(Tiểu luận) topic solutions in logistics situation (damage, sale contract, insurance contract sector)

VIETNAM GENERAL CONFEDERATION OF LABOUR
TON DUC THANG UNIVERSITY
DEPARTMENT OF BUSINESS ADMINISTRATION
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PRESENTATION REPORT
FIATA – MODULE 2 THEMATIC
Topic: SOLUTIONS IN LOGISTICS SITUATION (DAMAGE,
SALE CONTRACT, INSURANCE CONTRACT SECTOR)
Lecturers: Le Thanh Trung
Mentor:

Nguyen Huynh Dai Nghiep

Group:

Group 2

Shift:

Tuesday, Thursday

Ho Chi Minh City, 3rd March 2021.

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GROUP MEMBER

Order ID

Student’s Name

Student ID

1

Nguyen Thi Thuy Kieu

719H1085

2

Huynh Gia Linh

719H1089

3

Vo Thi Thao My

719H0424

4

Ho Thi Kim Ngan

719H0791

5

Ho Tan Phat

719H1102

6

Pham Hong Phuc

719H0478

7

Doan Hong Phuong

719H0482

8

Hoang Thi My Phuong

719H0483

9

Huynh Quang Sang

7190H500

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ACKNOWLEDGEMENT

First of all, with the deepest and most sincerely feelings, we ask for expressing
our gratitude to all the individuals and organizations that have facilitated and helped
our group throughout the learning and research process of this topic.
During the time from the beginning of researching the topic to the presentation,
the team has received a lot of attention and helps from the homeroom teacher and Mr.
Nguyen Huynh Dai Nghiep, thanks to their guidance, the research topic of my group
could be better.
With the deepest gratitude, our team would like to send to Ms. Pham Thi Ngan Head of International Business - Ton Duc Thang University for giving us the
opportunity to study and interact with FIATA syllabus.
Presentation reporting is done for about two months. The initial step into the
implementation of the group still has many difficulties, so we cannot avoid the
shortcomings, we are looking forward to receiving valuable comments from our
teachers so that our knowledge in this field will be completed. At the same time, we
also have additional conditions to raise their awareness.
We sincerely thank you!

Ho Chi Minh City, 3rd March 2021.
Implementation’s student – Group 2

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TEACHER COMMENT
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Ho Chi Minh City, 3rd March 2021.
Implementation’s student – Group 2

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CONTENTS

CHAPTER 1: INTRODUCTION...................................................................................7
1.1 Company information...........................................................................................7
1.1.1 Introduction.....................................................................................................7
1.1.2. Detail Information.........................................................................................7
CHAPTER 2: PROBLEMS ANALYSIS AND DISCUSSION......................................9
2.1 Problem statement.................................................................................................9
2.1.1. CIF term 2020 and some notes.......................................................................9
2.1.2. Liability of the different parties....................................................................11
2.2 Classified insurance.............................................................................................13
CHAPTER 3: SOLUTION PROPOSAL AND EVALUATION...................................19
3.1 Liability insurance...............................................................................................19
3.2 Responsibility of the carrier................................................................................23
3.3 Measure to minimize the risk of sea transportation.............................................26
3.5.1 Scope of practice...........................................................................................28
3.5.2 Procedures for participating in insurance......................................................29
CHAPTER 4: BACKUP PLAN....................................................................................32
4.1. First plan............................................................................................................32
4.2. Second plan........................................................................................................34

4.3. Third plan...........................................................................................................35
4.4. Fourth plan.........................................................................................................36
CONCLUSION............................................................................................................37

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LISTS OF PICTURES
Picture 1 Logo of PTSC’s Company...............................................................................7
Picture 2 Mr. Phan Thanh Tung - Chairman of the Board of Director of PTSC.............8
Picture 3 Company building motto of PTSC.................................................................8
Picture 4 Liability transfer responsibility at CIF Incoterm 2020....................................9
Picture 5 Responsibility between Seller and Buyer at CIF term in 2020......................11
Picture 6 Basic Principles of Marine Insurance............................................................16
Picture 7 Marine Insurance...........................................................................................16
Picture 8 Illustrating imagine about Insurance..............................................................19
Picture 9 Marine accident.............................................................................................20
Picture 10 Container flipping incident at sea................................................................22
Picture 11 Road Transport accident..............................................................................23
Picture 12 Insurance companies...................................................................................31
Picture 13 Logo of “Cargo of Signal”...........................................................................34
Picture 14 Two company using GPS system.................................................................35
Picture 15 Moisture – proof hanging bags in container................................................35
Picture 16 Daily Schedule............................................................................................36

LISTS OF PROCESS
Process 1 Participating in insurance.............................................................................29
Process 2 Dealing with insurance.................................................................................30
Process 3 Process to take a good container...................................................................33
LIST OF TABLES
Table 1 Risks are covered under condition A, B, C......................................................17

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CHAPTER 1: INTRODUCTION
1.1 Company information
1.1.1 Introduction
Petro Vietnam Technical Services Joint Stock Corporation (PTSC) is a member
unit of Vietnam National Oil and Gas Group with multi-disciplinary functions and
mainly provides technical services to the industry. oil and gas industry at home and
abroad.

Picture 1 Logo of PTSC’s Company
PTSC’s total asset value in 2011 was 23.546 billion VND. PTSC’s revenue in
2011 was 24.312 billion VND
PTSC provides various types of technical services to the oil and gas industry,
but these high-end small equipment Vietnam cannot make, so they have to import a
large amount to meet the production needs of large projects.

1.1.2. Detail Information
PTSC's main industry is to provide technical services to the oil and gas industry.
In addition, there are many types of strategic services with spearhead nature that
have been developed and professionalized to reach the international level such as:
o Specialized ship services
o Port base service,
o Design service,
o Manufacture and installation of oil and gas projects

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o Operation
o Maintenance and repair services for oil and gas projects
o Exploration services for underground works by ROV
o Geological exploration services
o ……..
From May 28, 2018, Mr. Phan Thanh Tung, a member of the Board of Directors,
holds the position of Chairman of the Board of Directors of PTSC.

Picture 2 Mr. Phan Thanh Tung - Chairman of the Board of Director of PTSC
The company's motto is that PTSC always commits to put the interests of
customers first and strives constantly to improve service quality, continues to develop
to ensure the provision of oil and gas services meeting quality standards. International

with the motto:

Solidarity
Creative dynamism
Unanimity
Speeding up development
Drastic innovation

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Picture 3 Company building motto of PTSC

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CHAPTER 2: PROBLEMS ANALYSIS AND DISCUSSION
2.1 Problem statement

The company - PTSC () has been planning lots of cargo
about equipment is valid for 530,000,000 USD will be sent many times from Germany
and we signed the contract with the supplier by CIF price at Cat Lai port. After coming
Cat Lai port, the equipment will be transported by truck to Dong Nai province for our
project.
To make sure the process goes well, we need to deal with many cases:
o What will we request the seller in buying insurance?
o What will we do to ensure the safety of the equipment from Cat Lai port
to Dong Nai province?
o What will we do when the equipment's cargo was broken after came to
Dong Nai?
2.1.1. CIF term 2020 and some notes

Picture 4 Liability transfer responsibility at CIF Incoterm 2020
Let's learn about the CIF incoterm so that we can fully understand the terms,
rights and obligations of stakeholders and innovation in incoterm 2020 about CIF
terms. CIF is a specified term for sea transport. CIF is generally used for agricultural
commodities or chemicals.

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The following are summarized in Incoterms 2020 regarding CIF terms. First, the
seller expires the risk of delivery to the buyer when the goods are placed on deck at the

port of loading. At this point, the risk of loss or damage to the shipment is transferred,
the seller fulfills his obligation to deliver the goods regardless of whether the goods
arrive at the port of discharge in good and complete condition. Secondly with CIF, the
seller must arrange transportation, buy insurance for the goods and provide all relevant
documents to the buyer. The Seller must buy insurance to ensure the safety of the
goods during the journey but the risk belongs to the Buyer after the Seller delivers the
goods on the main means of transport. If there is no other agreement, insurance value
Buyer usually buys at minimum ICC (C) -110%. Third, the seller must contract to
transport the goods from the place of delivery to the named port of destination.
The following are the changes to CIF 2020 compared to 2010. In the 2010
Incoterms, there is a provision that it cannot be used for goods transported by
container, if the goods are transported by container, the alternative conditions are
changed respectively FCA and CIP. However, international trading enterprises still do
not know the regulations and still use CIF for goods transported by containers instead
of using the appropriate terms FCA and CIP. In Incoterms 2020, the ICC modifies the
CIF term to become a usable condition for containerized cargo as in previous versions.
* Some notes when using INCOTERM 2020 regarding CIF terms:
First, one of the most misunderstood parts for people who use CIF is the
purchase of insurance and the transfer point of risk. As stated in INCOTERM: Seller
pays all costs, buys insurance and delivers documents, but they are not responsible for
the risk of the sea journey. In this case, Seller only buys marine insurance on behalf of
the buyer and it is only responsible for submitting the policy to the buyer with the same
documentation. If there is a loss of goods occurring on the sea, the buyer must settle
with the insurer, not the seller.
In addition, an equally important note in the negotiation process for CIF import
contracts to Vietnam that we need to clear. Because when the goods have problems, the
buyer will stand out with the insurer. Therefore, in order to facilitate the processing
when having trouble, due to the loss of time for procedures or signatures, we should
pay attention to discussing the insurance company and the company that in Vietnam or
the city we are working in. And in many cases, to increase optimization, it is possible

to limit the insurance companies that both buyers and sellers will cooperate with into a
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contract and combine two shipping lines (sea and land). Buy insurance for goods at an
insurance company to help buyers easily manage and track their shipments.

Picture 5 Responsibility between Seller and Buyer at CIF term in 2020
2.1.2. Liability of the different parties
The table of responsibility for buyers and sellers in CIF helps us to have
accurate perception and obligations of the two parties involved and to apply the most
correctly:

SELLER RESPONSIBILITY

BUYER RESPONSIBILITY

Delivery of goods:
Seller delivers, provides commercial invoice, or
equivalent electronic document, provides
proof of delivery (sea waybill)

Payment:
The buyer pays the seller to the seller

according to the sale contract

License and procedure:
Seller provides paper export authorization, or

License and procedure:
The buyer performs customs clearance and

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local authorization for export shipments.

applies for import permit for the goods.

Contract of carriage and insurance:
The seller contracts for cargo insurance under
the terms of normal insurance and bears the
cost of transporting the goods to the named
port on the cruise ship (or the ship may be
used for inland waterways).

Contract of carriage and insurance:
The buyer has no obligation to enter into the

main carriage contracts and to insure the
shipment.

Delivery:
Seller is responsible for delivering on board the
vessel at the named port.

Receiving goods:
When the seller delivers the goods, the buyer
is responsible for receiving the goods to be
delivered at the designated port of discharge.

Transfer of risk:
The seller's risk passes to the buyer when the
goods are delivered across the ship's rail.

Transfer of risk:
Buyer bears all risks of damage and loss after
the goods are delivered on board.

Freight:
Seller bears all the costs of bringing the goods
on board, loading and unloading costs and the
costs of transporting the goods to the port of
discharge, costs of purchasing insurance,
customs declaration, paying export duties and
other charges another in the exporting
country.

Freight:

Buyer bears all costs related to the goods
incurred. after the time the goods are
delivered on board. Costs payable by the buyer
also relate to unloading at the port of
destination, (unless otherwise provided in the
contract, these costs are to be borne by the
seller), charges for payment of import duties
and customs clearance of the goods.

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Inspection:
Seller bears the costs of checking, quality
control, measuring, weighing, tallying, packing
and marking the goods. If special packaging is
required, the buyer informs the seller of the
additional cost, and the buyer bears this
portion of the cost.

Testing:
Unless there are mandatory quarantine
barriers in the exporting country, the costs for
testing and testing must be paid by the buyer

in advance.

2.2 Classified insurance
The role of marine insurance
o The goods are not directly escorted by the responsible person in the course of
transportation so they must participate in cargo insurance.
o Overseas transportation often faces many risks caused by natural disasters or
unexpected accidents.
o Under the contract of carriage, the carrier is only liable for losing good within
a certain extent and limitation.
o Damage reduction with high value goods.
o Insurance marine is an international practice in foreign trade activities
worldwide.
Liability and obligation of the insurer
o Liability of the seller: If selling goods under the CIF terms, the seller is also
responsible for buying insurance for the goods and then endorsing the policy
to transfer the insurance benefit to buyer.
o Liability of buyer: Receive insurance document transferred by seller when the
goods are purchased at CIF terms.

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o Liability of the insurer: responsible for the insured risks causes to the insured

goods, also check documents related to the goods, the itinerary of carriage.
When a loss occurs under the scope of insurance liability, the insurer is
responsible for conducting an assessment, identifying the loss and claiming a
third party if they cause loss.
Some note when buying insurance for CIF terms
o Pay attention to the terms and agreements in the contract.
o Pay attention to insurance condition
o Notice the rights and obligations in the insurance policy
Marine Insurance:
Nowadays, most goods which were bought under 3 conditions A, B, C.
Condition C is considered minimum while A is maximum in all risks. When
using CIF terms, if the buyer does not have anything else satisfying, the seller
will buy insurance under condition C because the price is cheapest.
In CIF terms, although insurance is for buyer, the buyer will bear the full
amount of the goods + the insurance proceeds of the total payment to the seller
plus with 10% (110%) and must be currency used in the contract of sell.
RISKS ARE COVERED UNDER CONDITIONS A, B, C
Separate circumstances for cargo loss or
damage

ICC A
conditions

ICC B
conditions

ICC C
conditions

Sailing on shoal, sticking, sinking,

overturning of the ship or any similar event

YES

YES

YES

Overturning or rollover of the land transport
vehicles

YES

YES

YES

Collision of ships or other means of
transport

YES

YES

YES

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Collision with any other objects except for
the means of transport (with the exception
of water transport)

YES

YES

YES

Forced unloading at airports

YES

YES

YES

Fire or explosion

YES

YES

YES

Earthquake, volcano eruption or lightning
strike

YES

YES

NO

Malicious acts of the third persons

YES

NO

NO

Thefts and pilferage

YES

NO

NO

General accidents

YES

YES

YES

Forced throwing overboard

YES

YES

YES

Washing off from the deck

YES

YES

NO

Risks of war, riots, and strikes

NO

NO

NO

Piracy

YES

NO

NO

Water penetration into the ship, place of
storage, container, or any other
transportation unit

YES

YES

NO

Loss at loading/unloading (only in cases of
full loss)

YES

YES

NO

Any other risks of physical cargo loss or
damage not defined above

YES

NO

NO

Type of outstanding marine insurance:
o Insurance of import and export goods
o Hull insurance
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o Protection and Indemnity Insurance
My company is planning to import a lot of cargo about equipment with value
530,000,000 USD which will be sent many times from Germany so that I will buy class
A insurance to ensure the safety.

Picture 6 Basic Principles of Marine Insurance

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Picture 7 Marine Insurance
Under CIF terms, the liability and cost of insurance to the port of discharge is
Cat Lai. The risk point for domestic transport in VN is not covered by insurance so that
people will purchase Inland Marine Insurance to limit the losses.
Inland Marine Insurance
Insurance when the goods are loaded onto the means of transport at the
starting point of insurance indicated in the insurance contract to commence the
carriage and terminate from the moment the goods are unloaded from the means
of transport at the place of destination indicated in an insurance contract.
Risks covered include:
o Fire or explosion
o Earthquakes, floods, hurricanes, tsunamis and lightning strikes
o Vehicle wrecked, overturned, dropped, derailed, stranded, collided, or
collided with another object
o Broken trees; bridges, tunnels and other structures collapsed
o Transportation vehicles are missing
o General average
o Insured charges are reasonable expenses for:

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o Preventing or mitigating loss of insured goods (paid by the Insured / their
employees / agents)
o Unloading, storing and re-sending insured goods at one place along the
way due to the consequences of risks falling within the scope of
insurance liability
o Inspect and determine the cause and level of loss under insurance liability
Premium
o Premium = Sum insured x premium rate (%)
o The premium rate depends on the type of goods, the method of
packaging, the means of transport, the route.
Participating in domestic cargo insurance at PVI
o A claim form includes the main contents such as:
o Information about the insured person;
o Information on insured goods;
o Request for insurance (fill in the form to request for domestic freight,
download here)
o Attached documents;
o Statements of agents, brokers;
o Operations of insurance company.
Insurance certificate & insurance policy: after confirming the information,
PVI insurance company will issue insurance certificates and insurance contracts and
assign customers to request insurance.
Confirm information and pay insurance premium: customers receive the
insurance certificate, confirm the necessary information, and pay the premium for
PVI Insurance Company.
Type of Inland Marine Insurance
o Customer Coverage
o Motor Truck Cargo Coverage
o Builders’ risk
o Installation floater

Some companies selling Inland Marine Insurance

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o Sai Gon Bao Viet Life Insurance Company
o Bao Minh Insurance Company
o AIG Viet Nam Insurance Company
o PTI Insurance Company

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CHAPTER 3: SOLUTION PROPOSAL AND EVALUATION
3.1 Liability insurance
Insurance: is a commitment of an insurer to indemnify the insured for any
damage, loss caused to the subject-matter insured due to a risk insured, provided that
the insured must pay the insurer an amount of money called premium. Insurance split

the loss of one or few people with all the insured.

Picture 8 Illustrating imagine about Insurance
Generally, insurer is a person who undertake risk, enjoy premium and indemnify
for insured interest lost or damage. In this case study, we will refer to cargo about
equipment transporting from Germany to Cat Lai port and after that our equipment will
be transported by truck to Dong Nai province for our project. Therefore, we have two
stage that our cargo is followed and insured.

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Sea transportation (Cargo insurance)

Picture 9 Marine accident
According to ICC 1982 and QTC 1990, the insurer will responsible for A, B, C
cargo clauses:
a) Cargo clause C:
This insurance covers
+ Fire or explosion
+ Vessel or craft being
traded, grounded, sunk or
capsized, missing
+ Overturning or

derailment of land
conveyance
Collision or contact of
vessel, craft or conveyance
with any external object
other than water

Excluded risks

Excluded clause to
war
+ Loss/ damage or expense
+ War, civil war,
attributable to willful
revolution,
misconduct of the assured
rebellion, riot
+ Ordinary leakage, ordinary including terrorists
loss in weight or volume, or or any person acting
ordinary wear and tear of the from political
subject-matter insured
motive
+ Loss/ damage or expense
+ Withhold, seizing,
caused by insufficiency or
capture (not
unsuitability of packing or
privateer) and result
preparation of the subjectof these
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+ Discharge of cargo at a
port of distress
+ General average sacrifice
+ Jettison
+ Both to blame collision
clause

matter insured
+ Loss/ damage or expense
caused by inherent vice or
nature of the subject-matter
insured
+ Loss/ damage or expense
proximately caused by a risk
insured against.
+ Loss/ damage or expense
arising from insolvency or
financial default of the
owner managers charterers
or operators of the vessel.

+ Bomb, mine,

torpedo, remain
weapon from war
+ Strike, making
trouble in
employment

b) Cargo clause B
Cargo clauses B included insurable risk in C clause with 4 other risks:
o Earthquake volcanic eruption or lightning
o Washing overboard
o Entry of sea lake or river water into vessel craft hold conveyance
container or place of storage
o Total loss of any package lost overboard or dropped whilst loading on
to, or dropped whilst loading on to, or unloading from, vessel or craft.
c) Cargo clause A
All risks subject to exclusions
A= all risks – (excluded risks + extra risks)

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Picture 10 Container flipping incident at sea
Inland transportation
The insurer will responsible for the following risks:

Fire or explosion
Earthquake, storm, flood, volcanic eruption or lightening
Missing
Overturning or derailment of land conveyance
Collision together or collision with external object
Trees, bridge, drain or other building broken
o G/A
o
o
o
o

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Picture 11 Road Transport accident
3.2 Responsibility of the carrier
Sea transportation:
The carrier is also responsible for issuing the bill of lading to the shipper.
Risks occur to goods according to regulations and must be responsible for
protecting and taking care of the cargo transported in the journey from the
port to the destination port.
The carrier is responsible for careful and proper loading and unloading of
goods during transportation.

The carrier shall notify within a reasonable time to the shipper of the
place to be loaded onto the seagoing vessel, the time when the vessel is ready
to accept the cargo and the time limit for the loading of the cargo.
The carrier is liable for all carriage even though all or part of carriage has
been delivered to the actual carrier for performance. With respect to the part
of the carriage performed by the actual carrier, the carrier shall be responsible
for the acts of the actual carrier and of the servants and agents of the actual
carrier within the scope of assigned work.

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