MINISTRY OF TRANSPORTATION

MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

NGUYEN THI QUYEN

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATION TO IMPROVE THE OCEAN FREIGHT
FORWARDING PROCESS FOR IMPORT FCL CARGOES IN
GOLDEN STAR INVESTMENT TRADING AND LOGISTICS
COMPANY LIMITED

HAI PHONG – 2015


MINISTRY OF TRANSPORTATION

MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME:

NGUYEN THI QUYEN

CLASS:


developed country, the process of imported and exported cargoes plays an important
role. Because it ensures the exchange of goods with the country around the world,
effectively exploit the potential resources in the country, promote economic growth;
raise the level of technology and the restructuring of domestic industries; create jobs,
raise incomes, improve living conditions for citizens... Besides, when referring to
import and export activities,international freight forwarding is one of the most
important activities. They cannot separate and have a consistent relationship with each
other. The rapid increase in scale and speed of export-import operations is main reason
that make the developed strongly freight forwarding activity in both width and depth in
recent years, especially ocean freight forwarding.
The biggest advantage of international transportation by sea is able to transport
a large amount of cargoes with the low cost, compared to other modes of transport.
Because human beings take advantage of natural water surface and just have to invest
in build port and channel system, not much as other transport sectors. The second
strong point, if in the long distance as from Asia to Europe or America…, the speed of
ocean transport is only slower than the speed of air transport. The reason is the ship
acts continuously without a break, even in bad weather conditions that any other means
of transport cannot operate. Moreover, because of freight across the ocean, so the
vessel can choose the shortest route to go straight from one country to another without
waste time to wait or make procedures in the intermediate country. Consequently,
international transport by sea holds a special important position in transport goods in
the world.
Additionally, joining in most of freight activities is the forwarder. They are
organizer; bring goods quickly and efficiently from production place to consumption
place. Therefore, the freight forwarder plays an increasingly positive role in the
development of international trade in every country.
In the period internship time at Golden Star Investment Trading and Logistics
Company Limited (GSC Co., Ltd), I have chance to research and practice the process
Nguyen ThiQuyen – GMA02


Firstly, I would like to express my sincere gratitude to teachers who
conscientious to impart knowledge, valuable experience for us in last time. I also want
to thank Masters. Hoang BaoTrung. His guidance helped me in all the time of research
and writing of this dissertation.
Additionally, I sincerely thank the Board of Directors as well as the staff in
Golden Star Investment Trading and Logistics Company Limited who are enthusiastic
guidance and create convenient conditions for me. Thanks to its, I could improve
learned knowledge with practical activities, learn experiences and complete my
dissertation.
However, with limited knowledge and time, my dissertation does not avoid
certainly shortcomings. Therefore, I would like to receive suggestions, comments
evaluations from teachers as well as from the company.
I sincerely thank you!

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TABLE OF CONTENTS
PREFACE .................................................................................................................... i
ACKNOWLEDGEMENT .......................................................................................... iii
TABLE OF CONTENTS ............................................................................................ iv
LIST OF SYMBOLS AND ABBREVIATIONS ....................................................... vii
LIST OF TABLES...................................................................................................... ix
LIST OF FIGURES ..................................................................................................... x
INTRODUCTION ....................................................................................................... 1


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Recommendation to improve the ocean freight forwarding process for import FCL
cargoes in GSC Co., Ltd
2.1.4 Core values .....................................................................................................18
2.1.5 The capacity of the company ..........................................................................19
2.1.6 Management software system - SMF ..............................................................19
2.1.7 Human resources ............................................................................................20
2.1.8 The result of business operation ......................................................................21
2.1.9 The result of ocean freight forwarding activities for import FCL cargoes........23
2.1.10 Advantages and disadvantages of business activities of the company ............25
2.2
Ltd

The process of the ocean freight forwarding for import FCL cargoes in GSC Co.,
.........................................................................................................................27

2.2.1. Process ..........................................................................................................27
2.2.2 Explain the process .........................................................................................27
2.2.3 Time of the process.........................................................................................38
2.3 Evaluation of the ocean freight forwarding process for import FCL cargoes of
GSC Co., Ltd ..............................................................................................................38
2.3.1 Advantages .....................................................................................................38
2.3.2 Disadvantages .................................................................................................40
CHAPTER III. RECOMMENDATION TO IMPROVE THE OCEAN FREIGHT
FORWARDING PROCESS FOR IMPORT FCL CARGOES IN GSC CO., LTD ......42
3.1


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Recommendation to improve the ocean freight forwarding process for import FCL
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LIST OF SYMBOLS AND ABBREVIATIONS
GSC

Golden Star Investment Trading and Logistics Company Limited

FCL

Full Container Load

LCL

Less than Container Load

FIATA

International Federation of Freight Forwarders Associations

CLECAT

The European Association for Forwarding, Transport, Logistic and
Customs Services

ICD


EU

European Union

SMF

System ManagementFreight Forwarding

VAT

Value Added Tax

WTO

World Trade Organization

EMS

Express Mail Service

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ETD

Expected Time Departure

Recommendation to improve the ocean freight forwarding process for import FCL
cargoes in GSC Co., Ltd

LIST OF TABLES
Table 2.1: Business results September in 2013 – September 2015 ..............................21
Table 2.2: Business results of ocean freight forwarding activities for import FCL
cargoes in September 2013 - 2015 (Unit: thousand dongs) ...........................23
Table 2.3: The result of import markets of the company in 3 quarter firstly in 2015....24

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LIST OF FIGURES
Figure 1.1: The relationship between forwarder and related parties .............................13
Figure 2.1: Organizational chart ..................................................................................16
Figure 2.2: Chart of business results of the company period Sept. 2013- 2015 ............21
Figure 2.3: Chart of presenting import markets of GSC in 3 quarters firstly in 2015 ...24
Figure 2.4: The process of ocean freight forwarding for import FCL cargoes at GSC
Co., Ltd......................................................................................................27
Figure 2.5: The process of cargo clearance for import cargoes ....................................33

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to find out the current existence. Then, propose the solutions to solve these problems as
well as improve the efficiency of business operations of the company.
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Recommendation to improve the ocean freight forwarding process for import FCL
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3. Research Scope
The company provides various services of freight forwarding. However, the
main scope of this dissertation is research on theocean freight forwarding processfor
import FCL cargoes in Golden Star Investment Trading and Logistics Company
Limited.This research isbased on collecting and analyzing data of the company from
2013 to 2014.
4. Research Findings
The dissertation researches on the ocean freight forwarding processfor import
FCL cargoes in GSC. Through this, I will evaluate the process, find out strengths and
weaknesses in order to give some recommendations to improve the process of
importing cargoes as well as efficiency of forwarding activity, contribute to the
development of the company.
5. Research methodology
The internship at Golden Star Investment Trading and Logistics Company
Limited has given me a chance to practice import-export forwarding process. I have
learnt valuable knowledge as well as experience related to freight forwarding. In order
to do this dissertation, I have used some research methods as following:
-

Participation: for better understanding the export-forwarding process, I
physically and fully participated in the daily activities of the company.

a. Freight forwarding
 Definition of freight forwarding
According to International Federation of Freight Forwarders Associations
(FIATA):
“Freight Forwarding Services mean 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.”(FIATA, 1997)
On October 29, 2004, FIATA and CLECAT (the European Association for
Forwarding, Transport, Logistic and Customs Services), have adopted an official
description of “freight forwarding and logistics services”:
“Freight Forwarding and Logistic Services mean services of any kind relating to
the carriage (performed by single mode or multi-modal transport means),
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. FreightForwarding Services also include logistical services with modern
information and communication technology in connection with the carriage, handling
orstorage of the Goods, and de facto total supply chain management. These services

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 Advise the shipper about insurance, if required, can buy insurance for
them
 Transport the goods to the port, make customs clearance, the related
documentations and deliver the goods to the carrier
 Pay fees and other charges including freight
 Prepare bill of lading and take the signed bill of lading from the carrier
 Arrange for transshipment on the route (if necessary)
 Monitor the movement of goods through contact with the carrier and the
forwarder's agents at the goods received place
-

 Assist the consignor in complaining, if having any loss or damage goods
On behalf of the importer/consignee:
 Monitor transport cargoes
 Receive and check all related documents to transportation
 Receive from the carrier and if necessary, can pay transport fees
 Arrange customs clearance; pay duties and other charges to the customs
and other public authorities
 Arrange warehousing of goods (if necessary)
 Delivery goods to the consignee after customs clearance
 Assist the consignee in complaining to the carrier, if having any loss or
damage goods

Vietnam Commercial Law also gives the definition in article 164 of section 10,
“A forwarder is a trader having a business registration certificate for forwarding
services”. (VietnamCommercialLaw, 1997)
 The role of freight forwarder
The forwarder could undertake many different functions in providing services to
customers.They may be the shipper, the carrier and the consignee at the same time or
also may take on a unique responsibility. The forwarder can perform the following
basic functions:
-

Customs broker: the forwarder or any legal trustee units must complete customs
procedures for goods before importing or exporting.

-

Agents:
 To care about the cargoes forwarding process to protect the shipper‟s
interests.
 They perform the reasonable work according to the authorized
requirements. They are not responsible for shipping. They are only
responsible for searching third party to carry out this work, as long as
they are careful in the selection third party to perform the contract.

-

Transshipment and on-carriage: support and undertake the transshipment or
transit cargoes in a third country.

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door-to-door. This person is responsible for the goods during transport process.

It is clear that the forwarder plays an important role in the process of transport.
In other words, they are the architect in transportation sector because they have the
ability to organize carrier services in the best way, the safest and the best saving.
However, in order to become a good forwarder, we need a firm foundation about
professional knowledge, legal knowledge as well as international conventions.
 The right and obligation of the forwarder
In article 167, section 10 about goods forwarding services of Vietnam
Commercial Law, a forwarder shall have the following rights and obligations:
1. To be entitled to remuneration and other reasonable income;
2. To fulfill all his/her/its obligations in accordance with the contract;
3. To depart from the instructions of the customer during the performance of the
contract for a plausible reason and in the interests of the customer, provided that the
customer must be notified thereof immediately;
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Recommendation to improve the ocean freight forwarding process for import FCL
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4. To notify the customer immediately for further instructions of the cases where, after
the contract has been signed, the instructions of the customer cannot be followed in
whole or in part;
5. To perform his/her/its obligations within a reasonable period of time if there is in the
contract no agreement on specific time limit for the performance of the obligations to
the customer.
(VietnamCommercialLaw, 1997)
 Liability of the forwarder

2. A forwarder shall not be exempt from liability if he/she/it fails to disprove his/her/its
fault for the loss, damage, or delayed delivery of goods.
3. The damage is calculated based on the value of goods stated in invoices and other
amounts substantiated by proper vouchers. If the value of goods is not stated in the
invoices, damages shall be calculated on the basis of the market value of that type of
goods at the time when and the location where the goods are delivered to the customer.
If a market price is not available, the normal price of goods of the same type and
quality shall apply.
4. A forwarder shall not be liable in the following cases:
 The forwarder does not receive any notice of complaint within 14 days from the
date of delivery of goods, excluding Sundays and public holidays;
 The forwarder does not receive any written notice of any lawsuit instituted at a
court or an arbitration body within 9 months from the date of delivery of goods.
(VietnamCommercialLaw, 1997)
1.1.2 The legal basis of freight forwarding
 Vietnamese legal basis
The forwarding services (logistic services) has regulated by numerous legal
documents in many fields:
-

Vietnam Commercial Law in 1997 (from article 163 to article 171)
 Article 163: Goods forwarding services of traders
 Article 164: Forwarders
 Article 165: Forwarding contracts
 Article 166: Undertaking to transport goods
 Article 167: Rights and obligations of forwarders

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Some related decrees:
 Decree of Government No. 140/2007/ND-CP of providing detailed
regulations on the Commercial Law regarding conditions for engaging in
logistic services business and limitations on liability of logistic services
business entities
 Decree No. 115/2007/ ND-CP of the Government dated May5, 2007:
business conditions about maritime transport services.
 Decree No. 87/2009/ ND-CP dated October 29, 2009 about multimodal
transport.

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 Circular No.172/2010/TT-BTC dated November 2, 2010 guiding
collection rates, collection regulations, remittance, management and use
of customs fees.
 Circular No. 128/2013/TT-BTC of September 10, 2013, on customs
procedures, customs supervision and inspection; export tax, import tax,
and administration of tax on exported goods and imported goods
 International legal basis
-

Vienna Conventionin 1980: The United Nations Convention on Contracts for
the International Sale of Goods

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Recommendation to improve the ocean freight forwarding process for import FCL
cargoes in GSC Co., Ltd
1.2.2 Process of freight forwarding for import FCL cargoes
-

When receiving Arrival Notice, the forwarder brings original B/L and letter of

-

introduction to shipping lines in order to take D/O;
The forwarder brings D/O and the document to make the customs procedures
for goods and register verification (if have to check goods). The forwarder may
suggest putting the container on consignee warehouse or ICD (Inland Container

-

Depot) to check customs, but must pay container boxes on time otherwise, you
must be charged;
After completing customs procedures, the forwarder must bring the entire
documents along with D/O to the ship management office at the port to confirm

-

D/O;
Take goods delivery note and receive goods.

1.2.3 Related parties in forwarding process

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- Banks

Consignee

Figure 1.1: The relationship between forwarder and related parties

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