HO

cm MINH

CITY UNIVERSITY OF FOREIGN LANGUAGES AND
INFORMATION TECHNOLOGY
DEPARTEMENT OF INTERNATIONAL BUSINESS ADMISTRATION

•

TOPIC:

/ ;

SOME SUGGESTIONS TO PUSH UP THE
FORWARDING SERVICE AT SOTRANS
INTERNATIONAL FREIGHT
FORWARDER ENTERPRISE

STUDENT'S NAME : PHUONG HOAI TAM
CLASS
: KDOI-OI
ADVISOR
: MBA.THAN TON TRONG TIN

JULY, 2005


HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES AND
INFORMATION TECHNOLOGY
DEPARTEMENT OF INTERNATIONAL

BUSINESS ADMISTRA TION

TOPIC:

SOME SUGGESTIONS TO PUSH UP THE
FORWARDING SERVICE AT SOTRANS
INTERNATIONAL FREIGHT
FORWARDER ENTERPRISE

STUDENT'S
CLASS
ADVISOR

NAME

.JULY, 2005

: PHUONG HOAI TAM
: KDOI-Ol
: MBA. THAN TON TRONG TIN


,
•

Acknowledgement
I would like to express my gratefulness to Board of Director and International
Business Administration Department of the HUFLIT University for a valuable
opportunity to study and to write this graduation paper.


I would like to express my deeply-hearted

thanks and great gratitude to my

advisor, Mr. Than Ton Trang Tin, for his unvaluable
comments.

My graduation

paper

would

advice

not be completed

and help

without

his

enthusiastic supports, spiritual encouragement and invaluable guidance.

I would like to take this opportunity

0

give my deep-thank to Mr. Son and all


staff members of SOTRANS LF.F. They give me a good chance to practice at
the company and their helpful support and assistance.

From the bottom

of my heart,

I wish to thank my parents

for their

encouragement and support during four years in the university, especially in the
time of preparation and finishing this paper.

I also show my appreciation to all teachers of HUFLIT university for their
valuable knowledge and comment
Finally, I would like to say thank to all my friends.


•

ADVISOR'S

COMMENTS

Assigned by the Huflit University to guide graduation paper of Miss Phuong Hoili Tam
with the topic: "Some suggestions to push up the Forwarding Service at Sotrans I.F.F
Co. ", I have some comments as the followings:
Form:


Graduation Paper has been presented clearly, well with reasonable outline; not
many mistakes on spelling or grammar. Documents hilVe been illustrated thoroughly
and well cotlvinced.
It shows that the author was hardworking
in preparation
and
working.
Content:
Author shows an understanding
of the Basic forwarding in chapter 1, which is
the foundation for the work in the following chapters.
Author shows a spirit of serious working, performs rather completely all requests
given by the advisor. She usually meets the advisor to discuss the topic matters, in
which proved her ability of science research, analysis skills, self-solving problem. She
performs herself of eagerness in studying and collecting data, referenced materials by
which the work shows a deep analysis in business operation in Sotrans IFF, reflects the
reality in its procedure in forwarding. She wrote pretty well in SWOT analysis and then
recommended
the applicable solutions and recommendations
in improving the business
performance. This is also the part that the advisor is most interested and highly regards.
As the advisor, I am so proud of this student, Miss Phuong Hoai Tam.
This is the graduation paper that is highly appraised, especially in writing skill.
The author made much effort to finish the paper in the condition of attending internship
while working.
This paper is really one of the useful materials for student in later courses.
General recommendation:
The paper is considered excellent and it is recommended
permits Miss Phuong Hoai Tam to protect her work.

Dated 04 July, 2005
Advisor

Than T6n TrQng Tin

that the University


The trend of internationalization

in economic activities has more rapidly

increased, trade relations among countries have continuously developed in all
fields. Serving these relations, many service industries appear accompany to
the development of international trade activities including forwarding service.
Although forwarding

activity has appeared

for a long time, a forwarding

company with large or small size has some problems to be considered. Because
the development

is accompanied to fierce competition, always has customers

with higher and higher demands, always asks for something new. How are
these problems solved? That is the reason why it is necessary to study this
theme.
From that point of view, an understanding about forwarding service in Ho Chi

Minh City, using SOTRANS LF.F as an example, is necessary. This research
investigates

forwarding operation at SOTRANS LF.F and some solutions to

push forwarding service are then presented in order to improve the company's
performance in the future.
In this paper, some recommendations

for the government

and concerned

authorities are suggested with the hope that forwarding service will be more
developed and get more profits for the country in the future.


Figures
Figure 2.1: Organizational Structure of SOTRANS Corporation
Figure 2.2: Organizational Structure of SOTRANS I.F.F
Figure 2.3: organizational structure of logistics department
Figure 2.4: Revenue and net profit status of the enterprise from 1999 to 2003
Figure 4.1: Concentrated marketing of SOTRANS in next time
Figure 4.2: Vertical Marketing System (VMS)


Content
Acknowledgement

i


Advisor's assessments

ii

Acstract

111

List of tables and figures

iv

Introduction
Chapter 1 Basic understanding of Forwarding service
1.1 Definitions

1

1.1.1 Definitions of forwarding service

2

1.1.2 Definitions offreight forwarder and it's role

3

1.1.3 Rights and obligations of freight forwarders

4


1.1.4 Exemption of obligations

,

1.1.5 Scope of responsibility
1.2 Scopes and Benefits of forwarding service
1.2.1 Scopes of forwarding service

4
5
6
6

1.2.1.1 Exporting process

6

1.2.1.2 Importing process

7

1.2.2 Benefits of forwarding service

7

1.2.2.1 Benefits for exporters

8


1.2.2.2 Benefits for importers

8

1.3 Some forwarding organizations in Vietnam and in the world

9

1.3.1 Some forwarding organizations in the world

9

1.3.1.1 FIAT A organization
1.3.1.2 AFTA- Asean Federation of Forwarder Association
1.3.2 Forwarding organization in Vietnam -VIFAS
1.4 The main contents offorwarding operation
1.4.1 Forwarding operation for export cargo

9
11
12
14
14

1.4.1.1 Full Container Load (FCL/FCL)

14

1.4.1.2 Less Than Container Load (LCL/LCL)


16

1.4.1.3 Exporting bulk cargo with large quatity

17

1.4.2 Forwarding operation for import cargo

18


1.4.2.1 FCL
Chapter 2 General

18
introduction

about SOTRANS I.F.F

20

2.1 An overiew of corporation

20

2.1.1 The history and development of SOTRANS corporation

20

2.1.2 The history and development of SOTRANS LF.F


23

2.2 Responsibilities and authorities of SOTRANS LF.F

24

2.3 Organization structure of corporation

26

2.3.1 Organizational structure of SOTRANS corporation

26

2.3.2 Organizational structure of SOTRANS LF.F

27

2.3.3 Functions of each department

27

2.4 The business performance at SOTRANS LF.F in the last five years

30

2.5 SWOT analysis

32


Chapter 3 Forwarding

service at logistic department

of SOTRANS I.F.F .. 35

3.1 Forwarding operation for import cargo

35

3.1.1 Less a Container Load import cargo (LCL import cargo)

35

3.1.2 Full Container Load import cargo (FCL import cargo)

45

3.2 Forwarding operation for export cargo
3.2.1 Less a Container Load export cargo

45
46

3.2.2 Full Container Load export cargo
Chapter 4 Some suggestions to push up the forwarding

service at SOTRANS


I. F. F

51

4.1 Enhancing marketing activities

51

4.1.1 Investigating primary data

53

4.1.2 Deciding market segment...

54

4.1.3 Applying marketing mix

59

4.2 Planning for training and development human resource

.


Introduction
During nearly the part twenty years (1986 - 2005), thanks to the reform policy of the
Vietnam Communist Party with the applying of the open door policy and the expecting
of joining World Trade Organization (WTO), Vietnam's economy is yearly growing up
under a political stability. International trade develops; the quantity of import-export

cargo has strongly increased in recent years. Many service industries appear to serve
the

import-export

process,

such

as, transportation,

insurance,

forwarding,

ect.

Forwarding service is a service relating to transport process aim to bring cargo from the
seller to the buyer. Freight forwarder plays an important role in import-export trading.
There are more and more freight forwarders in our country. In a severely competition
market, customers will choose freight forwarder who can supply the fastest, safest,
cheapest services. Therefore, what measures should these forwarders

apply and how

can they operate at the most efficiently?
I would like to limit the scope of theme in forwarding operation by sea, because it
accounts for 90% of all import-export cargo in a whole country.
The research methods base on knowledge at school, relevant documents both in English
and Vietnamese,


data collected from newspapers, magazine, and some websites; and

activity observation

during the time of practicing at logistic department of SOTRANS

LF.F.
The aim of this study is to analyze forwarding operation at Logistic Department of
SOTRAN LF.F enterprise, then advantages and disadvantages through SWOT analysis
is investigated. From that point of view, some solutions to push up forwarding service


are presented.

Then, some recommendations

to the company as well as to the

government are carried out aim to develop, forwarding service in the future.
The study entitled "some suggestions to push up the forwarding service at SOTRAN
I.F.F" is composed of four chapters. Chapter I is dealt with basic understanding

of

forwarding; definition, scopes and benefits, some forwarding organization in Vietnam
and in the world, the main content of forwarding operation.

Chapter 2 describes


historical background of SOTRANS, SOTRANS I.F.F, responsibilities
organizational

structure, business performance,

and authorities,

SWOT analysis. Chapter 3 presents

forwarding operation at logistic department of SOTRANS I.F.F, forwarding operation
for import-export cargo in FCL, LCL. Chapter 4 is some suggestions
forwarding

service

at

SOTRANS

to push up the

I.F.F. It ends with a conclusion

recommendations to the enterprise and to the government.

and some


Chapter 1 Basic understanding of Forwarding service


1.1 Definitions
1.2 Scopes and Benefits of forwarding service
1.3 Some forwarding organizations in Vietnam and in the world
1.4 The main contents of forwarding operation


Chapter 1

Basic Understanding Of Forwarding

1.1 Definitions
1.1.1 Definitions of forwarding service
The prominent characteristics of international trade is the seller and the buyer is
far way. After
responsibilities

the sale contract

is signed,

the seller

carries

out his

is to transport cargo from the seller's country to the buyer's

country. In order to starts_continues30mpletes


this transport process, the seller

organizes a series of works such as preparing cargo, packaging, storaging,
bringing cargo to port, sending goods procedures, doing customs clearance, ship
on board, discharge and delivery

cargo to receiver in port of destination. All

these transactions are called forwarding services.
There some concepts about forwarding service
According to the frame rule of FIATA, forwarding service is any kind of service
relates to transport, consolidation, storage, loading, packaging or distribution as
well as consultant services or any service relates to these services, including
customs

procedures,

finance,

insurance,

payment,

collection

documents

concernmg cargo.
According to Vietnam Commercial Law, "Freight forwarding serVIces are a
trading behavior, in which freight forwarder will receive goods from senders,

and manage transportation, storage, paperwork and related services to deliver
goods to receivers as assigned by owners, carriers or other freight forwarders
(later referred to as customers)".
Forwarding service is the transportation cargo from the seller to buyer. To
complete this transport process, we carry out a series of related works such as
packaging, storing, bringing cargo to port, customs procedures, sending good
Student: Phuong Hoai Tam

PAGE 1


Chapter

Basic Understanding

1

procedures,

Of Forwarding

ship on board, transshipment,

unloading to delivery

cargo to

receiver in destination port.
Forwarding is a group of transactions relating to transportation aim to transport
cargo from sending place to arrival place. Forwarding is a service relating to

transportation, but not transportation.
1.1.2 Definition of Freight Forwarder

and its roles

According to Viet Nam Commercial Law, "freight forwarder is trader who
obtained business registration certificates to provide forwarding service. "
In the past, freight forwarder confided as agent for the exporter and/or the
importers to carry out some of works relate to import _export process. Freight
forwarder represents for the owners, carriers, loading /unloading companies or
other forwarding agents, warehousing companies to carry out transport cargo
from

links:

loading/unloading,

storage,

paperwork,

customs

procedures,

arranging means of transport (both domestic and foreign trade), insurance
policy, payment procedures, transport charge ...
Nowadays,

freight


forwarder

plays

an

important

role

in

international

transportation and trade. Freight forwarder not only excises customs procedures,
chartering but also supplies door-to-door services about the whole of process of
transportation and delivery goods. In different countries, freight forwarder is
called with different
Broker",

Clearing

names such as "Customs House Agent",

Agent",

"Shipping

and Forwarding


Agent",

"Customs
Principal

Carrier". Further more freight forwarder works as a Multimodal Transport
Operator (MTO) .
•:. Freight forwarder works as a Customs Broker
Student: Phuong Hoai Tam

PAGE 2


Chapter 1

Basic Understanding Of Forwarding

At first, freight forwarder does business in domestic market, role's freight
forwarder is to do customs clearance for import cargo. He gradually expands
scopes of activities serving both import-export cargoes. Basing on terms of the
sale contract, freight forwarder represents for the importer-exporter to booking
or deposit with shipping agents and carriers .Freight forwarder confided the
importer-exporter to declare customs procedures working as Custom Broker.
.:. Freight forwarder works as an Agent
In the past, freight forwarder doesn't work as a carrier. He is a link between
the consignor and carrier as a agent of carrier or consignor. Freight
forwarder assigned from the owner or the carrier to carry out some different
works


such as receiving and delivering, preparing documents, customs

procedures, storing, etc .. based on the confide contract.
.:. Freight forwarder works as a Cargo Consolidation
In European

countries, freight forwarder

railway transportation
container,

supplied forwarding

serVIces

along time ago. Especially in carriage goods by

consolidation

service is so necessary

aim to make a Less

Container Load (LCL) becoming Full Container Load (FCL); so achievable
consults is to take_advantage full carrying capacity of a container and get
lower transport charge. Being a consolidator, freight forwarder plays the
role of a carrier or an agent,
.:. Freight forwarder works as a carrier
In many cases, freight forwarder plays the role of carriers; it means that
freight forwarder directly signs a transport contract with the owners of goods

and taking responsible

Student : Phuong Hoai Tam

for transport cargo from port to port. Freight

PAGE 3


Chapter 1

Basic Understanding

QffOl.:w~rding

forwarder is a contracting carrier if he signs a transport contract but doesn't
directly participating in transport cargo; if he directly involves to this process
is called actual carriers .
•:. Freightforwarder

is a Multimodal Transport Operator (MTO)

When freight forwarder supplies door-to door service, he is called MTO
.MTO is a carrier and
transport

responsible for loss and damage of cargo in the

process .Freight forwarder is called "Architect of Transport"


because freight forwarder can organize the transport process in the safest,
the best way and the most economical.
1.1.3 Rights and obligations of freight forwarders

(Article 168 of Commercial

Law)
The following items are the rights and obligations of freight forwarder
~ Benefit service charges and other legitimate revenues;
~ Observe all their obligations stated in the contract;
~ Not to respect customers' assignments in the process of carrying out the
contract

if

there

are

customers' interests. However,

proper

reasons

freight forwarders

for

the


are required

sake

of

to inform

customers in advance;
~ Consult customers if there are incidental cases causing a failure in honoring
the entire contract or part of the assignments of customers after the contract
is signed;
~ Complete their obligation in an appropriate time if the contract does not state
any special time;
1.1.4 Exemption of obligations (Article 169 of Commercial Law)
Student: Phuong Hoai Tam

PAGE 4


----------

-----------------------------------

-

Chapter 1

Basic Understandiing Of Forwarding


Freight forwarding will not be responsible for losses and damage of goods in the
following cases
If customers or their authorized agents make mistakes
a. If all guidance of customers or their authorized agents is strictly followed
b. If customers package goods and note down the code of goods improperly
c. If goods have defects
d. If strikes occur
e. If there are undesired cases
Freight forwarder will not be responsible for the loss of benefits which customers
should have got, tardiness in delivery or location of wrong addresses Article 170.
1.1.5 Scope of responsibility (Article 170 of Commercial Law)
•

Responsibilities of freight forwarder in all cases will be limited within the
gross

•

value of goods, unless other-wise agreed in the contract

Freight forwarder will not be exempt from responsibilities if they have no
evidence proving that losses, damage or late delivery of goods are not their
fault.

•

Compensation is calculated based on the value of goods written on the bill
and other costs whose documents are legitimate. If the bill does not state the
value of goods, compensation will be calculated based on the value of those

goods with market prices when and where the goods are delivered. If there
no market prices, the calculation of compensation will be based on common
prices of goods of the same category and quality.

•

Freight forwarder will not take responsibility in the following cases:

Student: Phuong Hoai Tam

PAGES


Chapter 1

Basic Understanmng Of Forwarding

~ Freight forwarder does not:receive any announcement of legal action against
them within fourteen working days as from the date of delivery, excluding
Sundays and holidays.
~ Freight forwarder does not yet receive any announcement in writing of legal
action field at the Arbitrator and or Court, within nine months as from the
date of delivery.

1.2 Scopes and Benefits of forwarding service
1.2.1Scopes of forwarding service
1.2.1.1Exporting process
In exporting process, freight forwarder offers some following services
•


Consulting for the exporter about transport cargo

•

Taking into consideration requirements

in Letter of Credit (LlC-if any),

regulation of importing countries in sending and receiving cargo also in
transit through third country.
•

Signing a transport contract with carriers, chattering (Liner Term or Voyage
Chatter), booking, etc.

•

Providing tally service.

•

Supplying consolidation service, choosing transport line, means of transport
also suitable carriers.

•

Combining with exporter

III


packaging,

renting

warehouse

to storage

temporally cargo.
•

Receiving cargo from the consignor, organizing load ,weight and measures in
scope of stations, ports

•

Making

sending

goods

procedures,

prepanng

necessary

documents,


payment, customs procedures, inspection, quarantine.
Student: Phuong Hoai Tam

PAGE 6


Chapter 1

•

Basic Understanding Of Forwarding

Paying freight charge, load/unload fees, receiving sending cargo documents,
such as Bill of Lading.

•

Arranging transshipment cargo.

•

Informing departure schedule of means of transport.

•

Supervising and controlling cargo in transport process

•

Supporting for exporter


to claim the carriers in compensation

for damage

goods.
1.2.1.2

Importing process

•

Receiving cargo from carriers and delivery to consignee

•

Registering
documents

customs

declaration

for import cargo, setting

in order to the consignee

can receive

up necessary


cargo from the port of

discharge or agent of another forwarder.
•

Receiving and checking necessary documents relate to cargo of destination
port

•

Providing tally service.

•

Packaging and classification cargo.

•

Storage and preservation cargo.

•

Paying freight charge, handling and lifting fee, storage fee.

•

Noticing of loss or damage to carriers or forwarder in departure port.

•


Supporting the exporter sets up record of inspection in claiming procedures.

1.2.2 Benefits of forwarding service
Forwarding service contJibutes to push up transport cargo quickly because of
limiting error and discrepancy
supporting the importers-exporters
for lacking experience,

Student: Phuong Hoai Tam

in preparing

documents to transport cargo,

in saving time consuming, minimize risks

knowledge about foreign trade operation.

PAGE 7


Chapter 1

Basic Understanding Of Forwarding

1.2.2.1 Benefits for exporters
Thank to the forwarding service the exporter can get some benefits as follow
•


Reducing some of employees for a firm which doesn't export regularly and
the value of goods is not large. This leads to reducing in salary expenses, so
the company can get more profits.

•

Minimizing risks and saving time contact with carners (inland transport,
railway transport, air transport firms, etc. Professional freight forwarders can
update

new

information

and regulations,

changes

in concerning

to

forwarding operation but the exporter can not.
•

Being secured that cargo is delivered exactly the same as in Letter of Credit
and contract specified, avoiding suffer from great slowness. This can be a
cause leading to reject receiving goods of the importer or delay in payment,
require a decrease in the price of goods, even not payment.


•

In case cargo has to be transited in third country, freight forwarder take
responsibilities sending goods from the first vessel to the second vessel to
come final port, the exporter doesn't need

a representative agent there. So

the exporter can save his money.
•

Freight forwarders usually contact with shipping agents, domestic transport
companies, customs officers, government bodies or other related offices such
as insurance companies, inspection organizations, port officers, ect, so they
know clearly "unwritten rules ", suitable expenses, prestige shipping agents,
age of vessels, vessel schedule, etc; therefore the exporter can save money,
costs, and limiting risks.

1.2.2.2 Benefits for importer

•
Student: Phuong Hoai Tam

PAGE 8


Chapter 1

•


Basic Understanding

Of For.warding

Also reducing some unnecessary

employees,

savmg expenditure

for the

enterprise.
•

Limiting risks when the importer receives cargo (especially bulk cargo), the
loss or damage of cargo usually occurs; necessary formalities for a claim are
complicated.

Freight forwarder

assigned by the importer

to claim for

compensation to related parties.
•

Receiving cargo early, avoiding being imposed for warehousing, quickly
putting cargo into production chain and consuming in the market.


1.3 Some forwarding organizations in Viet Nam and in the world
1.3.1 Some forwarding organizations in the world
In common with development of transportation and international trade, forwarding
service

becomes

gradually

independent

business

industry.

Appearance

of

forwarding companies are more and more, the fierce competition among them lead
to arise Forwarding Federation in the scope of ports, countries, and regions. On the
world scale, Forwarding Federations are established such as Belgium Forwarding
Federation, Dutch Forwarding Federation, American Forwarding Federation ...ect,
especially PIATA.
1.3.1.1 FIATA organization
.:. History of FIAT A
FIA TA, in French "Federation International des Association de Transitaires et
Assimiles ",


m

English, "International

Federation

of

Freight

Forwarder

Associations ", was founded in Vienna/ Australia on May 31- 1926, is the largest
transportation, forwarding organization in the world.

Student: Phuong Hoai Tam

PAGE 9


Chapter 1

Basic Understanding Of Forwarding

PlATA, a non-governmental

organization, represents today an industry covering

approximately 40,000 forwarding and logistic firms in 150 countries, also known as
the "Architects of Transport". Members of PlATA include ordinary members and

associated members. Ordinary members are Forwarding Federations of countries;
associated members are particular forwarding firms.
PlATA are recognized by organizations, offices of United Nations such as the
Economic and Social Council (ECOSOC), the United Nations Conference on Trade
and Development

(UNTACD), the United Nations Commission on International

Trade Law (UNCITRAL), Economic Commission for Europe (ECE), ESCAP,
ESCWA, ect.
It's recognized
governmental
organizations
Commerce

as representing
organizations,

the freight forwarding industry by many other
governmental

authorities,

private

in the field of transport such as the International
(ICC), the International

Air Transport


Association

international
Chamber of
(lATA),

the

International Road Transport Union (TRTU), the International Union of Railways
(VIC), the World Trade Organization (WTO), etc.
In summary FIATA is the largest non-governmental

organization in the field of

transportation. It's influence is worldwide .
•:. Objectives of PlATA
PlATA's main objectives are
./ To unite the freight forwarding industry worldwide
./ To represent,
participating

promote

and protect

the interests

of the industry

as advisors or experts in meetings of international


by

bodies

dealing with transportation.
Student: Phuong Hoai Tam

PAGE 10


Chapter 1

Basic Understanding Of Forwarding

./ To familiarize trade and. industry and public at large with services rendered
by Freight Forwarders through the dissemination of information, distribution
of publications ...etc .
./ To improve the quality of serVices rendered

by Freight Forwarders by

developing and promoting uniform forwarding documents, standard trading
conditions, etc .
./ To assist with vocational training for Freight Forwarders liabilities insurance
problems,

tools

for


electronic

commerce

including

electronic

data

interchange (EDI) and barcode.
1.3.1.2 AFFA -ASEAN Federation of Forwarder Association

.:.

History of AFFA

The idea of forming an ASEAN organization for freight forwarders was first mooted at
an impromptu meeting of representatives
PlATA

World

Congress

held

of ASEAN countries present during the
111


October

1991

111

Singapore.

At the inaugural meeting of the ASEAN organization held on 7 December 1991 in
Kuala Lumpur, Malaysia,

the Federation

of Malaysian

Forwarders

Associations

(FMFF) was elected Proem Chairman of the grouping. This was soon followed by the
second meeting from 6 to 7 March 1992 in Jakarta, Indonesia which deliberated and
adopted the draft Constitution of the ASEAN Federation of Forwarders Associations
(AFFA).
Objectives of AFFA
The objectives of AFFA are as follows:
./ To unify all freight forwarders

111


the ASEAN regIOn through national

forwarder' associations;
Student: Phuong Hoai Tam

PAGE 11


Chapter 1

Basic Understanding Of Forwarding

-/ To foster, promote,

develop

and maintain

close co-operation

between

and

among freight forwarders in ASEAN;
./ To represent

members

in their collective


interests

III

relation

to freight

forwarding matters peculiar to the ASEAN region; an
./ To pursue all measures to improve the quality, standard and professionalism
freight forwarders in the ASEAN region.

1.3.2 Organization forwarding in Viet Nam-VIFAS
Being the professional associated organization established voluntarily by freight
forwarding enterprises

in November

(known as VIFFAS) became

1993, Vietnam freight forwarders association

FIATA's

unique ordinary member

in Vietnam

in


October, 1994. Below is some basic information about VIFFAS:
•

Full name: Vietnam Freight Forwarders Association

•

Address: 23 Lang Ha Street, Hanoi, Vietnam

•

President: Mr. Bui Ngoc Loan

•

Vice-president:
o

Mr. Tran Hong Dom; Mr. Nguyen Tham

General Secretary: Mr. Vo Nhat Thang

Date of foundation: 11/1993
Functions:
•

To make

recommendations


to the state

competent

authorities

on the

directions, policies relating to the freight forwarding industry
•

To advise the state concerned bodies of the ratifications,

participations

or

singing of the international treaties drafted by the international organizations
•

To provide members, conferences

on legal and technical freight forwarding

for members
•

To advise members of the professional matters and other related fields


Student: Phuong Hoai Tam

PAGE 12

of


Chapter 1

Basic Understanding Of Forwarding

•

Form of document used in business bay members: FBL

•

Laws regulating members'

business activities: commercial and maritime

laws Standard trading conditions (stc) available
•

Monthly Magazine: Visaba Times

•

Organization Structure: consists of general congress, management


board,

standing body to the management board, the board's term is a 3-year period
•

Finance: the main sources compose of membership

fees, supports from

domestic companies and individuals.
•

Membership:

enterprises

from every

economIC sector,

irrespective

0

management level, who has been established in accordance with the law of
Vietnam

and registered

to operate


as freight forwarders

in Vietnam,

agreeing to statutes of the association, voluntarily applying for membership
may be considered to be ordinary or associate members of the association.
•

Ordinary members include enterprises who have registered to operate as
freight forwarders in Vietnam and have a registered capital not less than the
limitation of liability as stipulated in stc of the association (30.000 sdr).

•

Associate members include enterprises having the registered capital lower
than the amount mentioned above.
Annual member fee:
Ordinary member shall pay 4.000.000VND
Associate member shall pay 2.000.000VND
Documents need to be summated to join VIFF AS
Application
Copy of decision of incorporation, registration of business (with public
notary)
Statute regulating the business activities of the enterprise
A brief report on the business situation and activities of the enterprise.

Student

: Phuong Hoai Tam


PAGE 13


Chapter

1

Basic UnderstamJi,og

Qf.~Q,l,;warding

Copy of the diploma of the director (deputy director) of the enterprise (with
public notary).
1.4 The main contents
1.4.1 Forwarding

of forwarding

operation

1.4.1.1 Full Container

operation

for export cargo
Load ( FCL/FCL)

Step 1
The exporter based on the amount of goods to exactly calculate the number of

containers need to rent, time for applying set of documents identified in sale contract
and LlC(Letter of Credit), sailing schedule, terms of delivery, date of delivery (before
the named date a period of time).
If the exporter sells FOB, FCA price, the exporter has to contact with shipping
company/ shipping agent appointed by the importer, booking based on sailing
schedule. The exporter does not interfere in paying freight charge. If the exporter
sells CFR, CPT, CIP, ClF price, he is responsible for chattering and paying freight
charge. The exporter contacts with shipping agent to negotiate

freight rate, he

compares freight rate among shipping companies to choose the best one. In addition,
the exporter has to consider time of transport, reputation of shipping firms/ shipping
agent, infrastructure of wharf, sailing schedule complies with the time of preparation
cargo or not in order to the exporter takes the initiative of transport arrangement
before having a final decision -booking. Booking note is regarded as a agreement
between shipping agent and its customers (importers-exporters

or forwarders). It is

also a compulsory document for customers to receive empty containers at container
yard.

Student: Phuong Hoai Tam

PAGE 14