FOREIGN TRADE UNIVERSITY

SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS

-----------------------------------------------

MIDTERM INTERNSHIP REPORT

Major: External Economics

FREIGHT FORWARDING PROCEDURE OF

EXPORTED GOODS (FCL) IN RUBY TRADING
TRANSPORT JOINT STOCK COMPANY

Name : Do Kieu Thu Hang

Student ID : 1511150044
Class : English 27- High-quality class- K54
Instructor : Tran Hai Ly (MA)

Hanoi, July 2018

 Table of Contents
PREFACE ........................................................................................................................ 1

Rationale....................................................................................................................... 1

Literature review .......................................................................................................... 1

Objectives of the study ................................................................................................. 2

Structure ....................................................................................................................... 3

Acknowledgment ......................................................................................................... 3

CHAPTER 1: OVERVIEW OF RUBY TRADING TRANSPORT JOINT STOCK

COMPANY 4

1.1. Establishment and Development ........................................................................ 4

1.2. Organizational structure, functions of departments ........................................... 5

1.2.1. Organizational structure ........................................................................... 5

1.2.2. Functions of departments and individuals:............................................... 6

1.3. Missions of Ruby Logistics ................................................................................ 8

1.4. Commitment to action ........................................................................................ 8

1.5. Fields of business................................................................................................ 9

1.6. Business performance in recent years .............................................................. 10

CHAPTER 2: FREIGHT FORWARDING PROCEDURE OF EXPORTED GOODS

(FCL) IN RUBY JSC ..................................................................................................... 12

2.1. Procedure .......................................................................................................... 12

2.1.1. Customer search ..................................................................................... 12

2.1.2. Quotation ................................................................................................ 13

2.1.3. Contracting ............................................................................................. 13

2.1.4. Receipt of the booking request from customers ..................................... 13

 2.1.5. Sending the booking request to the shipping line .................................. 14

2.1.6. Submit the booking information on the website of the shipping line .... 14

2.1.7. Sending the booking confirmation to the customer ............................... 14

2.1.8. The order of release of the empty container ........................................... 14

2.1.9. Arrival at the port to collect empty containers and domestic

transportation to the port of loading ....................................................................... 15

2.1.10. Requirements of documents from the customer to make an export

declaration .............................................................................................................. 15

2.1.11. Customs clearance .................................................................................. 16

2.1.12. Making HB / L and sending to the customer for inspection .................. 18

2.1.13. Sending information to the shipping line for making MB/L .................. 18

2.1.14. Checking MB/L received from the shipping line ................................... 18

2.1.15. Pre-alert and confirmation of complete transportation .......................... 18

2.1.16. Collection of documents and requirement for payment. ........................ 19

2.1.17. Shipping request and profit calculation .................................................. 19

2.2. Results of export FCL freight forwarding activities in Ruby Logistics ........... 20

2.3. Evaluation ......................................................................................................... 21

2.3.1. Strengths ................................................................................................. 21

2.3.2. Weaknesses............................................................................................. 21

2.3.3. Opportunities .......................................................................................... 23

2.3.4. Challenges .............................................................................................. 24

CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS ................................... 24

3.1. Development orientation .................................................................................. 24

3.2. Solutions ........................................................................................................... 25

 3.3. Recommendations to the company ................................................................... 28

3.4. Recommendations to the Government ............................................................. 29

CONCLUSION .............................................................................................................. 30

REFERENCE ................................................................................................................. 31

APPENDIX .................................................................................................................... 32
 TABLE OF TABLES

Table 1-1: Revenue and profit in recent years ............................................................... 11

Table 1-2: Statement of Ruby financial position ........................................................... 12

TABLE OF FIGURES

Figure 1-1: Organizational structure of Ruby Logistics .................................................. 6

Figure 1-2: Business performance in recent years ......................................................... 11
Figure 2-1: Container number and seal .......................................................................... 15
Figure 2-2: Structure of Freight Forwarding Service in 2017 ....................................... 20
 LIST OF ABBREVIATIONS

ICD Inland Clearance Depot

D/O Delivery Order

FCL Full Container Load

C/O Certificate of Origin

C/Q Certificate of Quality

CSR Corporate social responsibility

ETD Estimated time of departure

MBL Master Bill of Lading

HBL House Bill of Lading

ETA Expected time of arrival

CY Container Yard

L/C Letter of Credit

SI Shipping Instruction

THC Terminal handling charge

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PREFACE
Rationale
Along with the development of science, technology and the trend of globalization
all over the world, logistics activity increasingly plays an important role in the
competitiveness of each business and of the economy as a whole. Being an official
member of the World Trade Organization (WTO) has created opportunities for
Vietnam to develop its economy. In the process of integration into the global
economy, foreign trade has become indispensable and had a substantial effect on
the national economy. The volume of goods traded through import-export activities
is increasing rapidly, which demands efficient and effective logistics services. In
recent year, with geographical advantages and proper governmental investment,
logistics in Vietnam is growing in both quality and quantity, contributing greatly to
the country’s annual gross product.

Recent statistics of the Vietnam Logistics Business Association show that the
country has more than 1,300 logistics enterprises are operating, including foreign-
invested enterprises. Logistics companies in Vietnam are mostly small and medium
enterprises. Ruby Trading Transport Joint Stock Company started to provide
logistics services from 2013. As a relatively young company, the company has
developed step by step and better met the demand for domestic and foreign logistics
services. After 5 years of operation, the company has gained the customer
confidence and become a prestigious partner in doing business.

Recognizing the great potential of Vietnam logistics market, after 5 weeks of

practice at Ruby Joint Stock Company, with the knowledge gained during the study
in Faculty of Economics & International Business, I decided to choose the topic:
“Procedure of freight forwarding FCL container in Ruby Trading Transport
Joint Stock Company”

Literature review
Besides import, export plays a very important role in international trade. The
existence of container has simplified the process of cargo trading all over the world.
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It should be noted that in scientific works much emphasis on economic issues of

forwarding activities. Not enough attention is focused on the analysis of the
procedure of forwarding, especially FCL forwarding. Therefore, the author only can
rely on the research on export and import procedure and limited research on freight
forwarding.

This report is based on the work of Donna L. Bade (2015) “ Export/ Import
procedure and documentation”, 5th Edition. This comprehensive answer book
supplies readers with a clear view of the entire export/import process, explaining
the ins and outs of shipping and insurance; payment mechanisms; distributors vs.
agents; customs and export control requirements; and transportation issues.

In the article “Operational transportation planning of freight forwarding companies

in horizontal coalitions” of European Journal of Operational Research on
16/09/2014 (Pages from 1133- 1141), the authors (Xin Wang, Herbert Kopfer,
Michel Gendreau) studied the transportation planning process of forwarder and
analyze the benefits of external resources.

Maria Mikhailova, 2016, in her study “Import / Export Forwarding Processes in

Russian Foreign Trade. Case: Vodoley Company”, analyses import/export
forwarding processes in the Russian foreign trade. Additionally, the structure and
problems of Russian foreign trade were studied.

Ngo Quoc Viet, 2015, in his study “Recommendation to improve freight forwarding
procedure for imported goods in TNN logistics joint stock company” suggests
solutions to improve the quality of freight forwarding services based on difficulties
faced by TNN Logistics.

Objectives of the study

By learning how to process export of Ruby, I hope to learn how to apply theories in
the field of logistics into the actual operational activities of a logistics company.
Thanks to that, I can offer suggestions and solutions for the company to develop in
the future.
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Structure
The structure of this report consists of three parts as follows:

Chapter 1: Overview of Ruby Trading Transportation Joint Stock Company.

Chapter 2: Freight forwarding procedure of exported goods (FCL) in Ruby Jsc.

Chapter 3: Solutions and recommendations.

Acknowledgment
This study would not be completed without any assistance. Therefore, I gratefully
give acknowledgment to their support and motivation during the time of doing this
research as a requirement of the mid-course internship at Foreign Trade University.

Firstly, I am deeply indebted to my instructor Mrs. Tran Hai Ly, Lecturer of

Foreign Trade University for her guidance during the whole of the internship and
research period. I wish to express my great appreciation to her huge support and
responsiveness throughout the research period. Her suggestion and comments were
really a great source of spirit to make the report improved significantly.

Furthermore, I am also grateful to Mrs. Tran Thi Mai Lien, Director of Ruby Jsc,
who has been helpful with general advice and support from the beginning to
the end of my internship period.

Finally, I wish to thank all staffs and colleagues of Ruby Jsc for their support during
the time I worked and researched in the company.

Hanoi, July 2018

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CHAPTER 1: OVERVIEW OF RUBY TRADING TRANSPORT

JOINT STOCK COMPANY
1.1. Establishment and Development
Ruby Trading Transport Joint Stock Company was established in 2013, headquarter
is located in Hanoi and has a branch in Vietnam's largest and most important
seaport, Hai Phong.

The original precursor was Mr. Nguyen Anh Tuan, a member of the Board of
Directors of the Company holding the position of Head of Planning Department at
Petrolimex Joint Stock Company 653. With his capacity and, Mr. Tuan has
cooperated with other members of the management boldly invest in specialized
vehicles and is gradually affirming the brand "RUBY Logistics" on the market.

Despite its young age, but with accumulated experience and achievements in the
logistics business of the board, RUBY is developing step by step. Over 5 years of
development with its own efforts, the company has built many close relationships
with customers, most of who regularly use the services that contribute the stable
source of revenue for the company.

The company has mobilized all available resources, strengthened its marketing
capacity, participated in bidding, competitively quoting and shipped lots of goods
and equipment. At the same time, the company is investing more in vehicles and
cooperating with many transportation units in the market to bring customers high
efficiency, minimize costs and maximize the quality of the services.

Up to now, Ruby Transportation JSC has built a team of experienced employees,

skilled drivers who always listen to the opinions of customers. They are young,
dynamic and active staffs who always have a professional attitude to work. They are
devoted to the development of the company. With the dynamic and sensitive
contact with the new market, the company has signed many contracts of large
projects.
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Name in English Ruby Trading Transport Join Stock Company

Short name Ruby Logistics
Tax code 0106160211
Type of business Joint Stock Company
Date of 24/04/2013
Establishment
Status Active
Legal Tran Thi Mai Lien
Representative
Business field Logistics
Headquarter 399 Hoang Hoa Tham, Lieu Giai Ward, Ba Dinh District, Hanoi
Representative Room 1102, 27A1, Greenstar urban area, 234 Pham Van Dong,
office Co Nhue 1 Ward, Bac Tu Liem District, Hanoi
Branch 74/37/18 Lach Tray Street, Le Chan District, Hai Phong
Phone (84) -24.626.209.94
Fax (84) -24.666.401.90
Website http://www.rubylogistics.com.vn
Email rubylogistics01@gmail.com

1.2. Organizational structure, functions of departments

1.2.1. Organizational structure
Ruby Logistics is a relatively young business in the field of logistics services with
the scale of operation and capital is small so the organizational chart of the
company is quite simple.
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Board of
Directors

Director

Representative
Headquarter in
office in
Hanoi
Haiphong

Sales Operation Accounting

Fleet
Department Department Department

Figure 1-1: Organizational structure of Ruby Logistics

( Source: Ruby Logistics Company Profile)

The company’s operation is based on the model of functional structure. This model
is quite simple and offers both high performance and cost savings, especially for
small and medium enterprises. The decision-making is focused on the senior
management. Therefore, decisions can be made quickly. However, when
implementing this structure, it is easy to generate different opinions, suggestions,
and inconsistencies between functional sections, which can cause conflicts.

1.2.2. Functions of departments and individuals:

a. Board of Directors:

• Determine the strategies, midterm development plans, and annual business

plans of the company;
• Decide on investment plans and projects of investment within its competence
and limits prescribed by law or the Charter of the company;
• Decide on solutions for market development, marketing and technology;
• Supervise and direct the director and other managers in running the
company's day-to-day business operations;
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• Decide the organizational structure, rules and regulations of the company,

establishment of subsidiaries, branches, representative office, capital
contributions to or purchase of shares of other enterprises;

b. Director:

• Decide on all issues related to the day-to-day operations of the company;

• Organizing the implementation of decisions of the Board;
• Organize the implementation of the business plan and investment plan of the
company;
• Give recommendations on the arrangement of organizational structure and
internal management regulations of the company;
• Decide on wages and allowances (if any) for employees in the company,
including managerial officials under their authority.

c. Sales department

• Plan and implement business plans;

• Set up; deal directly with the customer system;
• Coordinate the company fleet vehicle with customers;
• Search for potential customers, set the price and negotiate for signing
contracts.
• Coordinate with related departments such as accounting, fleet ... to bring the
most complete services to customers.
• Handle documentation for customs clearance procedure

d. Operation department

• Receive export / import documents from sales and support to pay taxes,
process customs clearance of exports or imports at the customs department
outside the border gate.
• Receive documents and requirements from sales department for document
such as C / O, Fumigation, insurance, C / Q, certification ... or conduct
management procedures (quality control...)
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e. Accounting department

• Be responsible for advising the company, accounting for business operations,

planning production costs, and regularly report the financial situation of the
company.

f. Vehicle Fleet

• Receive orders from the supervisor and the sales department

• Take the initiative to contact customers directly
• Transport goods to ensure full delivery procedures: delivery the right product
to the right place at the right time in the right process.

1.3. Missions of Ruby Logistics

• Effectively performing services activities.
• Managing and exploiting its own capital in an effective way; performing its
obligation towards the government.
• Complying with policies, economic management system, export-import
management system and external trade management system.
• Performing every obligation in relevant shipping contracts.
• Improving the quality and quantity of transporting services; expanding
markets; attracting more foreign customers.
• Training to make more well-qualified staff.
• Implement CSR.

1.4. Commitment to action

Commitments of Ruby Logistics include:

• With partners: RUBY always committed to satisfying the maximum benefit

of partners on the basis of providing partners with the best products;
• With employees: The company is always concerned about material and
spiritual interests of the employees, ensuring a high and stable income;
• With shareholders: RUBY is committed to maintaining high annual
dividends;
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• With social community: RUBY is committed to performing its financial

obligations to the state budget, always caring for social work, and sharing the
difficulties of the community.

1.5. Fields of business

Ruby Logistics specializes in freight forwarding sector providing the services as
follows:

• Customs consulting services.

• Customs Clearance Services.
• Road transport services;
• Rail transport services;
• Projected cargo transportation;
• Transport services of overweight, oversized, overloaded cargoes;

The services provided by RUBY are mainly divided into 2 groups:

a. Customs service

Customs clearance is an extremely important step in completing import and export

procedures. Importers and exporters can face a lot of difficulties in customs
clearance due to lack of experience, misunderstandings, and incorrect documents
and so on. Ruby Logistics provide optimal solutions for its customer to easily
process the clearance in Vietnam.

Ruby’s customs consultants have in-depth knowledge of the current customs

clearance and quarantine inspection requirements and are always willing to handle
it all for customers. In terms of consulting, Ruby gives advice to help you clearly
outline an approach that's tailored to meet the needs and balances the benefits. Ruby
is also able to complete the required forms for customs clearance on behalf of its
customers and submit them to the competent authorities.

b. Transportation service
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Transportation service is the company’s main business field. It is the process of

moving goods from the place of the shipper to the place where the goods are
received by the consignee.

Ruby transportation services are widely appreciated by its clients and the company
has also received several positive responses for its timely services. Ruby use good
vehicles for transporting the goods from one place to the other.

Transport services with clearly defined transit times give its customers the security
they need in order to budget reliably and keep an exact control of the flow of goods.

With its own fleet of container trailers, Ruby specializes in transporting its
customer's goods from place to place with an assurance of total safety. Operating on
the principle of care and perfection, Ruby offers fast and reliable services.

Ruby takes pride in being a customer-oriented company. The safety and the timely
delivery are the supreme goals of the company. Ruby has been serving the
customers with reliable, efficient and professional services.

Especially with the number of tractor and dwarf trailer, Ruby always brings to you
the most peace of mind when transporting goods such as container 20 '; 40 '; 45 ',
specialized machinery and equipment in the construction such as drilling rig, bored
pile drilling rig, drill machine, crane, crane truck, electric generator, water pump,
concrete batching plant, excavator, bulldozer, motor grader, pile driving machine
and so on.

1.6. Business performance in recent years

Some indicators of Ruby’s business results are shown in the following table:
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Net revenue Profit before tax Profit after tax

2014 24,662,013,240 (47,360,855) (47,360,855)

2015 23,427,456,827 (43,446,840) (43,446,840)

2016 25,994,872,170 216,768,754 167,485,329

2017 30,590,370,798 167,219,454 116,486,840

Table 1-1: Revenue and profit in recent years

(Source: cited from Ruby’s Income Statements 2015-2017)

Chart 2: Business performance in recent years

35,000,000,000
30,000,000,000
25,000,000,000
20,000,000,000
15,000,000,000
Net revenue
10,000,000,000
Profit before tax
5,000,000,000
Profit after tax
-
(5,000,000,000)
2014 2015 2016 2017
Net revenue 24,662,013, 23,427,456, 25,994,872, 30,590,370,
Profit before tax (47,360,855 (43,446,840 216,768,754 167,219,454
Profit after tax (47,360,855 (43,446,840 167,485,329 116,486,840

Figure 1-2: Business performance in recent years

It can be shown that in the early stage of operation (2013- 2015) Ruby had high
revenue but no profit (even loss). This situation can be explained by the very high
cost when it was newly established and had little experience and relationship in the
field of logistics.

However, after 2 years of doing business, there are positive signals in Ruby’s
operation. The net revenue in 2016 is about 25.994 billion, which is not much
 12

higher than the net revenue in the two previous years but the profit after tax is
167.485 million, which is better and promising. In the next year (2017), Ruby
revenue had a sharp increase (about 18%) but the profit is smaller than that in 2016.
This figure still showed the inefficiency in cost management.

Total assets of the company increased over the years; in 2015, it increased by VND
1,282,748,495 (equivalent to 18.7%); in 2016, it increased by more than 4 billion
VND (equivalent to 49%); in 2017, it increased by 2.7 billion (22.5% respectively).
Liabilities also tend to increase. Current liabilities in 2017 are 9,770,568,696 VND,
2.6 times higher than this indicator in 2014

2014 2015 2016 2017

Total asset 6,855,906,069 8,138,654,564 12,168,372,913 14,911,176,723

Liabilities 3,756,723,371 3,282,018,706 7,144,251,726 9,770,568,696

Owner's
3,099,182,698 4,856,635,858 5,024,121,187 5,140,608,027
Equity

Table 1-2: Statement of Ruby financial position

(Source: cited from Ruby’s Balance sheets 2015- 2017)

CHAPTER 2: FREIGHT FORWARDING PROCEDURE OF

EXPORTED GOODS (FCL) IN RUBY JSC
2.1. Procedure
2.1.1. Customer search
To get good deals, it is important for the company to reach potential customers.
Sales staffs search for customers through many familiar channels such as

- Use B2B websites. Examples of leading webs like Alibaba.com,

Kompass.com, Tradekey.com, ec21.com, indiamart.com...
 13

- Search customer information on the yellow pages: trangvangvietnam.com,

hosocongty.vn
- Search for customers on import / export forums, seminars...
- Based on the relationship with existing clients

Searching is based on whether the need of the customers can be satisfied with
Ruby’s ability in a specific period of time. During this time, the company is aiming
to expand its market so it prefers to process new export orders to new markets
increases besides the export orders to the existing market.

2.1.2. Quotation
After finding out potential customers, sales staff will contact them, and then send
them the services’ quotation with related expenses through email or fax. Next, sales
staff will answer customer's questions about the related issues such as the
company's implementation of import-export of goods, charges, service charges ... In
addition, sales staff will negotiate the price of each service based on the quantity of
goods, types of goods, time and business relationship. If all goes well, the two
parties will sign the contract.

2.1.3. Contracting
After completing the negotiation on the price, responsibilities of the parties, time of
implementation, time and method of payment, the two sides will bind the
obligations and responsibilities of each party by signing the contract. Transportation
contract is a kind of service contract. The contract is often based on the basic
provisions of the Vietnam Commercial Law.

2.1.4. Receipt of the booking request from customers

Customers will fill in the booking request form with information related to the
shipment to be exported and return this form to sales staff. Basic information
required in a booking request includes:

- Vessel name and voyage ( If customers have their own intention to choose a
shipping line)
- Port of loading, port of discharge
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- Container type
- Commodity
- Tonnage, volume
- Address detail

After receiving the customer's booking request through email, Ruby Company
confirms receipt of the email from customers and started to process the document
for the exported goods.

2.1.5. Sending the booking request to the shipping line

After receiving the shipment information from the customer, Ruby will send the
booking request to the shipping line. Booking request can be sent in different ways
depending on certain shipping line:

Sending an email to the booking department of the shipping company for

information such as number of shipment, number of containers, status of the
shipment, expected delivery date (ETD), type of package, etc.

2.1.6. Submit the booking information on the website of the shipping line
The shipping line will send back Ruby a booking confirmation to confirm that it has
made room for the goods on its ship. Booking Confirmation displays the following
information: Ticket number, ship name, port of loading, port of discharge,
transshipment port, and closing time.

2.1.7. Sending the booking confirmation to the customer

Upon receipt of the above information, Ruby will notify the customer to prepare the
goods. When Ruby receives the acceptance of the shipping line, the empty container
will be transported to the customer’s premise.

When a shipment is scheduled, the sales staff will coordinate with the trucking
department to arrange the truck for carrying the empty container.

2.1.8. The order of release of the empty container

Booking information is sent from sales department to operation department.
Operation staff will come to the shipping line to exchange booking for the order to
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release the empty container. Ruby staff on behalf of the shipper fills in the Booking
Note and ask the representative of the shipping company or shipping agent to sign
on it. After that, the shipping company will issue an order to deliver the empty
container, Packing List and seal to the borrower. Operation staff goes to the empty
depot to pick up the empty container and send all information to the sales staff.
After getting the container, seals and packing list, the sales staff will update the
container number and seal number to complete the information for MB / L.

2.1.9. Arrival at the port to collect empty containers and domestic transportation to
the port of loading
The empty container is delivered by trucking staff to the customer’s premise for
packing. Once the goods are packed into the container, Ruby will deliver the
container to the port of loading. The transportation route of the vehicle from the
port to the factory and back to the port will be monitored and tracked by the
company’s software. If any delays or errors are detected during inland
transportation, sales staff will immediately notify and remind the driver.

Figure 2-1: Container number and seal

(Source: Internal documents)

2.1.10.Requirements of documents from the customer to make an export declaration

During the packing process, Ruby contacts the shipper to remind them to provide
the necessary information for customs clearance for the shipment.

Required information includes:

- Container Number / Seal Number

- Sales Contract.
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- Commercial Invoice.
- Packing List
- L / C documents.
- C / O certificate

These documents must normally be completed before the two days of departure,
and Ruby will carry out preparing for shipping documents such as MB /L and
HB/L. Before completing and submitting the electronic declaration, Ruby will make
a draft declaration and send it to the customer for inspection, then correct it if there
is any error.

Once the container has been packed by the client as above, a shipping instruction
(also known as bill of lading instruction or SI) is sent by the shipper to Ruby to send
to the shipping line. This is sent in order for the shipping line to prepare the bill of
lading. The SI is generally sent in shipping lines template updated on the website in
case of lines working on e-commerce (Safmarine / Maersk).

Once the SI is captured by the line, some of them send a draft copy of the bill of
lading to the shipper for it to be checked. When the draft is confirmed, then the
shipping line prints the final bill of lading for release.

2.1.11. Customs clearance

2.1.11.1. Documents for export declaration
- Customs declaration: 2 originals (1 for exporters, 1 for customs)
- Goods purchase and sale contract: 1 original
- Commercial invoice: 1 original
- Packing list: 1 original
- Business registration permit: 1 copy and 1 original (if the enterprise exports
for the first time)
- Letter of introduction from the exporting company: 1 copy

2.1.11.2. Data transmission via the e-customs network

The sales staff submits the electronic declaration. Data is transmitted through the e-
customs declaration software - online declaration. The customs network
 17

automatically updates the number of receipts, declarations and the channel of the
consignment.

+ Green channel: Exemption from strict inspection of the documents, exemption of

physical inspection of goods. The dossier is transferred to the head of the customs
branch to be censored and they will seal on the export declaration to show that the
customs procedure is completed.

+ Yellow channel: Exemption of physical inspection of goods. The dossier is

transferred to the tax assessment department for detailed examination. If the dossier
is valid, the dossier shall be forwarded to the head of the customs branch for
approval and the customs seal on the export declaration.

+ Red channel: The dossier is transferred to the physical inspection department. The
goods owners shall show 5%, 10% or 100% of goods for customs inspection. After
checking, if the goods are in line with the declarations and related documents, the
customs officer will seal on the container and note in the declaration. The dossier
shall be forwarded to the head of the customs branch for approval and the customs
seal on the export declaration.

2.1.11.3. Clearance procedures at the port

Step 1: Submit customs dossiers and register for declaration.

Step 2: Carry goods to the nominated place for inspection

Step 3: Pay customs fee and receive the returned declaration

Step 4: Liquidation of customs declarations

- The staff submits the declaration (1 copy and 1 original) for inspection in the
liquidation department of the customs office.
- The liquidation customs shall check and stamp then return the original.

Step 5: Ship's register

- Based on the booking staff to write the ship's number, trip number, container
number, seal number in boxes 28, 29 of the declaration.
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- The operation staff submits the customs declaration form

- The customs office shall return the declaration form and the confirmation of
registering the ship. The cargo will be scheduled to be loaded on board the
vessel.

2.1.12. Making HB / L and sending to the customer for inspection

When there are sufficient information and documents related to the shipments,
Ruby will begin to make the HB/L. The HB/L will include information about the
seal, the consignee and the notify party.

However, Ruby will make a draft HB/L to its customer for checking and send the
official one after finishing all the corrections.

2.1.13.Sending information to the shipping line for making MB/L

Ruby transfers the dossier (copies) to customers so that they can send information
to the shipping line for the issue of master bill of lading.

After the ship runs, the shipping company will send the bill of lading to the Ruby
operations staff. The operation staff shall forward the declaration form and bill of
lading to the Customs office to receive the stamp “actual export”.

The content of MB/ L includes information about consignee, name of vessel,

number of containers, seal number and so on.

2.1.14.Checking MB/L received from the shipping line

Based on information submitted by Ruby, the shipping line sends the draft MB / L
to Ruby for checking before issuing the original one.

When MB / L is completed, the shipping line will notify Ruby to get MB / L. To

receive the MB / L, Ruby will, on behalf of the shipper, pay all fees.

2.1.15.Pre-alert and confirmation of complete transportation

After completing the export documents (HB / L, MB / L), the sales staff will send a
description of the shipment including information about consignee, ship name /
shipment number, port of loading / port of discharge, ETD / ETA, B/L number
(house bill, master bill), type of B/L (original, surrender, ...), contract, invoice,
 19

packing list, copies of HB/L and MB/L as pre-alert to the agent in importing
country to keeps track of the shipment until it reaches the port of destination.

After the actual consignee completes all the formalities required to receive the
goods, the agent in importing country will send an email informing Ruby that the
consignee has received the goods.

Then, Ruby will contact its customer by email to inform them of the receipt of the
cargo.

2.1.16.Collection of documents and requirement for payment.

When there is a full set of original documents including: MB / L, HB / L,
Commercial Invoice and Packing List, Ruby will send all the documents to the
shipper and ask for payment of related fees.

If the payment is prepaid, the sales staff will send a debit note to the customer and
forward it to the accounting department for debt collection. Only when the shipper
pays the freight and related charges (THC, B / L, seal, etc.), Ruby sends the full set
of document to them.

If the payment is to be paid later, the sales staff will send a debit note to the
consignee at the port of discharge. The shipper only needs to pay the surcharges in
Vietnam and receives the bill of lading.

After customs formality is completed, the staff will check and rearrange the
documents into 3 sets: one for the customer, one saved in accounting department
and one kept by sales department. The set for the customer is accompanied by a
debt note signed and stamped by the director of Ruby.

2.1.17.Shipping request and profit calculation

This is the last step in the process of implementing the export documents by sea.
The sales department will issue a shipping request upon completion of each
shipment. This shipping request is the basis of loss and profit when Ruby is in
charge of forwarding a shipment. After completion, the shipping request will be
transferred to the accounting department. On the basis of the loss, the accounting
 20

department will report the results of business activities. Finally, the sales
department relies on the Shipping Request to issue a "Profit Statement" saved on
the shipment record as the basis for the future report.

2.2. Results of export FCL freight forwarding activities in Ruby Logistics

Chart 2: Structure of Freight Forwarding Service

2.00%

17%

37% 5%

39%

Air Import Air Export Sea Export Sea Import Road Export

Figure 2-2: Structure of Freight Forwarding Service in 2017

(Source: Ruby’s Summary Report)

In terms of freight forwarding, Ruby is mainly engaged in import and export

shipments by sea, in line with the current trend in the world because ocean freight is
the most economical way of transport. Sea freight is five times lower than
airfreight. Understanding the demand of the market, Ruby constantly develops its
service for sea transport by negotiating with the shipping line.

In 2017, Ruby handled more than 213 containers including 110 40’ containers and
103 20’ containers. 75% of these containers are exported from/ imported to Tien
Son Company in Thanh Hoa province, who was the main customer of Ruby in
2017. Compared to imported containers, exported containers account for a larger
proportion ( about 39%).

In the first half of 2018, Ruby has received more orders for processing FCL
shipments from others customers like TS Vina, Nam Thien Ha and Sewing T&T. In
 21

the last six months, Ruby has conducted 147 FCL orders, corresponding to 161 full
loading containers. More than half of the orders are to process exported goods. It is
a good result, which shows that Ruby has gradually gained the trust of customers.

2.3. Evaluation
2.3.1. Strengths
• The process of handling exported full container load (FCL) by sea at Ruby is
quite tight and clear, from the process of finding customers to making
payment. Different departments support each other to complete the work.
• Due to its good relationship with the shipping lines, the company offers
competitive rates with good transport quality.
• The tracking of the shipment during inland transport is conducted through
the company's tracking software, which helps to ensure that the truck is on
the right route and delivers goods on time.
• Internal communication is through Zalo, which ensures timely transfer of
important information and visual information. The contact with the customer
is done through both Zalo and email ensuring the flexibility and efficiency in
exchanging information and recording the negotiation process.
• Young, enthusiastic and dynamic staff, some of whom have many years of
experience in the industry.
• The cooperation with existing customers for a long time helps the company
remove unnecessary steps in the process of delivery, reduce delivery time
and increase profits.
• The company has good relationships with other logistics companies who can
help to deliver when the company truck is not available.

2.3.2. Weaknesses
• Ineffective application of technology

The interaction of the company website with customers is not high. The website is
not updated and does not help customers to learn the company’s procedure and to
 22

actively contact the company for consultancy of international shipping services. It

only provides brief information about the company and its main business areas.

• Seasonality of forwarding activities

In fact, the forwarding activities of the Ruby transport company are seasonal,
mainly conducted in the period from June to August and from December to
February of the next year due to the influence of the import and export market of
fabrics. In others periods of a year, Ruby has difficulties due to the lack of orders.

Seasonality makes business operations unstable. Business results by month and

quarter are not equal. This not only affects the repair and maintenance of vehicles
but also affects the income of employees. To overcome this difficulty, the company
needs the trust and support of customers to help stabilize the source of income and
create profit.

• Inexperienced staff

As mentioned above, most of the staffs at Ruby are young with a good base of
knowledge but lack of experience. Compared to other companies in Vietnam and
around the world, the level of staff at Ruby is still limited, which may reduce the
effectiveness and the efficiency of freight forwarding activities. Inexperienced
employees tend to make more mistakes in dealing with unusual cases, result in a
waste of time and money.

In addition, the e-customs declaration must still be outsourced, which increases the
costs and reduce the services’ competitiveness.

• Fleet has not met the transportation demand

Although the company has transportation facilities, the quantity is quite small and
meets only a part of the transportation need of the company. Thus, when the amount
of goods is large, Ruby has to hire trucks outside, making costs increase and having
less control over the means of transport.

• Small market share

 23

As a young company in the logistics industry in Vietnam, the number of Ruby

customers is limited. Due to Vietnam's participation in the process of international
integration, more and more foreign forwarding companies have emerged in
Vietnam, and competition has become increasingly severe. Ruby is also
experiencing great competition especially from the long-established companies,
who have a stable position and a strong financial ability to carry out large orders.
Nowadays, customers are not only interested in the quality of services, but also in
the offered price. Foreign competitors with large capital and technological
advantages are likely to offer lower prices. In addition, Ruby has no special
customer care programs as well as other promotion programs to find new
customers.

• Problems in the process of preparation and inspection of documents

This work is time-consuming and expensive (telephone, fax, etc.). The company
does not have a separate documentation department. Therefore, preparation and
inspection of documents are the responsibility of the sales staffs which makes their
volume of work is quite large. This may result in some mistakes when thay prepare
and check the documents. When customs detects errors in the documents, they
return them to Ruby for revision. Correction of documents usually takes 1 working
day.

2.3.3. Opportunities
Vietnam is located in the dynamic economies of the world, located close to the
South China Sea, is the connection between Southeast Asia, Northeast Asia, the
Pacific Ocean and the Indian Ocean, and has the potential to develop logistics
services infrastructure serving to the regional center of transshipment.

Seaport system has been invested in large scale with modern handling equipment. A
number of projects have been put into use, with the investment of the private sector
in building the base port logistics services following at Cai Mep - Thi Vai, the
research to develop logistics center in some provinces...
 24

There has formed a number of ICD to make customs procedures for imports and
exports container. There are 4 ICD in the North and 5 ICD in the South; a number
of locations outside border gate of the customs procedures. In the Central region,
large industrial zones have formed goods checkpoints outside the border gate.

There are many opportunities, institutions and policies are to be improved the legal
basis for the exploitation of logistics services. State of logistics management is
enhanced through the drafting and implementation of legal documents, strategies
and master plans; volume of exports and imports is increased, creating conditions
for the development of logistics services. Policies and mechanisms to develop
logistics services in Vietnam have been interested in building and gradually
improved.

2.3.4. Challenges
Rapid urbanization has led to many problems, making it difficult for people and
society for the transport access. Frequent traffic congestion along with natural
disasters makes it difficult to transport.

Transport infrastructure has grown rapidly but not yet synchronized, no connection
due to lack of multimodal transfer hubs, online infrastructure (rest areas, repair
facilities, commercial services...), especially not create multi-modal transport
corridors to transit while demand for high-quality service is growing, making the
cost of the domestic logistics much higher than other countries.

Customs procedures are still cumbersome and complicated, resulting in higher cost

CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS

3.1. Development orientation
In such a fiercely competitive market, to survive and develop, the company has to
expand the market. This is an effective orientation to achieve revenue target and
strengthen its position. When the market is expanded, a market sector’s fluctuation
will not have the serious impact on the company’s operation.
 25

In the next five years, Ruby aims to increase its market share, seeking more new
customers while maintaining business with existing partners. The company will
create new business relationships with international forwarding organizations. It
also seeks new markets and pays special attention to the markets like Europe, the
US and China.

Ruby continues to provide 3PL services with more investment in improving

equipment and facility to better serve the customers.

The company is going to develop a new operating mechanism to promote its

business, save costs and improve service quality so that it can increase the service’s
competitiveness and attract more customers.

Ruby focuses on training to have professional and experienced staff in the future.

Ruby is always trying to build a professional logistics company which will become
one of the most leading options for customers in the coming years.

3.2. Solutions
• Careful documents preparation and checking

Currently, the sales department of Ruby is undertaking the work of documentation

department in both the export and import sectors so it is necessary to recruit more
staff to handle the documentation. There is a need of specialization to minimize
errors when checking documents. In the documentation department, it is important
to divide clearly work for exporting document staff and importing document staff.
Once the staff has completed their work, the manager should take the time to check
the consistency of the documents.

The company should cooperate with the customs authorities to clarify customs
regulations. The documentation staff must complete exactly the contents of the
import / export goods declaration. They must always work with a high level of
focus in the document review process.

• Capital development
 26

The company faces increasingly fierce competition, not only from other enterprises
of the same size or big competitors with abundant financial resources but also from
foreign firms that recently enter Vietnam’s market. In addition, customers delay
payment and appropriate capital. Therefore, the solution is to increase the business
charter capital.

Ruby has a small scale with a medium amount of charter capital. The situation of
customers’ not paying debt has been occurring, which results in Ruby’s stages of
capital shortage. It is also the cause of Ruby’s delay in payment of fees and cost of
delivery.

Therefore, the company needs to mobilize capital by various methods such as

- Issuing bonds
- Establishing joint ventures with foreign enterprises
- Offering shares. Share offering is to increase of the number of shares offered
to sell and sell those shares during the operation to increase the charter
capital.
- Mobilize capital from bank credit

Bank credit is one of the most important sources of funds, through which joint-stock
companies can obtain short, medium and long-term loans to meet their capital
needs.

Bank credit has advantages over issuing bonds as when borrowing bank loans if the
debt repayment is due and the company is not able to repay, the company can apply
for debt rescheduling. However, if the company issues bonds, it is obliged to repay
the principal and interest when the bond is due.

As capital increases, the company can easily broaden its business. Ruby can extend
the customer debt payment period to create long-term relationships with customers.

Investment in infrastructure and means of transport (tractors, forklifts)

Investing in infrastructure is an urgent matter for the company. This is aimed at

creating the initiative in delivery and reducing dependence on outsourcing.
 27

At the same time, this solution will ensure the delivery time, reduce the price and
increase the competitiveness of services on the market.

• Human resources development

The company considers employees as the assets of the company. Employees play an
essential role in the company's existence and development. Staff’ attitude and
professional skills affect the level of satisfaction of the customer. Therefore, the
objectives of developing human resource are to:

- Keep the current customers

- Have more new customers

To achieve these goals, Ruby needs to create a more professional and pleasant
working environment by investing in office facilities and organizing teambuilding.
Intimate meetings need to be done in order to build employees’ trust and promote
the responsibility of the staff.

Every year, the company should create a service assessment to learn from and
improve the quality of its services. Ruby also has to recruit more sales staff to
increase the level of professionalism and support work for each other. The company
should encourage employees to take courses to improve their professional skills,
especially courses in customs and business law. Employees should learn more about
e-customs declaration to take care of this task to reduce costs and increase profits
for the company.

• Technological solutions

To utilize and use software to update and classify customers as well different
shipping lines

To increase interaction at the website: http://www.rubylogistics.com.vn/ by

providing both English and Vietnamese versions. The website should provide more
information about the services for potential customers. Online discussion and online
customer consultation are also recommended.
 28

• Market expansion to deal with seasonality

According to the company’s development orientation, market expansion is very

important for the existence of the company later on. In the existing market, Ruby
need to find more customers besides the familiar ones like Tien Son or TS Vina so
that if one customer terminates the contract, Ruby’s operation is not affected
seriously. In addition, having more customers gives Ruby chances to diversify its
commodity list. At present, the quantity of order almost depends on the amount of
garment and fabrics imported/ exported. Processing other commodities helps Ruby
reduce the seasonality of performance and improve the financial situation. It is
crucial that the company penetrate new markets like China, Europe.

3.3. Recommendations to the company

Ruby does not have a marketing department like many small-sized logistics
companies in Vietnam. The number of customers is limited by the lack of
appropriate marketing strategies and promotion plans. Accordingly, to get more
market share and have new customers, Ruby logistics need to invest more in
marketing.

Now logistic industry in Vietnam is potential but it also has some risks. According
to Porter five forces, the industry has high threat of entry, huge competitive rivalry,
medium level of substitution risk, high bargaining power of buyer and low
bargaining power of suppliers. Therefore, effective marketing mix strategy need to
be in place to convert the disadvantages to advantages.

It means, the company has to take into consideration 4 factors: price, product, place
and promotion. In terms of price, it should lower the price by using its own staff and
vehicle instead of outsourcing and performing carefully in each steps to avoid costs
incurred. For the product, service quality should be improved and developed into
customer-tailored service. The company should keep the promotion spending at the
higher level. At the same time, some advertising can be shown on the newspaper or
logistics journal to attract more customers. The application of advertisement
 29

depends on the financial ability of the company. The fourth is place - having well
networked offices and warehouses distributed geographically.

3.4. Recommendations to the Government

The Government should consider the opinions of enterprises in order to set up
appropriate policies and regulations. The fact is that the system of legal documents
in our country is quite unsystematic and incomplete, not made from the point of
view of the enterprises, which causes many problems in the implementation
process.

The application of information technology should be promoted. Administrative

procedures, especially customs procedures, should be modernized. The customs
authorities need to cooperate closely with the bank to keep track of enterprises’ tax
payment.

The Government should have detailed plans for investment in facilities of seaports,
sea and land road infrastructure. The Government should allocate and invest in
seaports appropriately to avoid the huge gap among the infrastructure of different
seaports. Some port now experience congestion and overloading while other ports
do not operate to full capacity.
 30

CONCLUSION
It has been 5 years since Ruby Logistics was established. Despite of lots of
difficulties, the company positions itself step by step on the market and gets certain
achievements. Market expansion in recent years allows Ruby to have more new
business opportunities from not only the neighbor countries of Vietnam but also
other areas in the world.

In this period of internship, the author has a chance to observe how a logistics
company actually operate and compare between theory learned at school and the
reality. The knowledge and skills the author get from this period are shown in this
report. In the first part, the author has learned the structure of a small business in
logistics. By analyzing business performance of Ruby in the period from 2014 to
2017, the author can understand how Ruby overcame many problems in its early
stage to make profit. In the second part, the author makes a list of steps to process
imported and exported FCL cargo based on the daily operation in Ruby. From that,
the author gives comments on the advantages and disadvantages of the company in
the implementation of these procedures and suggests solutions in the last part.

Besides what have been done, this report still has some drawbacks. Especially, the
financial situation of the company is not clarified in the report although the author
has collected full necessary financial documents from the accounting department.
Also, statistics on the performance of freight forwarding are not mentioned in detail.
Therefore, in the future, if any research about the same topic need to consider these
problems to have a deeper look into the procedures.

In short, thanks to the experiences I have had when working in Ruby Logistics, I
attain many new skills that I can’t get from school and have an overview of my
major in reality. This internship is a precious experience which helps me to define
my career path.
 31

REFERENCE
Textbook

1. Prof./ Dr. Hoang Van Chau, 2009, Textbook “Logistics và vận tải quốc tế”,
TT&TT publishing house, Ha Noi
2. Assoc. Prof./ Dr. Nguyen Nhu Tien, Textbook “Vận tải & giao nhận trong
ngoại thương”, KH&KT publishing house, Ha Noi

Internal Documents

3. Ruby’s Accounting Department, 2013, Ruby Trading Transport Jsc

Company Profile, Ha Noi
4. Ruby’s Accounting Department, 2015-2017, Ruby’s financial statements, Ha
Noi

Other documents

5. Belay Seyoum, 2013, Export-import Theory, Practices, and Procedures, 3rd

Edition
6. 2015, Guide to Customs Export Procedures. Revenue. Available at:

http://www.onf.ie/wp-content/uploads/2015/03/Guide-to-Custom-Export-
Procedures.pdf.

7. Johnson, Bade, Donna L, 2015, “Export/Import Procedures and

Documentation”, 5th Edition., AMACOM publishing house.
8. Canadian Manufacturers & Exporters, May 2003, TRANSPORTATION- Best
practices manual, Canada

Website

9. Hari, 2015, Article 4 – Import process. Available at:

https://shippingandfreightresource.com/article-4-import-process/

10. http://tuhocxuatnhapkhau.com/news-detail/quy-trinh-xu-ly-booking-request-
cua-khach-hang-tai-cong-ty-forwarder
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APPENDIX

APPENDIX 1: STATEMENT OF FINANCIAL SITUATION 2017

APPENDIX 2: INCOME STATEMENT 2017
APPENDIX 3: BALANCE SHEET 2017
 33

APPENDIX 1: STATEMENT OF FINANCIAL SITUATION 2017

34
 35

APPENDIX 2: INCOME STATEMENT 2017

 36

APPENDIX 3: BALANCE SHEET 2017

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