Hai My Duong - January, 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Hai My Duong (NON FIXED-DAY SHIPPING SCHEDULE IN TAN CANG SHIPPING AFFECTS TO CUSTOMERS SATISFACTION) MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 TIEU LUAN MOI download : skknchat@gmail.com Hai My Duong - January, 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Hai My Duong (NON FIXED-DAY SHIPPING SCHEDULE IN TAN CANG SHIPPING AFFECTS TO CUSTOMERS SATISFACTION) MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Trần Hà Minh Quân Ho Chi Minh City – Year 2018 TIEU LUAN MOI download : skknchat@gmail.com Hai My Duong - January, 2018 Table of Content Executive Summary. 12 Initial cause-effected map. 16 Potential root cause:. 17 Cause-effected map:.
22 In short time: Providing a weekly fixed-day shipping schedule. 22 In long time: Establishing the research and develop shipping schedule team. 27 Appendix 01: Interviewees Information. 28 Interview 1: Customers using TCS’s reefer service.
28 Interview 2: Vice Director of TCS’s Customers. 28 Appendix 02: Interview guides. 29 Interview Guide 01: Customers using referred container service. 29 Interview Guide 02: Regular customers.
29 Appendix 4: Frequency of TCS’s shipping schedule. 42 Appendix 5: Estimated output/ month for 40RH of TCS’s dry container customers. 45 3 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 Professional terminology and abbreviation: Professional terminology No. Meaning and abbreviation 1 20GP 20 feet general dry container 2 40HQ 40 feet high cube dry container 3 40RH 40 feet high cube reefer container The production of liner shipping and slot on vessel.
4 TEU 20GP = 1 TUES, 40HQ=40RH=2 Tues 5 Depot The yard contains empty container The truck goes to nearby the vessel to receive 6 Shipside container directly does not drop container on terminal yard. The time which vessel will stop loading container to 7 Closing Time prepare for departing. 8 Freight Price for transporting container by vessel Fee charge for plugging electronic of reefer container 9 Plugging Fee on terminal, on vessel 10 OPS Operation Service in Terminal 12 TCS Tan Cang Shipping Joint Stock Company 4 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 Executive Summary This thesis aims to identifiy the reason why TCS new reefer service could not attract customers. Basing on in-dept interview in TCS’s current customers, market information and report from marketing department, thesis find out there are 3 potential problems: - Low customer satisfaction of regular customers.
- Competitors are stronger than TCS show on 2 issues: - Marketing strategy to attract new customers does not implement. Using theories and analysis, identified central problem is: low customer satisfaction of regular customers. To giving exactly problem solving, the thesis draws cause-effected map to find out root cause. Thesis uses 4 groups of factors affect to customers satisfaction to conduct an interview on regular customers, the result show that many customer unsatisfied with TCS’s shipping schedule, to change un-fixed day shipping schedule, the broad director should change their intension that having fixed-day shipping schedule is more important than full fill each trip.
Background information Tan Cang Shipping Joint Stock Company (or Tan Cang Shipping – TCS) is a transport service company, was established in 2013 under the decision of the Board of Director of Sai Gon New Port Corporation. The beginning mission of Tan Cang Shipping is developing the transport services of Sai Gon New Port Corporation while their vision is "Leading in quality of service, customer oriented; Advanced management, professional and high quality in human resources; Military discipline, corporate culture, community responsibility " After almost 4 years of operation, Tan Cang Shipping now works on three areas like Sea Transport Services, Logistics and Shipping Agent. Despite its short time of operation, they work quite well, complete all the missions and develop Tan Cang Shipping becomes a prestige brand, having a strong position in the shipping industry in Vietnam nowadays. With the criterion "Coming to Saigon New Port, coming to one of the top quality services", Tan Cang Shipping always tries to provide their customers best quality shipping service.
To the Sea Transport Service, Tan Cang Shipping provides customers with domestic transport services by sea line including main routes: Ho Chi Minh - Da Nang - Hai Phong and opposite or Ho Chi Minh - Hai Phong and opposite. To Logistics, they provides a full range of professional logistics services such as freight forwarding, customs clearance services, warehousing services,.And to 5 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 Shipping Agent, we now are acting as an agent for vessels to import and export in domestic ports as well as international port in Vietnam. In addition, we are ready to provide ancillary services such as customs clearance, fresh water supply, fuel, crewmembers supplying and other support services when the customer needs. Besides developing shipping service, Tan Cang Shipping also focus on hiring and training their employees.
With the core value: "Satisfaction, Trust and Long-term commitment of our customers", all the employees of Tan Cang Shipping are always enthusiastic, hardworking, having responsibility with work and more experience to solve customers’ requirements quickly in all situations happened during transportation. Moreover, Tan Cang Shipping usually has the policies of supporting and consultation so that they can make their customers feel satisfaction when they choosing their service and want to build a long-term stable cooperation. The organizational structure of Tan Cang Shipping consists of 5 departments:. 6 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 Methodology This thesis was developed and supported by both primary and secondary data with particular following methods and resources: Business reports: TCS's business performance report for dry service and reefer service in 2017 checked in order to analyze how TCS achieve the target revenue as well as how each trip follows the golden structure.
The report on reefer container’s revenue in 2017 be classified by customer’s name and trip. Interview: From the results of data analysis in business report, classify the customer using TCS services into 3 focus-groups, build an interview guide and in-depth interview for each group and TCS’s Vice Director. Market Research: Online research in Viet Nam shipping line market as well as interview TCS’s customers to understand refer container market size. Theory: Customer satisfaction and Service Quality in liner shipping industry.
Problem Identification Situation Analysis The domestic shipping market has 2 types of good: dry container and reefer container. Dry container included: 20GP (20feet) and 40HQ (40 feet). Reefer container in domestics market only has 45RH. In liner shipping industry, the quality of good the vessel carried is calculated by TEU.
Each vessel has limited TEU to carried, all good have to be packaged in to container and 1x40HQ=1x45RH=2x20GP=2TEUS. The domestic shipping is the core business of TCS. TCS operates 4 vessels with 4 routes South- North and opposite a week. Domestic shipping industry in Viet Nam has 7 liners: Hai An, TCS, Vinafco, Vietsun, Germadept, Bien Dong, GLS…TCS and Hai An are 2 liners have more vessels and routes than the others.
From the beginning, TCS only transported dry container base on the relationship of broad 7 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 director in the market to attract customers. After 4 years, TCS gain their trust and loyal, and the Broad of Director realized that reefer container market is a potential field to develop. TCS has launched Reefer container’s service with 2 objectives: Diversified TCS’s service: Most TCS customers are freight forwarders who have goods in both dry and reefer container. TCS want to provide full of choice to customer who already has used TCS’s service in dry container filed.
Opportunity Costs: Receiving a reefer container is economically more cost-effective than a dry container of the same size. Specifically, the empty dry containers are owned by TCS and incur costs repair, cleaning, stock in yard… while empty reefer containers are owned by the customer (domestic liner does not own empty reefer containers), so that customers will pay all of these fees. Regarding the freight, 1 reefer container cost 10 million VND while the dry one is 7 million VND. We can calculate the opportunity profit of transport a reefer container, TCS will gain 3 million VND from difference freight while 40HQ and 40RH are covered similar slot (2 TUES), TCS will not pay the clean (200.000 VND) and storage fee (100.000 VND/ day) because 40RH are customer’s owner.
In order proceed reefer service, TCS's leaders were based on the actual situation of TCS customers, TCS infrastructure conditions and freight rates to calculate a golden structure for each ship to ensure the feasibility and maximize profit in the beginning. At present, there are 20 customers using TCS’s dry service have reefer container need to transport (see Appendix 05, Source: Marketing Department Report, December, 2016). TCS expects to attract 20-30% of these qualities. About the facilities of TCS, 4 vessels of TCS have different capactity, Tan Cang Foundation (TCFD) – 370 TEUS, Tan Cang Victory (TCVR) – 325 TEUS, Tan Cang Pioneer (TCPN) – 395TEUS and Tan Cang Glory (TCGR) – 425 TEUS and different freight of 20GP (3 million VND), 40HQ (7 million VND), 40RH (10 million VND).
TCS calculated the effective structure to ensure the feasibility, maritime safety and maximize profit called “golden structure”. 8 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 Table 2: Golden Structure of TCS’vessels. Target Quantity 40RH 20GP 40HQ TCFD 15 120 110 TCVR 20 125 80 TCPN 20 125 115 TCGR 20 135 125 Freight (VND) 10.000 Symptoms After 7 months operated reefer service, the result could not be as expected. Show on: Under-expected quantity: For detail, basing on the revenue report from Jan to July, 2017, it is figured out that 95% of the transfer below the expected level, only 5% achieved as equal or more than expected.
5% achieved the expected is on March, after Lunar New Year, when the market in in the peak. But only 5/ 16 routes on March achieved, while the market is in the peak on March. Chart 1: Revenue and target revenues by vessel in the beginning of 2017 For detailed analysis, for 20GP and 40HQ dry container, it is easy to see that dry sales nearly achieve the expected level, especially some trips are more remarkable. Chart 2: Revenue and target revenues by Dry container in the beginning of 2017 9 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 For revenue of reefer container, the output was completely below expected and unstable on each ship.
So that, the operation of reefer service is lower expected. Chart 3: Revenue and target revenues by Reefer container in the beginning of 2017 Attracting dry’s customers is not effective: Only 15/20 dry’s customers used TCS’reefer service and 2 of them have signed the fixed-slot contract with TCS, become key account in TCS’s reefer field. Table 3: TCS’reefer customer Customer’s Number of 40RH in 7 month Quantity in 7 month/ Type of customer name (79 routes) total quantity HNC 233 46,88% Key account VINACONNECT 143 28,77% HAI DANG 22 4,43% Regular Customer. PHAT TCRF 22 4,43% 10 TIEU LUAN MOI download : skknchat@gmail.satisfaction Hai My Duong - January, 2018 COLLYER : 21 4,23% VINALINES HP 21 4,23% VIET SAC 18 3,62% SCL 4 0,80% HAMITRANS 3 0,60% TNN 3 0,60% GL 2 0,40% New customer: GREEN LOG 2 0,40% DE LTA 1 0,20% GMD 1 0,20% KIM THANH 1 0,20% SINH Excepting key accounts, the quanlity of other customers are not stable.
Chart 4: Volume of 40RH from Jan-2017 to July-2017 Now, reefer container transportation plays an important role in domestics shipping industry because: About freight, receiving a reefer container is economically more cost-effective than a dry container of the same size.