Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

PREFACE
Countries soon realized that foreign trade brings mutual benifitsand at the
same time increase the overall wellbeing of world population. As the living standard
of people increases, so do their demand and purchasing ability for goods and
services. As the result the international trade has significantly increased over the
years. Since most of international trade was carried by seaway, it is undeniable that
the role of ports is becoming more and more important.
As the international trade was motivated, the cargoes flow between countries
increased through years; emphasized theimportant role of ports.
Tomeettheincreasingdemand forcargo transshipments, it is urgent issue to develop
and improve the business efficiency of Vietnam port system. Is a typical port in
HaiPhong, Chua Ve Terminal hascontributed toeconomicdevelopment of Vietnam
and HaiPhong city in particular.
The internship atChua Ve Terminal provided me a good opportunity to
experienced new things as well as reinforce knowledge. Regarding to my
dessertation, from my points of view, observing things, evaluating the company
business efficiency and giving solutions to improve stituation areprimary tendor.

I declare that this report is my own unaided work. It has not been submitted
before.
If violated, I am solely responsible for and bear the punishments of the Institution
and University.

Student Name and Signature

Dang ThiThanhNhan

Dang ThiThanhNhan – GMA02


TERMINAL ...........................................................................................................9
2.1 General information about Chua Ve Terminal ..........................................9
2.1.1 Introduction of Chua Ve Terminal ...........................................................9
2.1.1.1 Introduction of Port of Hai Phong ....................................................9
2.1.1.2 Introduction of Chua Ve Terminal .................................................. 10
2.1.2 Map layout and geographical location of Chua Ve Terminal................. 12
2.1.3 Infrastructure ........................................................................................ 14
2.1.4 Company main services ......................................................................... 15
2.1.5 Organization and functions ................................................................... 15
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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

2.1.5.1 Level 1 Managers ........................................................................... 17
2.1.5.2 Level 2 Professional Division ......................................................... 17
2.1.5.3 Level 3 Operating teams .................................................................18
2.1.6 Personnel .............................................................................................. 19
2.2 Evaluating the business efficiency of Chua Ve Terminal ......................... 19
2.2.1 Evaluating the general situation of the company ................................... 19
2.2.2 Evaluating business efficiency by profit ................................................. 27
2.2.3 Evaluating business efficiency by salary and labor capacity.................. 28
CHAPTER 3: RECOMMENDATIONS TO IMPROVE BUSINESS
EFFICIENCY OF CHUA VE TERMINAL ....................................................... 31
3.1 Vietnam port system’s development planning till 2020 and orientation till
2030 according to Decision no.1037/QD-TTg of Vietnam Prime Minister. ... 31
3.2 Orientation of Hai Phong seaport and the opportunities for Chua Ve
Terminal. .......................................................................................................... 32


LIST OF TABLES AND GRAPHS
Table 1: The ratio of profit to cost............................................................................6
Table 2: the ratio of profit to revenue .......................................................................6
Table 3: The ratio of profit to fixed capital...............................................................7
Table 4: The ratio of handling capacity to labor force ..............................................7
Table 5: The ratio of salary to labor force ................................................................8
Table 6: Port infrastructure .................................................................................... 14
Table 7: Port equipment ......................................................................................... 14
Table 8: Financial result of Chua Ve Terminal 2011-2014 ..................................... 19
Table 9: Cargo throughput of Chua Ve Terminal ................................................... 21
Table 10: Revenue of Chua Ve Terminal 2011 – 2014 (million VND) ................... 24
Table 11: Cost of Chua Ve Terminal 2011 – 2014 (million VND) ......................... 26
Table 12: Ratio of profit to cost/revenue/ fixed capital 2011 – 2014 ...................... 27
Table 13: Labor productivity and salary ratio ......................................................... 29

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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

LIST OF FIGURES
Figure 1: Chua Ve Terminal .................................................................................. 12
Figure 2: Geographic location of Chua Ve Terminal .............................................. 12
Figure 3: Map layout of Chua Ve Terminal............................................................ 13
Figure 4: Company organization ............................. Error! Bookmark not defined.
Figure 5: Financial result of Chua Ve Terminal 2011-2014.................................... 20
Figure 6: Cargo throughput of Chua Ve Terminal in terms of cargo directions ...... 22

It was divided into 3 main chapters:
Chapter 1: Literature review
Chapter 2: Evaluate business efficiency of Chua Ve Terminal
Chapter 3: Recommendations to improve business efficiency of Chua Ve
Terminal
Basic definitions, theories and indicators to evaluate business efficiency
were provided in Chapter 1. Chapter 2 describes the general information about Chua
Ve Terminal and use scientific methods such as analyzingand comparison to
evaluate the business performance of the company. Finally, the recommendations
were given in last chapter.
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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

RESEARCH SCOPE
The research focuses analyzing the financial result results from 2011 to 2014
and real conditions of the company.
The research was carried out in over 1 month in Chua Ve Terminal,
HaiPhong, Vietnam.
RESEARCH FINDINGS
After the research time, I understand more about the situation of the
company. Base on my knowledge and information I collected, some
recommendations were given. I hope it will have some use for the company to
improve its business.

Dang ThiThanhNhan – GMA02


financial costs…Total cost is made up of variable cost plus fixed cost:
-

Variable costs (VC) are the costs that changes as company varies the
quantity of outputs produced (wages, cost of materials…)

-

Fixed costs (FC) are the costs that do not vary based on activities or number
of goods produced, for example rental costs, depreciation.

Determine costs help company adjust price for products and services
appropriately. Lower and save costs in production are important tasks of business,
in order to be profitable. As the result, analyzing and managing costs effectively are
vital for an efficient business.

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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

1.1.3 Profit
Profit is the money that remained after total revenue minus total cost. It is the
final financial traditional aim of business operation and is a basic indicator to
evaluate business efficiency.Profit directly impacts all aspects of business operation
especially financial situation of companies.
1.1.4 Business efficiency
Business efficiency reflects the quality of business performance and how the


Price and consumers: Price, product quality, income, habits and tastes of
consumers are decisive forces in the development or failure of enterprise.
Nature resources: also affects the business efficiency. If a country has
abundant of resource, the cost of raw materials will cheap, lead to the cost of
production decrease, thus increase the profit; improve the competitiveness and
efficiency of business. On the other hand, sometimes natural resource also has bad
impact to a business. For example, the price of material is high because the country
has no resource.
Government policy: government policies ensure a fair environment for every
business models. The companies are responsible for follow the nation as well as
international regulations and laws.
Science - Technology: Technology and science level of company directly
affect its productivity as well as quality of goods, affect the saving of materials.
Technology helps firms eliminate the production cost, thus lower the products price.
However, modern technologies require a huge investment.
Infrastructure: including transportation networks, communication systems,
electricity, water… The firms that located in area has convenient transport systems,
utilities service stable will easier to develop and expand production, lower the cost
and improve business efficiency.
b. Internal factors
Workforce: Labor force is determinant factor for success and failure of enterprise.
They create new products suit consumer tastes and affect the service quality of
firms, thus have directly impact to business performance.
Organization structure: organization structure of a firm is considered as brain in the
body because the impact of organization to business results is enormous. It is the
factor that helps companies overcome others bad elements and impacts. A
inappropriate organization will waste human resources, takes time to make
decisions. In order to running business efficiently, personnel should be well
arranged.

P: Profit

This ratio reflects the how much profit one unit of cost can
generate. The greater the value is, the better the business
performance. If the result is higher than the previous year’s, then
say the company is doing well.

Table 2: the ratio of profit to revenue

The ratio of profit to revenue

𝑈=

Formula

Notes

R: Total revenue

𝑃
𝑅

P: Pre-tax Profit

This ratio shows how much profit a unit of revenue can generate.
If the value of the ratio is higher than previous year’s, then the
Meaning

company operating more efficiently compared to earlier years
and vice versa.

year’s, then the company has not made the best use of resources.

1.2.3 Labor productivity
Table 4: The ratio of handling capacity to labor force

The ratio of handling capacity to labor force (U)

𝑈=

Formula

Notes

Meaning

𝐻𝑎𝑛𝑑𝑙𝑖𝑛𝑔 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝐿

Handling capacity: the
quantity of handled cargoes.

L: Average labor force in certain
period

This ratio reflects the labor productivity, it points out how many
handling capacity perone person in certain period of time. If the
result is higher than previous years, it means the company has
used labor force efficiently.

Dang ThiThanhNhan – GMA02

Dang ThiThanhNhan – GMA02

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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

CHAPTER 2: EVALUATING BUSINESS EFFICIENCY OF
CHUA VE TERMINAL
2.1 General information about Chua Ve Terminal
2.1.1 Introduction ofChua Ve Terminal
2.1.1.1 Introduction of Port of HaiPhong
Trading name: PORT OF HAI PHONG JSC (so-called PORT OF HAI
PHONG)
Location: 20052’N – 106041’E
Address: No 8A Tran Phu, Ngo Quyen District, HaiPhong City, Vietnam
Fax: 84.031.3836943
Email: [email protected]
Website: www.haiphongport.com.vn
Port of HaiPhong is one of the most modern sea ports, traffic hubs of the
North Vietnam. Was built and used since the French colonization with only 6
warehouse and 3 pier, over140 years of development Port of HaiPhong has
expanded and grown. By the end of 2014, the company has managed and exploited
21 piers with total length of 3,546 meters; the output reached 19.6 million tons,
revenue was 1.390 billion VND. At the moment, Port of HaiPhong has over 250
modern cargo handling equipment for serving container operation such as floating
cranes, gantry cranes, portal cranes, rubber-tired gantry cranes, forklifts, reach
stackers… and is capable for ships of 40000DWT.
Along with the development of Vietnam economy and society, especially the
development of maritime services; Port of HaiPhong not only has expanded in


-

Region 2 (Doan Xa area) located far away region 1 a distance of about
1000m to the Dinh Vu. This is a large area but only was used a small part of
about 350m quay and 15000m2 of yard for storing sand stone (construction)
and receiving military goods in wartime.

In 1995, due to requirements for better production, the Terminal split into
two firms: Chua Ve Handling Enterprise and Doan Xa Handling enterprises. Chua
Ve Handling enterprise receivedDoan Xaareaand main facilities.
July 1996, Port of HaiPhongborrowed ODA Capital to expand and
reconstruct CVT for containerized cargoes operation; the total investment cost 40
million USD. Under the Transportation, Vietnam Maritime Administration, and
Port of HaiPhong’s care, CVT expanding follows 2 stages:
-

Stage 1: from 1996-2000: 150m pier, old yard and 40000m2 new yard were
improved and built for operating containerized cargoes, some 3200m2 CFS

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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

warehouse and new constructions serving producing and daily operating also
were erected.
-

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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

Chua Ve Terminal: 20°52’N - 106°43’E
Chua Ve Terminal is located next to Cam River, 4km from the city center to
the east of Haiphong and 20 nautical miles from zero buoys. To access the
Terminal, ships need to go via stream Nam Trieu, Dinh Vu Channel then enter Cam
River. The stream is shallow; the depth is only -8.4, -7.8 or even some area just
reach -5.5m. The depth in front of Quays is -8.5m; however the speed of sediment
has limited the accessibility of CVT. The Terminal can only capable for maximum
10,000 DWT ships.
The layout of Chua Ve Terminal

Figure 3: Map layout of Chua Ve Terminal
(Source: Port of HaiPhong website)

From the map layout, it can be seen that there are 5 wharfs on the terminal
namely Quay 1, Quay2, Quay 3, Quay 4, Quay 5 from left to right. Quay 1 and
Quay 2 uses 5 portal cranes while Quay3, Quay 4 and Quay 5 each has 2 gantry
cranes. However in 2014, 2 Gantry crane were moved out. With 5 piers, Chua Ve
terminal can operate maximum 5 ships at the same time. Lay in the center is the
yard divided into 5 main areas: A, B, C, D and E. Each area divided into blocks and
each block is for different purpose; for example are A includes block AA, AB, AC
and AD. Block AA, AB used to store bulk cargoes while AC stores exporting
cargoes and AD for dangerous and importing cargoes that left in a long time. Area
B and C each has 5 blocks, while D and E has 6 each. Beside area A is reefer

Average depth

-8.4m

CFS

3300 m2

Container yard

202110 m2

(Source: Port of HaiPhong website)

About equipment, CVT has 4 quayside gantry cranes, 5 portal cranes, 10
rubber-tyred gantries (RTG), 2 Truck cranes, 2 reach stackers, 9 folk lifts, 26 tractor
chassis, 1 E-Weighing machine.
Table 7: Port equipment

EQUIPMENT

Number

Capacity

Quayside gantry crane

4

35.6MT

5-45MT

Folklift

9

3-30MT

Tractor-chassis

26

20feet/40feet

E-weighing machine

1

120Tons

(Source: Port of HaiPhong website)

2.1.4 Company main services
Chua Ve Terminal provides number of services, including:
 Container handling
 Yard leasing; tallying, container stuffing and unstuffing; reefer
storage, cargoes inspection and quarantine
 Container Freight Station services
 120 ton Electronic Weighing for containerized bulk cargoes
 Handling equipment and trucks maintenance and repairing

Director

IT Division

Techniques Materials Division

CFS Warehouse

Crane Team

Container team

Mechanized Team

Security team

Industrial Hygiene
Team

Organization Wage Division

Finance Accounting Division

Administration Health Division

Figure 4: Company organization
(Source: Organization – Wage Division of Chua Ve Terminal)
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personnel, workforce, ensures policies related to rights and obligations of workers
and employees; Calculate wages and salaries for workers and employees under the
policies and regulations of nation and company.
Accounting – Finance Division: monitors financial activities; collects and
reports expenditures as well as revenues of company monthly, pay salary and wage
for workers.
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Recommendations to improve the business efficiency of Port of Hai Phong JSC-Chua Ve Terminal

Production Administration Division: on behalf of Deputy Director, directly
monitors and manages operating activities, implement the operating plans and
contracts.
Business Division: makes detailed plans monthly, quarterly according to plan
of Port of HaiPhong JSC. Write bill for handling fees, collect the money that cargo
owner still owe company. Stay informed of financial activities, company revenue,
wages, and salaries… Collect data to evaluate the business result of Chua Ve
Terminal and analyses the market.
Administration – Health Division: responsible for clerical works, supplies
materials for office, takes care of meetings holding; provides medical cares and
drugs for workers.
Information Technology Division: give advices for company’s managers
about information technology for effective cargo management and information
exchange.
2.1.5.3 Level 3 Operating teams
Security team: ensures security of the company; protects cargo and property
of Chua Ve Terminal.

process); 375 service workers (who serve for production process) and 95 indirect
employees.
In terms of age, 484 workers, about 60% of work force at Chua Ve Terminal
are under 40 years old.In terms of education, the company has:5 peoplesare
postgraduate (approximately only 0.6%), 271 peoples have bachelor degree (over
33%), 20peoples (2.5%)have college qualification and 30peoples (nearly 4%) have
vocational certificate.
2.2 Evaluating the business efficiency of Chua Ve Terminal
2.2.1 Evaluating the general situation of the company
Table 8: Financial result of Chua Ve Terminal 2011-2014

2011

2012

2013

2014

Cargo throughput
(Ton)

6,416,000

6,225,000

5,348,000

5,210,000



89,736

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