PART 1: INTRODUCTION Rational In the past, ocean freight is popular for shipping mass and heavy cargo in far distance through continents between companies But nowadays, when ecommerce is developed in globalization era, people are being boosted to buy goods from others countries Personal effects are often in small volume, which is suitable for shipping by air transportation but now when the demand is too high, sea carriers are focus on LCL shipment to serve small volume shipment with low rate than air method In addition, Vietnam is a potential market for foreign investor and consignee, because labor rate is lower than other Asia countries and product is in good rate and quality Therefore, many consignees are hunt cargo from Vietnam, moreover, many factories are moving from China to Vietnam because of trade war between China and USA and Covid In some countries’ opinion, Vietnam has stable political and controlling well Covid Vietnam government are planning to receive new FDI wave, beside, logistics activities are being improved to support foreign investment TICO International Corporation, a Vietnam forwarding company, will be effected directly by this new trend, therefore, they have to improve their LCL shipment service To deal with this problem, study of “Solutions for improving process of exchange LCL shipment in TICO International Corporation” is chose Object of study Object of the study is process of exchange LCL shipment in TICO International Corporation Aim and mission of study Aim of the study is recommendation of solutions for improving process of exchange LCL shipment in TICO International Corporation There are missions for reach this aim: - Provide knowledge that relevant to the process of exchange LCL shipment in TICO International Corporation - Analysis situation of the process of exchange LCL shipment in TICO International Corporation - Recommend solution to improve the process of exchange LCL shipment in TICO International Corporation Range of study According to space, my study focus on the process of exchange LCL shipment in TICO International Corporation According to time, my study analysis situation and data from 2017 to 2019 and provide some forecast from some reliable source for future Method of study On my study, the methods were used are: - Statistics: list data from TICO company source - Comparison: compare different shipping method to find out the suitable - Analysis: from these two method, I analysis the situation, find out advantage and disadvantage - Forecast: base on the past and recently situation of TICO company and world, forecast future trend to make suitable solution Design of study There are parts and chapter in the part 2, which is the main part as below: PART 1: INTRODUCTION PART 2: DEVELOPMENT CHAPTER 1: Theoretical background CHAPTER 2: Analysis LCL ocean shipment exchange situation in TICO International Corporation CHAPTER 3: Solution PART 3: CONCLUSION Chapter 1: Theoretical background 1.1 Definition 1.1.1 Ocean transportation The mode of sea freight is holding an important position in the global economy, with practical values brought in everyday trading activities The developed economy has led to higher demands of people in transporting and forwarding goods with customers and their partners But in order to meet that demand, the use of a combination of transport modes together is absolutely necessary, which is certainly a sea route that many people cannot ignore, especially those who regularly shipment that travelling far Definition: Ocean transportation is one of the common modes of transporting goods, using appropriate means of transport and infrastructure to meet cargo activities on the sea In particular, the most commonly used means are cargo ships of different load levels, equipment for loading and unloading goods As for infrastructure, it is the ports, construction facilities in the port for transporting goods by sea New trend of human transportation: As at present, the road is no longer the main route that people exploit for cargo transportation activities Along with that, other transport routes are also implemented to provide the most optimal transport solutions, helping each package to be delivered and received safely and effectively Suitable for each condition and practical requirements to transport each shipment, one will use the most optimal mode of transport Due to this fact, the current transportation routes hold a particular importance, which will ensure that each parcel of goods delivered and received takes place efficiently and brings the highest satisfaction, even though that What are the items, specification of dimensions and load capacity Roads are no longer the only choice of shippers and transport units, but at the same time, rail, air and sea are also fully utilized Depending on the delivery and receipt characteristics of each shipment, what is the demand of the goods owner that will carry the goods in the best way, ensuring the factors of safety, cost, and transport time Over time, the sea is showing a good shipping route, especially moving large shipments to areas of the country adjacent to the sea In fact, when freight trains have increased, the frequency of traffic between the seas has increased significantly, which supports trade for improving global economies Which cases should we or should we ship by sea? You can refer to the following cases: + When you want to transport huge quantities of goods + When you need to ship international goods in bulk but save money + When the place of delivery and receipt of goods is adjacent to the sea, a port is available for ships to anchor (*) Note that the form of sea transport is only possible and should be applied to non-urgent shipments, without time pressure 1.1.2 Sea importation and exportation a) Comment [user1]: Bỏ toàn nội dung mục khơng liên quan trực tiếp đến nội dung đề tài, giữ lại definition Sea importation - Definition: Sea Import means buying goods and services (including investment goods) from abroad by ocean transportation Imports are important in two ways Firstly, together with exports, it forms a country's trade balance Imported goods must be paid with the equivalent value of exports to maintain a balance in the balance of payments Second, it is a drawback or a leak from the cycle of national income, thereby reducing domestic production and income On the one hand, imports are beneficial because they enable the country to enjoy the benefits brought about by specialization and international trade, which means the country buys goods and services at a lower price than it does itself manufacturing But on the other hand, as the second point above points out, it is an obstacle because of the decline in domestic production and income It is important to maintain a balance between exports and imports Imports are beneficial when they are paid for by the exports, because the lost income for imported goods comes back from exports or capital inflows to invest in the domestic economy b) Sea exportation: - Definition: Merchandise exports are trading activities on an international scale It is not an act of individual trade but a whole system of trading relationships in an organized trade both inside and outside to sell domestically-made products and goods to foreign countries with foreign currencies, by promoting the development of commodity production, changing the stable economic structure, gradually raising people's living standards Import-export business is also the first international business activity of an enterprise This activity is continued even if the enterprise has diversified its business activities Exports of goods are in the area of goods distribution and circulation of an extended remanufacturing process, with the aim of linking production with consumption of one country to another 1.1.3 Container A container in sea transportation is any receptacle or enclosure for holding a product used in storage, packaging, and shipping Use ISO containers to be able to arrange on container ships, rail cars or specialized trucks There are three standard types of container lengths: 20ft (6.1 m), 40ft (12.2 m) and 45ft (13.7 m) Container capacity (of ships, ports, etc.) is measured in TEU (twenty-foot equivalent units, "20-foot units") TEU is a measure of containerized cargo equivalent to a standard 20ft (long) × 8ft (wide) × 8.5ft (high) (approximately 39 m³ volume) container The majority of containers today are variants of the 40ft type and hence are TEU 45ft containers are also counted as TEU Two TEUs are referred to as FEU, or forty-foot equivalent unit These terms of measurement are used equally High containers ("High cube") have a height of 9.5ft (2.9 m), while semi-tall containers, used to haul heavy goods, have a height of 4.25ft (1, m) Today, about 90% of the goods are packed in containers and loaded onto freighters in clusters More than 200 million containers are shipped annually The widespread use of ISO standard containers has affected the change in transport standards, primarily changing the removable parts of trucks or exchanging parts into parts of the same size size and shape (although no capacity changes are needed), and it has changed the entire world wide use of transport pallets to accommodate ISO containers or commercial trucks 1.1.4 Method of shipping by container When cargo is load into container for sea transportation, it is divided in kinds of method: FCL and LCL In this dissertation, I will focus on LCL method Therefore, LCL details and its comparison with FCL method will be refer on the next part as below 1.2 LCL shipping method 1.2.1 LCL definition LCL (Less Than Container Load) cargo, meaning that the goods are not loaded in one container This term describes the way of transporting goods when the goods owner does not have enough goods to fully pack a container, but needs to be combined with some other goods lots Meanwhile, the service company will combine multiple LCL shipments, arrange, classify and aggregate them into containers, then arrange transportation from the port of loading to the port of destination This is called consolidation And this company is called consolidator LCL shipment is distinguished from FCL (Full Container Load) cargo, that is, the goods are fully loaded, without having to be combined with other shipments Example of LCL: May 10 Garment Company needs to transport 10 CBM garments from Hai Phong to Canada This shipment is not enough to fill a 20GP container because the volume is over 35 cubic meters, so it should be paired with some other shipper lots to optimize space and save costs Of course, unless May 10 is willing to pay for a 20GP container just to send 1/3 of the allowable amount, they will certainly accept to combine with other shipments to have a reasonable price And the May 10 company mentioned above are called LCL shipment 1.2.2 Benefits of LCL consolidation services - For exporters: + Reduce transportation costs + More convenient when working with a consolidator + Can be provided door to door service while the carrier does not provide - For carriers: + Save paperwork, costs, time + Taking full advantage of the means of transport + Not afraid of losing revenue - For consolidators: + Enjoy the difference + Enjoy preferential rates Comment [user2]: Dấu câu? 1.2.3 Distinguish between FCL and LCL shipment: Table 1.2: FCL and LCL comparison Factor for comparison CBM or Feet) Shipment security (All subject owners want their goods to be safe when traveling across the ocean But not all shipments require the same level of security Some shipments are more sensitive to changes and movement that the goods are often exposed to, easily affected during transport.) Cost Volume ( have been dismantled and waiting to be trucking Because of the rigors and demand for this space, the goods are often kept in CFS for too long, especially during periods of overcrowding such as after the Covid epidemic or after the long Tet holiday *Objective disadvantages - World situation Globalization is expanded recently, many agreements are signed such as EUFTA between Viet Nam and Europe, CPTPP agreement about The Pacific Moreover, Vietnam is member of WTO, therefore, when world economic is changed, or it is not stable, Vietnam will be effected The most factor recently is virus Corona, it interrupted Logistics and supply chain, it decreased revenue of TICO company and delay many shipments The second factor is war trade between China and USA It makes world economy status is not stable, exchange rate is not remained, which has effect on shipper and consignee contract and speed of shipment - Weather The weather greatly affects the delivery, receipt and the process of transporting goods by sea and flight routes such as rain and storms That could cause complete damage to the goods on board or delay delivery, giving rise to economic consequences for the parties involved Each type of commodity has its own characteristics For example, agricultural products are perishable, easy to change quality and machinery and equipment are bulky goods, large quantities and sizes, so it will regulate how to pack, unload, how to tie properly, suitable for each type of goods to ensure delivery efficiency without being affected by weather 55 Comment [user12]: Những nội dung mang lại lợi ích cho VN nhé! NÊn bỏ nội dung unpredictable, with new trade barriers and unfavorable Due to the above effects that the weather will affect the quality of political factors goods, this is one of the causes of many disputes It is also the basis Trade tensions for building a force majeure case and the immunity of liability for the between the US forwarder - Fee and charge and China have One of the objective factors influencing TICO's retail freight forwarding process is the situation of prices and costs incurred for maritime services Price is one of the very sensitive and major factors affecting the delivery and delivery of businesses Most companies set their own rates of service based on cost and overall market price, so this price varies from time to time and from company to company Giving is also different This stems from the fact that the State has not had any specific regulation on stabilizing the price of logistics industry In addition, in difficult periods, companies not hesitate to lower prices to find customers, so it is difficult for TICO to accept to break even or suffer losses to retain customers Chapter 3: Solution 3.1 Situation and trend of world logistics and Vietnam logistics in the future 3.1.1 World logistics In 2019, the global logistics and transport market is affected by major factors including: major technological advances, international trade volatility, new trends in e-commerce and new requirements on environmental protection, prevention of climate change in logistics As Vietnam logistics report from VLA, “Global trade becomes more also created a shift of factory systems 56 Comment [user13]: Em cần cho số liệu cụ thể, cần so sánh TICO đối thủ cạnh tranh from China to other more potential markets In addition, the development of global electronic payment and trading platforms also allows micro, small and medium-sized enterprises to appear and reach customers in many markets Multinational enterprises also focus on investing in developing logistics networks in emerging markets to make the most of their resources there Along with that, the trend of automation is changing global production as well as logistics activities for production and consumption The digitization of the economy, the innovation of government support mechanisms, consumer culture, the development of e-commerce and the sharing economy are helping to develop stronger cross-border.” Changes in the global supply chain, especially in the face of major fluctuations in international trade, are the factors that have a strong impact on the world logistics sector in 2019 in the past and in the near future Food production, cosmetics, retail, etc are the sectors that will have big changes with the rapid development of logistics services The 3PL and 4PL services are expected to be the driver of the global logistics market In particular, the services that account for a large proportion include: freight forwarding, freight management, consulting and route optimization, project management, warehouse and storage management and supply chain consultancy among other logistics services Activities related to the application of high-tech logistics services such as monitoring and monitoring, analysis, forecasting and real-time planning are expected to bring many lucrative opportunities to the translation market logistics services in the near future According to forecasts of the International Transport Forum (ITF) “in 2019, global transport demand is expected to continue to increase sharply in the next three decades, expected to triple by 2050.” New trade could affect global trade volumes, logistics chains and transport infrastructure The introduction of new 57 technology to improve logistics efficiency is forecast to have a strong impact on freight transport in the future 3.1.2 Vietnam Logistics Enterprises in the transport and logistics industry in Vietnam highly appreciate the growth potential of the logistics market in the coming years Data from the Ministry of Industry and Trade shows that “in 2018 Vietnam's logistics industry grew by 12-14% compared to 2017 The number of transport and logistics enterprises operating on roads, railways, sea routes, inland waterways and airways about 3,000 enterprises.” According to the representative of the Ministry of Industry and Trade, “the development of the transport and logistics industry will create conditions for Vietnam to quickly become a new production center in the region, able to compete with China.” Vietnam can now exert many advantages available Firstly, the increase in global trade together with international economic integration and the successful signing of Free Trade Agreements has opened the door to an increasingly wide trade for Vietnam With the infrastructure being gradually improved, plus having an appropriate geographical location, Vietnam can build large transit centers for Southeast Asia However, besides the opportunities, the growth challenge is not small The three biggest challenges of the transport and logistics industry in Vietnam today are limited infrastructure, capital size and limited management capacity and very high costs of taxes and surcharges In fact, the improvement of infrastructure is still not enough for the development of this industry The trucking industry is in dire need of greater railroad participation The port system is still unbalanced when more than 92% of container traffic in the South focuses on Cat Lai port, which leads to overload and causes waste In addition, capital problems also 58 prevent businesses from expanding their businesses Only about 7% of enterprises have capital of more than VND 1,000 billion, mainly falling into the multinational group, while over 70% of transport and logistics enterprises currently operating are small and medium-sized 3.1.3 Future development orientation of TICO Foundation: with professional, experienced staff, facilities and assets such as depot, lift truck, network of customers and forwarding agents who are foreign partners all over the world From the existing platforms, to receive and promote the value of the movement trends of large factories to Vietnam and the development and boom of logistics industry worldwide, According to Mr To Ngoc Phuong, TICO have a future orientation for the retail sector as follows: “In 2020-2022, TICO will penetrate into Europe and the US market, TICO has prepared human resources and English proficiency to take on this role Later in 2022-2024, when there is a large amount of goods going to the US, TICO will stop cooperating with co-loader Seahorse or Pudong, but instead TICO will become a co-loader to the US" 3.2 Solution 3.2.1 Solution from TICO Construction of in-land truck system: TICO needs to buy more trucks and containers to optimize transportation costs Most of the shipments are transported on regular routes such as from large industrial zones in Bac Ninh, Hung Yen, Hai Duong, Thai Nguyen to Hai Phong, or from Binh Duong, Bien Hoa to Ho Chi Minh These routes account for 80% of the retail volume that TICO usually has, since there are large industrial zones 59 and the need for foreign trade, TICO does not need to expand the scale across the provinces and cities, 20% goods from the remaining irregular provinces may hire an outside transport service Especially in big port cities such as Hai Phong, Da Nang and Ho Chi Minh, a certain amount of cars and drivers are also needed to transport goods Table 3.1: Proportion of TICO company routine to main ports in Vietnam Route To Hai Phong port To Ho Chi Minh port Others Corporation Chart 3.1: Proportion of TICO company routine to main ports in Vietnam 60 PROPORTION To Hai Phong port To Ho Chi Minh port Others 20% 30% 50% Source: TICO International Corporation Total cost of basic trucking when using truck service for all TICO shipments: Quotation = Car maintenance fee + driver rental fee + petrol + rented company profit + TICO profit When owning a car, TICO will reduce 80% of the cost of profits of the company hired the service, then the formula as below: Quotation = Car maintenance fee + driver rental fee + gasoline + 20% of the rented company profits + TICO's profits Proportion of trucking costs: Table 3.2: Proportion of component fee in trucking fee in TICO company Trucking costs Vehicle maintenance fee Driver rental fee Gasoline fee Rental profit of the company TICO profit margin Corporation Chart 3.2: Proportion of component fee in trucking fee in TICO company PROPORTION Vehicle maintenance fee Gasoline fee Driver rental fee Rental profit of the company TICO profit margin 10% 30% 20% 30% Corporation When TICO owns trucks for the aforementioned routes, the cost of the profit of the leased company will be reduced by 80%, which is 24% of the total trucking cost for the entire retail shipment Comment [user14]: Nội dung phân tích 3.1.2 Shortening time of the process in CFS cho lên chương 2, phần so sánh đánh giá giá dịch vụ, chi phí dịch vụ TICO Reason to choose this method: 62 - Advantage: TICO is a regular freight forwarder with large monthly average volume This advantage needs to be taken advantage of, so as not to waste the company's capacity - Current situation of CFS warehouse: The number of CFS warehouses is now extremely large and in the future will grow more to serve the needs of the market Increasing competitiveness At the same time they always welcome cooperation with forwarding companies with regular goods and large volumes such as TICO - Short-term goal of the method: Reduce handling time in CFS warehouse of TICO company Minimize CFS warehouse cost for TICO, improve delivery time in retail delivery process - Long-term goal of the method: build a long-term, sustainable relationship between the two companies The long-term cooperation helps the two parties to cooperate in making the delivery process become faster and more convenient because the two parties have enough trust, experience and understanding of working style, rarely occur errors in the process of handling and troubleshooting easier - Method: by TICO's staff in charge of loading and unloading and packing activities outside the warehouse related to the handling of goods in the warehouse Specifically: The process of doing retail goods at CFS warehouse includes: However, the agreement will change the following stages to TICO to undertake: - Lower container from port to CFS warehouse - Withdraw goods from the container into the warehouse - Bringing containers to empty yards at seaports - Loading and unloading from the warehouse to the owner's car 63 This method also helps TICO not need to pay additional expenses that may arise as follows: - Charges for handling operations for goods inspection, sampling if required by customers - Freight classification if goods not declare shipping mark, unclear code, commodity codes have many identical lots when withdrawing goods from containers to warehouses In contrast, the benefits that the warehouse receives are as follows: - The warehouse will handle all TICO's odd shipments to the port of destination - Warehouse will enjoy the refund policy of TICO Accordingly, TICO will have a part of profit from the revenue that the contract brings The amount of the commission will be shared by the two parties to agree accordingly 3.2.2 Solution from government - Fixed prices and costs of logistics: At present, the costs related to logistics industry have not been clearly regulated by the government, prices are completely dependent on the market, causing continuous fluctuations that greatly affect businesses in the presence of TICO companies, unintentionally creating unfair and difficult competition for newly established small companies Therefore, the introduction of price stabilization policies is extremely important Among logistics costs, sea freight, surcharge and local charge are the three most volatile fees, it is directly affected by the world market, the remaining two fees, customs and trucking, are stable and have tariff rate - Reduce customs procedures: upgrade VNACCS software VNACCS is automatic clearance software Currently logistics companies and parties involved in logistics activities are using this software, but due to the large volume of 64 goods and countless participants, the system is often faulty and prone to collapse and overload, so the government needs to constantly upgrade, develop, improve and maintain the system to solve difficulties in time, without disrupting the national logistics system - Improve infrastructure, modernize the seaport system to move goods into ports more quickly and strictly manage them more effectively Currently, most of seaports and warehouse systems are in the modernization phase, such as the system of lifting and lifting containers at seaports, lifting systems in warehouses and depots However, at major ports of the world such as Singapore or Shanghai port of China, artificial intelligence has been applied in automatically optimizing container loading space, balancing the placement of such containers ships, information storage of goods in and out of seaports, the entire system of cargo status or Flow Through Gate system: the management system of imported trucks for taking cargo containers out of the port This is an extremely important process of goods, verifying the driver's identity determines the success of the shipment, avoiding the driver from impersonating to steal goods, it shortens the identity verification process but still guaranteed accurate results To use the Flow-Through Gate system, drivers will be identified by a card with an identification chip and fingerprints After that, the driver will be required by the system to bring the car to the weighing station In this area, the system checks the driver's identity, the identity of the truck, the weight and the number of containers against the declaration and proceeds with the procedure to allow the truck to be imported When the driver passes the above tests, the system will send a message to the driver's mobile phone or mobile data terminal (MDT) notifying the location of loading and unloading of goods for container trucks 65 PART 3: CONCLUSION It can be said that the continuous evaluation, professional improvement and service quality improvement are a prerequisite for the sustainable development of any business, especially when the level of competition is increasing higher than ever For TICO International Corporation, over 15 years of business and development, although it has achieved significant success, it is still modest compared to well-known competitors in the market Demonstrate professionalism in the service by updating advanced technology applications, but the company still needs to research thoroughly from customer feedback for optimal options in the process of exchange LCL shipment includes searching for customers and shipping lines; cargo tracking; Customs procedures; Door-todoor transportation for customer’s needs to be carefully planned to avoid errors that cause many costs to customers and customers' trust in the company Offer more competitive pricing strategies by negotiating with shipping lines, studying favorable shipping routes Develop infrastructure, invest in a system of warehouses and specialized vehicles to proactively control and ensure goods for customers in the best way Besides, improving professional skills for employees is extremely important In addition, in order to leverage the development of freight forwarding activities by containers, the State and competent agencies need to have reasonable policies and laws to facilitate expansion trade with regions in the world, stimulate import and export activities to develop more Cutting down on cumbersome procedures, researching and applying digital technology to the procedures, developing transportation systems, seaport infrastructure is extremely necessary to bring the progress and quality of freight forwarding services go up Thoroughly grasping 66 and repelling signs of corruption and bossy acts of customs officers and seaports to help smooth and smooth forwarding and creating a clean service environment The paper successfully achieved its objectives and found the answers to the research questions I am confident that this research can help you improve the quality of your business in the future, not only in the retail delivery department but also all other functions I would like to express my sincere thanks to the Academy, all of the staff in TICO Company and especially the help of Ms Dao Hong Quyen for guiding and helping me to complete the study My study will definitely have shortcomings due to the inexperience, I hope to receive the comments from the teachers to make the study more complete Thank you sincerely! 67 REFERENCE - VLA (Vietnam Logistics Aviation), annual training, Basic Logistics background for new staff of member, 2019 - TICO International Corporation data - FIATA book, Logistics Academy, 2019 - Website TICO company: https://ticog.com/ - Website of General Statistics Office of Vietnam: https://www.gso.gov.vn/Default.aspx? tabid=217 - Website of Vietnam Customs: https://www.customs.gov.vn/home.aspx? language=en-US Belay Seyoum PhD (2000), Export – import Theory, pratices and procedure - Justin Paul, (2011), Export import Management 68 Comment [user15]: Đánh số, thêm vài giáo trình logistics nghiệp vụ kinh doanh xuất nhập vào ... improve the process of exchange LCL shipment in TICO International Corporation Range of study According to space, my study focus on the process of exchange LCL shipment in TICO International Corporation. .. that relevant to the process of exchange LCL shipment in TICO International Corporation - Analysis situation of the process of exchange LCL shipment in TICO International Corporation - Recommend...3 Aim and mission of study Aim of the study is recommendation of solutions for improving process of exchange LCL shipment in TICO International Corporation There are missions for reach this aim: