MINISTRY OF TRANSPORTATION

MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: TRAN THI HA MI

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVE SERVICE QUALITY FOR
EXPORT CARGOES AT CONTAINER FREIGHT STATION OF THE
TRANSPORT AND CHARTERING CORPORATION-HAIPHONG
BRANCH

HAI PHONG – 2015


PREFACE
The dissertation is a result of my three-month internship at Vietfracht
Transport and Chartering Corporation, Hai Phong branch. In this period, I had a
chance to observe and learn practical knowledge at Vietfracht CFS warehouse.
Thus, it helps me to bridge the gap between theory and reality and acquire useful
experience for my future career. Finally, I decided to do research on how to
improve CFS services for exported cargoes. During the period, the dissertation
would not have been completed if I did not received support of Vietfracht Transport
and Chartering Corporation, Hai Phong branch. Therefore, I would like to express
my grateful to them. Besides, I would like to sincerely thanks to Msc, Vu Thanh
Trung for his guidance and support when I wrote this dissertation.
My dissertation includes three main chapters:

CFS main activities ..............................................................................3

1.1.4.

Types of store cargoes ..........................................................................4

1.1.5.

Conditions to CFS establishment..........................................................5

1.1.6.

CFS functions ......................................................................................5

1.1.7.

Customs supervision ............................................................................6

1.2.

Service ........................................................................................................6

1.2.1.

Definition .............................................................................................6

1.2.2.

Service quality .....................................................................................6


2.1.1.

General information ........................................................................... 12

2.1.2.

The history of foundation and development ....................................... 12

2.1.3.

Main services ..................................................................................... 13

2.1.4.

Organization structure of Transport and Chartering Corporation ........ 14

2.2.

Introduction of Vietfracht Hai Phong ....................................................... 15

2.2.1.

General information ........................................................................... 15

2.2.2.

Organization Structure of Vietfracht Hai Phong .................................15

2.2.3.



Recommendations to improve service quality for export cargoes at CFS ..34

3.1.1.

Updating facility and equipment ........................................................ 34

3.1.2.

Calculating productivity and allocating work ..................................... 34

3.1.3.

Focusing on recruiting and training activities ..................................... 35

3.1.4.

Regularly receiving feedbacks and updating services ......................... 36

3.1.5.

Urging vendors/ factories to delivery cargoes on time ........................ 36

3.1.6.

Establishing the List of Documents in use .......................................... 37

3.1.7.

Establishing and practicing emergency plan ....................................... 37


CY

Container Yard

ETD

Estimated Time of Departure

SERVQUAL

Service and quality

SERVPER

Service and performance

SD

Standard Deviation


LIST OF FIGURES
Figure 2.1: Organization structure of Transport and Chartering Corporation ........ 14
Figure 2.2: Organization Structure of Vietfracht Hai Phong ..................................... 15
Figure 2.3: Forklift truck ...................................................................................................17
Figure 2.4: Reach Stacker .................................................................................................17
Figure 2.5: Hand pallet truck ............................................................................................ 18
Figure 2.6: Container truck ............................................................................................... 18
Figure 2.7: Vietfracht CFS output from 2012 to 2015 ................................................ 19

topics “Recommendations to improve service quality of export cargoes at Vietfracht
CFS” can contribute for the development of Vietfracht CFS as individual and
container freight station as a whole.
Research Purpose
The purpose of my research is taking a closer look at How VF CFS provide
services for export cargoes. After gaining the insight in this, some recommendations
to improve the quality service for export cargoes will be suggested. During the
research period, I strive to look for appropriate model to measure the service quality
that VF CFS has provided for customers. Especially I focus on studying to improve
service quality for exporting cargoes in order to more feasible recommendations.
Some hidden weaknesses may be revealed by under sending the survey to CFS
customers. Through this research, I have a valuable opportunity to not only acquire
practical knowledge but also skills about how to conduct a research.
Research Scope
The internship took place in Vietfracht CFS for export cargoes. During this
internship, I have chance to learn about services that CFS provides for their

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customers. The dissertation focuses on evaluation of services quality with strengths
and weaknesses of services for export cargoes.
The dissertation was carried out from August, 2015 to October, 2015. The
work was done in three-month period including with taking an internship, choosing
topic of dissertation, collecting information and statistics and writing.

Recommendations to improve service quality for export cargoes at CFS of The Transport and Chartering
Corporation – Hai phong branch

CHAPTER 1: LITERATURE REVIEW
1.1. Container freight station
1.1.1. Definition
According to business dictionary, container freight station can be simply
defined as “port facility for loading and unloading containerized cargoes from or to
ship” (Dictionary)
Another definition is that “Container Freight Station (CFS) means the
location designed by the Carrier or his authorized agent for the receiving of goods
to be stuffed into containers or for the delivery of goods stripped from containers by
the Carrier or his authorized agent” (OOCL)
CFS locates in the locations where import/ export cargoes can be easily
loaded/unloaded, consolidation and deconsolidation for transportation to
destinations. In order to establish this warehouse, firm need to granted licenses to
operation because CFS warehouse is under the strict control and supervision by
custom authorities.
1.1.2. The importance of container freight station
We have lived in global village where trading between countries and regions
grow exponentially. A great volume of goods transported to ports have caused bad
congestion in ports. Another justification is a long waiting time for customs
clearance. This delay time will add up the cost of sea transportation.
Container freight station is established as convenient location to
consolidation and deconsolidation, temporary storage, customs inspections…hence
CFS helps to accelerate the flow of containers and cargoes, facilitate the port
operation, increase productivity and reduce port congestion.
1.1.3. CFS main activities
Main activities in CFS are receiving, put away, storage, picking, packing and
shipping.

confirmation, invoicing, sealing, staging and loading. Cargoes are gathered
together, checking, invoicing, and loaded to customers‟ vehicles by using handling
equipments.
1.1.4. Types of store cargoes
According to Article 61 in 2014 Customs Law, there are two main types of
cargoes which are allowed to store in CFS (Container Freight Station). Firstly, it is
imported cargoes which have not yet finished customs clearance. Secondly, it is
exported cargoes which have completed customs clearance or registered custom
declaration but have not been under custom inspection.
However, Container Freight Station often refers as a place dealing with LCL
cargoes which stands for Less Than Container Load. LCL cargoes are cargoes
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which are not enough to full a container so it can be joined with other LCL cargoes
in order to save transportation cost.
1.1.5. Conditions to CFS establishment
According to Article 62 in 2014 Customs Law (Government, 2015), bonded
warehouse or cargo consolidation locations are constructed in following area:
- Seaports, international airport, domestic port for exporting and importing
cargoes, gate road, international railway station
- Industrial zones, High-Tech zones, the non-tariff zones and other areas as
prescribed by law.
According to the Decree 08/2015/NĐ-CP, government regulates about CFS
establishment

1.1.7. Customs supervision
In the Circular 38/2015/TT-BTC (Government, 2015), there is regulation
about the supervision of customs in CFS
In term of exported cargoes, customs employees in CFS will check and
compare the ion in Customs systems with cargoes brought into CFS. In term of
imported cargoes, customs employees in CFS will supervise imported cargoes in
accordant to transportation declaration and bill of lading of cargoes. Services
performed in CFS must be subject to supervision by the customs authorities. CFS
operators have to inform customs the current status of cargoes and the business of
CFS every 3 months.
1.2. Service
1.2.1. Definition
First of all, it should be noted that there are many different ideas and
definitions about services. General, service is often referred as intangibility.
According to (Kotler, 2003), service can be defined as any behavior or act in a
contact between two parties: the provider and the receiver. Walfried (Walfried M.
Lasser, 2000) saw service as a set of characteristics that meet the clients' needs,
reinforce the links between the organization and them, and improve the clients'
value as well.
1.2.2. Service quality
Measuring service quality has been one of the most heated topics to many
scholars over decades due to the prevalence and developments of service in a wide
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individually and showing sympathy and affection.

Based on SERVQUAL model, Cronin and Taylor (J.J. Cronin, 1992)
proposed new model SERVPER (Service performance) to simplify the
measurement of service quality. Cronin and Taylor claim that service quality can be
measured by the actual performance of service instead of the gap in customer
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expectation of customers and level of current service in Servqual. Cronin argued
that Servqual model of Parasuaraman easily misleads between satisfaction and
attitude of customers. It is undeniable that SERVPER is easier to implement ranging
from collecting to analyzing data. SERVPER is also suitable for research which
limits in time and cost. SERVPER uses exact 5 criteria of SERVQUAL which is
listed above.
However, due to the distinct features and characteristics, each type of
business or industry will require different measuring model. Chowdhary and
Saraswat (Chowdhary, 2003) also said that different dimension or criteria should be
applied based on characteristics and purposes of services. Therefore, when
measuring the quality of CFS, I have to take an account of characteristics of CFS
warehouse.

As a critical part in logistics system, CFS warehouse has unique

features of logistics providers.

quality of CFS warehouse. Furthermore, two criteria, time and cost will be added in
order to adequately judge all service aspects that CFS provided. After revising, new
conceptual model for this study is shown in table 1.1
Table 1.1: The model of measuring service quality at CFS.
Factors

Items

Code

Tangibility

CFS‟s facilities are adequate to provide good services
for export cargoes (including warehouse, depot,
office..,)

TAN 1

Equipment of CFS is adequate and up-to-date
(handling equipment, container trucks...)

TAN 2

CFS uses the up-to-date technology in management

TAN 3

Cargoes are stored in appropriate condition and do
not have any damage



Employees have good knowledge and are skillful to
perform tasks

ASS 1

Employees have ability to solve occurred problems
and emergencies

ASS 2

Company regularly receives feedbacks and updates
services according to customer‟s demand

EMP 1

Reliability

Empathy

Furthermore, in order to gain more insight into CFS services, ImportancePerformance Analysis (James, 1977) should be applied. Importance-Performance
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Analysis (IPA) may ask customers about level of importance and performance of

more general ideas in advance, I also interview some employees who are seniors at
Vietfracht CFS. Therefore, they would demonstrate the deep knowledge and
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experience. After carry out the most importance step- sending questionnaires, I
have to define the target population for the research. Target population is
respondents who I can send questionnaires to. Due to the distinct characteristics of
CFS for export cargoes, customers are forwarders who work directly with CFS on
behalf of cargoes owners. Forwarders will take charges of consolidate LCL cargoes
and rent CFS to stuff these cargoes into containers. At Vietfracht CFS, it has only
20 forwarders, so I intend to send questionnaires to all of them. Furthermore, I
strive to send some questionnaires to some cargoes owners but I may require more
effort. In the questionnaire, I ask customers rating the current performance and
importance of each factor in the questionnaire in 5-point scale. With rating
performance, it starts from 1 as “strongly disagree” to 5 as “strongly agree”. With
rating importance, it starts from 1 as “not important” to 5 as “very importance”
with 3 as middle point. Method of sending question is sending directly to
forwarders supervising at CFS or sending through email.
1.3.3. Sampling
The population is defined as 20 forwarders/ companies who directly
working with CFS likes APL logistics, ASAP, Shipco, Dolphin logistics, one world
logistics… As the rule of thumb, with the population under 100, I should strive to
receive from 80 to 100 % of respondent rate.
1.3.4. Methods of data analysis

Vietfracht ís a member of a wide range of prestigious international
organizations like BIMCO (Baltic and International Maritime Council), FIATA
(International Federation of Freight Forwarder Associations), FONASBA (The
Federation of national associations of shipbrokers and agents), FASA (The
Federation of Asean Shipowners‟ Associations). Vietfracht is also one of founding
members of VSA( Vietnam Shipowners Association), VISABA (Vietnam Ship
Agents and Brokers Association),VIFFAS (Vietnam Freight Forwarder
Association), VCCI (Vietnam Chamber of Commerce and Industry)…With more
than 50 years of experience and growth, Vietfracht was known as one of the most
Vietnam maritime companies locally and internationally. As the acknowledgement
of Vietfracht‟s dedication, the state and government awarded the company with
honor titles like First Class Labour Medal, Third Class Independent Medal and
Labour Heroic Unit.
In 2005-2015 periods, Vietfracht defines its objective “to boost company to
higher level”. Vierfracht strives to expand its businesses, diversify of services, focus
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on human resource and upgrade the means of transportation, improve infrastructure
and information systems and participate in contributing capital for the establishment
of joint stock and subsidiary companies.
2.1.3. Main services
 Ship owning
Vietfracht has owned and exploited the dry cargo fleet with the capacity of
about 20000 DWT operating in Asian Pacific routes. Vietfracht has over 40 years of

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 Freight forwarding and assembling equipments for projects and factories
 Consolidation and distribution services
 Warehousing and trucking
Vietfracht has network of modern warehouses in the several cities of
Vietnam such as Hai Phong, Binh Duong province; Ho Chi Minh City…
Transportation fleet operates on time and safety which helps to move containers
from container yards to warehouses and vice verse.
 Shipping agency
Vietfracht is operating as ship agency for many shipping lines all over the
world. The company has dealt with many types of vessels such as bulkers, dry
carriers, reefers, tankers, ro-ro, cruide oil carrier and containerships. Vietfracht
provides a wide range of services including inward and outward procedures for
vessels, stevedoring, ship repair and maintenance, crewing, food and equipments
provider for ships. Company also offers package services in protecting agency, local
husbandry, cargo canvassing, information agency system, booking and marketing.
2.1.4. Organization structure of Transport and Chartering Corporation

Figure 2.1: Organization structure of Transport and Chartering Corporation

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Ship Agent
Department

Depot

Human
Resource
Department

Trucking

Accounting
Department

Procedure Team

Figure 2.2: Organization Structure of Vietfracht Hai Phong
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2.2.2.1.

CFS employees






Workshop area: 400 m2
Depot: 20000 m2 with capacity of more than 1000 containers
Camera system operating 24/24
Modern and synchronous handling equipments

2.2.4. CFS facilities
2.2.4.1. Handling equipment
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a. Forklift truck
There are 4 forklift trucks which are used in warehouse with capacity being 4 T

Figure 2.3: Forklift truck
b. Reach stacker
There are 2 reach stackers in total which are mainly used in depot to lift
containers. Reach stackers have lifting capacity of 45 T

Figure 2.4: Reach Stacker
c. Hand pallet truck
Hand pallet trucks are main equipments to help workers move cargoes