Tài liệu Real situation and Logistics applicability in freight forwarding of Haiphong Port – Recommendations

ĐỀ TÀI: Real situation and Logistics applicability in freight forwarding of
INTRODUCTION
Freight forwarding plays an important role in international trade. International trade refers to the transferring of goods’ possession right. Freight forwarding is responsible for putting this transferring into practice. After the open-door policy, Vietnam’s export turnover has continuously increased through years. In 2000, export turnover of Vietnam was USD 30 billions, in 2003; this number is 60 USD billions. The highly development of export and import activities stimulates the development of freight forwarding. At present, freight forwarding services ofVietnam is rather diversified. Many kinds of services are provided which meet the demand of the society. However, in fact, freight forwarding industry of Vietnam still has many insufficiencies, in which the serious problem is the quality of services. The main reason is inappropriate method of business operation. We need to have an advanced method of freight forwarding in order to reduce the cost as much as possible. In this case, logistics is an effective way, which is needed to apply in freight forwarding enterprises in Vietnam. I chose the topic “Real situation and Logistics applicability in freight forwarding of Haiphong Port – Recommendations to improve performance” for my field study report. Through the time of field study in Haiphong port, I conducted research on logistics in these following sectors:
§ The overview of logistics and freight forwarding
§ The current situation of logistics service in Haiphong port
§ The recommendations for the logistics service in Haiphong port.
I hope that my field study report about logistics in Haiphong port will bring out the meaning of this new service in Vietnam, and will help the port to improve their logistics services in the near future.






LIST OF ABBREVIATIONS
EDI: Electronic Data Interchange
ADSL: Asymmetric Digital Suberibers Lines
LCL: Less than container load
FCL: Full container load
PL: Provider of logistics
VIFFAS: Vietnam Freight Forwarding Association





















CHAPTER 1: OVERVIEW OF FORWARDING AND LOGISTICS
1.1. Freight forwarding
1.1.1. Definition.
Freight forwarding is the process of moving cargo from one place to a destination, according to the demand of customers.
An international freight forwarder is an agent for the exporter in moving cargo to an overseas destination. Freight forwarders assist exporters in preparing price quotations by advising on freight costs, port charges, consular fees, costs of special documentation, insurance costs, and their handling fees. They recommend the packing methods that will protect the merchandise during transit or can arrange to have the merchandise packed at the port or containerized. If the exporter prefers, freight forwarders can reserve the necessary space on a vessel, aircraft, train, or truck. The cost for their services is a legitimate export cost that should be included in the price charged to the customer.
1.1.2. Typical services of freight forwarding
Since Vietnam opened the door to develop economy, especially with the entry in WTO in 2007, local and foreign shippers have concerns over just how competitive the country will be, given huge challenges to its freight forwarding industry. Therefore, freight forwarding service has been highly developing.
A freight forwarder can offer a variety of services.
· Advising on the best routes and relative shipping or airline.
· Booking the necessary space with shipping or airline.
· Arranging with the exporter for the packing and marketing of the goods.
· Consolidating shipment from different exporters.
· Handling customs clearance abroad.
· Arranging marine insurance for the shipment.
· Preparing the export documentation.
· Translating correspondence in foreign language
· Scrutinizing and advertising on ability to comply with letter of credit.
Once the order is ready for shipment, freight forwarders review all documents to ensure that everything is in order. This is of particular importance with letter of credit payment terms. They may also prepare the bill of lading and any special required documentation. After shipment, they can route the documents to the seller, the buyer, or to a paying bank. Freight forwarders can also make arrangements with customs brokers overseas to ensure that the goods comply with customs export documentation regulations. A customs broker is an individual or company that is licensed to transact customs business on behalf of others. Customs business is limited to those activities involving transactions related to the entry and admissibility of merchandise; its classification and valuation; the payment of duties, taxes, or other charges assessed or collected; or the refund, rebate, or drawback thereof. According to its size, number of branches overseas, a freight forwarder will offer all or some of these services.
1.2. Logistics.
1.2.1. Definition.
Logistics refers to the management of the physical flow of products from the point of original as raw materials to end users as finished product. Logistics wed production activities to the activities needed of transportation, storage, and distribution. According to definition of Logistics, the process is described in the below chart:
Raw materials→Raw materials →Manufacturing→Finished goods→Market
Supply point Storage
1.2.2. Logistics flow.
Logistics deals with geography, time and value. Moving from source to destination, freight and transportation connects buyer to seller and make the final delivery. In this process, there are number of stages involved. Freight and transportation alone encompasses many modes including truck, sea, rail, and air, all with varying issues, costs and levels of service. The flow chart below illustrates the process, which involves the input of these services providers in the movement of a particular product from the point it leaves the plant to end consumer in a retail outlet.
Figure 1.1 Logistics flow


(Source: Hausman, Warren H. 2004 . “Supply Chain Performance Measures.” In Corey Billington, Terry Harrison, Hau Lee, and John Neale, eds., The Practice of Supply Chain Management.)

Businesses and organizations address their logistics requirements by assigning staff to perform logistics activities by outsourcing one or several functions to third – party providers.
In house logistics department usually manned by full- time logisticians who perform logistics- related functions. Their positions include purchasing managers, transportation managers, custom brokers, shippers and receivers. In the absence of outsourcing options, companies have dealt with moving and storing of goods in a disparate ways. Although outsourcing of logistics services is a fairly emerging trend, there are a large number of firms that maintain their own in- house logistics or distribution departments. This is largely prevalent in the manufacturing, commodity sectors, wholesaling and retailing.
1.2.3. Fundamental elements of logistics
Logistics includes such fundamental elements:
§ Transportation: This is the most important element of logistics. In order to reduce the cost of logistics, it is necessary to reduce the cost of transportation from the manufacturing places to different markets. Transporting process must be done smoothly to make the delivery of goods or supply required materials on time, minimize the inventory cost.
§ Marketing: Logistics includes making plans, implementing it and controlling the delivery of goods from the point of original as raw materials to end users as finished products. Therefore, it is clear that all the services focus on customers and meet the demand of customers. Effective marketing strategies help managers to have good customer services, deliver right products to right places and right customers.
§ Distribution: An effective distribution channel can reduce the cost of logistics. It is necessary for managers to combine two factors: right place and right time to create an optimal distribution channel.
§ Management: It also plays an important role in logistics. Lack of management factor, logistics services cannot meet the requirements of the customers as well as the objectives of the firms. Therefore, logisticians must have expertise or thorough understanding about transport modals, transport cost, and warehouse.
Beside such important elements above, logistics also include following elements, which is not less important:
§ Warehouses, factories
§ Technical document
§ Supporting and supervising equipment
§ Human resources and staff training
1.2.4. Benefits from improved logistics
1.2.4.1. Reduces the cost for consumer and producer
Logistics is “the process of planning, implementing and controlling the efficient,
cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption for the purpose of conforming to customers’ requirement”. So, logistics reduces the cost of transferring goods between markets and of course it will reduce the prices paid by consumers . On the consumers’ side, this effect can be seen most clearly by examining the price of goods at the port relatived to the price of goods inland. Producers will not ship goods inland unless the prices they receive, net of shipping, is at least as high as prices at the port. This means that inland consumers bear the full burden of shipping costs for goods that is not produced locally. This burden can be substantial.
A similar logic applies to exports. International markets will not pay more for goods produced in inland regions, and so the ex- factory or ex- farm prices are reduced by the full inland logistics costs of access to the port.
1.2.4.2. Insurance against regional price fluctuations.
– Recommendations to improve performance