of the importance of air freight forwarding activities for the development of the national economy in general and at VINATRANS in particular, through a period of time directly studying the business of air freight forwarding business At VINATRANS, I chose the topic: "Current situation and solutions to promote import and export of goods by air at Vinatrans company” for my graduation thesis with the desire to improve my own practical knowledge and 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 goods transported by air at VINATRANS

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

of civil aviation operations Thanks to the activities of these organizations, the international aviation network is unified and synchronized, in order to avoid possible disputes However, the application of the rules of these organizations is arbitrary because in addition to that application, the national or regional airlines also have their own specific provisions of the airline transport shops in those localities

Here are some typical organizations:

1 International Civil Aviation Organization - ICAO

This is a special United Nations agency, established in 1947 to manage the airline's operations in its member states This agency was established on the basis

of the 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; recommends encouraging art aircraft for peaceful purposes; encourage the development of airways, airports and airlift equipment ; meet the world's transportation needs by air, preventing waste due to unreasonable competition; ensure respect for the rights of Contracting States; promote the development of aviation science in all aspects

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ICAO's headquarters are located in Montreal, Canada, with representative offices in Paris, Dakar, Cairo, Bangkok, Lim a & Mexico Vietnam has been an official member of ICAO since 1980

2 International Air Transport Association - IATA

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

The purpose of IATA is to promote safe, regular and for the benefit of the world's people; encourage trade by air; contribute to promoting the interaction between air transport enterprises; close cooperation with ICAO and other international organizations

The General Assembly is the highest authority of IATA, conducting annual 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

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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 official members who are international forwarding federations and cooperative members which are individual forwarding companies

FIATA is the world's largest forwarding organization with 40,000 forwarding and logistics companies, employing 8-10 million people in 150 countries Agencies of the United Nations such as the United Nations Economic and Social Council (ECOSOC), the United Nations Conference on Trade and Development (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 by international organizations involved in trade and transport such as the International Chamber of Commerce (ICC) as well as the carrier and shipper organizations

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

by developing and improving sample delivery and receipt documents, standard business terms; professional training at the international level; strengthen coordination 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

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 Model Code define the delivery service in the direction of listing all services relating to the process of transporting goods from the shipper (the exporter) to Hand of the consignee (importer) with a range of jobs such as packaging, packaging, storage, bringing goods to the port, carrying out procedures for goods loading , loading

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

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

1.2 Forwarder concept

The person dealing in forwarding services is called the Forwarder (Freight Forwarder, 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 ship owner (when the ship owner acts on behalf of the owner of the goods), loading

or unloading company, a warehouse, a professional freight forwarder or any other 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”

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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 get the goods to the correct address

According to the 1997 Vietnam Commercial Law, goods delivery service providers are traders who have business registration for goods delivery and service services because according to Article 163 of the 1997 Vietnam Commercial Law, "Chemical is a commercial act ." requires the person who conducts delivery services to have a business registration certificate and be considered a "trader" for engaging in commercial acts

In the past, freight forwarders used to act as agents to perform some tasks entrusted 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 and technological advances in the transport industry, forwarding services have also been expanded The date of delivery plays an important role in international trade and transportation The forwarder not only does customs procedures, or ships but also provides a full service on the entire process of transport and distribution of goods In many different countries, freight forwarders are called different names such as Customs House Agent, Customs Broker, Clearing Agent, Shipping and Forwarding Agent, Principal Carrier…

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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 by air also bears the basic general characteristics of forwarding in general From the definition of forwarding as mentioned above, it can be understood that air freight forwarding is a collection of operations related to the air transport process in order 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 agents and freight forwarders:

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

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

+ Air freight forwarder: Is the business of forwarding services air The air freight forwarder may be an IATA agent or not an IATA agent, the service of which 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

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goods from production to consumption Perform function as a bridge between economic and trade activities across regions, between domestic and foreign, the forwarder can undertake role as transport agents, customs brokers, as brokers, as freight transport business, consolidator or dealers multimodal transport business

In the field of freight forwarding in particular, the role of the deliverer receive specific expression and expertise The forwarder when acting as aviation agents 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 relationship between the consignor/the consignee and the airline as well as in shipping For the airline, the agency is quite knowledgeable about the situation goods and goods on demand for goods transported by air of importers With our marketing network, the agents can ensuring relatively regular sources for airlines to be in one' s transport It can be said that the proportion of freight freight by air travel agents are much larger than direct orders to airlines, this density often comes to 90% Moreover, as authorized airlines, agents unable to implement, provide services to senders and ensure delivery for airlines in the package is ready to carry, this is much more convenient for airlines Also it should be highlighted that 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, this collaboration has been existence for many years and continues to remain maintained This is beneficial for airlines and agents for the purpose provide high

- quality services to senders and recipients row

For the consignor or consignee, the agent is really necessary because the procedures and operations for exporting or importing a consignment are

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

by the agent who ensures all procedures, services and packaging, storage, route selection, receipt of documents and even delivery to the recipient because agents often have their own network of agents abroad (Companies acting as agents 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 IATA agents, but they specialize in consolidation services So the role of the air freight forwarder is similar to that of the air freight agent, but adding a number of consolidation services such as the consolidation of single of multiple shippers places going into whole shipments to send and deliver to recipients at the same destination So when acting as an air freight forwarder or more specifically a consolidation service, the forwarder has brought a lot of benefits to the importer, the carrier or more specifically the shipping companies air freight and for air freight forwarders themselves

- For exporters: it is beneficial for them to pay freighters to a lower rate

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

do

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

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- For freight forwarders: enjoy the difference between the total freight collected at the consolidator and the amount payable to the airline at the lower freight 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 that requires high professionalism Therefore requires the State to have strict regulations to facilitate the application The issue of import and export goods forwarding has now become a macro strategy of each country, so it needs appropriate investment in technical facilities, people as well as legal documents apply Moreover, air freight forwarding requires even more accuracy, so the legal role needs to be more standardized in accordance with international practices

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

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

To date, nearly 130 countries around the world have joined or ratified the Convention, 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 in the Hague is called the Hague Protocol

The additional convention to the Warsaw Convention signed in Guadalajara on September 18, 1961, is referred to as the Guadalajara

According to the Conventions, the scope of the liability of the carrier is from the time when the carrier receives the goods for delivery until delivery to the recipient The fault-based principle of liability means that the carrier is responsible for the loss, damage, loss, delay of goods in transit unless it is proved that he (the agent, the person employment) have taken all necessary reasonable measures to prevent the goods from such losses The carrier, on the other 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 his agent has taken all necessity measures to avoid damage

Limitation of liability of air carriers under the Warsaw Convention is 250 Fr/Kg of cargo unless the shipper has declared the value at the time of delivery and an additional amount if required In this case, the carrier's liability does not exceed the declared amount The supplementary protocols of Montreal 1975 changed the limit of liability in SDR to apply to the member countries of the IMF International 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 on December 26, 1991, effective from June 1, 1992, amended and supplemented on

- Air waybill is evidence of a contract of carriage of goods by aircraft Shipper must specify in the bill of lading details of the goods The carrier has the right to check the correctness of this declaration A contract of carriage is valid when the bill of lading is completed, that is, when the shipper or his or her party signs the bill of lading to the carrier or its agent The contract expires when the goods are delivered to the recipient indicated in the bill of lading

- The carrier is not responsible for compensation for loss, deficiency or damage of cargo during carriage by aircraft unless the damage occurs due to one

of the 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

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

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

of merchandise

 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 the complaint 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 The statute

of limitation for submission of a claim is 1 year from the date the cargo was transported to the destination or from the date the aircraft should have arrived at the destination or from the date on which the carriage was suspended

b Vietnam Commercial Law:

The Vietnam Commercial Law was passed by the National Assembly on May 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 and obligations of freight forwarders, cases of exemption, limitation of liability

c Ordinance of economic contracts

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

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Ordinance on Economic Contracts, in 1997 the Draft Ordinance on New Economic 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 is directly related to customs procedures, so in addition to strictly complying with the above-mentioned legal documents, the forwarder must be familiar with the Customs Ordinance

e Standard business conditions of the Vietnam Forwarding Association

The Vietnam Forwarding Association provides standard business conditions, including general rules, specific definitions, obligations of the forwarding 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 a type of economic contract, so the contract of forwarding of import and export goods 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”

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 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 each other

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

Therefore, the subject of the freight forwarding contract is the person providing forwarding services and the customer must be an individual or a legal entity with business registration In addition, freight forwarding service providers must also be traders who have certificates of goods delivery service business registration

 Form and validity of the contract

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

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

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

 Content of the contract

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

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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

- Payment method

- 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 of the seller to ask the buyer to pay the amount stated on the invoice On the commercial 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

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b Transport documents: Airway bill (AWB):

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

The shipper is responsible for the correctness of the details of the bill of lading 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

in calculating taxes and enjoying preferential tariffs treatments

+ Quarantine certificate and hygiene certificate

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IV AIR CARGO DELIVERY PROCESS

1 Export delivery process

- The exporter delivers the goods to the forwarder together with the shipper's instruction letter so that the forwarder can deliver the goods to the carrier and 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

at the destination

- The forwarder issues a warehouse receipt to the exporter (FWR - Forwarder's warehouse receipt) if the goods are stored in the forwarder's warehouse before 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 the documents sent from the exporting country and the documents issued by the exporting 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

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 If the forwarder is a consolidation agent, he must receive the whole shipment by the owner bill of lading, then divide the odd cargo to the individual shippers and withdraw the consolidation bill of lading

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

 The forwarder proceeds to receive goods from the carrier, pay all the charges collected later, complete the procedures and pay fees to the port

of aviation, 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 air freight in general, but in reality, freight forwarding companies can follow their own steps to suit the situation and the ability of each firm

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

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CHAPTER II: ACTUAL SITUATION OF

FORWARDING IMPORT AND EXPORT OF GOODS

TRANSPORTED BY AIR AT VINATRANS

1 Process of establishment and development of the VINATRANS company

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

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

18, 1995, the Ministry of Trade decided to transform Ho Chi Minh City Foreign Trade Logistics and Forwarding Company into an independent State-owned enterprise under the Ministry Commercial, since September 1998, the company used the trade name VINATRANS Over 30 years of operating in the field of forwarding, VINATRANS has quickly asserted its voice in this new but competitive service industry and indeed every stage of development of VINATRANS is always attached with the maturity of Vietnam's forwarding industry in general

The development history of VINATRANS Company can be divided into 3 phases as follows:

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

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1.2 Period 1985-1995: period of comprehensive innovation, development and effective 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 1986 when the country entered a period of renewal, along with the strong transformation of the whole country and the logistics industry in Vietnam, this is also a transition period difficult meeting for the operation of VINATRANS Company Due to changes in management mechanisms, the Company is no longer the unit that is the focal point to focus on the delivery of import and export goods according to the norms, but must follow the authorization of the goods owner Forwarding volume is only equal to 18% of the same period The company has no agency relationship with foreign partners, no foreign currency revenue, life of employees is extremely difficult

In this situation, the Board of Directors focused on discussing and seeking new directions for the Company The company advocates to change the business operations from simple forwarding activities within the border gate to performing international freight forwarding services; through contact with the establishment of agency relations with international forwarding companies; improve the quality of the workforce in accordance with the requirements of the new situation; renovating equipment, means of transport, loading and unloading information, changing the convoy structure from the place of transporting bulk cargoes, with a capacity of 5-7 tons/vehicle to a fleet of specialized container trucks with a capacity of 20 -25 tons…

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b From 1991 - 1995:

This is the period when the company focused on developing new business direction that is developing international forwarding business and continuing to maintain traditional forwarding, deploying to diversify types of services During this 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, on 18/01/1995 the Ministry of Commerce signed the decision to transfer the logistics company Ho Chi Minh City under the Ministry of Commerce as a state-owned business Accounting independent, with full legal personality The mechanism of the new management organization has facilitated the company actively 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 of VINACONSOL cargo and Collection agency division

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

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

In recent years especially since the years 2000, we have witnessed the bustling atmosphere unprecedented in the field of logistics which is the principal cause of Monopoly is no longer available There has been hundreds of forwarders 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 with incrementally expanding and enhancing its delivery service activities In 2003, VINATRANS conducted the joint stock of 3 parts of the enterprise, affiliated branches 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 is VINATRANS and 13 member companies are joint stock companies, limited liability, foreign workers with the total capital about VND 400 billion and more than 1000 workers nationwide

Business activities include:

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- 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 also focuses 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 container packing stations and export container packing stations

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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

3 The organizational structure of VINATRANS company

Diagram 1: Organization structure of the company

ORGANIZATION STRUCTURE OF THE COMPANY

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`

BUBU

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:

- Export Logistics Department

- 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

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- 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 overseas customers 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 competitive situation from time to time to make a price list of VINATRANS and an price list

of ancillary services

- Forecasting and proposing suitable marketing solutions

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

- Booking (booking space) with shipping lines and receiving confirmation from the carrier (Confirmation)

- Make a price list (purchase price, sale price, proposed commission and other expenses) and transfer it to the accounting department to issue an invoice, report to the customer service department to issue the bill of lading

The business department consists of 2 groups:

- Documentation team at the office

- Goods handling team

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* Documentation team will do the following main tasks:

- Organize the daily delivery schedule, assign specific staff to carry out the assigned 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

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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-set form and agent list, ensuring the right person in charge and the right department duties abroad The contents of the Pre-alert inform the mandatory details about the shipment such as the train, the number of MB/L, HB/L, the payment method, the amount 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 by the 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

c Operation

This department is directly involved in shipping activities as well as freight forwarding The field division is responsible for operating the escort of cargo 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

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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

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

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

Unit: million dong

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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

Source: Department of Accounting-General company Vinatrans

Chart 2: Revenue from air forwarding

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Thereby, it is easy to see that the revenue from air freight forwarding is constantly increasing and reaching the highest level in 2019 Although in 2017 and 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 of more than 40% Air freight forwarding, characterized by high freight rates, accounts for a relatively large proportion of total revenue If only considering the Hanoi branch of VINATRANS Company, 2017 and 2019 will receive 63% and 65% 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 forwarding market and is very active in the field of freight forwarding Hanoi Branch is considered as the strongest branch of all 4 branches of VINATRANS and is gradually separated independently This is also an encouraging point for the operation 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 company has focused on organizing its own organization in the company of 1 air-freight forwarding department specializing in this activity However, during the operation process, the freight forwarding department is also responsible for coordinating with other departments in the Company to conduct business operations Speaking of the forwarding of import and export goods by air of VINATRANS, we have to mention two main operations, namely "Services Contract" and "Co - load" services

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2.1 “Service contract” operation

“Services contract” can be understood as follows: Airlines when participating in the transport market often do not stand directly to offer shippers because this will force these carriers to do retail For greater convenience, the air transport company will through the air freight forwarding service provider to receive the contract of freight transport air transport company will give the freight forwarder the lower preferential freight rates when freight directly soliciting customers to compensate the forwarders or forwarding companies must commit to having a sufficient quantity of goods as agreed by the two parties for each school year Air freight forwarders "wholesale" these "Service Contracts" to forwarders, and then these forwarders conduct retail sales to shippers Currently VINATRANS is using routes of domestic airlines such as Vietnam Airlines, Pacific Airlines and foreign carriers such as Malaysia Airlines (Malaysia), Thai Airway (Thailand), Korea Airlines (South Korea), AirFrance (France), Tiger Airway (Singapore)… Depending on the shipment required to transport toany locations, the Company will associate with certain airlines to suit the flight routes to be able to shorten transit time to the lowest level When performing the

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

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2.2 “Co-load” operation

The pricing for the company's services depends on the rates of the airlines that the company uses the flight route in reference to the rates of other domestic and foreign forwarders to achieve competitive rates However, as mentioned above, 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 these companies are well-known forwarders, they will always have a large enough volume to win preferential rates from the air carriers, so their delivery rates are always low Based on the rates these forwarding companies provide and the price when VINATRANS directly contacts with the airlines, if higher, the company will 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-known forwarding 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 Kintetsu companies that VINATRANS are acting as agents The products that the Company makes air-freight forwarding are divided into two main groups: Nomination and Free-hand Designated cargoes are those that are acquired through the efforts of VINATRANS of foreign agents In contrast, self-exploited goods are those obtained as a result of offering services to customers of employees of the Sales Department of VINATRANS

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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 sign with foreign partners sell at FOB prices Therefore, the right to choose and appoint forwarding agents is decided by the importer and is usually approved through the provisions of the foreign trade contractor in L/C When collecting information related to air-freight shipments (through foreign trade contracts, relationships with customers or cooperating with operators in Vietnam), Agents VINATRANS contacts customers (importers) to introduce their services and delivery system, showing them the advantages and economic benefits that customers can get, from That persuades customers to use the Company's services

Diagram 2: Export delivery process specified