MINISTRY OF TRANSPORTATION

MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: KIEU PHUC HIEP

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

Recommendation to improve freight forwarding process of
imported cargoes in Tung Bach Export Import And Transport
Services Trading Company

HAI PHONG – 2015


MINISTRY OF TRANSPORTATION

MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: KIEU PHUC HIEP
CLASS

: GMA-02

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

Recommendation to improve freight forwarding process of imported
cargoes in Tung Bach Export Import And Transport Services Trading
Company
Supervisor:

Hoang Bao Trung

Division:

Basic Economics

Faculty:

Economics

HAI PHONG – 2015


Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

PREFACE
Intership is very important with students to interact the knowledge they have
learnt at school and hands-on experience. Besides, intership is a good chance for
students to visit places they might not ever visit on their own.
Many scientists affirm that intership is very important and necessary to students
to have a new experience and learn how to use what they are learning in the real
situations. Students are able to gain all experience beyond reading and can see
elements by their eyes instead of reading about it in books and believing what they

are told because it’s in print.
With intership, student knows clearly and exactly how to do a work, then they
can draw the real-work knowledge for themselves and can be successful in their
business after finishing education. Moreover, not only learning but also practicing,
students will feel more confident about their abilities and can work more efficiently.
It is also the opportunity for students to make a great combination of learning
and fun; it will make the outside classes more interesting and more working.
Intership can provide entertainment for students; and it can make students more
focus back in the classroom.
It is better if students have chance to practice all the knowledge they have learnt
in the educational process; and intership helps to make it become true. This is an
useful and important part to help students complete the working abilities in the
future. And furthermore, intership can change the way students consider and look at
education and the way they recognize their communication skills.
In conclusion, intership is indispensable part in the educational process, it helps
students improve the knowledge they have learnt and perfect all the skills and
abilities. It is absolutely a new experience for students and it will make the success
of students in the future.
As a student of Vietnam Maritime University (VIMARU) and has the passion in
maritime field, I chose Tung Bach Export Import And Transport Services Trading
Company as my intership company. Along with the history, an interesting
development process as well as the specialization in work, I believe that this is the
best choice for me.
Hai Phong, September 30th, 2015
Student

Kieu Phuc Hiep
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
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ACKNOWLEDGEMENT
During the process of doing my research, I am thankful for the all people that
helped me finish my dissertation.
First of all, I would like to express my gratitude to my supervisor Mr. Hoang
Bao Trung for his guidance and valuable suggestion during my training time as well
as the processing of this dissertation. I cannot perform my dissertation correctly
without his advice.
Secondly, I’m grateful to the staffs of Tung Bach Export Import And Transport
Services Trading Company for their enthusiastic assistance, instructions and advices
during my training time.
Lastly, I also would like to thank my parents and my friends for their support
and encourage both in mentally and physically in that time.
Adding more, because of limited knowledge and time in the process of
completion, shortcomings cannot be avoided so the helpful advices from teachers
and readers are warmly welcome.

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

LIST OF TABLES
TABLE 2.1: Business result in 2013 (Unit: Million VNĐ)
TABLE 2.2: Business result in 2014 (Unit: Million VNĐ)
TABLE 2.3: Business result in first 3 quarters of 2015 (Unit: Million VNĐ)

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

LIST OF FIGURES
FIGURE 2.1: Organization system of Tung Bach Company
FIGURE 2.2: Business Results of Tung Bach Company in the 11 consecutive
quarters
FIGURE 2.3: Business results of Tung Bach company in 2013 and 2014
FIGURE 2.4: Business Results of Tung Bach Company in the first 3 quarters of
2013, 2014, 2015
FIGURE 2.5: Process of imported FCL goods
FIGURE 2.6: Customs clearance process

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

TABLE OF CONTENT
Preface............................................................................................................................. i
Acknowledgement..........................................................................................................ii
List of tables.................................................................................................................. iii
List of figures................................................................................................................iv
Introduction.................................................................................................................... 1
Chapter I: Foundation of freight forwarding...................................................................3
1.1. Freight forwarding and operation.........................................................................3
1.1.1 Foundation of freight forwarding...................................................................3
1.1.2 Enterprises engaged in freight forwarding......................................................3
1.1.3 Legal basic, rules of freight forwarding..........................................................4
1.1.4 Types of freight forwarding............................................................................5
1.2 Freight forwarder foundation and duties in the international trade scenario.........6
1.2.1 Foundation of freight forwarder.....................................................................6
1.2.2 Role, duties and powers of freight forwarder.................................................7
1.3 Freight forwarding process...................................................................................9
1.3.1 Duties of parties involved in freight forwarding process................................9
1.3.2 Shipping goods methods...............................................................................10
1.3.3 Criterion for evaluating the freight forwarding process of imported FCL
cargoes………………………………………………………………………...11
1.4 Essential documents in freight forwarding cargoes.............................................12
1.4.1 Bill of lading (B/L).......................................................................................12

1.4.2 Certificate of origin (C/O)............................................................................12
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

1.4.3 Commercial invoice.....................................................................................12
1.4.4 Packing list...................................................................................................13
Chapter II: Forwarding process of imported cargoes in Tung Bach Export Import
And Transport Services Trading Company...................................................................14
2.1 Introduction of Tung Bach Export Import And Transport Services Trading
Company................................................................................................................... 14
2.1.1 Background of the company.........................................................................14
2.1.2 Mission, function and core values of Tung Bach company..........................15
2.1.3 Organization.................................................................................................16
2.1.4 Personnel......................................................................................................18
2.1.5 Facility.........................................................................................................19
2.1.6 Functions of Tung Bach Export Import And Transport Services Trading
Company...............................................................................................................19
2.1.7 Analysis of business result of Tung Bach Export Import And Transport
Services Trading Company during the period from 2013 to 2015……………21
2.2 Freight forwarding process of imported FCL cargoes in Tung Bach Export
Import And Transport Services Trading Company....................................................25
2.2.1 Negotiate and sign the contract....................................................................25
2.2.2 Receive and check the documents from importers.......................................27

2.2.3 Receive notification of arrival of goods.......................................................27
2.2.4 Exchange B/L and take D/O at shipping agent.............................................27
2.2.5 Carry out customs clearance for the import goods.......................................27
2.2.6 Exchange D/O for delivery note and pick up goods.....................................29
2.2.7 Deliver containers to the imported warehouse..............................................30
2.3 Evaluation the freight forwarding process of imported FCL cargoes at Tung
Bach Company………………………………………………………………......30
Chapter III: Recommendation to improve freight forwarding process of imported
cargoes in Tung Bach Export Import And Transport Services Trading Company.........34
3.1 General evaluation of Tung Bach company........................................................34
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
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3.1.1 Advantages...................................................................................................33
3.1.2 Disadvantages...............................................................................................35
3.2 Goals and directions for Tung Bach company in the future................................36
3.2.1 General solutions for the company...............................................................37
3.2.2 Solutions for infrastructure...........................................................................38
3.2.3 Solutions for human resources.....................................................................39
3.3 Recommendation of the company to improve freight forwarding process..........39
3.3.1 Recommendation for reducing cost of providing services............................39
3.3.2 Complete online business capabilities..........................................................40
3.3.3 Participate in professional associations organizations..................................40

3.3.4 Closely cooperate on information……………………………………….41
3.3.5 Creat a hightly professional style in serving customers...............................42
Conclusion.................................................................................................................... 43
Reference...................................................................................................................... 44

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

INTRODUCTION
Necessity
Transportation is the life-blood of the economy, transport development will
motivate other economic sectors develop. In the era of modernization and
globalization today, transportation plays a very important role, especially maritime
transport. Thanks to marine transportation, the economic sector of countries can link
to each other, close the gaps on geographical space, reducing significantly
production cost as well as product prices, creating big profits not only for a certain
country but also for regions and even the world.
In international trade, maritime transport plays an extremely important role.
According to the International Maritime Organization (IMO), “Maritime transport is
essential to the world’s economy as over 90% of the world’s trade is carried by sea
and it is, by far, the most cost-effective way to move goods and raw materials
around the world” [CITATION IMO \y \t \l 1033 ]. Therefore, shipping becomes
one of the most potentail business serviecs in Vietnam recently, and has developed

more service segments to serve better for customers.
Along with the development of maritime industry, freight forwarding services
also attract more attention and become one of the indispensable services of all the
shipping companies. During practice at Tung Bach Export Import And Transport
Services Trading Company, along with the knowledge I have learned in school, I
noticed that freight forwarding is as the core of all foreign trading activities.
Enterprises want to achieve good results, obtain much profit required to perform
well the process of freight forwarding cargoes. Standing in front of this trend, Tung
Bach Export Import And Transport Services Trading Company, as well as countless
other businesses, need to prepare a good knowledge, professionalism and quality of
service to meet the high demands of our customers, especially with freight
forwarding process of imported cargoes of the company - one of the key services.
Understanding the importance of this issue, I chose topic “Recommendation to
improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company” as my dissertation’s topic.
Research object
Research object of the dissertation is the process of freight forwarding imported
cargoes at Tung Bach Import Export And Transport Services Trading Company.
Besides, the research also gave an assessment of the business situation of company
in terms of logistic and freight forwarding in recent years. Thereby can evaluate the
strengths and weaknesses in freight forwarding services, and then come up with
solutions to improve the quality of service and meet the customers’ needs which is
suitable with the current situation.

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

Research Scope
Due to the limitation of time and knowledge; therefore, the research scope is:
-

Location: Tung Bach Import Export And Transport Services Trading
Company in Hai Phong

-

Research field: Freight forwarding services

-

Research space: the foundation, development and business operation of
intership company, evaluation the process of freight forwarding imported
cargoes; recommendation based on strengths and weaknesses of the process
implementation during the training time at company.

-

Research time: from 2012 to 2015

Research findings
During the time as a trainee at Tung Bach Import Export And Transport Services
Trading Company, figures and data are provided by the accounting department of
the company. Besides, in a month working as a freight forwarder, the knowledge

gained through mostly from working practical, and a part was from the experience
and the guidance of staff in the company.
On the other hand, information as well as some knowledge and concepts to be
mined from trusted sources on the Internet to help get more complete study.
During the training time at Tung Bach Company, as a forwarder, I realized some
noticable internal problems of freight forwarding process of the company which
affect the efficiency of the whole process. Along with my experience and the help of
the company’s staffs, I have come up with several recommendations to improve
freight forwarding process to improve profitability and reputation of Tung Bach
Company

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

CHAPTER I: FOUNDATION OF FREIGHT FORWARDING
1.1.

Freight forwarding and operation

1.1.1 Foundation of Freight forwarding
Outstanding feature of international trade is that buyers and sellers are in
different countries. After signing the contract, the sellers will deliver the goods,
which means that goods are transported from one country to other countries. To let

the transportation process perform completely, it requires a series of activities
related to the shipping process including packaging, storage, transfer goods to the
port, implement the shipping procedures, handling goods, and reach recipients.
According to FIATA, “Freight forwarding services means services of any kind
relating to the carriage, 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” [ CITATION FIA \l 1033 ]
According to Article 163 of the Vietnam Commercial Law, issued on May 23 rd,
1997, freight forwarding services are as commercial practices, whereby freight
forwarders receive goods from sender, and then organize transport, storage,
warehousing, do paperwork and other services related to delivery to the recipient
under the mandate of shippers, carriers or other people who do freight forwarding
services.
Briefly, freight forwarding is a set of operations and processes related to the
implementation of transport to ship goods from the shipper (consignor) to the
destination (consignee). Forwarders can make the service either directly or through
an agent and hire the services of other third parties.
1.1.2 Enterprises engaged in freight forwarding
According to the government decree on the conditions for maritime service
business, issued on March 19th, 2001 (effective after 15 days from the date of
signing), enterprises have following registered business lines can engage in foreign
trade freight forwarding
1.1.2.1 Agency services for sea transport
Agency services for sea transport is service to perform the following tasks under
the entrustment of goods owners:

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

-

Organizing and carrying out works which support transport process, freight
forwarding, transportation of passengers and baggage on the basis of contract
of carriage by sea or multimodal transportation contract.

-

Rental sea transport means, handling facilities, warehouses, wharves, jetties
and other specialized maritime equipment.

-

Working as container agent

-

Resolving other matters as authorized

1.1.2.2 Maritime brokerage services
Maritime brokerage service is a service implemented the following tasks:
-


Being a broker in marine contracting

-

Being a broker in signing other contracts relating to maritime activities
required by trustees in each specific contract

-

Being a broker in signing chartering contract, purchasing ships contract,
towage contract, leasing and crew contract

1.1.2.3 Cargo tallying services
Cargo tallying service is service responsible for tallying/counting the actual
quantity of goods upon delivery or with the ship or other means under the
entrustment of the shipper, consignee or carrier.
1.1.2.4 Cargo handling services
Cargo handling services at ports perform work of loading and unloading of
goods at the port according to the technological process of loading and unloading of
each certain commodities.
1.1.3 Legal basic, rules of freight forwarding
Freight forwarding of export and import should be based on a legal basis, as the
international law (924 International Convention for the Unification of Certain Rules
of Law relating to Bills of Lading and Protocol of Signature, 1978 United Nations
Convention on the Carriage of Goods by Sea, 1980 United Nations Convention on
Contracts for the International Sale of Goods…), the legal documents of Vietnam
regarding freight forwarding, commercial contract types and letters of credit (L/C),
to ensure the rights of goods owners.
The State of Vietnam has issued many legal documents relating to transport,

freight forwarding as 330CP decree ... and Maritime Code 1990, Decision
No.2073/QDGT dated 6-10-1991 of Ministers Ministry of transport and postal. The
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

current text stipulates the principles of freight forwarding at Vietnamese Port as
following:
-

The delivery of goods at the port is conducted by port, based on contracts
signed by the shipper, or his delegate (forwarding company) with Port

-

If cargoes are not stored at port, goods owners or his delegate can dirrectly
work with carrier (ships). Thus, shippers must settle directly with the ship,
only make agreement with port about handling locations, handling fees and
other incurred costs

-

Cargo handling services within the port are implemented by port. If the
goods owners want to take the means and workers into the ports for loading

and unloading goods, owners must make a deal with the port and pay the
relevant fees for the Port

-

When being delegated to receive goods from ships, Port will use the same
method with both 2 process: receipt and delivery

-

The consignee must produce the valid documents, certifying the right to
receive goods and must receive continuous in a given period of time

-

Port is not responsible for the goods when they have been taken out of the
warehouse, yard

1.1.4 Types of freight forwarding
1.1.4.1 Services on behalf of the shipper (exporter)
Forwarders with the specific agreement will help their customers (exporters) all
of the following:
-

Choose transport routes

-

Rent packing place following the request of the carrier


-

Deliver and issue the relevant documents

-

Search the conditions of the letter of credit (L/C) and other documents of
government legislation relating to carrying goods of exporting country,
importing countries, including the transit countries, as well as prepare the
necessary documents

-

Packaged goods (except when goods are packed before delivering to the
recipient)

-

Advice to exporters on the importance of cargo insurance

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company


-

Prepare warehouse for storing goods, weighing goods (if necessary)

-

Transport goods to ports, conducted through the procedures of fees in
customs supervision area, port authorities and then deliver to the exporter.

-

Receive B/L from the carrier, then deliver to the exporters

-

Monitor the movement of goods to the port of destination by contacting the
carrier or forwarding agent abroad

-

Note about the loss or damage to goods (if any)

-

Help the exporters in the complaint for damages, loss or damage of goods

1.1.4.2 Services on behalf of the consignee (importer)
Forwarders with the specific agreement will help their customers (exporters) all
of the following:
-


Monitor the movement of goods in case the importer is responsible for
shipping costs

-

Receive and examine all documents relating to the carriage of goods

-

Merchandise from carriers

-

Prepare documents and pay the fee for customs supervision, as well as other
related fees

-

Prepare transit inventory if necessary

-

Deliver goods to the importer

-

Help the importers in the complaint for damages, loss of cargo

1.1.4.3 Other services

In addition to the above services, the forwarder also provide other services as
requested by the customer as consolidation service, advising customers on new
markets, competitive situation, the export strategy, the appropriate delivery
conditions
1.1.4.4 Specially freight forwarding services
Freight forwarders usually take the responsibility with vast variety of goods such
as finished products, dry goods, semi-finished products and other miscellaneous
commodities exchanged in international trade. These kind of goods are frequently
transported by 2 above ways (Services on behalf of the shipper and Services on
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

behalf of the consignee); however, according to customer demand, freight forwarder
also can do other services related to special merchandise and some may specialize
in doing above services. Special cargoes such as:
 Shipping goods for the project
This work is mainly related to transport machinery,
build major projects such as airports, chemical
refineries ... from the place of production to the
movement of goods should be carefully planned to
time and may have to use heavy cranes, over-sized
vessels. This is a specialized field of logistics.


heavy equipment ... to
plants, power plants,
construction site. The
ensure the delivery on
truck, special types of

 Overseas exhibition
Freight forwarders are usually assigned by exhibition organizer for
transporting cargoes to the exhibition place in other countries. Freight
forwarders must comply with the special instructions of the exhibition
organizer on transport means, the specific location of customs procedures at
destination, and the documents required.
1.2

Freight forwarder foundation and duties in the international trade

1.2.1 Foundation of freight forwarder
According to FIATA (freight exports curriculum - ASS Prof., Dr. Hoang Van
Chau), a freight forwarder is who endeavored goods tranported under trust contract
and act for the benefit of the trustee that this freight forwarder is not a carrier.
Freight forwarders also undertake all the work related to delivery contract such as:
preservation, storage, transshipment, customs procedures, goods inspection.
According to Article 164 Vietnam Commercial Law, freight forwarder is trader
who has certificate of business registration of forwarding service. Freight forwarder
might be:
-

Owners: when the owners take the responsibility of forwarding activities
with their owner goods


-

Shipowners: when shipowners behalf shippers perform forwarding tasks

-

Agents, handling companies or warehouse, professional freight forwarder or
any other person have a business registration in freight forwarding service

In short, freight forwarder who is operating under trustee contract, to protect the
interests of shippers. Freight forwarders are responsible for transporting goods but
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
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not necessarily a carrier, freight forwarder only perform actions within the
delegation of shippers.
1.2.2 Role, duties and powers of freight forwarder
1.2.2.1 Role of freight forwarder
The development of freight forwarding industry led to the development of the
infrastructure system, especially infrastructure projects directly serving freight
forwarding such as ports, roads, rivers, railways, airports…
Freight forwarders are both multi-modal carrier and organizer, the “architect” of
transport. Freight forwarders are responsible for choosing the means of transport,

the proper transport, proper roads effectively stands out the most economical
Along with the development of international trade and technological progress in
the transportation industry, nowadays, freight forwarding companies play important
role in international transport.
They not only take the responsibility for customs clearance or charterer but also
provide full service to the whole process of transportation and distribution of goods.
In detail, freight forwarding companies have done the following functions:

ii.

-

Customs brokers: freight forwarding companies on behalf of the exporter or
importer to declare complete customs procedures or customs broker

-

Agent: companies are entrusted by shipper or carrier to perform various tasks
such as receiving, shipping, storage following the contract

-

Transshipment and on-carriage: when goods need to be transported to a 3 rd
country, freight forwarding companies are responsible for completing the
necessary formalities for goods to the final destination.

-

Warehousing: in the case of goods to be stored prior to export or import,
freight forwarding companies will take care of it by their own means or hire

other party and even distribute goods if necessary.

-

Consolidator: in transport goods by container, consolidation is indispensable
to turn LCL (less than container load) into FCL (full container load).

-

Carrier: forwarding companies sign the contract with shippers and be in
charge of transporting goods from one place to another place. Companies are
considered as contracting carrier if they signed the contract without
transportation; and if they directly transport goods, they are considered as
performing carrier.

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
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-

Multimodal Transport Operator – MTO: provide transportation services went
smoothly, also known as door to door services. MTO is actually the carrier usually carrier under contract and be responsible for goods.

1.2.2.2 Obligations and powers of freight forwarder
Obligations and powers of freight forwarder specified in Article 167 in Vietnam

Commercial Law:
1. Enjoy service charges and other reasonable expenses
2. Fully implement obligations under the contract
3. During the performance of contracts, if any plausible reason for the benefit of
clients, freight forwarder can do other than the customer's instructions, but to
immediately notify the customer unless agreement
4. After signing the contract, in case of if any failure to implement a part or
whole of the customer's instructions, they must immediately notify the
customer for additional indications
5. In case no agreement on a specific period fulfill the obligations to customers,
they must perform their duties in a reasonable limit
6. To undertake the freight forwarding tasks, they must comply with the law and
practices of specialized transport
1.2.2.3 Liability of freight forwarder
Article 70 of Vietnam Commercial Law regulates the liability of freight
forwarder as follow:

ii.

-

Liability of freight forwarder in any case should not exceed the value of
goods; unless the parties make agreement in the contract.

-

Freight forwarders are not exempt from liability if they can not prove that
loss, damage or delay in delivery is not caused by theirs fault.

-


Compensation is calculated on the basis of the value of goods on the bill and
other amounts have valid documents. If the bill does not have value of goods,
compensation is calculated based on the value of goods at the place and time
they are delivered to customers at market prices; if there is no market price,
the amount of compensation is calculated according to the price of goods at
the same kind and quality

-

Freight forwarders are not responsible in the following cases:
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
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 Freight forwarders do not receive notice of appeal within 14 days of
delivery, excluding Sundays and holidays
 Do not receive notice in writing of the defendant of the court within a
period of 9 months from the date of delivery.

1.2.2.4 Liability exemption of freight forwarder
According to Article 169 of Vietnam Commercial Law, freight forwarders are not
responsible for loss, damage or incurred in the following cases
-

Due to the fault of customer or the customer's authorization


-

Forwarders have to comply with the instructions of the customer or the
customer's authorization

-

Customer packages and coding incorrectly

-

By errors of commodity

-

Due to the strike

-

Force majeure cases

1.3

Freight forwarding process

1.3.1 Duties of parties involved in freight forwarding process
1.3.1.1 Duties of Port

ii.


-

Contracting of handling, delivery, preservation and storage of goods with
shippers

-

Loading exported goods into ships and unloading imported goods from ships

-

Prepare necessary documents in order to protect the rights of foreign shippers

-

Deliver imported goods to domestic shippers on behalf of importers

-

Perform handling, shipping, storage and preservation of goods in port areas

-

Take the responsibility for cargo damage caused by Port during process of
transportation, handling

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
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-

Take the responsible for the loss and damage of goods storaged at Port and
pay compensation to shippers if any valid records and if the Port does not
prove that they have no fault

-

Port is not responsible for the goods in the following cases:
 Once goods removed from Port yard or warehouse
 Goods are still inside the pack, the seals still intact
 The code of goods wrong or unclear (leading to confusion or loss)

1.3.1.2 Duties of shippers
-

Sign the entrusted forwarding contract with port in case of goods go through
the Port

-

Conduct freight forwarding procedure

-


Make the contract of handling, tranportation, preservation and storage of
goods with Port

-

Provide Port information about goods and ships

-

Provide Port necessary documents to perform forwarding process

-

Monitor forwarding process to solve inccured problems

-

Set necessary documents during the process of forwarding to complaints
involved parties

-

Pay the fees for Port

1.3.1.3 Duties of customs

ii.

-


Conduct custom procedures, perform the inspection, supervision with
imported exported goods and ships

-

Ensure the implementation the processes of State of export and import, the
export tax, the import tax…

-

Undertake measures to detect, prevent, investigate and handle acts of
smuggling, trade fraud or illegal transportation of goods, foreign exchange,
Vietnamese currency through port.
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
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1.3.2 Shipping goods methods
1.3.2.1 Full Container Loaded (FCL)
With FCL, if an exporter has goods in one full container load, he books an FCL
(Full Container Load) to contain his cargo, it means that the container owns by one
shipper. “In an FCL owned by one shipper, the cargo in the container need not have
fully loaded cargo in the container. Let the cargo be half loaded or quarter loaded
container, if booked by one shipper under one shipment, the said shipment is called
FCL shipment”[ CITATION Dif15 \l 1033 ]
FCL includes common goods such as 20’/40’/40 HC…

When sales FCL goods, it is necessary to notice following points:
-

Check if any handle agents at destination port

-

Check with customers the method of paying fee whether collect or prepaid

-

Check at least 3 carriers with the destination port as the main port to ensure
the best rate. Advise customers on related services such as: customs
clearance, packaging, transportation, inspection…

1.3.2.2 Less than Container Loaded (LCL)
With LCL, if a shipper does not have enough goods to contain in a full container,
he arranges with a consolidator to book his cargo. The consolidator will arrange a
full loaded container (FCL) with a main shipping carrier, and collect more
shipments of other shippers to hold in one full container. It means that this full
loaded container (FCL) now does not belong to only one shipper. The freight
forwarder takes the responsible for sorting out differnt goods of different shippers to
the right transhipment place or final destination, avoid the confusion in the process
of transporting goods. Once goods are shipped to the right destination, each
consignee will collect their shipments differently and pay for the different charge if
any
When sales LCL goods, it is necessary to notice following points:

ii.


-

Check if any handle agents at destination port

-

Check with customers the method of paying fee whether collect or prepaid

-

Check at least 3 co-loaders to ensure the best rate for the whole process of
shipping

-

Advise customers on related services such as: custom clearance, packaging,
domestic transportation, forwarding method at destination port
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

1.3.2.3 Combination method (FCL/LCL and LCL/FCL)
This method is a combination between 2 different method: LCL and FCL. It
depends on specific conditions, shippers can make a deal with carrier to perform the
better way of transportation.
When delivering goods by combination method, responsibilities of shippers and

carriers also change to adapt the situation
1.3.3 Criterion for evaluating the freight forwarding process of imported FCL
cargoes
1.3.3.1 Timing
In freight forwarding industry, timing is a criteria which is considered as one of
the most important factors to evaluate process. Implementation time must be stated
within the expected time mentioned in the contract has been signed earlier to avoid
additional costs and referendum. As usual, a process of freight forwarding will be
completed in an average of 3 days, except in cases customs ramification is to the red
line, time will take an additional 2 to 3 days. To ensure good operation time, the
departments in freight forwarding companies required the close cooperation in order
to timely and quickly process of necessary documents and data for the forwarding
activities in ports and customs area.
Time has also been influenced by the transportation of goods from the ports to
the importer's warehouse. During this process, it can occurs several incidents of
truck machines as well as several accidents causes delays in getting container to
warehouse.
1.3.3.2 Safety during the transportation of cargoes
Safety should be considered carefully because it affects the reputation of freight
forwarding companies as well as affects the importers. What should be concerned
most is about the safety in the process of transporting container by vehicle’s fleet.
Sometimes technical errors or accidents are inevitable, but it will impact the time of
using products of the importers, even causing undue damage, influence seriously
problems for both sides. Therefore, vehicle’s fleets of companies should have strong
experience in the transport of long distance and vans should be checked regularly in
order to minimize accident probability.
1.3.3.3 Efficient use of human resources
In order to perform a complete freight forwarding process, requiring the
involvement of many different departments such as the accounting department
which is responsible for calculating the costs of forwarding, forwarding department

is solving the papers and referendum, trucking department will arrive cargoes to the
final destination. Thus, the link between human resources between departments is
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

very important, and the amount of manpower needed to maneuver is also a matter of
concern.
Depending on the amount of paperwork that must be treated and the volume of
work, the staffs are not so many to avoid redundancy in terms of manpower,
however, the staff are also not too few which leads to overload of employees as well
as delays in business operations.
1.4

Essential documents in freight forwarding cargoes

1.4.1 Bill of lading (B/L)
Bill of lading is an important document, it is evidence that the carrier has
received the goods as stated for transportation to the place of delivery.
The principal use of the bill of lading is as a receipt issued by the carrier once the
goods have been loaded onto the vessel. This receipt can be used as proof of
shipment for customs and insurance purposes, and also as commercial proof of
completing a contractual obligation
Bill of lading is set when the shipper requests ship owner transport goods from

one place to other places by sending booking note. If the carrier agrees to transport
goods, they will issue a bill of lading to the consignor, that means all the
responsibilities to transport goods belong to ship owner.
1.4.2 Certificate of origin (C/O)
C/O is a paper on the place of production of goods. This document is necessary
for the customs authorities to apply the tax preferential regime according to state
policies. It is also important for the monitoring of quotas, reflecting the quality of
goods because local characteristics and production conditions affect the quality of
goods
C/O is set after completing customs formalities, the goods have been loaded and
got the original bill of lading. C/O is issued by the Commerce and Industry
department, on the basis of the manufacturer's declaration. C/O can be also issued
by manufacturers to certify the origin of goods. The records needed to obtain C/O
including:
-

01 original declaration

-

Original bill of lading

-

01 packing list
01 commercial invoice

1.4.3 Commercial invoice
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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export
Import And Transport Services Trading Company

This is paper set by the seller requires the buyer to pay the amount of money that
printed in bill. Commercial invoice includes specific information of products such
as: quantity of goods, description of goods, purchasing price, country of origin,
transport cost, etc. Setting commercial invoice based on contract between 2 parties
and packing list
1.4.4 Packing list
Packing list is a declaration of all goods contained in a shipment. Packing list is
required when packing goods. Packing slips placed in containers so that buyers can
easily find, also can be placed in a bag attached to the outside of the packaging.
Packing list includes name of seller and buyer, name of goods, contract number,
number of L/C, name of ship, date of loading, port of loading, port of unloading, the
number of shipments, cargo weight, the volume of shipments, the container
number...Packing list is very useful for the verification of goods

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Recommendation to improve freight forwarding process of imported cargoes in Tung Bach Export

Import And Transport Services Trading Company

CHAPTER II: FORWARDING PROCESS OF IMPORTED
CARGOES IN TUNG BACH EXPORT IMPORT AND
TRANSPORT SERVICES TRADING COMPANY
2.1 Introduction of Tung Bach Export Import And Transport Services Trading
Company
2.1.1 Background of the company
Tung Bach Export Import And Transport Services Trading Company – which is
located at room 101, first floor, The New Petrolimex Building, 441 Da Nang street,
Dong Hai I ward, Hai An district, Haiphong city, Vietnam - is the new company in
Forwarding industry, but the company has experienced rapid and strong growth in
recent years
Tung Bach Export Import And Transport Services Trading Company was
established and started to operate on March 22 nd 2012. Since the day of
establishment, company has been pursuing the spirit of being very client-oriented
and providing comprehensive services. Especially, company has offered tailor-made
service and professional suggestions to meet customers’ satisfaction on logistics
aspects.
As a limited company, at the beginning, Tung Bach Company was facing with
many difficulties in competing with the older shipping companies which are
available on the long-standing reputation. Besides, as a small and start-up business,
the company also faced difficulties in administration management and risk-control
ability which were not truly effective, documents and workflow were not really
synchronized. However, along with an understanding of the transport market as well
as a smart business strategy, the company has achieved initial development.
Up to now, after 4 years of operating, Tung Bach Export Import And Transport
Services Trading Company is an independent organization, qualified legal,
independent accounting business, able to open a bank account and use the seal as
prescribed by state.

Business scope of the company is very wide, including 33 different industries
(according to business registration). However, company is only specializing in
providing high quality shipping services such as shipping agent, supply
crewmember, transport, forwarding services and logistics. The company is
strengthen its ties in different shipping companies in the area such as China,
Taiwan, Japan, Korea, Singapore and even other regions like European countries to
cope up the needs of customers across Asia. The company also provides customers
in both the quality of services and competative prices in terms of general services.
On the other hand, the company’s reputation as a reliable, creative supplier is built
by experience and extensive knowledge in the field of Shipping Services and
Forwarding.
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