INTRODUCTION OF NGHI SON AQUATIC PRODUCT
Establishment and development
Nghi Son Aquatic Product Exim Co., Ltd, established in 2014 and part of the Nghi Son Foods Group, is a family-owned company with extensive expertise in the seafood industry The company's vision is to become a leading manufacturer and exporter of high-quality seafood in Asia, particularly in Vietnam This overview provides essential insights into Nghi Son Aquatic Product Import Export Limited.
Legal name: NGHI SON AQUATIC PRODUCT IMPORT EXPORT COMPANY LIMITED
Abbreviation name: NGHI SON CO.,LTD
Head office: Floor 7th, 85 Nguyen Huu Cau, Tan Dinh Ward, District 1, Ho Chi Minh City
Legal representative: Nguyen Van Minh
Main business fields: Processing and trading Marine fish, Freshwater fish and Dried seafood
Leveraging family traditions in seafood business knowledge, the company effectively manages its supply chain, encompassing the catching of raw materials, freezing and drying processes, and the packing and delivery of high-quality products at competitive prices Continuous improvements in processing and shipping systems have enhanced substantial retail distribution efforts, both within Vietnam and in international markets.
Consumer recognition in the home country highlights the company's commitment to improving its services, validating the efforts made This positive feedback has enabled the firm to successfully expand into international markets, including China, Japan, Korea, the Philippines, Malaysia, Spain, Thailand, India, Indonesia, and Egypt.
Functions, missions, organizational structure and human resources
Nghi Son Aquatic Product Exim Co., Ltd specializes in processing and trading a variety of fishery products, including marine and freshwater fish, dried seafood, Pangasius, Yellowfin Tuna, and Shrimp The company processes these products at its factory in Binh Thuan Province and exports both its own processed goods and aquatic products sourced from other factories under specific sales contracts While Nghi Son imports frozen fishery products, these imports represent a small fraction of its overall business With a vision to lead in the supply and export of high-quality aquatic food, Nghi Son is committed to enhancing its processing systems and supply chain management to ensure efficient delivery of products at competitive prices.
Nghi Son is dedicated to adhering to both domestic and international laws and regulations, with a core mission centered on conducting business with integrity This commitment underscores the company's values and operational principles.
Nghi Son operates legally under business license number 0730103446345, engaging in the processing and trading of fishery products while fulfilling tax obligations The company is committed to delivering high-quality fishery products that comply with both Vietnamese regulations and the standards of its international partners To meet the growing demand for aquatic goods, Nghi Son actively conducts market research to expand its trading markets.
Nghi Son prioritizes human capital in its human resources management, emphasizing the importance of employee development alongside compliance with Labour Law The company fosters a corporate culture rooted in humanitarian values, motivating employees to work diligently and contribute meaningfully to the organization’s success.
1.2.3 Organizational structure and human resources management
Nghi Son Aquatic Product Exim Co., Ltd is structured into four key departments: Documentation, Sales, Accounting, and Human Resources & Administration This departmental organization facilitates a functional management approach within the company The accompanying chart illustrates the organizational structure of Nghi Son Aquatic Product Exim Co., Ltd.
(Source: Human Resources & Administration Department)
The functional structure features a defined hierarchy, with a designated head for each function responsible for overseeing the quality and consistency of employee performance This fixed and repetitive role distribution within departments enables employees to enhance their skills and boost their performance The Board of Directors and departmental functions work collaboratively to ensure organizational efficiency and effectiveness.
Board of Directors includes three people One General Director, the firm’s legal representative, oversees the overall performance of the company and directs
Nghi Son's organizational structure includes a financial director and a manufacturing director overseeing their respective areas The Board of Directors plays a crucial role in setting the company's objectives and strategies, fostering partnerships with both domestic and international economic organizations, ensuring compliance with Vietnamese laws, and promoting employee involvement in business management to maximize performance.
The Documentation Department consists of four members: a head supervisor overseeing tasks, a logistics executive handling bookings, a documentation executive responsible for document preparation, and a team member managing customs and outdoor activities This department is essential for booking logistics, preparing vital documents such as Commercial Invoices, Packing Lists, Certificates of Origin, and Health Certificates, as well as executing customs formalities.
The Sales Department is composed of nine members, including a head and eight sales staff Their primary responsibilities involve identifying potential customers and gathering contact information through various channels such as fairs, conferences, seminars, partnerships, the internet, and social media The sales team engages with consumers through phone calls, emails, and direct interactions, negotiates transactions, prepares contracts, and collaborates with the Documentation Department to ensure contract execution.
The Accounting Department consists of three key roles: a chief accountant, a warehouse accountant, and a treasurer This team is responsible for managing financial activities, including recording transactions, preparing monthly, quarterly, and annual financial reports, ensuring compliance with tax regulations, budgeting for business operations, and monitoring revenue, costs, and profits.
The Human Resources & Administration Department consists of a dedicated female professional responsible for managing internal communications and overseeing human capital Her role includes recruiting talent, maintaining documentation, and performing various administrative tasks to ensure efficient operations.
Since the company is small-sized, one person is enough to undertake the above mentioned things
The Sales, Accounting, and Human Resources & Administration Departments have a sufficient number of employees to fulfill their job requirements However, the Documentation Department is understaffed, as highlighted by its head During peak shipment periods, the lone staff member responsible for booking, documentation, and customs tasks faces overwhelming workloads, leading to hectic days.
Nghi Son Aquatic Product Exim Co., Ltd employs a total of 23 individuals, with a notable majority being female In terms of educational qualifications, the highest proportion of employees holds bachelor's degrees, surpassing other degree levels.
Table 1.1 Human resources by gender and education level of Nghi Son
Aquatic Product Exim Co., Ltd
(Source:Human Resources & Administration Department)
In terms of gender, the vast majority of human resources are female, which is
In a workforce of 23 individuals, 16 are female, making up 69.75% of the total, while 7 males account for 30.43% The ratio of females to males is two to one, with men predominantly occupying outdoor roles such as operations staff, which require strong physical health Conversely, the accounting department is exclusively female, and a significant portion of sales and documentation positions are also held by women These roles prioritize carefulness and detail orientation, typically involving minimal outdoor activity.
Over 50% of employees possess a university degree, adequately fulfilling job requirements Managerial roles are typically held by individuals with master's or bachelor's degrees and extensive experience Non-managerial positions are often filled by those with college degrees and practical skills, alongside recent graduates who, despite lacking experience, show a strong eagerness to learn.
Business outcomes
The table presents the business performance of Nghi Son Aquatic Product Exim Co., Ltd over a three-year period from 2017 to 2019, focusing on revenues, costs, and profits It includes annual figures for each variable and provides comparative analysis between 2018 and 2017, as well as between 2019 and 2018, highlighting both absolute and relative changes.
Table 1.2 Business outcomes of Nghi Son Aquatic Product Exim Co., Ltd between 2017 and 2019
Currency: USD (United States Dollar)
Table 1.3 Comparison of business outcomes of Nghi Son Aquatic Product
Exim Co., Ltd from 2017 to 2019
Currency: USD (United States Dollar) Comparison
Between 2017 and 2019, the company experienced an increase in revenues, costs, and profits after taxes, both in absolute and relative terms Notably, profits saw the highest growth rates during the periods of 2017-2018 and 2018-2019, while the growth rate for costs was comparatively lower This analysis, based on data from the Accounting Department, will further explore the company’s performance during this timeframe.
In 2018, revenues rose to USD 11,978,542.26, an increase of USD 1,034,606.41 from USD 10,943,935.85 in 2017 The upward trend continued in 2019, with revenues reaching USD 13,279,268.16, reflecting a growth of USD 1,300,725.90 compared to the previous year Additionally, costs also increased by USD 846,583.29 between 2017 and 2018.
In the period from 2018 to 2019, revenues increased by USD 1,107,578.14, outpacing costs and leading to higher profits Specifically, profits in 2019 surpassed those of 2018 and 2017 by USD 188,023.12 and USD 193,147.76, respectively.
Between 2018 and 2019, revenue growth accelerated to 10.86%, compared to 9.45% from 2017 to 2018, driven by Nghi Son's successful establishment of long-term customer relationships and numerous contract signings In contrast, cost growth increased from 8.52% in the previous period to 10.27% in the latter, primarily due to the expansion of the fishery-processing factory in Binh Thuan Province and the hiring of additional sales staff to support a five-year growth strategy While profits rose more significantly in absolute terms between 2019 and 2018, the growth rate was lower than the previous period, partly due to rising raw fishery product prices impacting profitability.
The importance of documentation department in Nghi Son Aquatic
The documentation department at Nghi Son Aquatic Product Exim Co., Ltd plays a crucial role in coordinating with the sales and financial accounting departments to manage export and import activities, which are vital to the company's operations This team is responsible for booking and preparing essential documents, as well as handling customs formalities Throughout the documentation process, employees closely monitor shipments to ensure all relevant information is accurately reflected in the documents It is imperative that the documentation staff guarantee the accuracy and completeness of all documents sent to customers Once contracts are finalized, the documentation department takes on significant responsibilities in executing these agreements.
Summary of internship period
From 13 July, 2020 to 14 July, 2020, I worked as an intern in the Documentation Department I have had the opportunity to learn and understand practical knowledge regarding import and export, especially the process for executing export contracts at Nghi Son during the last five weeks My internship period at the company can be summarized as follows:
Tasks: Read up on the company; having been taught about the general export process at the company; copied and scanned some documents
Results: Learned of the establishment and development of Nghi Son, got acquainted with how the company works, gained general understanding about the process for exporting a shipment
Tasks: Read documents of previous shipments; , observed how Customs declaration, Health Certificate application and Certificate of Origin registration were conducted online
Results: Understood information included in the documents, improved the grasp of practical export process
Results: Understood how to draft documents, such as Invoice, Packing List, Shipping Instruction (SI), Verified Gross Mass (VGM)…
Week 4 and 5 (3 August – 7 August and 10 August – 14 August, 2020):
Under the guidance of Mr Thong, the Head of the Documentation Department, I am engaged in the ongoing preparation of essential documents such as invoices, packing lists, shipping instructions (SI), verified gross mass (VGM) certificates, health certificates, and certificates of origin.
Results: Enhanced carefulness and skill in preparing documents, having been familiar with process for executing export contracts.
PROCESS FOR EXECUTING THE EXPORT SALES
General process for executing an export sales contract at Nghi Son
The following figure outlines the typical procedure followed by Nghi Son Aquatic Products Exim, Ltd for executing an export contract Once the sales contract is signed, the process consists of seven key steps This article will first provide an overview of how export contracts are executed, followed by a detailed analysis of a specific shipment that the company is currently handling during my internship.
Figure 2.1 General process for executing an export sales contract at Nghi Son
(Source: The author’s collecting data through observation)
Upon receiving an email from the importer regarding deposits sent to Nghi Son's bank account or the application of the original Letter of Credit as per the sales contract, the Sales Department promptly forwards this email to the Accounting Department The Accounting Department then verifies the bank account status or the issuance of the Letter of Credit, confirming the receipt of deposits via Telegraphic Transfer.
4 Stuffing empty containers with cargo
7 Completing and sending the set of original documents to the Buyer the Letter of Credit has been issued, the incharge sales person of such contract will then email Purchasing Team based in Binh Thuan province for their preparation of the goods There are two main ways which the goods are prepared First, the goods are processed within the company’s factory in Binh Thuan Second, Purchasing Team is responsible for purchasing fishery products from fishermen, or ordering them from other factories in accordance with requirements of Buyers under specific contracts
Nghi Son's exports primarily consist of aquatic products that undergo safety checks by the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) For goods processed in-house or sourced directly from fishermen, Mr Long oversees marine and freshwater fish, as well as dried seafood, while Mr Phi is responsible for catfish, ensuring that current samples are submitted to NAFIQAD for food safety testing When products are sourced from external factories, the Documentation Department coordinates the necessary documentation, including sample information and the application for a Certificate of Origin, in collaboration with the processing factory's staff.
Samples for testing can be analyzed on-site if the factory is close to NAFIQAD; otherwise, they must be sent to NAFIQAD centers Normal testing results are available within five working days of sample receipt, while tests for antibiotics and heavy metals take seven working days to process, starting from the same sample receipt date.
NAFIQAD’s testing aims to ensure food safety and provide Health Certificates upon request from importing countries A Health Certificate is issued only when samples meet the required export standards; if they do not, the samples may undergo a second test or may not be tested again at all.
The export trade terms in sales contracts between Nghi Son and its buyers predominantly utilize C terms, specifically CFR and CIF Consequently, Nghi Son is typically responsible for arranging the vessel for nearly all transactions, with the documentation staff tasked with the vessel booking process.
When NAFIQAD testing results for food safety are available, Mr Cuong, responsible for booking the vessel, communicates with forwarding agents via email to negotiate freight rates, vessel schedules, and terms The company typically collaborates with forwarders such as Headway Logistics, Thami Shipping & Airfreight Corporation (TMC), Oscar Logistics, Advantage Logistics, Golden Line Transport Corp., and NYD Logistics Corporation This process allows Mr Cuong to select the most cost-effective forwarder based on freight and schedule Once a forwarder is chosen, he receives a Booking Confirmation for FCL shipments or a Booking Note for LCL shipments, which he then forwards to the trucking company, warehouse staff, and packing employees via email Additionally, this information is shared with the Documentation Department's group on Viber for verification.
2.1.4 Stuffing empty containers with cargo
After confirming the booking with the trucking company, Mr Cuong contacts them to arrange the pickup of empty containers from the designated shipping line location These containers are then transported to the stuffing warehouse in Hoang Lai, Long An province, where Nghi Son's operational staff will load cargo according to the specified conditions and temperature in the Booking Confirmation The trucking company sends photos of the container details and seal numbers to Mr Cuong via Zalo upon receipt Upon receiving this information, Documentation Executive Ms Hanh prepares the Shipping Instruction (SI) and Verified Gross Mass (VGM) documents, which are then forwarded to the freight forwarder for the draft Bill of Lading.
Once the goods are ready for loading, the operations staff will carefully stuff reefers with dried and frozen products After loading, they adjust the reefers' temperatures to minus 10 degrees Celsius for dried items and minus 18 degrees Celsius for frozen ones before coordinating with the trucking company to transport the containers to the loading port If any issues arise during the stuffing process, such as container conditions or discrepancies in goods quantity, the warehouse staff in Long An must promptly inform the head of the Documentation Department for resolution.
Draft documents are created based on sales contracts, with Ms Hanh responsible for their preparation Mr Thong reviews and forwards these documents to Sales for the Buyer’s review and confirmation The two parties negotiate the draft contents via email, while the Documentation Department of Nghi Son makes necessary adjustments The required documents include a Commercial Invoice, Packing List, Health Certificate (if applicable), and Certificate of Origin (if applicable) For sales contracts under CIF Incoterms® 2010, the Documentation Department must send the draft Bill of Lading and draft Invoice confirmed by the Buyer to the insurer before the vessel departs from the loading port.
Mr Thong or Ms Hanh oversees customs and e-port declarations, while Mr Lam handles customs clearance, liquidation, and vessel records before the port's closing time E-port declarations are made through the website eport.saigonnewport.com.vn, where container lifting-on/lifting-off procedures and associated fees can be paid online Customs declarations are processed via the VNACCS system, allowing for immediate feedback from the Customs Authority After submitting shipment information, Mr Lam prints the customs declaration form and proceeds to the port for clearance and liquidation Notably, fishery products are exempt from export duties, with approximately 80-90% of the company's products falling under the green channel, 10-20% in the yellow channel, and only 1-2% categorized as red, which are selected randomly by customs.
2.1.7 Completing and sending the set of original documents
Upon receiving confirmation of the documents from the Buyer, the Documentation Department will finalize and adjust them as needed The complete set of documents includes a Commercial Invoice, Packing List, Health Certificate (if applicable), and Certificate of Origin (if applicable).
In the telegraphic transfer process, both scanned and original documents are provided to the Buyer The Sales Department emails scanned documents, while the Documentation Department ships original documents via DHL express The final payment is collected once the Buyer receives the scanned documents If payment is made through a Letter of Credit, the Documentation Department sends the original documents to Nghi Son’s bank as stipulated in the sales contract.
Detailed description of process for executing export sales contract of
On July 13, 2020, an order for Dried Anchovies was placed with Workshop Dried Marine Products - Phu Hai Sea Products Factory, despite the contract being dated July 12, 2020 No deposits were required for this transaction, and due to a prior shipment to the same buyer, the order process was expedited within a day The General Director managed this export contract personally, ensuring that any changes in requirements were promptly communicated via phone and email with Ms Rose, a sales representative from Nghi Son, and the responsible employees at Phu Hai factory.
The total quantity of Dried Anchovies is 52,000 kilograms, packaged in 4,000 cartons weighing 13 kilograms each These cartons are labeled according to specifications provided by Ms Rose via email to the factory's marking supervisor and are stored at a temperature of minus ten degrees Celsius The goods are divided into two lots: NS0004 and NS0005, each with a net weight of 26,000 kilograms Lot NS0004 was produced on June 1, 2020, while lot NS0005 was produced on June 2, 2020, both having a shelf life of two years from their respective production dates.
Nghi Son prepares goods through two main methods: processing at its own factory or purchasing from fishermen or other factories In this instance, goods were ordered from a factory outside of Nghi Son, specifically from Phu Hai Factory, which expedited the shipment preparation due to previous orders If this were a new processing contract, it would have required more time The new order saw minimal changes, primarily in quantity and pricing, thanks to the established relationship between Nghi Son and Phu Hai, as well as the long-term partnership with Yin Qing Company However, Nghi Son lost some control over ensuring adequate goods were available by the estimated departure date from the loading port, necessitating a revision of the Booking Confirmation.
On July 13, 2020, after finalizing an order with Phu Hai factory in Binh Thuan Province, Ms Rose advised Mr Thong, head of Nghi Son’s Documentation Department, to ensure that the dried anchovies met NAFIQAD standards through a phone confirmation with Phu Hai Given a previous similar order, this verification took only five to seven minutes Additionally, since the buyer was from China, compliance with local regulations required a Health Certificate for the import of fishery products, as stipulated in Annex VIIA of Circular No 16/2018/TT-BNNPTNT Consequently, it was essential for Nghi Son to obtain the Health Certificate for the exported dried anchovies destined for Yin Qing Company, with the application process to be handled by Nghi Son’s Documentation Department following quality assurance results.
On July 24, 2020, Mr Thong submitted an online application for a Health Certificate via the Vietnam National Single Window (vnsw.gov.vn), providing three essential documents: the Bill of Lading, the Health Certificate Registration Form, and a Detailed Packing List as required by NAFIQAD After completing the health certification declaration, he contacted NAFIQAD 4 via email at chungnhanonline@nafi4.com.vn to request the issuance of the Health Certificate Subsequently, on July 27, 2020, Mr Lam received the Health Certificate by post from NAFIQAD 4, which was referenced as YD l4354/20/CH.
Comments: Like preparation of the goods, the previous order of Dried
Anchovy significantly streamlined the quality testing process for Nghi Son at the Phu Hai factory Following NAFIQAD 4's guidelines for Health Certificate issuance, companies typically receive their original Health Certificate one working day after registration In this instance, the application was submitted on a Friday, allowing Nghi Son to obtain the original Health Certificate by the following Monday.
The Dried Anchovies contract operates under CIF Huang Pu, China, as per Incoterms® 2010, which places the responsibility of vessel booking on Nghi Son On July 13, 2020, after ensuring that safety checks complied with NAFIQAD standards, Mr Thong communicated with Mr Cuong via Skype regarding inquiries about freight services with forwarders A Booking Confirmation was sent to Mr Cuong on July 14, 2020, as the shipment constituted a full container load.
Conditions of containers were required to be new, clean, in good conditions,
The shipment, weighing 34 MTs and requiring a temperature of minus 10 degrees Celsius, was initially scheduled to depart on July 22, 2020 However, due to insufficient quantities of Dried Anchovies from the Phu Hai factory, Mr Cuong had to adjust the booking A new Booking Confirmation was issued on July 20, 2020, with a revised estimated time of departure set for July 25, 2020 This confirmation was communicated to the Documentation Department via Viber, as well as to the warehouse, operations staff, and trucking service through email Additionally, Mr Cuong followed up with a phone call to the trucking service to ensure they were informed about the pickup details and the condition of the empty containers.
The collaboration between the company and its regular forwarders, along with Mr Cuong's expertise in booking, ensured a smooth and timely booking process However, it was essential for Phu Hai factory to supply the agreed amount of Dried Anchovy to Nghi Son by July 22 to avoid any need for booking revisions Although these revisions incurred no additional costs, they still resulted in time loss Furthermore, there is a risk of late delivery under the export contract between Nghi Son and Yin Qing Company.
2.2.4 Stuffing empty containers with cargo
On the morning of July 22, 2020, a trucking company was tasked with collecting two empty high-cube reefer containers from G-Fortune Depot in Dong An Industrial Park, Binh Duong These containers were then transported to the Hoang Lai warehouse in Long An for stuffing Throughout the process, logistics staff member Mr Cuong and operations staff member Mr Quang maintained constant communication and closely monitored the operations to ensure compliance with all requirements Documentation, including photos of the containers and Equipment Interchange Receipts detailing the container and seal numbers, was also sent for record-keeping.
Mr Cuong communicated via Zalo and shared information in a Viber group chat Ms Hanh completed and submitted the Shipping Instruction (SI) and Verified Gross Mass (VGM) to NYD Logistics Corp, enabling the issuance of the draft Bill of Lading from Evergreen Line By 2 P.M., the draft Bill of Lading was issued and checked by Mr Thong and Ms Hanh, confirming no issues The Documentation Department communicated with the forwarder through email In the afternoon, containers were transported to and stored at Cat Lai Port in Ho Chi Minh City.
During this stage, employees across various functions collaborated effectively due to a standardized procedure recognized by all departments Communication was facilitated through multiple channels, including email, Viber, Zalo, Skype, and phone, showcasing flexibility The Dried Anchovies contract utilized CIF Incoterms® 2010, which proved unsuitable for container shipments Under CIF Incoterms® 2010, risk transfer occurs "on board the vessel"; however, for this company, the risk actually transferred at the exporter’s warehouse after the containers were loaded, rather than at the vessel.
On July 22, 2020, the Documentation Department received a draft Bill of Lading from Evergreen Line via email from the forwarder Ms Hanh proceeded to draft essential documents including the Commercial Invoice, Packing List, Health Certificate, and Certificate of Origin Once Ms Hanh completed the draft set, Mr Thong reviewed the documents and found no issues He then emailed the finalized documents to Ms Rose for submission to the Buyer.
On 23 July, draft documents confirmed by the Buyer were sent to Mr Thong There were some formatting mistakes The contents were acceptable Therefore, Ms Hanh did not need to substantially change those documents On 24 July, Commercial Invoice, along with draft Bill of Lading were sent to the Insurer to obtain insurance for the shipment
Thanks to the expertise of seasoned documentation professionals such as Mr Thong and Ms Hanh, drafting and verifying documents has become a swift process An accompanying Excel file featuring sample templates for essential documents like Commercial Invoices, Packing Lists, Shipping Instructions, and Health Certificates significantly streamlines the workflow for documentation staff This resource allows for the efficient completion of most document sections using information from the Contract and Booking Confirmation, requiring only the addition of container and seal numbers.
General comments on the current procedure of the company
The company's export sales contract process is generally uniform, with each employee clearly understanding their tasks and responsibilities, which streamlines execution and saves time However, this structured approach is flexible; each step can be adjusted based on the specific circumstances of a contract.
Documentation executives in Nghi Son possess extensive experience, ensuring that the document preparation process is efficient and timely This expertise not only saves significant time but also facilitates clear communication and negotiation among all departments involved in contract execution Any discrepancies are promptly addressed and resolved, maintaining smooth operations throughout the process.
Utilizing multiple communication channels demonstrates flexibility, as evidenced by the online application processes for the Certificate of Origin and Health Certificate, along with electronic customs declarations These digital systems significantly minimize the need for staff to travel to physical locations, proving especially beneficial during the Covid-19 pandemic.
Nghi Son effectively leverages its strong relationships with regular customers, evidenced by multiple contracts with repeat buyers This approach significantly reduces negotiation time and costs, as seen in the Dried Anchovies contract where the product description is omitted, streamlining the agreement based on prior documentation.
In the sales contracts between Nghi Son and its Buyers, there is no explicit reference to the latest Incoterms® revision, such as Incoterms® 2010 Given the long-standing business relationship between the Seller and Buyer, it is implied that they adhere to Incoterms® 2010 However, when engaging with other Buyers, it remains uncertain if they also consider Incoterms® 2010 as their standard trading terms While the most recent version, Incoterms® 2020, became effective on January 1, 2020, parties can choose any version, as earlier versions remain valid This flexibility poses a risk of misunderstandings between contract parties, potentially leading to disputes Additionally, most export contracts from Nghi Son involve container shipments, typically using trade terms such as CFR or CIF, where the risk transfers “on board the vessel.” For instance, the analyzed contract specifies CIF as the term of trade for full container shipments.
2010, but risks actually transferred at the warehouse in this real case
In the context of payment terms beyond Letters of Credit, it is important to note that no deposits are required for sales contracts with regular customers The contract analyzed in this report exemplifies this, as Yin Qing and Nghi Son maintain a consistent business relationship However, despite this long-term partnership, there is a risk that the Exporter may not receive payment from the Consignee Additionally, if the Buyer refuses delivery, the company could incur return fees or be forced to sell the goods at a loss While negotiations may occur between the Buyer and Seller in such cases, they can be time-consuming and resource-intensive.
When ordering goods from factories outside of Nghi Son’s facility, the company faces uncertainty regarding the availability of sufficient quantities at the time of stuffing This lack of adequate stock can lead to the booking staff needing to revise the estimated time of departure from the loading port Although these revisions incur no additional charges, they result in time wastage and could potentially cause delays in delivery due to the slow preparation of goods.
During peak shipping seasons, the insufficient number of documentation staff can lead to significant challenges With one executive managing various types of goods, including marine fish, freshwater fish, and dried fishery products, the risk of mistakes in document preparation increases This shortage not only causes errors but also results in wasted time and resources, highlighting the need for adequate staffing during busy periods.
REVIEW OF INTERNSHIP PERIOD AND
Comparison between current procedure of the company and that of
The fundamental steps in executing export contracts in Nghi Son closely align with theoretical procedures, primarily involving a set of essential documents such as the Sales Contract, Commercial Invoice, Packing List, and Certificate of Origin However, discrepancies between theory and practice are inevitable, and the author will further elaborate on these differences in the subsequent section.
The Nghi Son company exhibits significant deviations from theoretical processes in its operations Notably, it opts for CFR and CIF terms over CPT and CIP for container shipments in export contracts Additionally, the company bypasses the "export permit application" step, as its fishery products are not subject to such regulations In terms of customs declaration, Nghi Son utilizes the VNACCS system at its office, eliminating the need to visit the port While theory suggests the prevalent use of Letters of Credit for payments, Nghi Son primarily relies on TTR due to established long-term relationships with its buyers Furthermore, the firm frequently applies for Health Certificates, as many of its buyers require them for imported fishery products.
Lessons learned from the internship
3.2.1 Lessons learned regarding practical knowledge
During my five-week internship at Nghi Son, I gained valuable insights into the execution of export contracts and practiced drafting relevant shipping documents My academic background in International Commercial Transactions and International Transportation prepared me well for this experience, as I found the practical processes closely aligned with my studies In addition to theoretical knowledge, this internship has provided me with numerous practical skills that are essential in the field.
In Nghi Son, export contracts predominantly utilize the CFR and CIF trade terms, even for container shipments Mr Cuong, a booking staff member, explained that the transfer of risk occurs once the operation staff completes stuffing the containers and they are handed over to a trucking company for transport to the designated port When I inquired with Mr Thong, the Head of the Documentation Department, about the use of CPT and CIP terms in their container shipments, he confirmed that these terms had never been applied in their contracts This indicates that the choice of trade terms and contract conditions largely relies on the customary practices and mutual agreements between the contracting parties, with any disputes resolved through negotiation until a consensus is achieved.
This internship has proven to be an invaluable experience, reinforcing my academic knowledge During my time, I practiced drafting essential documents, such as the Certificate of Origin, which familiarized me with its various forms For example, a Certificate of Origin form E is required for shipments to China, while form D is used for Singapore Additionally, I learned that different products undergo distinct quality checks; agricultural commodities require phytosanitary inspections, whereas a Health Certificate is necessary for certifying the health of aquatic animals, depending on the importing country's regulations.
During my university studies, I encountered terms like Commercial Invoice, Packing List, and Bill of Lading, but my real-world experience in the Documentation Department revealed many additional complexities The department utilizes an Excel file containing templates for essential documents such as Commercial Invoices and Shipping Instructions Initially, I underestimated the difficulty of filling out these templates, but I quickly realized the importance of understanding related documents like the Contract and Booking Confirmation to accurately input information I also learned the significance of the Shipping Instruction, which is crucial for issuing the draft Bill of Lading Furthermore, strict adherence to various deadlines outlined in the Booking Confirmation, such as cut-off dates for Shipping Instructions and Verified Gross Mass, is vital in the document preparation process.
3.2.2 Lessons learned regarding attitudes and soft skills at workplace
My five-week internship has significantly exceeded my expectations, largely due to my positive, can-do attitude that encouraged proactive learning I embraced the challenges of transitioning from academic knowledge to real-world applications by actively seeking guidance from Mr Thong and other colleagues, which helped me minimize mistakes in document drafting I also took every opportunity to ask questions about specialized knowledge, maximizing my practical learning experience Additionally, maintaining an open mind towards new environments and diverse cultures has allowed me to adapt quickly to the business setting at Nghi Son, a crucial skill for future work in multinational enterprises Lastly, I viewed feedback as a valuable tool for professional growth, welcoming insights from my peers to identify strengths and areas for improvement, which has fostered my development throughout the internship.
In the import-export industry, proficiency in English is essential, as most documentation, such as Sales Contracts and Commercial Invoices, is conducted in this language To enhance my competitive edge, I am committed to improving my English skills daily Time management is another critical skill I am working on, as adhering to strict deadlines is vital to prevent shipment delays and contract breaches Effective task organization is necessary, especially when managing multiple shipments simultaneously, as punctuality reflects professionalism and dedication Communication skills, both written and verbal, are also crucial in the workplace I strive to ensure clarity and appropriateness in my written communications through emails and messaging apps, while also practicing active listening in face-to-face interactions Maintaining eye contact and confirming understanding are key elements of effective verbal communication I am fortunate to have supportive colleagues, like Mr Thong, who provide valuable guidance, allowing me to gain practical knowledge during my internship.
3.2.3 Lessons learned regarding carreer orientation
My internship experience at Nghi Son provided me with valuable insights into the export-import industry and the specific role of a documentation executive This hands-on experience allowed me to acquire essential skills and practical knowledge while helping me envision my future in the import-export field As a documentation intern, I recognized the importance of certain attitudes, attributes, and knowledge necessary for success in this role.
Working with documents can be highly stressful, as employees must ensure accuracy in every figure and word Consequently, documentation executives need to be meticulous and detail-oriented in their work Women often exhibit these traits, making documentation roles particularly well-suited for them.
Documentation tasks often involve repetitive activities, leading to inevitable boredom Therefore, it is crucial for documentation staff to be committed to long-term involvement in their roles Additionally, adherence to professional ethics is vital, as these individuals handle sensitive business information and must maintain confidentiality.
Having a solid understanding of international trade, including aspects like transportation, commercial transactions, and payment methods, is a significant advantage for documentation employees My academic background enabled me to quickly adapt to the processes involved in executing the company's export contracts While documentation roles may not require frequent outdoor activities like operational staff, it is crucial for documentation executives to remain proactive in staying updated on changes related to import and export duties and quality testing.
Recommendations for the export contract of fishery products at Nghi
3.3.1 Choosing and incorporating Incoterms® rule appropriately
The absence of a specified Incoterms® version in sales contracts at Nghi Son poses significant risks in the event of disputes, as newer versions do not invalidate previous ones Additionally, while all export shipments are conducted in containers, the company uses CFR or CIF terms based on Incoterms® 2010, which stipulate risk transfer "on board the vessel." This is inconsistent with container shipments, where risk transfer should occur "at the warehouse," highlighting a critical oversight in their shipping practices.
Detailed recommendations: It is advisable that the year of Incoterms® should be referred in the contract, for example, Incoterms® 2002 or Incoterms®
To prevent conflicts in sales contracts with both regular and new buyers, sales employees should prioritize using appropriate trade terms for container shipments It is advisable to use CPT (Carriage Paid To) and CIP (Carriage and Insurance Paid To) instead of CFR (Cost and Freight) or CIF (Cost, Insurance, and Freight), as these terms better reflect the point at which risks transfer during container exports.
3.3.2 Including deposits in every payment term regardless of Buyers
Under long-term sales contracts with customers, the absence of deposits poses significant risks for exporters like Nghi Son, particularly if a buyer refuses to accept the goods This situation not only leads to wasted time and resources during subsequent negotiations but also jeopardizes payment from the consignee If negotiations fail, Nghi Son may face additional costs for returning the cargo or be forced to sell it at reduced prices.
In any Seller-Buyer relationship, it is advisable to incorporate deposits into payment terms, excluding Letters of Credit The deposit amount may vary based on the nature of the business relationship, but it should always be sufficient to cover the return shipping fees for goods sent back to the exporter’s country in case of shipment refusal.
3.3.3 Keeping close track of preparation of the goods ordered from other factories
Inadequate preparation of goods in terms of quantity can result in significant delays due to the need for revising bookings and adjusting estimated delivery dates, ultimately leading to late shipments Additionally, when sourcing goods from factories outside of Nghi Son, the company risks losing oversight on inventory levels at the critical moment when containers are being loaded, further exacerbating potential supply chain issues.
After finalizing the sales contract, it is crucial for the company to ensure that the goods prepared meet the agreed-upon quality and quantity standards before loading them onto containers The Purchasing Team should consistently remind factories, particularly those outside of Nghi Son's facility, to maintain quality and timeliness in their production It is advisable for the Purchasing Team to utilize various communication channels such as phone, email, Zalo, and Viber to effectively urge these factories Additionally, when engaging with external factories, Nghi Son should clearly negotiate all requirements related to the preparation of goods, emphasizing critical aspects like timing, quantity, and quality Including penalty clauses in contracts with these factories can help mitigate issues related to shortages or delays in delivery.
3.3.4 Providing internal employees with training for back-up purpose
During periods of high shipment volume, the Documentation Department experiences significant stress due to insufficient staffing, with only one employee handling each critical function of booking, operations, and documentation This lack of adequate personnel to manage multiple shipments simultaneously can lead to inefficiencies and increased pressure on employees.
As a result, it is certain that those employees are put under pressure during peak seasons, leading to unexpected errors in documents
Preparing documents is straightforward, thanks to available sample templates However, attention to detail is crucial for those involved in documentation To enhance this process, the Human Resources Department should implement training sessions where the Documentation Department educates other departments, particularly the Sales Department Since sales employees frequently interact with Buyers, they are likely to become more adept at handling documents During peak periods, these sales executives could serve as backup documentation personnel, with incentives and bonuses for exceptional performance.
My five-week internship at Nghi Son Aquatic Product Exim Co., Ltd has equipped me with practical knowledge of the export process and essential skills valuable for my career This experience allowed me to reflect on my university learning in relation to real-world applications, reinforcing my commitment to the import-export field Nghi Son specializes in processing and trading fishery products, including marine and freshwater fish, dried seafood, and shrimp Established six years ago, the company benefits from the longstanding fishery business tradition of its parent company, Nghi Son Foods Group, enabling it to manage its supply chain effectively From 2017 to 2019, Nghi Son experienced growth in revenues, costs, and profits as it aims to expand its export markets while maintaining strong relationships with regular customers The company’s workforce consists of 23 employees across five departments, including the Board of Directors, who are well-equipped to meet task requirements.
The export sales contract process at Nghi Son involves seven steps that align closely with theoretical frameworks The company leverages its long-term customer relationships to successfully finalize sales contracts However, despite its achievements in executing these contracts, Nghi Son faces common industry challenges, particularly related to Incoterms® rules and payment issues.
During my internship, I gained valuable lessons in practical knowledge, attitudes, soft skills, and career orientation Additionally, this report includes recommendations to address identified drawbacks, aiming to minimize risks for Nghi Son in future sales contracts I hope that Nghi Son continues to thrive in the fishery business moving forward.
Hoàng Văn Châu, 2009, Logistics và Vận tải quốc tế, NXB Thông Tin Và Truyền
Nguyen Tien Hoang, 2013, International commercial transaction, VNU-HCM
Phạm Duy Liên, 2012, Giáo trình giao dịch thương mại quốc tế, NXB Thống Kê Đinh Xuân Trình, 2011, Giáo trình Thanh toán quốc tế, NXB Khoa Học Và Kỹ Thuật
In the field of foreign trade, key resources include Vũ Hữu Tửu's "Giáo trình Kỹ thuật nghiệp vụ ngoại thương" published in 2007 by NXB Giáo Dục, and Đoàn Thị Hồng Vân's "Giáo trình Kỹ thuật ngoại thương" released in 2005 by NXB Thống Kê Additionally, VASEP's 2020 online publication, "Fishery Profile," provides valuable insights into the seafood industry, accessible at http://mseafood.vasep.com.vn/685/onecontent/fishery-profile.htm, with the last access recorded on July 13, 2020.
The seafood export in June 2020 experienced a continued decline of 10% This trend highlights the ongoing challenges faced by the industry during this period For further details, the original article can be accessed online.
Bảo Ngọc, 2020, Xuất khẩu thủy sản VN từ 1/1 đến 15/6/2020, [online] Available at: http://vasep.com.vn/Tin-Tuc/123_61358/Xuat-khau-thuy-san-VN-tu-11-den- 1562020.htm [Accessed 14 July, 2020]
Ha Thanh, 2020, Seafood exports gained momentum after Covid-19 pandemic,
[online] Available at: https://customsnews.vn/seafood-exports-gained-momentum- after-covid-19-pandemic-14582.html [Accessed 15 July, 2020]
In 2020, Kylie Nguyen highlighted positive trends in seafood exports, emphasizing key products that signal growth in the industry The article, accessible online, provides insights into the factors contributing to this success Additionally, NAFIQAD outlines the registration process for obtaining export certificates for seafood shipments, which is crucial for ensuring compliance and quality in international trade.
[online] Available at: http://www.nafiqad4.gov.vn/hoat-dong/kiem-tra-chung- nhan/thuy-san-xuat-khau/quy-trinh [Accessed 16 July, 2020]
The process of exporting goods by sea involves several crucial steps that ensure efficiency and compliance with international shipping regulations It is essential to understand the documentation required, including bills of lading and customs declarations Additionally, selecting the right shipping method and carrier can significantly impact delivery times and costs Proper packaging and labeling of goods are also vital to prevent damage and ensure smooth transit Overall, a comprehensive approach to maritime export logistics is necessary for successful international trade.
Nitoda, 2019, Export process by seaway (FCL), [online] Available at: https://www.nitoda.com/lp/export-process-by-seaway-fcl.html [Accessed 20 July,
Seller(卖方公司): NGHI SON AQUATIC PRODUCT IMPORT EXPORT COMPANY LIMITED
Buyer: Invoicing Company (买方) GREAT HAND CO., LTD 深圳恒瑞喜供应链有限公司
Contact person(联系人): Emily Xu Phone NO(电话): +86 755-83191703
Address( 地址 ): Room 1633 International Culture Mansion Futian Road, Futian Dist Shenzhen City,
For the end user/ consignee: 昆明冬冬食品有限公司
