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 FIGURE

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

contributes to the development of port as well as economy. In my dissertation, I
have researched the model to measuring the service quality at Vietfracht CFS
specifically to export cargoes which uses the knowledge I studied at university and
practical experience I learned at Vietfracht CFS. Hence, I hope that my research
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.

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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”[ CITATION Bus15 \l 1033 ]
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”[ CITATION OOC15 \l 1033 ]
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.

According the demand of customers, cargoes are packing carefully to avoid damage
or losses in transportation.
Shipping is considered as final process in CFS which includes 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 [ CITATION Gov15 \l 1033 ],
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

- Consolidation and break-bulk of LCL cargo.
- Temporary storage of cargo and containers.
- Maintenance and repair of container units.
1.1.7. Customs supervision
In the Circular 38/2015/TT-BTC[ CITATION Gov15 \l 1033 ], 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 [ CITATION Phi03 \l 1033 ], service can be defined as any behavior
or act in a contact between two parties: the provider and the receiver. Walfried
[ CITATION Wal00 \l 1033 ] 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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accurately.

-

Responsiveness: Willingness of the employees to serve clients promptly and
properly.

-

Assurance: The ability conveys trust and confidence. This reflects the
employees' knowledge and experience

-

Empathy: knowing the customers' personal needs, taking care of customers
individually and showing sympathy and affection.

Based on SERVQUAL model, Cronin and Taylor [ CITATION JJC92 \l 1033
] proposed new model SERVPER (Service performance) to simplify the
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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
expectation of customers and level of current service in Servqual. Cronin argued


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In addition, equipments and facility reflects the CFS capacity to handle
cargoes and have implication on judging CFS services. These factors are merged
into intangibility dimension of SERVPER model. As aforementioned analysis, using
5 criteria in SERVPER model is quite appropriate to assess the services 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

CFS finishes stuffing and shipping containers on time
( before ‘cut-off’ time)

REL 5

Responsiveness

Employees are willing to help and answer questions
of customers

RES 1

Assurance

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

want to study service quality for all, it means that I have to deal with very large
target population which I cannot define the exact quantity of them. Therefore, it
may cause the problem in choosing sampling proportion and collect the adequate
quantity of questionnaire to analyze. In addition, by only chose the smaller part, I
can provide more feasible solutions to improve the service quality. After analyzing
the collected data, I will have a general outlook about service quality at Vietfracht
CFS. From what I have been found, some recommendation will be proposed to
improve service quality at CFS.
1.3.2. Methods of data collection
The research mainly uses the quantitative method because in order to assess
quality service of CFS, questionnaires were sent to customers. However, to gain
more general ideas in advance, I also interview some employees who are seniors at
Vietfracht CFS. Therefore, they would demonstrate the deep knowledge and
experience. After carry out the most importance step- sending questionnaires, I
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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


Introduction of the Transport and Chartering Corporation (Vietfracht)

2.1.1. General information
Name: The Transport and Chartering Corporation
Abbreviated name: VIETFRACHT
Head quarter: 74 Nguyen Du Street, Ha Ba Trung District, Ha Noi
Tel :( 84.4)38228915
Fax: (84.4)38228916
2.1.2. The history of foundation and development
Transport and Chartering Corporation was established on January 18 th, 1963
and formerly named as Foreign Trade Transportation Corporation. At the beginning,
Vietfracht was a state owned company and transformed into a joint stock company
in 2006.
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.

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 Freight forwarding and multimodal transport
-

Documentation, insurance management and customs clearance

-

Stevedoring and tallying

-

Hiring transport vehicles to move cargoes

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-

Storage facilities (long-term and short-term)

-

Pre-inspection for reefer cargoes

-

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

Figure 2.1: Organization structure of Transport and Chartering Corporation
2.2.

Introduction of Vietfracht Hai Phong

2.2.1. General information
Name: Vietfracht Hai Phong
Address: 35 Minh Khai Street, Hai Phong, Viet Nam
Tel: (84.31) 3745529
Fax: (84.31) 3842276
Email:
Vietfracht Hai Phong is a branch of Transport and Chartering Corporation
maritime in key areas-Hai Phong. Vietfracht Hai Phong is considered an important
member contributing greatly to the strong performance and efficiency of Transport
and Chartering Corporation.
2.2.2. Organization Structure of Vietfracht Hai Phong

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Director


2.2.2.1.

CFS employees

a. Vice Director is the highest position in VF CFS who takes charges of
controlling entire activities at CFS. He will receive daily reports from all
departments and give direct guidance to each department. In addition, he will
make the importation decision related to development of CFS
b. Warehouse manager takes charge of managing all activities in CFS for export
and import cargoes like receiving; storing, stuffing, unstuffing, shipping…He
will receive direct guidance of Vice Director.
c. Depot Manager is responsible for activities in depot like lifting on/off
containers, storing empty containers…He will directly receive the commands
of Vice Director.
d. Trucking fleet is including 8 containers trucks and drivers. The trucking fleet
is responsible for shipping containers from other depots to VF CFS and vice
verse

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e. Procedure team will in charge of dealing with all kinds of documents for
export and import cargoes at VF CFS. Hence, they keep the close
relationship with other parties like forwarders or shipping lines. They also
receive the direct commands of Vice Director

Corporation – Hai phong branch

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
were stacked in pallets. There are 35 hand pallet trucks but the majority of them
is poor condition and need to be replaced.

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