BANKING ACADEMY OF VIET NAM FACULTY OF FOREIGN LANGUAGES ------------o0o------------ GRADUATION THESIS LOGISTICS SERVICE MANAGEMENT AT VNLOGS IMPORT & EXPORT JSC Student: Nguyen Thi Trang Class: K19ATCB Academic year: 2016-2020 Student ID: 19A7510222 Supervisor: Ms. Can Thuy Lien Hanoi - June 2020 DECLARATION I hereby declare that the graduation thesis entitled “Logistics Service Management at Vnlogs Import & Export JSC” submitted to the Banking Academy of Vietnam is a work carried by me under the guidance of MSc. Can Thuy Lien. I further affirm that this work has not been submitted in any other institutes for any purpose.
Hanoi, 06 June, 2020 Signature Trang Nguyen Thi Trang i ACKNOWLEDGEMENT First and foremost, I would like to express my gratitude to my supervisor - MSc. Can Thuy Lien for the thorough guidance, encouragement, and suggestion during the progress I conduct this research. She also helped me in detecting, correcting my mistakes, and directing me to accomplish this thesis properly. I also express my further gratefulness to all of the lecturers of Banking Academy in general and the Faculty of Foreign Languages in particular for the dedicated instructions and supports throughout four past years.
Next, I would like to thank my parents and friends who have supported me a lot in completing this report irrespective of their busy business. They not only supported me in terms of physicality but also mentality by giving me useful advice, sincere encouragements, and much of love. Last but not least, I want to send my thankfulness to Vnlogs Company, especially Mr. Toan for the great contribution in helping me fulfil this research.
ii ABSTRACTS Logistics Service Management at Vnlogs Import & Export JSC Author: Nguyen Thi Trang Keywords: Logistics service management Advisor: Ms. Can Thuy Lien Named as "Logistics Service Management at Vnlogs Import & Export JSC", this graduation thesis explores the actuality of management on logistics service at Vnlogs Import and Export Joint Stock Company, with the ultimate goal of minimizing costs and time on performing services for customers, thus enhancing this company's competitiveness. This research focuses on finding and highlighting serious deficiencies in Vnlogs management for the including sections: international and inland transportation services, customs services, and logistics information systems. The database utilized for this research is the secondary data source provided by Vnlogs, such as customer policies, annual accounting reports, etc.
This source of data is synthesized, selected, and then presented in forms of chart and table to show apparent and precise findings for the readers. Also, the achievements of the company over the years as well as the existing management deficiencies are uncovered and then discussed attentively in the discussion section. It is revealed that one of the weaknesses is the ineffective management strategy which prevented the company from expanding its market size. Therefore, the paper suggests appropriate and practical recommendations to help the company and other stakeholders resolve outstanding issues in the future, further developing both Vnlogs and the domestic logistics sector.
iii TABLE OF CONTENTS DECLARATION. iii TABLE OF CONTENTS .iv LIST OF ABBREVIATIONS.vii LIST OF TABLES .ix LIST OF FIGURES .ix CHAPTER 1 - INTRODUCTION. Background of the Study. Objectives of the Study.
Significance of the Study. Scope and Limitation of the Study. Definition of Terms. 5 CHAPTER 2 - LITERATURE REVIEW.
Theoretical and Conceptual Framework. Theoretical and Conceptual Framework. 11 CHAPTER 3 - RESEARCH METHODOLOGY. Locale of the Study.
Data Gathering Procedure. 14 CHAPTER 4 - THE CURRENT SITUATION OF LOGISTICS SERVICE MANAGEMENT AT VNLOGS FROM 2017-2019. Overview of Logistics Service and Logistics Service Management. Classification of logistics service.
Logistics Service Management. The Current Situation of Logistics Management at Vnlogs from 2017-2019. The International and Inland Transportation Services. Size and Proportion of Revenue from Logistics Services.
The International Markets of Vnlogs. The Using of Transportation Modes. The Customs Service. Types of Customs Service.
Revenue from Each Type of Customs Service. The Logistics Information Systems. Information from Each Party Involved in Logistics System. Information from Each Department within Vnlogs.
Information about Each Step within the Logistics Chain. The Discussions on Vnlogs’s Management of Logistics Service. The International and Inland Transportation Services. The Unstable Growth of Services’ Revenue Proportion.
The Unevenness and Downward Trend in the International Markets. The Disproportion in Using Transportation Modes. The Customs Services. The Unevenness in Income Proportion of Each Customs Service.
The Downward Trend in Income Proportion of Some Customs Services. The Logistics Information Systems. Unqualified Information Technology Facilities. Incomprehensive Information Management Strategy.
43 CHAPTER 5 - SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION. Summary of Findings. Recommendation for the Ministry of Industry and Trade. Recommendation for the Ministry of Transportation.
Recommendation for Vnlogs. Approaching and Enlarging International Markets. Utilizing Transportation Modes Smartly and Flexibly. Upgrading and Enhancing the Technological Facilities.
1 vi LIST OF ABBREVIATIONS Abbreviations Full form A/N Arrival Notice B/L Bill of Lading B2B Business to Business BOT Build – Operate – Transfer C/O Certificate of Origin COVID-19 Corona Virus Disease 2019 CPTPP Progressive Agreement for Trans-Pacific Partnership CSCMP The Council of Supply Chain Management Professionals D/O Delivery Order ERP Enterprise Resource Planning EVFTA EU-Vietnam Free Trade Agreement FCL Full Container Load FTA Free Trade Agreement GSC Global Supply Chain LCL Less than Container Load LIS Logistics Information Systems LIS Logistics Information Systems vii OMS Order Management System SMEs Small and Medium Enterprises TMS Transport Management System TPP Trans-Pacific Partnership Agreement VLA Vietnam Logistics Association VNACCS/VCIS Vietnam Automated Cargo And Port Consolidated System/ Vietnam Customs Intelligence Information System WMS Warehouse Management System WTO World Trade Organisation viii LIST OF TABLES Table 4. 1 - Size and Structure of Vnlogs’ Revenue Breakdown by Service (2017-2019). 2 - Using Inland Transportation Modes at Vnlogs (2017-2019). 3 - Structure of Income from Customs Services of Vnlogs (2017 – 2019).
28 LIST OF FIGURES Figure 4. 1 - Market Structure Breakdown by Region of Vnlogs (2017-2019). 2 - Using International Transportation Modes at Vnlogs (2017-2019). 3 - The Logistics Information Systems.
30 ix CHAPTER 1 - INTRODUCTION 1. Introduction In the context that international economic integration is taking place extensively all over the world, trading activities are no longer limited in the boundaries of a country or a region. Every day, enormous flows of goods and physical products get traded on the global market, creating the vast global supply chains. It is a fact that logistics plays a significant and indispensable role in these chains, bringing about several economic benefits to the countries.
In Vietnam, this industry is considered a young and new business in comparison to other sectors since it has just been established officially in Vietnam for about 27 years from the establishment of the Vietnam Logistics Association (the forerunner of Vietnam Logistics Association - VLA) in 1993. That is the reason why many enterprises operating in this sector do not have much experience and a steady position in the global logistics market. Besides the shortage of regular knowledge and experiences, the high competition is causing several challenges to logistics companies. Since 2014 when Vietnam committed to accept 100% foreign-invested enterprises’ operation in the country, there has been an exclusive integration of foreign logistics groups to the locale.
In addition to the domination of international logistics companies, the increase in the number of new logistics enterprises with different competitive advantages has made the competition more and more intense. To improve and enhance the competitive position of enterprises in the logistics environment, they need to take out specific solutions and directions for themselves. Besides investing in infrastructure, science, technology, and training high- quality staff, it is very crucial to build up an effective logistics management strategy. Vnlogs is a logistics company that is making every effort in managing its logistics service with the goals to gain as much profit as possible.
The company has conducted numerous projects to increase the logistics service management such as applying technological and scientific advances in tracking and monitoring logistics activities, or verifying and developing new services. However, the actual effects generated by those solutions did 1 not reach the company’s expectations. This results from that there are availably weaknesses and shortcomings in Vnlogs’ logistics managing activities. Therefore, "Logistics Service Management at Vnlogs Import and Export Joint Stock Company” is chosen to support the company in managing its logistics service efficiently, thus improving its competitive capacity.
Background of the Study On November 7th, 2006 in Geneva (Switzerland), Vietnam officially became the 150th member of the World Trade Organization (WTO) after fifteen negotiations throughout eleven persistent years. This is an extraordinary step when Vietnam had just completely liberated the South and reunited two parts of the country for about 31 years. Becoming a member of WTO, which is one of three major international economic organizations, was a significant event marking Vietnam’s role and position in the world market. This occasion has paved the way for Vietnam to expand the market, attract investment, and take advantage of the technological revolution to enter the Global Supply Chains.
This somehow lend Vietnam a hand to approach and develop a brand new but extremely significant industry that is the Logistics Sector. Even though being a “baby in the woods” in this industry, Vietnam has been performing its crucial role and position to the global logistics business. Since the global economic integration is taking place dynamically all over the world, a variety of free trade agreements (FTAs) have been signed recently, typically the EU- Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Therefore, a large number of great opportunities were brought about to Vietnamese enterprises operating in the logistics industry.
Vietnam's logistics businesses will hold the chance to infiltrate into the global financial services market. Besides, CPTPP also increases the possibility to attract foreign investors and cooperate with developed countries to raise funds and modernize trade foundation, especially the logistics infrastructure. Along with that, the Vietnamese 2 commercial and logistics businesses can also obtain more opportunities to enlarge markets, particularly the EU market. However, opportunities always accompany with challenges.
Most of Vietnamese logistics companies have a small and medium scale, which is the greatest weakness compared with foreign businesses when entering a strict markets such as the US and EU. Recently, under the spreading of Coronavirus disease (COVID-19), an infectious disease caused by a newly discovered coronavirus, the whole world has been suffering a terrible loss. There is not only the loss of lives but also all other aspects like the economy, transportation, tourism, education, trade, etc. Logistics is not an exception since according to a new report of VLA, around 15% of companies have a 50% reduction in revenue compared to 2019, and more than 50% of businesses bear the decrease from 10% - 30% in the number of domestic and international logistics services over the same period last year.
Besides, there are many other macro factors impacts the logistics industry such as the tensions of the US-China trade war. Up to now, Vnlogs has been operating in the logistics field for about 5 years, so the company has experienced some ups and downs throughout that time. However, in the present situation that involves both opportunities and challenges, the company has to face with the high competition level, the unpredictable trade environment along with the interwoven impact of new generation FTAs and trade barriers. Therefore, it is essential to regularly improve its business strategies, particularly in logistics service administration.
This study expects to support the company in dealing with those problems in this critical phase, and help to set up a fitting, comprehensive and practical development strategy to handle those problems, therefore, enhance its position in the global logistics market.