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MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: LA THI MINH DUYEN

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVE THE FREIGHT
FORWARDING SERVICES FOR IMPORTING FCL CARGOES
AT DONG TAI GLOBAL LOGISTICS AND TRADING CO.,LTD

HAI PHONG – 2015


MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: LA THI MINH DUYEN
CLASS:

GMA02

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO IMPROVE THE FREIGHT

Logistics subject which is closely related to this topic, therefore, this knowledge in
practices is extremely important to monitor the topic.
This dissertation includes three chapters:
 Chapter 1: LITERATURE REVIEW OF FREIGHT FORWARDING
SERVICE
 Chapter 2: THE CURRENT STATUS OF FREIGHT FORWARDING
SERVICES FOR IMPORTING FCL CARGOES AT DONG TAI LOGISTICS
AND TRADING CO.,LTD
 Chapter 3: RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF
THE FREIGHT FORWARDING SERVICES FOR IMPORTING FCL CARGOES
AT DONG TAI GLOBAL TRADING COM.,LTD
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

La Thi Minh Duyen

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

ACKNOWLEGEMENT

Firstly, I would like to thank all lecturers at VietNam Maritime University
for teaching me during the time I study at university. Secondly, I would like to
express my sincere gratitude to my advisor M.S. Doan Trong Hieu for the
continuous support of my dissertation and related research, for his patience,

SERVICE ................................................................................................................ 3
1.1

Theoretical basis of freight forwarding service ............................................... 3

1.1.1 Definition of freight forwarding service and freight forwarder ...................... 3
1.1.2 Commercial role of freight forwarder ............................................................ 3
1.1.3 Freight forwarder obligations and rights ........................................................ 5
1.1.4 Related documents in freight forwarding services for importing FCL
cargoes .......................................................................................................... 6
1.1.5 Relationship of freight forwarder with other parties ...................................... 8
1.2

Legal basis framework ................................................................................... 9

1.2.1 National law .................................................................................................. 9
1.2.2 International law ........................................................................................... 9
1.3

Assessment theory of forwarding services for importing FCL cargoes ........... 9

1.3.1 Full container loaded cargoes ........................................................................ 9
1.3.2 General freight forwarding process for importing cargoes by ocean ............ 10
1.3.3 Service quality assessment framework ........................................................ 11
1.3.4 Relationship between service quality and customer satisfaction .................. 14
CHAPTER 2: THE CURRENT STATUS OF FREIGHT FORWARDING
SERVICES FOR IMPORTING FCL CARGOES AT DONG TAI CO.,LTD ........ 15
2.1

General information about Dong Tai Co.,Ltd ............................................... 15

2.3.3 Tangibles .................................................................................................... 40
2.3.4 Empathy...................................................................................................... 41
2.3.5 Responsiveness ........................................................................................... 42
2.3.6 Price............................................................................................................ 43
2.3.7 General assessment of freight forwarding service for importing FCL
cargoes at Dong Tai Global ......................................................................... 44
CHAPTER 3: RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF
THE FREIGHT FORWARDING SERVICES FOR IMPORTING FCL
CARGOES AT DONG TAI GLOBAL TRADING COM.,LTD ............................ 46
3.1

Create a standard and detail process for importing FCL freight
forwarding service ........................................................................................ 46

3.1.1 Adding step for “Checking documents received from importer” ................. 46
3.1.2 Adding “Arrange Transportation Agencies” after “Prepare Documents”
step ............................................................................................................. 46
3.1.3 Adding “Complete daily report” step into the forwarding process ............... 47
3.2. Improving quality of facilities and the application of information
technology .................................................................................................... 49
3.2.1 Ensuring basic requirements in warehouse system ........................................ 49
3.2.2 Applying information technology in freight forwarding activities................. 49
3.3

Paying attention at the quality of human resources ....................................... 50

3.3.1 Focusing in recruitment ............................................................................... 50
3.3.2 Investing in training course for staff ............................................................ 50
3.3.3 Creating motivation for staffs ...................................................................... 51
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INCOTERMS

International Commercial Terms

LCL

Less Container Load

FCL

Full Container Load

B/L

Bill of Lading

CO

Certificate of Origin

D/O

Delivery Order

NVOCC

Non-Vessel Operating Common Carrier.

VNACCS

For Importing FCL Cargoes At Dong Tai Global Based On 6 Dimensions ............ 45
Table 7: Estimated Time For Each Step Of Recommended Process ....................... 47

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

LIST OF FIGURES
Figure 1: Relationship Among Freight Forwarder With Other Parties ......................8
Figure 2: Organizational Structure Of Dong Tai Global ......................................... 17
Figure 3: Revenue, Cost And Profit Before Tax Of Dong Tai Global..................... 27
Figure 4: Sales Process At Dong Tai Global .......................................................... 27
Figure 5: Detailed Forwarding Order Of Steps For Importing FCL Cargoes .......... 30
Figure 6: Customer Satisfaction Toward Import Forwarding Service For FCL
Shipment At Dong Tai Global (On Scale From 1 To 5) ......................................... 36
Figure 7: Clients Satisfaction Level Toward Reliability‟s Criteria ........................ 37
Figure 8: Clients Satisfaction Level Toward Tangibles‟ Criteria ........................... 40
Figure 9: Clients Satisfaction Level Toward Empathy‟s Criteria ........................... 41
Figure 10: Criteria For Selecting Freight Forwarder Service Supplier .................... 43
Figure 11: Completed Recommend Import Forwarding Process For FCL Shipments
.............................................................................................................................. 48

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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Method of data analysis: The dissertation is composed based on the real
process collected information of handling paperwork of freight forwarding services
of FCL cargoes being implemented by Dong Tai staff. There are 2 main sources of
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

data aggregated: from customer surveys and data provided by the company to
identify current status, analyze and assess the quality of import FCL cargoes
forwarding services of the company.
Statistical methods are also applied to given statistics in this dissertation.
The data is collected including revenues, expenses, profits, salaries ... from
accounting department of Dong Tai Global
Logical methods point out various dimension and criteria to assess FCL
import forwarding performance at Dong Tai Global.
Observation method is applied during my 2-month-internship period, giving
statistics on the number of FCL importing shipments being delayed.
DISSERTATION SCOPE
The dissertation is implemented so as to analysis and evaluate current status
of importing FCL cargoes at Dong Tai Global. The dissertation concentrates on
service quality based on customer feedback, detail steps of sales and freight
forwarding process for understanding the real activities. Additionally, this
Dissertation also gives some recommendations to improve the efficiency of FCL
import forwarding service.
TIME DURATION
The dissertation‟s statistics, survey results and clients‟ comments are
collected within 2 month. During this period, I had chance to work, study and gain
actual knowledge, experience to complete this dissertation

According to ( Vietnam Commercial Law, 2005), Freight Forwarding and
Logistics services are “commercial activities whereby traders organize the
performance of one or many jobs including reception, transportation, warehousing,
yard storage of cargoes, completion of customs procedures and other formalities
and paperwork, provision of consultancy to customers, services of packaging,
marking, delivery of goods, or other services related to goods according to
agreements with customers in order to enjoy service charges.”
In short, freight forwarding is the overall management of the way resources
are obtained, moved to the locations and stored where they are in need.
1.1.2 Commercial role of freight forwarder
Commercial role of freight forwarder is regulated in forwarder law ( Mandy
Verena Rigtering, Capetown). They are:
Transshipment
Transshipment is a fundamental feature of modern container operations. Due
to high cost of operation, container ships with large volume usually serve „hub
ports‟. The transportation from hub port to regional ports is mostly coordinated by
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

shipping lines to operators of vessels. This involves booking on a transshipment
vessel, unloading, discharging, sorting, loading and distribution of the cargo to
various importers. Transshipment agents mostly operate as agent for the shipper,
consignee or freight forwarder.
Packing, warehousing and distribution
The freight forwarder arrange service for warehousing, packing and
distributing the cargo. He keeps goods in warehouse before exporting, subsequent to
import meanwhile awaiting distribution or transportation. The freight forwarder can

packing, custom clearance, insurance and charges customers an amount of fee - a
proportion of total expenses.
Cargo Consolidation and multimodal transport
The cargo consolidation service is one of the critical functions of today
freight forwarders. The container operators offer an integrated movement of using
multimodal instead of using unimodal transport modes. The freight forwarder
collects cargo from different shippers or freight forwarders, and combines goods for
shipment and distribution to the receivers in the destination place.
1.1.3 Freight forwarder obligations and rights
According to (General Freight Forwarder's conditions of Association of
Logistics and Freight Forwarding, 2005) forwarder obligations and rights are:
Obligations
The freight forwarder bear responsible for procuring for the customers the
transportation of goods on customers‟ account but under his name from original to
destination place
- To take transport of consignments at destination port or deliver stored
consignment in keeper‟s warehouse, if he is trusted with tasks regulated in terms of
freight forwarding contract.
- To fulfill his duties which arises out of the freight forwarding contract with
professional manner, taking care to satisfy the interests of the clients.
- To take care of cargoes and warn the clients of any obvious incorrectness of
his instructions.
- To assess and perform inspection in term of goods quantity as well quality
delivered during the period of time transport to the carrier that was provided and
agreed with clients; inform the clients whether the consignment or cargoes are
under threat of damage.
Rights
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by the bank of importer for payment under a letter of credit.
Master Bill of Lading
A schedule of costs for services rendered issued by a ship's master or
another carrier official, and which documents that certain products were received on
board as cargo for shipment to a particular place and to be delivered to the
stated receiver.
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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Commercial invoice
The commercial invoice is authorized document between the provider and
the customer which describes sold cargoes, and the total volume to customer. The
commercial invoice is one of the primary documents used by customs officials in
the progress of determination of customs duties.
Packing list
Packing list is prepared document by seller which indicate the net and gross
weights of cargoes, dimensions and contents of all shipping pieces in
a consignment. Each packing list should mention the shipment and concur with the
related commercial invoice.
Pro forma Invoice
A brief invoice sent by exporter to an importer in advance of a shipment.
It notes the
type
and volume of
cargoes,
their value,
and

1.1.5

Relationship of freight forwarder with other parties

Import – Export Control Organization
Import – Export License Organization,
Customs, Quadrant Organization
Tax Control Organization
Commercial Chamber……

Exporter

Forwarder Agent

Freight Forwarder

Port

Importer

- Carrier, Bank, Shipping agent,
Warehouse, Insurance Company,
Inspection Organization……

Figure 1: Relationship Among Freight Forwarder With Other Parties

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Recommendations to improve the freight forwarding service for importing FCL cargoes at

international trade.
1.3

Assessment theory of forwarding services for importing FCL cargoes

1.3.1 Full container loaded cargoes
FCL is the abbreviation for "Full Container Load" which is commonly used
in international shipping industry. In international shipping, this term describes an
ocean freight service, designed for international ocean freight shipments of cargo
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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

where international shipper has exclusive use of entire ocean freight container ( for
example 20 foot or 40 foot container )
1.3.2 General freight forwarding process for importing cargoes by ocean
Step 1: Prepare the documents
The consignor must prepare the following types of documents:
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Business registration license

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License of import ( with import code of company)

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Open and submit customs declaration form

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Deliver goods to the specific place for customs inspection

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Pay tax

Step 7: Receive the goods
Bring the original bill of lading to the carrier to get D/O. Bring D/O to port:
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For bulk cargo: supervise the unloading from the vessel; sign the report on

receipt of cargo, deliver goods to the buyer at desired location
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For container:
FCL cargo: receive directly from container yard

LCL cargo: depending on the location the freight forwarder chose to release
the goods, the buyer will come and receive
1.3.3 Service quality assessment framework
Service quality definition
According to Parasuraman, Zeithaml and Berry (1985), service quality is
defined as how well a provided service adapts and conforms to

The table. Shows detailed dimension and its criteria related to measure
quality service
Besides 5 factors of RATER, customer satisfaction is also directly impacted
by Price factor. The price fairness influences the customer satisfaction in a positive
way but the perceived price fairness can be negatively affected by the customer‟s
vulnerability (Herrmann, Xia, Monroe & Huber, 2007). The customer perceives the
price according to the quality whose result end up in dissatisfaction or satisfaction
(Oliver, 1997). Price reasonability also plays a critical role in creating customer
satisfaction. The reason of customer turning to any other service providers is the
price reasonability from where they get it (Imran, Safwan, Rehman, Afzal, Ali, &
Ali, 2010).The unreliable and unreasonable pricing policy effect the customer
satisfaction negatively. Customer demands good quality products at a reasonable
price which they can afford service/ product easily and if any firm offers this to the
clients it will build long term relation with customers. Therefore, Price is an
important dimension that should also be concerned.

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
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Table 1: 5 Factors Of Rater Model – Service Quality Dimensions

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Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd


Recommendations to improve the freight forwarding service for importing FCL cargoes at
Dong Tai Global Logistics and Trading Co.,Ltd

CHAPTER 2: THE CURRENT STATUS OF FREIGHT
FORWARDING SERVICES FOR IMPORTING FCL
CARGOES AT DONG TAI CO.,LTD
2.1

General information about Dong Tai Co.,Ltd

2.1.1 Company background
Dong Tai global logistics and trading company Co.,Ltd is known as a
member of head company - Dongsue Logitics Korea Co.,Ltd
DONGSUE LOGISTICS CO.,LTD
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Head office: Dongsue Logistics Co.,Ltd

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Address : Room 302, Dongyang BLDG, 89-20, Seosomunro, Jung-gu Seoul,

Korea
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Tel: 82-2-775-7200 – Fax: 82-2-773-8611

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Chief Executive Officer: Mr Y.T.Bay