CHAPTER 2: ANALYZING AND EVALUATING SEA FREIGHT
2.5 Sea freight forwarding activity at E.I freight forwarding company
2.5.2 Factors affect to freight forwarding activities at the company
Law and regulations
Scope of export and import activity by ocean relates to many countries.
Therefore, legal environment should be understood not only the legal environment of export country but also the legal environment of import country. It is international law.
Any changes in law and regulations such as the issuance and approval of a circular or decree of the Government listed above; or approval, through an international convention will also have effect on limiting or promoting import and export activity. The laws of the country as well as the international convention not
37 only define the concept and scope of activities but more importantly it is very clear provisions on obligations , responsibilities and rights of participants in the field of freight forwarding service. Vietnam's legal system is more complete; there are many progressive laws be enacted and amended such as commercial law, the law encourages foreign investment. All aim to create advantage for investment and enterprise development.
Political Environment
Stability in politics and society of a country not only to create favorable conditions for the development of these countries, but also is one of the factors to other countries and foreign exchange traders to cooperate with that country.
The fluctuations in the political and social environment in the countries concerned in the transport operation will affect greatly to process delivery import and export by sea. Such as in a country going armed conflict will not be conducting receiving and delivery (if that was the shipping) or delivery and pickup to hand the consignee (if that's country) or to change the route...
Vietnam is considered as one of the most stable politics country in the world.
It is advantage for attracting foreign investment. Therefore, the company can cooperate with foreign company, learn more about management skills, information system, and expand the market. In the other hand, good relations between Vietnam and many countries around the world are thought to be affected quite well to the company. Since joining the WTO, economic exchanges between Vietnam and other countries are constantly increasing made forwarder has the opportunity to grow.
With the aim of expanding international relations, Vietnam is a country with high growth. Export markets expanded even so in scale and quality, however, so that enterprises must strengthen quality assurance due to increasing levels of competition.
The weather fluctuation
The weather has a great effect on delivery, receive goods, and process of transportation by ocean. This will affect on making and delivering time. In addition, the process of transportation may be suffered the impact of weather, it causes losses and damages for goods. It will lead to loss of money for concerned parties.
Due to the impact that the weather will affect the quality of goods and it is the cause of the dispute. It is also the basis for solving case of force majeure and the possibility of free of charge for freight forwarder.
Infrastructure system of country
38 The infrastructure is also a factor affecting to freight forwarding service.
Infrastructure is indispensable elements impulse freight forwarding activities. It includes roads, traffic systems, information system….For example, with the old decrepit infrastructure of our country at present has caused much difficulty in during transportation routes. Road transport system has not been upgraded, cramped, so much more difficult to take care of the ramp. Routes traffic congestion often gets into rush hour. Bridge load is intolerable weight of transcendent importance and many more shipment does not fit railway international standards should make perishable goods during transport and accessibility schemes and time stretching. If the time drag long overdue delivery as well as damaged goods, the freight forwarder will be fine compensation and lead to increase transport costs, then the business will not be get profit even as losses. Therefore, if the infrastructure is guaranteed, the upgrade routine will contribute to effective freight forwarding service.
2.5.2.2 Internal environment
Brand name of the company
The brand name is not just a tool for competitive business; it also acts as an important asset of the enterprise. This is an intangible asset but bring so much profit. In the freight forwarding market, there are many enterprises that supply much freight forwarding service but still not sell or attract customers. Prices and quality of service are causes but another problem is brand name, prestige of the company. In this market economy, if a company can attract customer, this will be initial success, and a famous brand name will help the company do that.
Through brand name, the company creates value perception for customers about their service. With the brand name Expeditors, it is a ensure certainty for quality of service that E.I provides to customers.
Human resource
Employees are the most important asset of a company. The working effort of employees and the leadership of board of director create the success of the company. In fact, according to the author’s observations during the internship in the company, the management of the enterprise are quite professional and efficient. The work and activities of the company's Board of Directors will be informed quickly;
the decision of the leadership is also conducted by the staff immediately.
The evaluation for company's human resources is good. The number of document staffs, customs staffs, freight forwarding staffs, account management staffs, sale staffs who have bachelor’s degree is high. All employees are proficient
39 in English and informatics. Furthermore, employees are work in a professional environment, it also increase efficiency of work. Corresponds to the efforts of employees, the company also has the regulations concerning rewards as well as rewards during the holidays as well as the entertainment programs.
Capital source of the company
Finance is a vital factor for a company. If the company does not have enough finance source, it cannot start operation. Lacking of infrastructure and incomplete machinery technology will make difficulties in freight forwarding process. All activities of the company from investment equipment, salary for employees, rent…will not be implemented without financial capital. With the limit in capacity of finance, the company does not have many system of warehouse. Furthermore, financial strength will affect to the scale of the company and the quality of service.
Information technology system
Accurate and timely transfer of information is as important as moving the shipment itself. E.I views technology and systems development as a core business strategy and strength. Due to organic growth, company’s entire global network uses unified, event-driven operational systems. Systems' development is controlled by designing and supporting the software that E.I’s operations staffs uses every day. IT professionals work on the development of new systems applications and enhancement of our existing systems. This consistency drives global standardization and enhances the quality and efficiency of company’s communications. The internal systems are built to provide efficiency and functionality to E.I staff, allowing company to provide outstanding customer service and competitive rates.
E.I recognizes the importance of EDI (Electronic Data Interchange) to increase productivity and further the development of a paperless environment between E.I’s customers and service providers. Through communication with company’s global network, customers and service providers, E.I handles approximately 20 million EDI transactions a month. Company’s EDI and document imaging capabilities provide real-time visibility, increase data accuracy, eliminate document re-keying and provide standard communications with trading partners.
Quality of service
Quality of service relates to competitive competency of the company.
Meeting customer’s demand and make them feel satisfied will help the company attract more customers and expand the market share. Therefore, E.I always tries to improve and provide qualitative services for customers. A good service will help maintain customers and increase the prestige of the company.
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CHAPTER 3: SOLUTIONS AND SOME