Recommendations to improve the freight forwarding service for importing FCL cargoes at dong tai global logistics and trading co ,ltd

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MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: LA THI MINH DUYEN

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVE THE FREIGHT
FORWARDING SERVICES FOR IMPORTING FCL CARGOES
AT DONG TAI GLOBAL LOGISTICS AND TRADING CO.,LTD

HAI PHONG – 2015


MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: LA THI MINH DUYEN
CLASS:

GMA02

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVE THE FREIGHT

FORWARDING SERVICES FOR IMPORTING FCL CARGOES
AT DONG TAI GLOBAL LOGISTICS AND TRADING CO.,LTD
Supervisor:

Doan Trong Hieu

Division:

Economics of International Trade

Faculty:

Economics

HAI PHONG – 2015


Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

PREFACE
This Dissertation is a description of my 2-month- internship which occur in
September and October in 2015. During 2 months, I have chance to witness the real
work of a logistic company named Dong Tai Logistics and Trading Co.,Ltd. My
topic “Recommendations to improve freight forwarding service for importing FCL
cargoes at Dong Tai Global Logistics and Trading Co.,Ltd” is really useful for me
because it helps me to enhance my knowledge about freight forwarding service in
general and importing service for FCL cargoes in particular. Further, this is an
opportunity for me to take part in professional working condition. In Global Studies
and Maritime Affairs curriculum, the students are supposed to study International

Logistics subject which is closely related to this topic, therefore, this knowledge in
practices is extremely important to monitor the topic.
This dissertation includes three chapters:
 Chapter 1: LITERATURE REVIEW OF FREIGHT FORWARDING
SERVICE
 Chapter 2: THE CURRENT STATUS OF FREIGHT FORWARDING
SERVICES FOR IMPORTING FCL CARGOES AT DONG TAI LOGISTICS
AND TRADING CO.,LTD
 Chapter 3: RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF
THE FREIGHT FORWARDING SERVICES FOR IMPORTING FCL CARGOES
AT DONG TAI GLOBAL TRADING COM.,LTD
I declare that this report is my own unaided work. It has not been
submitted before. If violated, I am solely responsible for and bear the punishments
of the Institution and University.
Student Name and Signature

La Thi Minh Duyen

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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ACKNOWLEGEMENT

Firstly, I would like to thank all lecturers at VietNam Maritime University
for teaching me during the time I study at university. Secondly, I would like to
express my sincere gratitude to my advisor M.S. Doan Trong Hieu for the
continuous support of my dissertation and related research, for his patience,

motivation, and immense knowledge. His guidance helped me in all the time of
research and writing of this thesis. I could not have imagined having a better advisor
and mentor for my study.
Thirdly, I deeply thank Director - Mr. Do Viet Thanh and the help of all
staffs in Dong Tai Global Logistics and Trading Co., Ltd who have created best
conditions for me to complete this topic.
Above all, I thank my family and friends for all the encouragements they
gave to me during this study. Special thanks to all respondents for giving me
answers to my questionnaires and to those who gave extra supports in making my
work have a better quality.

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TABLE OF CONTENTS
PREFACE ................................................................................................................ i
ACKNOWLEGEMENT .......................................................................................... ii
LIST OF ABBREVIATIONS ................................................................................. vi
LIST OF TABLES................................................................................................. vii
LIST OF FIGURES .............................................................................................. viii
INTRODUCTION ................................................................................................... 1
DISSERTATION METHODOLOGY ..................................................................... 1
DISSERTATION SCOPE........................................................................................ 2
TIME DURATION .................................................................................................. 2
RESEARCH RESULT ............................................................................................ 2
CHAPTER 1:
LITERATURE REVIEW OF FREIGHT FORWARDING

SERVICE ................................................................................................................ 3
1.1

Theoretical basis of freight forwarding service ............................................... 3

1.1.1 Definition of freight forwarding service and freight forwarder ...................... 3
1.1.2 Commercial role of freight forwarder ............................................................ 3
1.1.3 Freight forwarder obligations and rights ........................................................ 5
1.1.4 Related documents in freight forwarding services for importing FCL
cargoes .......................................................................................................... 6
1.1.5 Relationship of freight forwarder with other parties ...................................... 8
1.2

Legal basis framework ................................................................................... 9

1.2.1 National law .................................................................................................. 9
1.2.2 International law ........................................................................................... 9
1.3

Assessment theory of forwarding services for importing FCL cargoes ........... 9

1.3.1 Full container loaded cargoes ........................................................................ 9
1.3.2 General freight forwarding process for importing cargoes by ocean ............ 10
1.3.3 Service quality assessment framework ........................................................ 11
1.3.4 Relationship between service quality and customer satisfaction .................. 14
CHAPTER 2: THE CURRENT STATUS OF FREIGHT FORWARDING
SERVICES FOR IMPORTING FCL CARGOES AT DONG TAI CO.,LTD ........ 15
2.1

General information about Dong Tai Co.,Ltd ............................................... 15

2.1.1 Company background ................................................................................. 15
2.1.2

Brief development history .......................................................................... 16
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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2.1.3 Organizational structure .............................................................................. 17
2.1.4 Main services .............................................................................................. 19
2.1.5 Company Infrastructure and equipment ....................................................... 23
2.1.6 Company workforce .................................................................................... 23
2.1.7 Company performance ................................................................................ 24
2.2
2.2.1

Forwarding service for importing FCL cargoes of Dong Tai Global ............. 27
Sales process .............................................................................................. 27

2.2.2 Freight forwarding order of steps for importing FCL cargoes ...................... 29
2.3

Assessing forwarding service for importing FCL cargoes at Dong Tai
Global .......................................................................................................... 35

2.3.1 Reliability ................................................................................................... 37
2.3.2 Assurance ................................................................................................... 38

2.3.3 Tangibles .................................................................................................... 40
2.3.4 Empathy...................................................................................................... 41
2.3.5 Responsiveness ........................................................................................... 42
2.3.6 Price............................................................................................................ 43
2.3.7 General assessment of freight forwarding service for importing FCL
cargoes at Dong Tai Global ......................................................................... 44
CHAPTER 3: RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF
THE FREIGHT FORWARDING SERVICES FOR IMPORTING FCL
CARGOES AT DONG TAI GLOBAL TRADING COM.,LTD ............................ 46
3.1

Create a standard and detail process for importing FCL freight
forwarding service ........................................................................................ 46

3.1.1 Adding step for “Checking documents received from importer” ................. 46
3.1.2 Adding “Arrange Transportation Agencies” after “Prepare Documents”
step ............................................................................................................. 46
3.1.3 Adding “Complete daily report” step into the forwarding process ............... 47
3.2. Improving quality of facilities and the application of information
technology .................................................................................................... 49
3.2.1 Ensuring basic requirements in warehouse system ........................................ 49
3.2.2 Applying information technology in freight forwarding activities................. 49
3.3

Paying attention at the quality of human resources ....................................... 50

3.3.1 Focusing in recruitment ............................................................................... 50
3.3.2 Investing in training course for staff ............................................................ 50
3.3.3 Creating motivation for staffs ...................................................................... 51
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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3.4

Specializing in customer service and market expansion to optimize
Empathy and Responsiveness level. ............................................................. 51

3.4.1 Establishing a specialized Marketing Department ....................................... 51
3.4.2 Promoting marketing activities strategy ...................................................... 52
CONCLUSION ..................................................................................................... 54
APPENDICES ....................................................................................................... 55
Bibliography ................................................................................................. 56

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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LIST OF ABBREVIATIONS
ABBREVIATIONS

Meaning

FIATA

International Federation of Freight Forwarders Associations

INCOTERMS

International Commercial Terms

LCL

Less Container Load

FCL

Full Container Load

B/L

Bill of Lading

CO

Certificate of Origin

D/O

Delivery Order

NVOCC

Non-Vessel Operating Common Carrier.

VNACCS

Vietnam Automated Cargo Clearance System

CFS

Container Freight Station

TEU

Twenty Equivalent Unit

EIR

Equipment Interchange Receipt

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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LIST OF TABLES
Table 1: 5 Factors Of Rater Model – Service Quality Dimensions ......................... 13
Table 2: Quantity And Qualification Of Officers In Dong Tai Global .................... 24
Table 3: Business Result Of Dong Tai Global Logistics From 2010 To 2014 ........ 26
Table 4: Dividing Work Tasks Of Dong Tai Global Staffs In FCL Import Shipment
.............................................................................................................................. 39
Table 5: Price Quotes To Customer With Minimum Profit Of FCL Shipment And
Inland Service Of Dong Tai Global........................................................................ 44
Table 6: Summary Of Strengths And Weaknesses Of Freight Forwarding Service

For Importing FCL Cargoes At Dong Tai Global Based On 6 Dimensions ............ 45
Table 7: Estimated Time For Each Step Of Recommended Process ....................... 47

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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LIST OF FIGURES
Figure 1: Relationship Among Freight Forwarder With Other Parties ......................8
Figure 2: Organizational Structure Of Dong Tai Global ......................................... 17
Figure 3: Revenue, Cost And Profit Before Tax Of Dong Tai Global..................... 27
Figure 4: Sales Process At Dong Tai Global .......................................................... 27
Figure 5: Detailed Forwarding Order Of Steps For Importing FCL Cargoes .......... 30
Figure 6: Customer Satisfaction Toward Import Forwarding Service For FCL
Shipment At Dong Tai Global (On Scale From 1 To 5) ......................................... 36
Figure 7: Clients Satisfaction Level Toward Reliability‟s Criteria ........................ 37
Figure 8: Clients Satisfaction Level Toward Tangibles‟ Criteria ........................... 40
Figure 9: Clients Satisfaction Level Toward Empathy‟s Criteria ........................... 41
Figure 10: Criteria For Selecting Freight Forwarder Service Supplier .................... 43
Figure 11: Completed Recommend Import Forwarding Process For FCL Shipments
.............................................................................................................................. 48

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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INTRODUCTION
In the process of integration with other countries from every corner of the
world, associated with their impact of globalization process and trade liberalization,
Ocean Shipping industry has achieved strong development both in quality and scale.
Therefore, freight forwarding has played an important role in expanding trade by
obtaining efficient and economic modes of transport. It creates flavor conditions to
ensure that both export and products may timely reach final destinations and helps
to transport goods efficiently from sellers to the end consumers. This national
industry is young in Vietnam, but it has contributed to the improvement of the
country‟s payment balance by assisting promotion related to export and giving
support to the Carriers& Insurers. Being aware of this high demand of market, Dong
Tai global logistics and trading Co., Ltd was established and operated in the field
ofglobal freight and transportation services. To develop company in long term,
Dong Tai global logistics and trading Co., Ltd has raised consensus towards young
employee, especially, employees who graduated from university. Besides, Dong Tai
global logitics and trading Co., Ltd has provided conditions to help students have a
successful internship and chances to work in the real environment.
Every year, Vietnam Maritime University gives student conditions to
internship in enterprises. Students have opportunities to apply the knowledge of
major which was taught at university. During my internship in Dong Tai global
logistics and trading Co.,Ltd - an enterprise providing full array of global freight
and transportation services, in which its working style and environment is suitable
with my trained major. I have opportunities to learn about not only real freight
forwarding modal but also discipline in the workplace. In this dissertation, I would
like to present the freight forwarding services for importing FCL cargoes, focusing
on transportation activities through sea freight and inland trucking. From analyzing
the strengths and weaknesses of Dong Tai Co., Ltd, some recommendations are
proposed to improve freight forwarding service for imported FCL cargoes in Dong
Tai Co., Ltd.
DISSERTATION METHODOLOGY

Method of data analysis: The dissertation is composed based on the real
process collected information of handling paperwork of freight forwarding services
of FCL cargoes being implemented by Dong Tai staff. There are 2 main sources of
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data aggregated: from customer surveys and data provided by the company to
identify current status, analyze and assess the quality of import FCL cargoes
forwarding services of the company.
Statistical methods are also applied to given statistics in this dissertation.
The data is collected including revenues, expenses, profits, salaries ... from
accounting department of Dong Tai Global
Logical methods point out various dimension and criteria to assess FCL
import forwarding performance at Dong Tai Global.
Observation method is applied during my 2-month-internship period, giving
statistics on the number of FCL importing shipments being delayed.
DISSERTATION SCOPE
The dissertation is implemented so as to analysis and evaluate current status
of importing FCL cargoes at Dong Tai Global. The dissertation concentrates on
service quality based on customer feedback, detail steps of sales and freight
forwarding process for understanding the real activities. Additionally, this
Dissertation also gives some recommendations to improve the efficiency of FCL
import forwarding service.
TIME DURATION
The dissertation‟s statistics, survey results and clients‟ comments are
collected within 2 month. During this period, I had chance to work, study and gain
actual knowledge, experience to complete this dissertation

RESEARCH RESULT
This dissertation aims to demonstrate freight forwarding service for importing
FCL cargoes of Dong Tai Global. This dissertation provides an analysis of
advantages and disadvantages of the import freight forwarding service based on 6
dimensions then some recommendations are given based on those point.

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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CHAPTER 1: LITERATURE REVIEW OF FREIGHT
FORWARDING SERVICE
1.1

Theoretical basis of freight forwarding service

1.1.1 Definition of freight forwarding service and freight forwarder
According to definition of (FIATA, 2004) Freight Forwarding and Logistic
Services means “services of any kind relating to the carriage (performed by single
mode or multimodal transport means), consolidation, storage, handling, packing or
distribution of the Goods as well as ancillary and advisory services in connection
therewith, including but not limited to customs and fiscal matters, declaring the
Goods for official purposes, procuring insurance of the Goods and collecting or
procuring payment or documents relating to the Goods. Freight Forwarding
Services also include logistical services with modern information and
communication technology in connection with the carriage, handling or storage of
the Goods, and total supply chain management. These services can be tailored to
meet the flexible application of the services provided”

According to ( Vietnam Commercial Law, 2005), Freight Forwarding and
Logistics services are “commercial activities whereby traders organize the
performance of one or many jobs including reception, transportation, warehousing,
yard storage of cargoes, completion of customs procedures and other formalities
and paperwork, provision of consultancy to customers, services of packaging,
marking, delivery of goods, or other services related to goods according to
agreements with customers in order to enjoy service charges.”
In short, freight forwarding is the overall management of the way resources
are obtained, moved to the locations and stored where they are in need.
1.1.2 Commercial role of freight forwarder
Commercial role of freight forwarder is regulated in forwarder law ( Mandy
Verena Rigtering, Capetown). They are:
Transshipment
Transshipment is a fundamental feature of modern container operations. Due
to high cost of operation, container ships with large volume usually serve „hub
ports‟. The transportation from hub port to regional ports is mostly coordinated by
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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shipping lines to operators of vessels. This involves booking on a transshipment
vessel, unloading, discharging, sorting, loading and distribution of the cargo to
various importers. Transshipment agents mostly operate as agent for the shipper,
consignee or freight forwarder.
Packing, warehousing and distribution
The freight forwarder arrange service for warehousing, packing and
distributing the cargo. He keeps goods in warehouse before exporting, subsequent to
import meanwhile awaiting distribution or transportation. The freight forwarder can

operate his own warehouse and provide listed above services as principal to the
shipper and freight forwarders, or play role as an agent in obtaining service from
independent contractors for his clients. The fact is that freight forwarder does not
own his warehouse, which does not mean that he provides the service as agent.
Carriage term in contracts may include storage services before and after discharging
the cargo, waiting custom clearance.
Documentation and customs clearance
The freight forwarder provides all required documentation for the import and
export regarding to customs and legal requirements and terms in commercial sales
contract. He is considered as an agent on behalf of his customer.
Arranging cargo insurance
Freight forwarders are not supposed to be cargo underwriters, but may
arrange cargo insurance and service fee, as agents for their clients. In fact, it is
helpful for a freight forwarder to recommend his customer to procure insurance
covering for cargo on a basis. The selling of such services like insurance, for further
commission is a traditional income source for freight forwarders.
Payment of freight and local taxes
Playing role as agent of consignee, the freight forwarder influences payment
of freight to the carrier and local taxes on behalf of his clients to avoid delays.
Transport arrangements
After the customer decide their route and mode of transportation, freight
forwarder books space on ship and dispatches the goods. Based on classic role,
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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freight forwarder will then arrange carriage contracts and establishes relationships
among his customers and the carrier. Furthermore, he will pay freight charges,

packing, custom clearance, insurance and charges customers an amount of fee - a
proportion of total expenses.
Cargo Consolidation and multimodal transport
The cargo consolidation service is one of the critical functions of today
freight forwarders. The container operators offer an integrated movement of using
multimodal instead of using unimodal transport modes. The freight forwarder
collects cargo from different shippers or freight forwarders, and combines goods for
shipment and distribution to the receivers in the destination place.
1.1.3 Freight forwarder obligations and rights
According to (General Freight Forwarder's conditions of Association of
Logistics and Freight Forwarding, 2005) forwarder obligations and rights are:
Obligations
The freight forwarder bear responsible for procuring for the customers the
transportation of goods on customers‟ account but under his name from original to
destination place
- To take transport of consignments at destination port or deliver stored
consignment in keeper‟s warehouse, if he is trusted with tasks regulated in terms of
freight forwarding contract.
- To fulfill his duties which arises out of the freight forwarding contract with
professional manner, taking care to satisfy the interests of the clients.
- To take care of cargoes and warn the clients of any obvious incorrectness of
his instructions.
- To assess and perform inspection in term of goods quantity as well quality
delivered during the period of time transport to the carrier that was provided and
agreed with clients; inform the clients whether the consignment or cargoes are
under threat of damage.
Rights
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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The freight forwarders have their own rights to demand a reasonable advance
and benefits from the clients to cover costs related to the performance of the
contract in freight forwarding service
- To demand the necessary compensation and reasonable incurred costs in
connection with the performance of freight forwarding contract; additionally, to
request compensation for expenses which were spent effectively while performing
his tasks.
-

To ask clients to correct missing or incorrect information, or supplement

incomplete instructions; and to request correct data in relation with the contents of
the consignment.
1.1.4 Related documents in freight forwarding services for importing FCL
cargoes
International Ocean Freight Bill of Lading
Bill of lading is one of the most critical documents in shipping industry. It is
a document presenting the receipt of goods by shipper‟s agent or carrier and the
transportation contract of goods for shipment. That is usually issued by individual
engaged in transporting or forwarding.
House Bill of Lading
B/L is issued by freight forwarder to a consignor as a receipt for
the cargoes being transported with other cargo as one shipment (usually as a FCL).
The B/L of carrier indicates the forwarder as the consignor, and the name
of forwarder's agent at destination port as the receiver. Even though it is not a
complete title document, a house B/L has the same legal status as to that of a normal
B/L. If no specifically forbidden, it has capability of being negotiated and accepted

by the bank of importer for payment under a letter of credit.
Master Bill of Lading
A schedule of costs for services rendered issued by a ship's master or
another carrier official, and which documents that certain products were received on
board as cargo for shipment to a particular place and to be delivered to the
stated receiver.
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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Commercial invoice
The commercial invoice is authorized document between the provider and
the customer which describes sold cargoes, and the total volume to customer. The
commercial invoice is one of the primary documents used by customs officials in
the progress of determination of customs duties.
Packing list
Packing list is prepared document by seller which indicate the net and gross
weights of cargoes, dimensions and contents of all shipping pieces in
a consignment. Each packing list should mention the shipment and concur with the
related commercial invoice.
Pro forma Invoice
A brief invoice sent by exporter to an importer in advance of a shipment.
It notes the
type
and volume of
cargoes,
their value,
and

other
essential information such as weight and charges. Pro forma invoices are commonly
used as initial invoices with quotation, or for purposes of customs clearance in
import. They are different from a normal invoice which is not required for payment.
Certificate of Origin
A Certificate of Origin (CO) is an essential international commercial
document verifying that cargoes in a specific export shipment are wholly achieved,
produced, processed in a particular nation.
Certificate of Insurance
A document issued by an insurance company which is used to confirm the
presence of insurance under particular conditions regarding to listed individuals.
Specifically, this document records the information of effective date of policy, type
of purchased insurance coverage, liability kinds and amount of money need to
pay.
Cargo manifest
Cargo manifests listed all the particulars of the goods loaded on a vessel, for
official and administrative purposes.
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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Arrival Notice
Notice sent by a carrier or shipping agency to the receiver (and to the notify
party, if any) to inform about the arrival time of shipment, number of packages,
description of goods, weight and charges (if any)….
Delivery Order
A Delivery Order is a document from a exporter, a shipper, or an owner
of freight which orders the release of the transportation of cargo to another party.

1.1.5

Relationship of freight forwarder with other parties

Import – Export Control Organization
Import – Export License Organization,
Customs, Quadrant Organization
Tax Control Organization
Commercial Chamber……

Exporter

Forwarder Agent

Freight Forwarder

Port

Importer

- Carrier, Bank, Shipping agent,
Warehouse, Insurance Company,
Inspection Organization……

Figure 1: Relationship Among Freight Forwarder With Other Parties

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1.2

Legal basis framework

1.2.1 National law
In order to encourage international integration in the industrial era, the
national legal system relating to logistics services has been formed. Commercial
Law in 2005 has been enforced and replaced Commercial Law in 1997, which used
the logistics and forwarding services term. In this year, 2005, new Maritime Code
2005 also revised Maritime Code 1990, making VietNam maritime law gradually
appropriate with international law. Simultaneously, with the birth of Maritime
Code, Laws associated to Airway, Road, Rail, Inland Waterway, Customs,
Insurance.....were born. In 2006, VN officially recognized Convention which
contained favorable conditions for ships to enter ports (FAL-65). Decree 140/2007
also adjusted Logistics Activities and Decree 87/2009/ND-CP about the multimodal
transport ...are important legal basis that influences logistics and freight forwarding
services in Viet Nam.
1.2.2 International law
The first international law regulates forwarding service is Vienna Convention
for International Trade in 1980. The Convention for transportation such as the
International Convention to unify rules on Bill of Lading signed at Brussels on
August 25th 1924, which is also known as the Hague Rules. This Convention has
two amendments, the first one was the Visby Protocol named in 1968 in Visby and
the second amendment was in 1979, called the SDR Protocol. The second law is the
United Nation Convention on the carriage of goods by sea, signed in Hamburg in
1978. Another well-known international regulation is Incoterm 2010 - standard
interpretation of trade term in International Chamber of Commerce. This basis
defines the right, risk and obligation clearly between consignee and consigner in

international trade.
1.3

Assessment theory of forwarding services for importing FCL cargoes

1.3.1 Full container loaded cargoes
FCL is the abbreviation for "Full Container Load" which is commonly used
in international shipping industry. In international shipping, this term describes an
ocean freight service, designed for international ocean freight shipments of cargo
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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where international shipper has exclusive use of entire ocean freight container ( for
example 20 foot or 40 foot container )
1.3.2 General freight forwarding process for importing cargoes by ocean
Step 1: Prepare the documents
The consignor must prepare the following types of documents:
-

Business registration license

-

License of import ( with import code of company)

-

License or import quotas

Step 2: Open the L/C
The consignee need to calculate the period of time to open L/C to avoid the
lose of capital (if L/C is opened too soon) or incurring the charges for L/C ( if L/C
is open too late). The consignee must apply for opening L/C and make deposit at the
bank. The bank will decide the total amount of deposit money need to be prepaid.
Depending on the Incoterm agreed between two parties before, the consignor might
perform the following steps:
Step 3: Charter mean of transport
-

Tramp ship: Buyer contacts the carrier to book the ship

- Liner ship: Buyer must contact to the ship owner for details about routes and
shipping cost
Step 4: Insure the goods
After receiving notice of delivery, the consignees will immediately contact
the insurance company to insure their cargoes
Step 5: Receive a set of documents
The consignees directly receives required documents from the seller or the
bank and wait for the notice of delivery to carry out customs clearance and receive
their goods
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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Step 6: Customs clearance

-

Open and submit customs declaration form

-

Deliver goods to the specific place for customs inspection

-

Pay tax

Step 7: Receive the goods
Bring the original bill of lading to the carrier to get D/O. Bring D/O to port:
-

For bulk cargo: supervise the unloading from the vessel; sign the report on

receipt of cargo, deliver goods to the buyer at desired location
-

For container:
FCL cargo: receive directly from container yard

LCL cargo: depending on the location the freight forwarder chose to release
the goods, the buyer will come and receive
1.3.3 Service quality assessment framework
Service quality definition
According to Parasuraman, Zeithaml and Berry (1985), service quality is
defined as how well a provided service adapts and conforms to

the client's expectations. Service business operators often assess the service quality
provided to clients in order to improve delivered service, to quickly identify and
solve the problems, and to better assess client satisfaction.
Crolin and Tailor (1992) suggest that customer satisfaction should be
evaluated in short period, and quality of service must be assessed according to the
attitude of customer service in long run.
Quality assessment modal for service – RATER (SERVQUAL)
The evaluation model service quality or customer satisfaction considered
service is a set of attributes as well as the underlying explicit and not a discrete
structure. Regarding to quality of service, the most popular scale is SERVQUAL
(service quality) carried out by VA Zeithaml Parasuraman and Leonard L. Berry,
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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which is also known as RATER to easily memorize the first letter on 5 criteria (
standing for: Reliability- Assurance- Tangibles- Empathy- Responsiveness).
SERVQUAL represents service quality as the differences between client's
expectations for service offering and the client's perceptions of service received,
requiring respondents to answer questions about both their expectations and their
perceptions related to:
Reliability: ability to perform the chartered service accurately and dependably
Assurance: Courtesy and knowledge of employees and their ability to inspire
confidence and trust to clients
Tangibility: The physical images or representations of a service
Empathy: caring individualized attention the servicer operator provides to its
customers
Responsiveness: willingness to support customers and provide prompt service

The table. Shows detailed dimension and its criteria related to measure
quality service
Besides 5 factors of RATER, customer satisfaction is also directly impacted
by Price factor. The price fairness influences the customer satisfaction in a positive
way but the perceived price fairness can be negatively affected by the customer‟s
vulnerability (Herrmann, Xia, Monroe & Huber, 2007). The customer perceives the
price according to the quality whose result end up in dissatisfaction or satisfaction
(Oliver, 1997). Price reasonability also plays a critical role in creating customer
satisfaction. The reason of customer turning to any other service providers is the
price reasonability from where they get it (Imran, Safwan, Rehman, Afzal, Ali, &
Ali, 2010).The unreliable and unreasonable pricing policy effect the customer
satisfaction negatively. Customer demands good quality products at a reasonable
price which they can afford service/ product easily and if any firm offers this to the
clients it will build long term relation with customers. Therefore, Price is an
important dimension that should also be concerned.

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

Table 1: 5 Factors Of Rater Model – Service Quality Dimensions

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

1.3.4 Relationship between service quality and customer satisfaction
Quality of service and satisfaction, two different concepts but has a close
relationship together in research on services (Parasuraman & CTG, 1988). The
study of (Cronin & Taylor, 1992) showed that service quality is the cause of
satisfaction. The reason is quality relates to the service offering, meanwhile client‟s
satisfaction can only be measured after using service. Therefore, when using the
service, if customers perceive high-quality services, they would be satisfied with. If
customers receive low quality service, the dissatisfaction will appear. Therefore,
customers play a very important role in service. However, when it comes to
assessing service, service providers usually confuse 2 concepts "service quality" and
"customer satisfaction"
However, according to the researchers, these are two different concepts.
Service quality focused on specific components of service offering. Meanwhile,
satisfaction is a general concept measuring their satisfaction as a service consumer.
In another definition, customer satisfaction is how products or services supplied
meet or surpass a customer‟s expectation. To assess satisfaction, customers should
have the experience to product/ service offered. Most researchers agree that
assessment is the result of a process of comparison. The rating is based on cognitive
processes in which customers compare their previous expectations with what they
really get from the product/service. Customers who are satisfied is considered as has
actual results that meet or exceed their expectations. Similarly, if expectation is
higher than actual results will lead to dissatisfaction.
Generally in service activities, whether referring to aspects of quality of
service other level of customer satisfaction, the requirements that manager need to
raise consideration is how to draw the gap between customer expectations and the
company's ability to conform client‟s expectation.

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

CHAPTER 2: THE CURRENT STATUS OF FREIGHT
FORWARDING SERVICES FOR IMPORTING FCL
CARGOES AT DONG TAI CO.,LTD
2.1

General information about Dong Tai Co.,Ltd

2.1.1 Company background
Dong Tai global logistics and trading company Co.,Ltd is known as a
member of head company - Dongsue Logitics Korea Co.,Ltd
DONGSUE LOGISTICS CO.,LTD
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Head office: Dongsue Logistics Co.,Ltd

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Address : Room 302, Dongyang BLDG, 89-20, Seosomunro, Jung-gu Seoul,

Korea
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Tel: 82-2-775-7200 – Fax: 82-2-773-8611

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Chief Executive Officer: Mr Y.T.Bay

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Website: www.dongsuero.com

In 2001, Dongsue Logitics Co.,Ltd was found after separated from “Dongsue
Shipping Co.,Ltd” based on license number 87367/KR-375SE of Korean Ministry
of Trade. Main business activity of company is trading and international freight.
Dongsue Logistics Co.,Ltd set up many shipping branches internationally. The
company has over 80 branches in major cities including Qingdao, Shanghai,
Mongolia, Russel, Incheon, Busan. As a reputable member of KIFFA, the company
ensures to customers that goods are shipped safely to the port of destination.
DONG TAI GLOBAL LOGISTICS AND TRADING CO.,LTD
- Address: Room 202-204, Tasaco Building, Nguyen Binh Khiem street, Hai
An, Hai Phong, Viet Nam
- Tel: (84) 313 979356/ 357/ 595/ 351 - Fax: (84) 313
979494

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