Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD

PREFACE

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

Đặng Minh Anh

Đặng Minh Anh GMA02

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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
Table of contents
PREFACE ................................................................................................................... 1
List of table.................................................................................................................. 4
List of figure ................................................................................................................ 4
List of abbreviations .................................................................................................... 6
Introduction ................................................................................................................. 8
Necessity ................................................................................................................... 8
Dissertation Methodology .......................................................................................... 8
Dissertation Scope ..................................................................................................... 8
Duration Time ........................................................................................................... 8

1.4.2

Current form of International payment .......................................................20

1.5

Vietnam exporting coffee beans situation ......................................................22

Chapter 2: The Activity of Exporting Coffee Beans ....................................................27
2.1

Introduction of Dong Tai Global Logistics And Trading Co., Ltd ..................27

2.1.1

The establishment of the company ..............................................................27

2.1.2

Organization ...............................................................................................27

2.2

The Activity of Exporting Coffee Beans ........................................................31

2.2.1

Sending fix offer ........................................................................................32

2.2.2

Chapter 3: Evaluation and Recommendations .............................................................72
3.1

Evaluation .....................................................................................................72

3.1.1

Advantages .................................................................................................72

3.1.2

Disadvantages ............................................................................................72

3.2
Recommendations to enhance export activity of coffee beans at Dong Tai
Global Logistics And Trading Co.,LTD. ...................................................................73
3.2.1

Recommendation about analyzing market and choosing partner. ................73

3.2.2

Recommendation about receiving and delivering process ...........................73

3.2.3

Recommendation about payment process ...................................................74

Conclusion ..................................................................................................................75
References ..................................................................................................................76

by Vietnam (tons)

49

Table 7:Coffee beans production export by
Dong Tai Global Logistics and Trading
Co.,LTD (tons)

50

List of figure
Figure 1: Global coffee production by two coffee products

22

Figure 2: Global coffee production by countries

23

Figure 3: Global coffee exporting by country, November 2014.

24

Figure 4: Vietnam‟s coffee value chain process

25

Figure 5: Organization of Dong Tai Global Logistics And
Trading CO.,LTD



B/E

Bill of Exchange

C/O

Certificate of Origin

CEPT

Common Effective Preferential Tariff

EU

European Union

EVFTA Free Trade Agreement between Vietnam and the European Union
FCA

Free Carrier – (name place)

FTA

Free Trade Agreement

GPA

Government Procurement Agreement


Partnership and Cooperation Agreement

SMEs

small and medium-sized enterprises

TBT

Technical Barriers to Trade

UK

United Kingdom

US

United State

WMS

Warehouse Management System

WTO

World Trade Organization

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During this period, I had chance to get in export activities job and gain knowledge and
experience to complete this dissertation.
Research Result
This study is aim to demonstrate the nominated goodexporting procedure of Dong Tai
Global Logistics and Trading Co.,LTD. Meanwhile, by applying observation method,
the implementation of the procedure shall be evaluated and compared with the
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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
requirements of the company procedure. So that, advantages and disadvantages of this
procedure implementation are figured. Finally, some recommendations are built based
on the above analysis.

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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
Chapter 1: Literature Review
1.1

Concept of export

The term export means shipping the merchandises and services out of a country‟s port.

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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
1.3

Types of export

1.3.1 Direct export
Direct export is a situation in which a firm sells its merchandises directly to customers
in another nation without using another organization or person to make arrangements
for them. In this situation, firm take responsible for handling documentation, pricing
policies and physical delivery. Selling directly to clients will prevent other businesses
taking a share of your margin. Nevertheless, this approach requires a large commitment
of human and financial resources. It takes time to build relationships and make
contacts, understanding the market and carry out marketing, negotiate deals.
1.3.2 Indirect export
Selling to or through an intermediary is a comparatively cheap and become a direct
way to enter a new market. Intermediaries are typically distributors or sales agents
based in your target export market who sell your goods or services to end users.
A good intermediary will have much experience in the market, contacts as well as
reputation. Using intermediary can be considered as a quick way to get your goods and
services to the end customers. They will generally require a level of support in the
overseas marketing and selling of your product.
Indirect export includes: agent, export management company, export trading company,
freight forwarder company.
1.3.2.1Agent
Party has authority to act for the principal in order to bring the principal
into contractual relationships with other parties. An agent is obligated to the principal,

insurance. Sometimes, an export trading enterprise may help locate potential buyers for
manufactures. Group of international enterprises may create their own export trading
company.
1.3.2.4Freight forwarder company
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 theGoods for official purposes,
procuring insurance of the Goods and collecting or procuring payment or documents
relating to the Goods.(FIATA Model Rules for Freight Forwarding Services).
Freight Forwarding and Logistic Services means services of any kind relating to the
carriage (performed by single mode or multimodal 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
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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
fiscal matters, declaring the Goods for official purposes, procuring insurance of the
Goods and collecting or procuring payment or documents relating to the
Goods.Freight Forwarding Services also include logistical services with modern
information and communication technology in connection with the carriage, handling
or storage of the Goods, and de facto total supply chain management. These services
can be tailored to meet the flexible application of the services provided.
a. Commercial role of a forwarder
- Customs clearance
The freight forwarder provides all necessary documentation for the import and export

o Arranging insurance purchase base on Customer‟s expenses.
o Assisting customer to obtain required documents for export such as
Bill of Lading, and Certificate of Origin.
o Consulting customer about transportation and distribution, market and
other legal issues.
- Collecting cargo and inform tariff
In the present age, collecting cargo is one of the most important role of a forwarder. In
order to perform thisfunction, he collects the separated goods from anumber of
customers. After that, the forwarder classifies them according to type of cargo, point of
destination. Then, he consolidates all the cargo which has something in common into a
big one to maximize the economy of scale. He also contracts suppliers for inland
haulage and sea transport. The forwarder inform tariff for each mean of transportation.
- Carrier
In multimodal transportation, a forwarder could be a carrier which means he signs
contract of carriage with the customers. In this case, he shall responsible for cargo until
the destination.
b. Forwarder liability and responsibility
- Forwarder liability
o Freight forwarder shall perform his obligations with appropriate interest
in a reasonable time unless there is a written agreement for the
customers‟ benefits.
o Freight forwarder performs all the instructions of the customer. In case,
he finds reasonable cause for the benefit of clients and implements
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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD

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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
FCL container shipment costs lower freight rates than an equivalent weight of cargo in
bulk. The cargoes being stuffed into one container is allowable to reach maximum
weight or full measurement that being regulated by International Maritime
Organization (IMO) for standard weight of a container with full loaded cargo.
- Loading FCL cargoes
Container loading is a quite difficult procedure, and during the loading it is necessary
to pay attention in order to avoid cargo damage. Following there are some rules shipper
should know in order to save goods in proper condition:
The container (usually 20‟or 40‟ dry or reefer containers) for loading cargo should be
inspected carefully before loading on ships under the management and supervision of
the legal authorities.
The cargo must be lashed/ stuffed by the best appearance inside the container.
The container must be loaded the admitted weight.
Cargo should be packed in the proper way, it‟s necessary to use special packing for sea
or air shipment.
During the loading you have to use suitable equipment, do not use heavy forklifts into
the container during loading/discharging, it follows risks of damaging the container
floor.
- Delivery FCL cargoes
FCL cargoes are usually loaded and sealed at origin by shippers‟ employees or port‟s
employees under the supervising and managing of Customs authorities and Port
authorities. Then the cargoes are transported by rail or truck or ship or by a
combination of sea, rail and/or road to the final destination. The vessels which

be used, and other characteristics.
Export Packing List considerably more detailed and informative than a standard
domestic packing list, an export packing list lists seller, buyer, shipper, invoice
number, date of shipment, mode of transport, carrier, and itemizes quantity,
description, the type of package, such as a box, crate, drum, or carton, the quantity of
packages, total net and gross weight (in kilograms), package marks, and dimensions, if
appropriate. Both commercial stationers and freight forwarders carry packing list
forms. A packing list may serve as conforming document. It is not a substitute for a

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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
commercial invoice. In addition, U.S. and foreign customs officials may use the export
packing list to check the cargo.
Pro Forma Invoice is an invoice prepared by the exporter before shipping the goods,
informing the buyer of the goods to be sent, their value, and other key specifications.
It also can be used as an offering of sale or price quotation.
The Certificate of Origin (CO) is required by some countries for all or only certain
products. In many cases, a statement of origin printed on company letterhead will
suffice. The exporter should verify whether a CO is required with the buyer and/or an
experienced shipper/freight forwarder or the Trade Information Center.
Insurance certificate states the type and amount of coverage. This instrument is
negotiable between the sellers and the buyers. Cargo list is document that shows the
detail information of the cargo being packing in container and loading on the ship.
Arrival notice is issued by an ocean freight carrier to consignee to inform about the
arrival of the containers.Arrival notice provides shipments details, charges and

Another international regulation is Inco-terms2010 standard interpretation of trade
terms of the International Chamber of Commerce. This basis defines clearly the rights,
the obligations and the risk of the buyer and the seller in international trade.
1.4

International payment

1.4.1 Overview of international payment
International payment is one of the bank's operations in the payment for the value of
the shipment between the buyer and the seller in the foreign trade fields. The
international payment method is currently the most popular:
+ Transfer by TTR (Telegraph Transfer Remittance) or MTR (Mail Transfer
Remittance): forwarding documents and telegraphs between units incurring
international transactions and international settlement department of the payment
center are implemented on T24 Browser.
+ C.A.D: A payment arrangement in which an exporter instructs a bank to hand
over shipping and title documents (see document of title) to the importer when
the importer fully pays the accompanying bill of exchange or draft.Also called
documents against payment.
+ Collection: A payment method that after delivering or supplying services the
sellers (the exporter) entrust their serving bank to present the buyer (the
importer) documents by the agent bank in order to be paid, accept the draft or
agree other conditions or terms.
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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD

Logistics And Trading Co., LTD
+ Step 2: The Buyer requests their bank to transfer to the Seller
+ Step 3: The Buyer's bank send a debit notice to the Buyer
+ Step 4: The Buyer's bank remits to the Seller's bank
+ Step 5: The Seller's bank sends received notice to the Seller

1.4.2.2

L/C - Letter of Credit

At the present, the payment method of L/C is a common tool in international
payment operation since it ensures maximum advantages for both sellers and buyers.
The overall process of this method can be presented in following diagram:

Step 1: Parties of Importer and Exporter enter into the commercial contract with
each other.
+ Step 2: The Importer implements procedure to request the Issuing Bank to open
L/C for the Beneficiary, known as the Exporter.
+ Step 3: The Issuing Bank opens L/C as required by the Importer and moves to
the Advising Bank.
+ Step 4: The Advising Bank notifies the Exporter that the L/C was opened.
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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD
+ Step 5: Based on the content of L/C, the Exporter delivers good to the Importer.
+ Step 6: After delivery the Exporter establishes a set of documents then send to


Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD

Figure 1: Global coffee production by two coffee products
Source: United States Department of Agriculture (2014)
Total global coffee product in 2015 is estimated at 149.8 million of bags with 2.7
million lower compared to previous year and it is explained by lower production from
four key producers named Brazil, Vietnam, Peru, and Indonesia while two key
producers (Central America and Columbia) are still remaining their production
capacities (United States Department of Agriculture, 2014). It is also denoted that the
production volume of Arabica is decreased compared to Robusta with total market
consumption of Arabica is down from 62% in 2014 to 55% in 2015. In another side,
global coffee consumption is expected increasing in 2015, from 142 million of bags to
147 million of bags accordingly (United States Department of Agriculture, 2014).
Major consumers with total consumption by millions of bags are named as European
Union (from 42 million to 45 million of bags), and US (from 24 to 25 million of bags).

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Recommendations to improve export activity of coffee beans at Dong Tai Global
Logistics And Trading Co., LTD

Figure 2: Global coffee production by countries
Source: United States Department of Agriculture (2014)
The global coffee production map is now very dynamic in six countries (Brazil,
Vietnam, Colombia, Central America and Mexico, Indonesia, and Peru). Among these

Vietnam is ranked as second largest coffee production in the globe and the country is
behind by Brazil with total production in 2015 of Vietnam and Brazil are 51 and 29
million of bags. Lower coffee production volume of Vietnam is explained by the fact
that the country does not have formalized supply chain process or underperformance of
logistics performance compared to Brazil (Ipos Business Consulting, 2013).

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