Factors affecting freight forwarding activities at Bach Viet Transport Co., Ltd
Human resources play a crucial role in determining the success or failure of a business, as they are essential for generating both material and spiritual wealth At Bach Viet, the company has focused on enhancing its workforce by expanding its employee network, thereby improving both the quantity and quality of its staff while also scaling up its operations.
Table 2.11: Labor structure of Bach Viet company in 2020
(Source: Accounting - Human Resources Department, Bach Viet Transport Company
By the end of 2020, Bach Viet Transport Co., Ltd employed 215 people, with a higher number of female employees, reflecting a common trend in the service industry Most of the workforce is concentrated in the business department, focusing on customer engagement and problem-solving The company prioritizes highly qualified staff, with six times more employees holding university degrees compared to those with lower qualifications, showcasing a commitment to quality in a competitive market Additionally, over 73% of employees are aged between 20 and 35, contributing youthful energy and enthusiasm, although this youthfulness can lead to inexperience in handling complex customer issues.
With a workforce of 56 seasoned professionals, the company benefits from strong industry partnerships that drive significant profits Since 2018, the Board of Directors has prioritized human resource development by offering internships, training courses, and seminars aimed at final-year university and college students in Hanoi These initiatives enhance students' skills and help identify potential employees for the company Additionally, summer travel activities and teamwork programs further foster skill development and collaboration among staff.
As a private company in Vietnam, Bach Viet's capital is mainly based on loans.
However, with a 15-year history of development and large profits that the company earns every year, it also forms a sufficient capital for the company to be financially self- sufficient.
Table 2.12 - Capital of Bach Viet Transport Company Limited
(Source: Accounting - Human Resources Department, Bach Viet)
Between 2017 and 2020, the company experienced a notable increase in equity, both in terms of value and proportion, demonstrating its growing financial autonomy and funding capabilities Although the percentage increase in 2018 and 2020 was modest, the overall trend remained upward By 2020, total capital reached 226 billion, representing 51.33% of the overall capital, which is nearly 2.5 times higher than the 35.71% recorded in 2016.
The company's total liabilities have steadily decreased from 2017 to 2020, with proportions dropping from 64.36% to 48.54% This indicates effective utilization of business capital, contributing to increased profits over the years However, despite a more than twofold increase in total capital by 2020, the changes in the proportions of loans and equity remain minimal, suggesting that the management of the company's receivables could be improved.
Bach Viet's headquarters is strategically located at 195 Kham Thien, Hanoi, offering convenient access for employees The office features an open workspace where all departments collaborate, with each employee provided a comfortable personal desk, computer, and phone The management and staff work side by side in a glass-partitioned meeting room, fostering a family-like atmosphere without hierarchy The office is equipped with essential tools, including a fiber optic network, printers, fax machines, scanners, and photocopiers, all maintained for optimal efficiency Additionally, a dedicated dining room is available, complete with microwaves, refrigerators, and catering services, promoting employee health and productivity.
The company offers a comprehensive range of equipment and services, ensuring that air conditioning and machinery are consistently stable, with on-site technical staff available for prompt repairs, minimizing downtime and costs However, the diverse computer systems are managed by only one IT staff member, leading to slow response times and increased employee downtime during technical issues, which negatively impacts overall business performance Despite these challenges, the information exchange and processing system is fully equipped.
The economic development of Vietnam significantly influences Bach Viet's operations, particularly through exchange rate stability Fluctuations in the exchange rate can have both positive and negative effects on the company For instance, when the exchange rate rises, Bach Viet can invoice customers in Vietnamese dong to collect more funds from unpaid accounts However, this increase also raises costs associated with obtaining bills of lading and delivery orders from shipping lines Consequently, it is crucial for Bach Viet to stay informed about exchange rate changes to navigate these impacts effectively.
Between 2018 and 2020, the global economy faced significant challenges that hindered import and export growth However, by the third quarter of 2020, signs of recovery emerged, largely driven by the substantial effects of the Covid pandemic.
Despite the challenges posed by the COVID-19 pandemic, the logistics industry continues to show promise for growth and profitability According to the General Statistics Office, Vietnam's GDP is projected to rise by 2.12% in the first nine months of 2020 compared to the same period in 2019, marking the slowest growth rate from 2011 to 2020 However, the logistics sector remains resilient and is expected to thrive in the future.
Bach Viet has the potential to expand its customer base by capitalizing on the growing import and export volume of Vietnam's goods, particularly in light of the US-China trade war As the US imposes taxes on Chinese imports, Vietnam's export strengths align well, presenting a significant opportunity for market share growth By leveraging this situation, logistics companies like Bach Viet can enhance their revenue and strengthen their competitive position against both domestic and international rivals.
At the Vietnam Logistics Forum 2020, Minister Tran Tuan Anh highlighted that new-generation free trade agreements like CPTPP, EVFTA, and RCEP will significantly enhance institutional reform and boost the competitiveness of goods, businesses, and the economy These agreements provide access to export markets with preferential tariffs, promote trade liberalization, facilitate trade, and lower input costs through technology transfer and more affordable imports under favorable conditions.
In 2020, Vietnam successfully navigated the challenges posed by the Covid-19 pandemic while leveraging opportunities from new-generation free trade agreements like CPTPP and EVFTA This dual approach led to a stable macroeconomic environment, controlled inflation, and a secure financial system with reduced interest rates and a stable exchange rate The commitments to market openness in logistics services under these agreements align closely with Vietnam's WTO obligations and existing laws Notably, these agreements present significant opportunities and challenges for the logistics sector, impacting market growth through increased service demand, quality improvements, and the need for capacity expansion, particularly for domestic logistics firms facing competitiveness issues.
Vietnam is strategically positioned next to the East Sea, a vital trade route on the global maritime map Among the 39 active maritime routes worldwide, 29 of them are significant, with one of the ten largest routes traversing the East Sea This busy waterway sees an average of 250-300 ship transits daily, with over 50% of these vessels exceeding 5,000 DWT and approximately 15-20% weighing 30,000 DWT or more, highlighting its critical role in global shipping traffic.
Vietnam's extensive 3,260 km East Coast features numerous seaport construction areas, with several locations capable of developing deep-water ports Notable sites for deep-water port construction include Cai Lan, Ha Long, Bai Tu Long, Lach Huyen, Tan Vu, Dinh Vu, Cat Hai, Do Son, Nghi Son, Cua Lo, Hon La, Vung Ang, Chan May, Da Nang, Dung Quat, Van Phong, Cam Ranh, Vung Tau, and Thi Vai.
The criteria for evaluating the results of business activities of import and export
2.5.1 Revenue, profit and asset criteria
Table 2.13 Some indicators related to business performance of Bach Viet Transport
(Source: Accounting - Human Resources Department, Bach Viet)
Between 2018 and 2020, Bach Viet demonstrated a consistent improvement in its profit-to-sales ratio, indicating a positive trend in the company's business performance over the years.
The company's return on sales (ROS) profit margin increased from 10.941% in 2018 to 16.794% in 2020, reaching its highest level in 2020 In 2018, for every 100 VND of revenue generated from business activities, the company earned 10.941 VND in after-tax profit, which rose to 12.915 VND in 2019.
In 2019, the company's after-tax profit decreased to 12.915% per 100 dong of revenue, down from 1.974% in 2018 Conversely, the Return on Equity (ROE) showed an upward trend, rising from 14.497% in 2018 to 16.81% in 2020, indicating that for every 100 dong of equity, the company earned 16.810 dong in after-tax profit by 2020 Despite a slight dip in 2019, the ROE demonstrated recovery and growth Additionally, the Return on Assets (ROA) also increased significantly, peaking at 20.987% in 2020, which means the company earned 20.987 dong of profit for every 100 dong invested in fixed assets The ROA rose from 11.302% in 2018 to 14.745% in 2019, reflecting improved asset efficiency and consistent growth over three years, showcasing the company's effective management and operational success.
Service quality at Bach Viet is evaluated both during and after contract execution The document staff efficiently prepares necessary paperwork for customer signatures, while the delivery team ensures prompt and secure delivery of goods, minimizing the risk of loss or damage Bach Viet offers competitive service pricing that is easily acceptable Additionally, the preparation of documents for certificates of origin is expedited, and the staff managing payment documentation are highly competent, ensuring a smooth transaction process between customers and partners Furthermore, return documents are promptly provided to customers upon contract completion.
Table 2 14: The proportion of quality goods delivered by Bach Viet
Bach Viet has limited customer appreciation initiatives, primarily offering gifts to partner companies during the Lunar New Year and on New Year's Day This suggests that while the quality of service during contract execution is commendable, the follow-up customer service and gratitude programs leave much to be desired.
2.5.3 Market share criteria of enterprises in the field of freight forwarding
The company's current market share in freight forwarding is relatively modest, comprising approximately 8% of the overall market and around 6% of the sea freight segment While this share represents a significant value, it highlights a challenge for the company, especially when considered against its broader development scale Addressing this issue is essential for future growth and competitiveness in the industry.
Bach Viet Foreign companies Other companies
In the competitive landscape of sea freight forwarding in Vietnam, local companies face significant challenges against foreign firms and joint ventures, which often leverage superior capital and technology to offer lower prices and exceptional service This pricing advantage heavily influences customer decision-making, compelling local companies to strive for better positioning in the market Additionally, there is a notable imbalance in the structure of goods transported by sea, with imports consistently outpacing exports This discrepancy is exacerbated by Bach Viet's higher export prices compared to industry peers, highlighting the need for strategic efforts to enhance competitiveness and market share.
2.5.4 Criteria for the level and speed of business development
After 16 years of growth, Bach Viet has established itself as a level 1 agent specializing in customer-requested services such as customs clearance, document preparation, storage, warehousing, and forwarding While essential assets like transport, equipment, and machinery are crucial for logistics companies, Bach Viet focuses on delivering the best and fastest shipping solutions to meet customer needs.
Bach Viet opts not to invest in high-value assets like transport vehicles and machinery due to their significant maintenance costs and underutilization, choosing instead to outsource these services to reputable partners such as Safaco and Sao Hai Phong These partners provide a range of trucks and tractors for both intra-city and long-distance transportation, covering routes with high demand but limited supply, like from Cat Lai port to regions such as Lam Dong and Gia Lai The company also relies on third-party warehousing services from firms like NCTS and GWS, avoiding investment in physical structures Additionally, Bach Viet prioritizes the maintenance of its management devices, ensuring regular checks and repairs, and invests in essential software for its operations, which constituted 12.686% of its fixed assets in 2020.
The service quality assessment model that customers often use
To evaluate customer perceptions of service quality at Bach Viet company, an assessment questionnaire was distributed via email to current and former partners This research aims to identify areas of customer dissatisfaction and the underlying causes, enabling the company to gather insights and suggestions for enhancing service quality The findings from the survey will provide valuable information to improve customer satisfaction and overall service delivery.
Due to time and resource constraints, this small study distributed a questionnaire to 80 email addresses of logistics companies and organizations that have engaged in transactions with Bach Viet Company The email contacts were sourced from the company's customer list and various platforms, including Shipping Gazzet, a magazine specializing in international transportation The response rate was encouraging, with 53 out of 80 companies providing feedback via email The insights gained from these responses, along with additional information collected during the research and internship at the company, serve as a solid foundation for assessing customer perceptions of the company's service quality.
Table 2.15: Reliability statistics table Target
2 Delivery area spread all over the world
4 Carry make documents quickly and accurately
5 The ability to well meet the special (such dangerousgoods goods that need to be duffled)
The statistics reveal that customer satisfaction with Melody Logistics' service quality is notably impacted by delivery times, with 17% of customers rating it as poor and 37.7% as normal Feedback indicates that delays can arise from various stages in the forwarding process, involving multiple parties such as shippers, carriers, and customs Factors contributing to these delays include unforeseen circumstances like inclement weather, scheduling inaccuracies, and issues related to the seller or consignee Despite these challenges, 26.4% of customers still rated the delivery time as good, and 18.9% as very good, likely due to the company's proactive approach in collaborating with other forwarders to expedite shipments when dealing with less-than-container loads.
Table 2.16: Statistical table of assurance
1 The behavior of the company's employees customers
2 Customers know a lot of information through the advice of the company's staff
3 Customers professional qualifications company employee service
4 The company's always polite and friendly to customers
Service quality assurance hinges on the knowledge and behavior of service providers, as well as their ability to instill trust in customers Since the service product is intangible and defined by the customer, its quality is assessed through subjective feelings and the interaction with company staff While the same service package may be offered, different employees can lead to varied customer evaluations This study, based on a limited number of responses, highlights specific cases and personal observations Customer confidence in the company's services is paramount; however, 25% of customers rated Bach Viet's staff as providing a normal level of trust, with 5.7% expressing dissatisfaction with staff behavior Only 28.3% of customers rated the staff as good, and 24.5% as very good, indicating a need for improvement in professional qualifications to enhance customer trust.
Only 18.9% of employees are rated as very good, highlighting the overall poor professionalism within the forwarding industry To excel in this field, employees must possess a broad range of knowledge, including sales skills such as effective communication, customer persuasion, and post-sale care Additionally, a successful salesperson in forwarding needs a solid understanding of forwarding operations, customs regulations, import and export activities, relevant legislation, and the nature of goods to ensure a smooth transportation process.
Viet employs a young workforce that possesses knowledge but lacks extensive experience Balancing work and study presents challenges, often resulting in difficulties that can lead to unmet customer expectations.
2 Company such as quotes…Scientifically presented and eye-catching
3 The company's arranged neatly and attractively
4 The company has a full range of equipment and facilities to serve the needs of cutomer
While services are inherently intangible, tangible factors such as physical conditions, equipment, and staff appearance significantly contribute to customer satisfaction A recent survey revealed that 41.5% of customers rated the company's equipment as good, with 20.8% rating it as very good, highlighting Bach Viet's commitment to utilizing and innovating technology The office is well-equipped, with individual computers and desk phones for each employee, as well as fax machines, printers, and photocopiers to meet business needs Employees can easily communicate with relevant departments and clients, thanks to an internet connection across all computers Additionally, the company has implemented an electronic customs declaration system, allowing customs declarants to submit data seamlessly from their office, where the system automatically processes the declarations.
1 The company's staff dedicated ready to solve, answer all customer questions
2 Customers company and noted by a certain employees
At Bach Viet, each customer is assigned a dedicated employee who provides enthusiastic and thoughtful care throughout the entire contract process, from initial consultation to delivery This personalized attention ensures that customers can easily track their shipments and feel valued A recent survey revealed that 49% of customers rated the staff's ability to pay attention as good, while 28.3% rated it as very good The commitment to dedicated service is evident, with 52.8% of customers giving very good feedback and 28.3% rating it as good Employees are well-equipped to address diverse customer inquiries, and the sales team emphasizes empathy, maintaining personal notebooks to capture essential client information This individualized approach allows staff to understand each client's unique preferences and working styles, ensuring tailored service that meets various needs, whether focused on project progress or pricing details Overall, the survey results indicate a strong understanding of customer needs, with no negative assessments reported.
1 The company questions complain quickly
2 Complaint make customers feel satisfied
3 Informationbetween customers and always maintained
Service quality is fundamentally determined by the company's responsiveness to customer complaints, which can only be assessed after the service is delivered A recent survey revealed that 28.3% of customers found the complaint handling slow, while 52.8% rated it acceptable, and only 18.9% rated it as good or very good In the context of international trade, where the import and export processes involve numerous stages, procedures, and risks, the company faces various challenges The duration from when goods are prepared for shipment to their arrival at the recipient's location is often lengthy, highlighting the importance of effective complaint resolution in maintaining service quality.
Customers consistently seek updates on their shipments, including status, quality, and any procedural issues Communication between the company's employees and customers is rated positively, with 62.3% of customers acknowledging good to very good information flow However, 39.7% rated it as average Employees' sense of responsibility towards customers is commendable, as they maintain consistent communication and address customer concerns promptly Despite this, customer satisfaction with feedback responses is only average, with 56.6% rating it as "normal" and 9.4% expressing dissatisfaction with the company's complaint handling.
General evaluation
Between 2018 and 2020, Bach Viet achieved significant milestones due to clear directives from its Board of Directors The company experienced steady growth in both revenue and profit, with annual figures consistently surpassing previous years, indicating a robust growth trajectory Additionally, the company's Return on Equity (ROE) and Return on Sales (ROS) metrics showed continuous improvement, reflecting enhanced management of business expenses Furthermore, since early 2017, Bach Viet has expanded its customs and domestic transportation services, integrating these into its freight forwarding operations to gain a competitive edge over local firms Notably, total revenue and profit in 2019 exceeded those of 2018, partly due to the company's strategic expansion into new import and export markets.
Bach Viet's investment in domestic services has significantly boosted customer attraction and retention, enhancing sales and competitiveness In 2017, the company joined the WCA (International Freight Forwarding Association), allowing for valuable partnerships with reputable agents, shipping lines, and airlines, which has led to preferential treatment and better pricing for its clients This competitive pricing strategy has established Bach Viet as a strong player in the market, facilitating its overseas expansion Additionally, the company's salary and bonus structure is favorable, particularly for sales staff, who have the autonomy to set their own prices based on customer relationships, resulting in high commission rates of 30-35% This approach has motivated employees to drive profitability and improve overall business efficiency Furthermore, Bach Viet maintains stringent forwarding contracts that clearly outline pricing, payment terms, and mutual responsibilities, leading to minimal disputes and customer complaints.
Bach Viet's import and export freight forwarding process is designed for efficiency, featuring a well-defined division of responsibilities among Sales, document, delivery, reception, and accounting teams This specialization ensures that each step of the process is executed optimally, facilitating a swift and effective delivery experience.
Firstly, customers also complain a lot about delivery time and lost, broken goods.
In 2018, the percentage of damaged goods peaked at 4.9%, while it dropped to a low of 2.4% in 2020 Additionally, the highest rate of goods delayed compared to the plan occurred in 2017, with the lowest rate recorded in 2019 at 2.1% These issues have led to significant customer dissatisfaction, adversely impacting their businesses and resulting in a decline in service usage Currently, only about 50% of customers remain loyal to Bach Viet's services, having utilized them for six years or more.
Firgue 2.9 Proportion of damaged and delayed goods in Bach Viet's delivery process,
Despite increasing personnel for business expansion, Bach Viet Transport Co., Ltd still struggles with the quality of its customs clearance and domestic transportation services The average processing time for a golden stream customs declaration is typically 1-2 days, but delays can occur, especially when goods enter the red channel, leading to extended wait times Delays in customs procedures can result in shipments being stored at the yard, incurring additional costs such as storage fees Furthermore, the company's domestic transportation arrangements lack proactivity, requiring a full day's notice for full-container deliveries and half a day's notice for LCL shipments to ensure timely delivery to customers.
Despite having a structured plan for employee training and periodic evaluations based on specific criteria, the company faces challenges with uneven staff quality, primarily due to a workforce comprised mostly of young, inexperienced employees, many of whom are recent graduates or still in school On-the-job training provided by former employees often leads to knowledge gaps, resulting in frequent mistakes during actual work processes that ultimately compromise service quality.
The quality of post-delivery customer service remains inadequate, with a lack of appreciation programs negatively impacting the relationship between customers and the service provider.
Currently, Incotrans holds a relatively low market share in the Vietnam logistics sector, comparable to other forwarding companies of similar scale Additionally, the company's development level is rated as level 1, indicating that it primarily functions as a basic forwarding service provider Despite issuing a House B/L, Incotrans has not yet achieved level 2 status, as it lacks exclusive agents at the ports for managing the closure and withdrawal of import and export goods.
The company faces significant challenges in debt collection, resulting in a large amount of tied-up capital and an extended average collection period Only 45-50% of customers pay their debts on time, with invoices typically issued 15-20 days after the sale However, many customers generate multiple shipments and prefer to settle their accounts at the end of the month, leading to actual debt repayment occurring 45 days post-invoice, which is approximately 20 days overdue This delay negatively impacts the company's capital efficiency and increases costs associated with bad debts.
The personnel arrangement within the company is ineffective, with the sales department comprising over two-thirds of the total staff, while after-sales support is insufficient to manage the workload generated by sales Consequently, departments such as Pricing, Customer Support, and Operations are consistently overwhelmed, often requiring employees to work late into the evening to complete their daily tasks.
The delays in delivery stem from the company's reliance on outsourced garage and warehouse services, leading to a disjointed connection and complicated delivery plans Many urgent shipments require immediate attention, but upon arrival at the warehouse for retail processing, they often face a minimum wait of 14 hours before delivery vehicles can be arranged This process is further complicated by the availability of rental cars, making timely deliveries a challenge.
The forwarding service experiences significant seasonality, with peak and low periods closely tied to the import-export market's fluctuations Typically, the first months of the year see reduced activity, while the last six months are overwhelmed, placing undue pressure on staff and potentially disrupting workflow and productivity Additionally, challenges such as shipping lines running out of space or missing containers compel employees to seek alternative solutions, including contacting shipping lines or co-loaders for reservations This situation can inadvertently raise the cost of goods sold and delay delivery times.
Delays in train services due to unfavorable weather conditions significantly impact logistics quality Additionally, the underdeveloped seaport system in our country forces many ships to transship through other ports, leading to potential delays and dropped goods Customer-related issues, such as late document submission, urgent plan changes, and outstanding tax debts, further complicate the logistics process, as companies must wait for bank notifications before clearing goods.
SOME POWERFUL SOLUTIONS FOR TRANSPORTATION
Objectives and development orientation of the company in the coming time
To ensure future growth and adaptability to economic fluctuations, Bach Viet's board of directors implements timely strategies and policies The company prioritizes enhancing its sea freight forwarding business by refining processes and improving quality at each stage, from receiving goods to customs declaration and storage Effective communication and information sharing are crucial to prevent costly errors that could impact business performance Additionally, Bach Viet plans to expand its delivery services for high-value and specialized goods, such as those requiring inspection certificates and export permits, thereby attracting and retaining customers while boosting revenue The company aims to strengthen relationships with domestic partners and expand its market presence in China, ASEAN, Europe, and America To support these initiatives, Bach Viet is developing a robust business management and pricing mechanism to enhance competitiveness, reduce costs, and improve service quality Employee training in foreign trade and soft skills is also a priority, alongside regular assessments to identify strengths and weaknesses, fostering better performance Finally, the company emphasizes close coordination among departments and branches to achieve collective success.
Analysis of the company's opportunities and challenges
Simple personnel organization: Currently, Bach Viet's personnel structure includes
A streamlined organizational structure featuring one director and one deputy director enables rapid capitalization on market opportunities With minimal intermediate layers, communication is direct and swift, facilitating the quick implementation of new strategies This simplicity reduces the challenges of collaboration that often arise in more complex organizations.
Bach Viet's strong reputation in the shipping industry stems from its commitment to enhancing service quality and offering professional services, including customs consulting, import and export entrustment, and document handling This dedication ensures that Bach Viet consistently delivers exceptional service to its customers.
With 16 years of experience in logistics, the company has established a strong market presence by delivering a continuous value-added chain for customers It offers comprehensive logistics solutions, including sea and air transportation, supply chain management, warehousing, cargo clearance, and road transport, showcasing its operational strength and commitment to customer satisfaction.
With the rapid advancement of information technology, the significance of information has become increasingly evident Bach Viet leverages its young and dynamic workforce to swiftly understand import and export market trends, customer needs, and competitor pricing This strategic approach enables the company to gain a competitive edge in both pricing and service quality, allowing it to dominate the market effectively.
The company boasts advanced technology with comprehensive Wi-Fi coverage, allowing employees to efficiently manage their customer systems through the company website, which is seamlessly integrated with other departments Customers are kept informed about their shipments, receiving notifications when goods depart from the port and arrive at their destination Additionally, they can track their orders using the REF number or container number on Bach Viet's website.
Bach Viet leverages its extensive network of suppliers to secure advantageous contracts with major shipping lines like Maersk, One, and COSCO, resulting in competitive pricing This diverse supplier base not only allows for a variety of pricing and services but also enhances product uniqueness, enabling the company to effectively meet customer demands.
Despite its advantages, Bach Viet faces several challenges in the delivery and receipt of import and export goods that require improvement The slow integration of science and technology in forwarding procedures, particularly in electronic customs declarations, often results in errors related to tax codes and declaration data Additionally, the document verification and preparation process can be cumbersome due to the variety of required documents, especially for large and complex orders, which may include contracts, commercial invoices, customs declarations, packing slips, and certificates of origin This can lead to delays in customs clearance when documents are incorrect, invalid, or conflicting Furthermore, while the company boasts a large and dynamic workforce, most employees are young and lack the necessary experience and expertise to effectively address these challenges, necessitating significant time and effort for training and development.
Fourthly, the company's import entrustment service often encounters many difficulties.
Each year, the company refreshes its imported goods, but this continuous innovation hampers its ability to fully understand individual commodity markets, resulting in a diminished reputation in the international trade arena.
Under Prime Minister Nguyen Xuan Phuc, Vietnam's logistics industry, particularly sea freight forwarding, is experiencing significant growth and promotion The implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on January 14, 2019, has created new opportunities for international businesses in Vietnam, as the country is one of the 11 participating nations Additionally, the upcoming Vietnam-Europe Trade Agreement (EVFTA) is set to further enhance trade relations and economic prospects.
In 2020, the import-export and logistics sectors in our country experienced significant growth, driven by the European Union's agreement to implement 0% import-export tax incentives on over 90% of goods from Vietnam As Europe ranks among the key markets for our companies, following China and Asia, it presents substantial profit opportunities With the government's support fostering industry development, this is an excellent chance for businesses to thrive both domestically and internationally.
Many Vietnamese enterprises still struggle to fully engage in transportation and forwarding services, often acting as mere satellites for foreign companies by handling isolated tasks like customs procedures or leasing transport In contrast, Bach Viet leverages its resources to assert control over its own future and operations.
Bach Viet company's human resources, while not as specialized as those of competitors, have accumulated significant experience As the market grows, the demand for skilled professionals rises, yet Bach Viet's scale and structured training processes provide a competitive edge in attracting top talent.
Balancing low freight rates with high-quality delivery services is a persistent challenge for logistics companies like Bach Viet While customers consistently demand affordable shipping options, management must also ensure profitability to sustain business operations This dilemma is not unique to Bach Viet; it is a common pressure faced by all logistics firms To navigate this issue, companies must implement strategies that align the interests of both the business and its customers, striving to satisfy client needs while maintaining financial viability Achieving this balance is often a complex task.
The management of agencies and sectors faces challenges due to overlapping and inconsistent policies, which can hinder business operations For instance, during the customs declaration process for retail goods, customs authorities mandate that goods must arrive at the port and enter the warehouse before declaration, while warehouse operators require a new declaration for the goods to be admitted.
The logistics market is becoming increasingly dynamic, with numerous new entrants intensifying competition In this rapidly evolving landscape, businesses must stay attuned to trends and continuously enhance their service quality; otherwise, they risk being overshadowed by emerging players and losing their competitive edge.
Some solutions to develop freight forwarding services
In today's highly competitive forwarding market, companies must expand their reach to survive and thrive This strategic approach is essential for achieving profit goals and enhancing market position.
Currently, the company is expanding its presence in various international markets, with a primary focus on the Chinese market, which shares cultural similarities with Vietnam However, there remain untapped opportunities in regions such as the Americas, Europe, Africa, and South America, including countries like Mexico.
Market expansion is a complex endeavor, as each market possesses unique economic, political, cultural, legal, and social characteristics These factors significantly influence the business environment and consumer psychology, impacting a company's ability to penetrate and grow in new markets To successfully expand, companies must undertake specific strategic tasks tailored to these diverse market conditions.
To successfully enter a new market, a company must understand the local customs and laws that differ from its existing markets Identifying these differences is crucial, as they may present challenges or obstacles to effective freight forwarding operations.
The US market presents significant opportunities for strategic expansion, but it is also highly demanding due to the complexities of its legal system With stringent regulations at both federal and state levels, companies must navigate a diverse array of laws that vary by state Success in one contract does not guarantee the same outcome in future agreements, underscoring the importance of understanding and adapting to the unique legal requirements of each jurisdiction.
Understanding the forwarding demand in a market is crucial for long-term development To assess a market's potential, a company must analyze the demand and quantity of services needed, as early identification of growth opportunities can lead to significant profits Currently, China represents a vital market for the company, contributing a substantial volume of goods The company is committed to deepening its presence in this market, while also gradually building relationships in the promising US and European markets to establish a strong foundation for future business endeavors.
Entering a new market requires thorough research on competitors to understand the level of competition It's essential to analyze the strengths and weaknesses of these competitors, which will enable the company to develop effective strategies for successful market entry.
Accurate and complete information enables a company to enter the market efficiently and cost-effectively Understanding current customer needs and future growth potential is crucial for success in traditional markets The company must assess its ability to meet these needs both now and in the future If the services offered align with customer demands, the company should consider expanding its service range strategically to enhance market responsiveness and demand fulfillment To gather essential insights, it is vital for the company to employ qualified staff who can engage in knowledge exchange with domestic and international firms, as well as participate in professional training programs.
The company focuses on expanding its customer base through a deep understanding of both customer needs and market dynamics Sales staff engage directly with clients to promote the company's services, while leadership participates in seminars and meetings to foster relationships with international firms and secure contracts A well-planned penetration strategy is essential, requiring employees to possess strong professional expertise, marketing skills, and effective communication techniques Although entering the market independently allows for greater initiative, it also entails risks, as initial efforts may not yield immediate results.
A prevalent type of joint venture involves partnering with foreign companies that have existing knowledge of the target markets While this collaboration requires sharing profits and may place the company in a less dominant position, it allows for leveraging the capital and networks of partners This strategic approach enables the company to bypass extensive market research and quickly expand its market share while effectively reducing risks.
In the realm of sea freight forwarding, our company offers essential services such as bulk cargo transportation, full container cargo shipping, consolidation services, and warehouse-to-door delivery We emphasize the importance of our consolidation service, which benefits all parties involved: carriers save time on odd shipments, shippers reduce costs by avoiding full container rentals, and forwarders enjoy increased revenue from higher retail freight rates By establishing efficient delivery and packing stations, our company can easily and responsibly manage these services, ensuring a seamless experience for our clients.
To enhance operational efficiency, the company must forge partnerships and establish contracts with domestic and international shipping lines, airlines, and railways, ensuring priority access to transport means and seating during peak seasons It is crucial to coordinate effectively at transshipment points, with branch agents closely monitoring and promptly communicating transport schedules and departure times Selecting the right carrier is vital for seamless connections upon arrival at transshipment points, safeguarding space to prevent cargo loss Additionally, investing in the expertise and experience of professional staff is essential for building a strong market reputation, which is critical for the growth of this service.
To ensure efficient contract performance and timely delivery of goods, it is crucial for employees across all departments to collaborate effectively Field staff should be assigned immediately after a sale is finalized, enabling customers to understand the necessary procedures and required documentation in advance This proactive approach minimizes the risk of delays and additional costs due to customs issues Sales representatives must regularly confirm that customers have signed and sent their contracts, as well as prepared the essential documents for customs clearance This not only streamlines the process but also enhances customer confidence in the delivery of their shipments with Bach Viet.
Sales staff prioritize understanding customer needs to provide optimal solutions They implement loyalty programs for existing customers while actively seeking new ones Regular seminars are held to promote new brands and services, fostering communication and feedback After-sales care involves engaging with customers about their lives and challenges, serving as an effective and low-cost form of service advertising that encourages word-of-mouth promotion of the company's offerings.
3.3.3 Solution 3: Improve the quality of human resources
Bach Viet should consistently provide employees with opportunities to attend foreign trade training courses offered by Customs Additionally, experienced employees should actively mentor new hires, helping them quickly acclimate to the company and understand its processes and unique characteristics.