Process of air freight forwarding services for exporting

Over the last few years, the concept of logistics has become more and more recognized, it has even become a vital part of foreign trade activities. Integrating with the trend of globalization, Vietnam has gradually developed forwarding and logistics industry, created incentives to develop export and import activities in the country. After a long period of time fostering professional knowledge, I found this internship program a chance that the university had offered to students to gain actual work practice and apply learning theory.With the experiences in 3 weeks of internship at Overgrow Consultant and Logistics Corporation and the knowledge accumulated in class, I have completed the mid-course internship report with the key topic â€Å"Process of air freight forwarding services for exporting processing goods at Overgrow Consultant and Logistics Corporation†, which includes the actual process of exporting goods by air at the company and some recommendations to improve this act ivities.The report consists of three chapters, including: Chapter 1 : Introduction of Overgrow Consultant and Logistics Corporation Chapter 2: Estimating the process of air freight forwarding services for exporting processing odds Chapter 3: Recommendations to improve the process I would like to say thanks to Foreign Trade University Ho Chi Mini city Campus that has facilitated us in experiencing with the mid-course internship; Mr.. Unguent Tine Hang who has devotedly helped me to finish this report. I am grateful for the help from Overgrow C. L. Co's Board of Directors and their staffs, especially Mr..Unguent Van Sang – General Director and Miss Train NCO Phonon NIH – Assistant General Director, who have enthusiastically supported me to approach documents and actual activities in the company. However, due to the lack of knowledge and practical experience, the port may contain some inevitable mistakes. I would be really appreciated to have further comments to improve t his subject from the readers. Ho Chi Mini City, 22nd August, 2013 Student TryГn HTH H;I Line Chapter 1 : INTRODUCTION OF OVERGROW CONSULTANT AND LOGISTICS CORPORATION 1. . Rater History Overgrow Consultant and Logistics Corporation was first established on 20/09/2000 at Cote Building, 7 Name Quo Gang, Pam Eng Ala Ward, HCI with the name of Overgrow Services – Consultant – Trading Limited Liability Company. January 2nd 2008, the company became officially quizzed and changed its head office to 853 El Hong Phone, Ward 12, Didst. 10, HCI. In January 2011, the head office was once again moved to 273/5 Unguent Throng Tune, Ward 10, PH Nonhuman Didst. , HCI and became official until now. . 2. General Information company's Name: OVERGROW CONSULTANT AND LOGISTICS CORPORATION Business Name: OVERGROW C. L. C Brand name: [email  protected] Head Office: 273/5 Unguent Throng Tune, Ward 10, PH Nonhuman Didst. , HCI City Certificate of Business Number: 4103008954 Issued by: Depa rtment of Planning and Investment of Ho Chi Mini City Tax Code: 0305416676 Initial capital: 800. 000. 000 dong Tell: 08 38 455 277 Fax: 08 38 455494 Website: overgrow. Com. Van Email: [email  protected] Com. Van Chairman of the Board of Directors: Mr..Quack Than Dan General Director: Mr.. Unguent Van Sang Slogan: â€Å"Ever Value Growth† 1. 2. 1. Functions Consultancy Investment Consultancy Consultancy on Enterprise Administrative Management Legal Consultancy M&A Consultancy Real Estate Consultancy Franchising Consultancy Export – Import Customs Broker Logistics Services Packaging, labeling Consolidation Authorized representatives of import and export Distribution Accounting – Tax and Financial Services Vocational Training Trading 1. 2. 2. MissionsTo plan and carry out company's business services in accordance with the current regulations to execute the above function To develop and utilize efficiently the company's funds, constantly improve the company's serv ices to preserve and expand capital To comply with policies and regimes of state law related to business activities of the company, commit to the contracts with customer To fulfill obligations to employees and tax obligations to the state To take legal responsibility for the operations of the company To train and develop the employees of the company, facilitate staffs' professional development 1. 3.Organizational structure With the number of fewer than 30 employees, Overgrow is a small company whose capital is 800. 000. 000 vend. This figure is quite not significant during the time when more and more large logistics company has Joined in the market inventive with strong investment in scale and infrastructure. However, the dynamic and young team of staff, the enthusiastic and experienced management team, the compact size which is easy to control are the company's advantages. With the slogan of Ever Value Growth for, the company will always be prepared for the long-term oriented devel opment and sustainability. . 3. 1 . Organizational Hierarchy chart Chart 1 . 1: Organizational Structure Source: website 1. 3. 2. Functions of main departments Personnel Department Responsible for managing rules and regulations of the company, clerical work, salary administration, compensation and benefits, office, security, fire fight and prevention, developing human resource. Business Development Department Responsible for researching and developing service products, designing and determining the price of product, pursuing business opportunities, customer care and development.Consultancy Department Provide consultancy services in accordance with investor's requirement and business environment Research and update systematically related legal information to provide customer with the best investment, commercial, import-export information Plan business projects, investment proposal, obtain investment license. Import-Export Department Import-Export Department is the most important depa rtment contributing to the company's revenue. It consists of two sections: documents section and field section.The main activities are: Provide import and export services in accordance with customer's requirement and business environment Deal with customers, receive information and documents, process documents and import-export formality Initiative contact with related State agencies and customers to resolve any problems Carry out customs broker activities, transportation and delivery of goods Operate the company's direct trading and import export activities. 1. 4. Business outcomes from 2010-2012 Table 1. 2: Business Revenue, Cost, Profit from 2010 to 2012 Unit: Vietnam Dong 2010 2011 2012 Net Revenue 4. 650. 094. 413 4. 185. 920. 237 3. 25. 444. 644 Cost 2. 404. 717. 225 1 . 668. 673. 268 1 . 613. 829. 861 Gross Profit 2. 245. 377. 188 2. 517. 246. 969 1 . 811. 614. 783 Revenue from finance 2. 185. 735 4. 125. 176 997. 140 Cost from finance 2. 561. 199 58. 210. 523 19. 096. 204 Op erating cost 2. 190. 445. 214 2. 357. 866. 622 1 . 799. 491 . 875 Net profit (15. 443. 490) 105. 295. 000 (5. 976. 156) Other profit (74. 133. 603) (14. 143. 102) 25. 842. 125 Profit before tax (89. 577. 093) 91. 151. 898 19. 865. 969 Profit after tax (90. 254. 460) 72. 725. 273 14. 373. 160 Source: Finance Statement 2010-2012 In 2010, the company's business faced a lot of difficulties.Although net revenue increased by 29. 96 % compared to 2009 (Revenue 2009 was 3. 578. 025. 005 VEND) but costs increased significantly. The total cost in 2010 was 4. 741. 857. 41 VEND, 32. 66 % higher than in 2009 which was 3. 574. 409. 473 VEND. This consequence was partly due to the bad effect of general market, the unstable economy, oil prices sharply rise, especially financing costs which increased significantly from 5. 153. 310 VEND in 2009 to 72. 561. 199 VEND 2010. Over the years 2011-2012, the business situation was much more positive thanks to costs reduction. However, the company's net reven ue has declined.The fact that a number of customers of the company have had their own import and export department along with the introduction or expansion of many logistic companies in Ho Chi Mini City may lead to the deduction of the amount of contract. 1. 5. Internship activities at Overgrow C. L. C Research about organizational structure, functions and tasks of each department, observe everyone's works Approach to some important document required in import- export activities such as contact, Bill of Lading, Airway Bill, Commercial Invoice, Packing list, Booking Note, Certificate of Origin†¦After registered at HCI City Customs Department 2 Ham Nigh, Ben Nigh Ward, Didst. 1, HCI and within the validity period of the contract, every consignment under this contract will be declared at this Customs Department. After getting notice from Hong Pouch Duce about the export consignment, the document processing staff ill: Receive information about the consignment from customer: Descrip tion of Goods: Polo Half HAS code: 61099020 Quantity: 298 pieces = 6 cartons Total value: $2. 63,14 Country of origin: Vietnam Country of import: Japan Port of export: Tan Son Neat airport, HCI Port of discharge: Osaka, Japan Gather the necessary documents and translate into English including: Commercial Invoice 1 original Packing list Bill of Material Schedule of contract Certificate of Origin Airway Bill 1 copy Table 2. 2. Documents required in process Notes: Certificate of Origin and Airway Bill will be obtained after the consignment departs Modes of supply documents: Via email, post, MESS or directly hand in to Overgrow Headpiece.Normally, field staff will come to customer's company to get the documents and signatures. Date on all documents must be the same (June 10th 2013) except for C/O and A/B June 4th 2013: contact the carrier and obtain Booking Note for the flight of June 33rd 2013 2. 1. 2. Customs Declaration and Clearance Online declaration: For processing goods, we will use Thai Son soft-Uses EGG. June 10th 2013: Documents processing staff will insert the information of the consignment, attach documents such as Commercial Invoice†¦ After information is submitted inline, Customs officer accepts customs declaration and give out declaration number.This consignment of Hong Pouch Duce is classified as Green lane and exempt from taxes, documents staff will print out the declaration sheet. June 1 lath 2013: Field staff will submit the 2 Declaration Sheet (original) (signed by Hong Pouch Duck's director) to Customs Officer at HCI Customs Department to get the clearance confirmation. In other cases, if the consignment is classified as Yellow or Red lane, the Customs Department will check on the commercial documents or actually inspect of goods and move on to Taxes Department. 2. . 3.Good Delivery June 22nd 2013: Field Staff will bring the 2 Declaration Sheet (confirmed) and Booking Note to TTS warehouse and Hong Pouch Duck's representative will deliver the goods there to the representative of the carrier along with a forwarding instruction from the shipper. Staffs of the airline warehouse weights the goods and sign in the Scaling Report. Field staff will submit the 2 Declaration Sheet to the customs inspector, get the confirmation and take back the sheet then liquidate the goods. After that, he will pay the entire fee to TTS and transfer documents to the carrier's representative.A ay or two, he will come to the carrier's office to get the airway bill. 2. 1. 4. Documents Storage and Transferring After finishing all customs procedures, field staff returns all the bills and detailed list of relating cost to the accosting department. Accounting department will draw the final balance sheet, settle all payment relating to the consignment, bill the service charges and transfer the document to customer. Documents Processing staff will obtain the C/O and then transfer the final documents to Hong Pouch Duce, including: C/ o Airway bill And other necessary documents Overgrow will keep one copy of each document. 2. Summary of strengths and weaknesses 2. 2. 1 . Strengths Established for about 10 years, the procedures of Overgrow C. L. C are currently well developed. The connection between each section ensures that the work process is fast and tight. The process is closed to theory and regulations of the state, which minimizes the chances of mistakes and other problems. The company is applying advantages in information technology to develop customer network and execute the import and export procedures. The usage of electronic customs declaration software USES-EGG lasted update enables all processes to become more convenient and simple.The current headpiece, which is near the airport, makes it easier for staff to move from office to the warehouse and the Customs Department. More over, short distance helps the company to save a lot of money and time. Staffs with strong knowledge, rich experience and enthusiasm always prove their professionalism, hardly make any mistake at work. After several years of operation, Overgrow has created close relationships with many airline companies and provide the air transport service with a competitive quality and price. 2. 2. 2. Weaknesses Firstly, investment and development of services is limited due to lack of capital sources.Overgrow mostly work with customers whose company is in the medium and small scale. The lack of human sources also constrains the company from expanding the business. Besides, there are still employees whose professional qualifications are not really strong to solve any problems occur at work, especially when they are working with customs agency. Moreover, Overgrow does not have any warehouse as well as transportations. The fact that they must hire other transport agency raises the cost and for worst, they can not control the quality of shipment. Sometimes, due to the carelessness of the supervising staff, goods are lost, stolen or damaged.Thi s situation affects the company's credit as well as financial status since the value of compensation quite high. Chapter Three: RECOMMENDATIONS TO IMPROVE THE PROCESS OF AIR FREIGHT FORWARDING SERVICES FOR EXPORTING PROCESSING GOODS 3. 1 . Outlook of air freight forwarding services in the company 3. 1. 1 . Opportunities The negative impact of the globe recession has clearly affected the import-export market in Vietnam. However, signs of global economic recovery along with the efforts of business community and Ministries will be an important driving force, supporting the recovery of Vietnam market.For logistic sector, growth opportunities are even higher. According to some experts in this field, after Joining in WTFO, Vietnam is chosen by many foreign investors and gradually become a new manufacturing center of the world, after China and India. This is also a good sign for Overgrow as the situation is gradually better. The export and import activities in many manufacturing companies have recently promoted, which lead to more and more customers. Customs regulations nowadays are more appropriated than they were before. The simpler, neater they are, the more convenience for the company.The company is coated in an area with developed economies such as Ho Chi Mini City, Dong Ana and Bin Dong. This area attracts many domestic and foreign investments, enabling companies to find new customers. In the future the company continues to expand the relationships, seeks for investment partners not only domestic but also abroad and potential new customers while maintaining and strengthening goods relationships with the old customers. Besides, the company also developed many types of services other than major import and export activities such as consulting, investment, trading bring on more abundant source of profits and stability.Especially for air freight industry, thank to their advantages of quick and safe services, future development of this field is indisputable. The numb er of export and processing contracts of the company are stable and tend to increase. Besides, customs procedures are more quickly than the sea freight plus the competition between air transport companies which leads to costs reducing tend to be the deciding factors for customers to choose this type of freight. 3. 1. 2.Threats One of the biggest challenges of the company's current situation is the fact that the numbers of logistics companies are increasing leading to fierce competition in annuity, quality and services price. In addition, the trading and manufacturing companies are gradually investing themselves a separate import and export division, making the number of contracts and the number of customers using the service also declined somewhat. Most of the company's customers are small and medium enterprises, exports and imports volumes are not large and the value of service contracts is not high.The expansion of the market may face many problems due to financial instability and human resources are increasingly scarce, especially qualified staff, strong expertise who meet the requirements of companies. The research and develop product activity requires skilled, professional and strong acknowledged of market employees, who are also the target talent of others competitors. One other difficulty is the seasonal characteristic of logistics industry, which makes the company operation results unstable and revenue uneven. Benefits of the employee are also affected.At peak season, they have to work overtime till midnight to wait for a shipment but at the opposite one, workload reduces and so does their income. Last but not least, in 2012 , Vietnam government has permitted 100 % foreign owned egoistic enterprises in the country, this will make the competition becomes more intense, when small enterprise like Overgrow confront with the big names in the worldwide market like Marks , PAPAL , NYC , MOL who have huge capital investment, abundant experiences and intend to invade Vietnamese potential market. Small-scale infrastructure and limited services companies could hardly compete with those giants. . 2. The company's oriented development for air freight forwarding services Develop direct foreign investment and enterprise investment consulting services, erectly invest if there is a good opportunity Develop customs broker service and freight forwarder, specialize each stage, diversify fields and selectively develop Overgrow Company does not only develop human resources but also desire to bring them professional solid foundation for the future Advertise and develop brand's image to the potential customers Become a closed chain services provider in 201 5 3. 3.Recommendations to improve air freight forwarding services for exporting processing goods 3. 3. 1. To the Board of Director Upgrading computer systems to facilitate employees complete task more quickly and accurately Invest in equipping transportation to reduce working with agency with high pri ce and low quality Carefully monitor working habit of the staffs to ensure seriously inside and outside the office Consider investment in marketing activities and advertising company's image in order to expand customers network as well as to attract more potential employee 3. . 2. To the Personnel Department Criticize and create sanction regime for workers to increase work efficiency Foster knowledge and soft skills of staffs, especially field staffs working directly with the customs officers, require high flexibility Limit the costs and time when handling the shipment, and time off of employees 3. 3. 3.To the import and export staffs Avoid unnecessary mistakes in processing documents to minimize handling time Try to arrange time and places to handle as many consignments as possible to reduce moving time and cost when traveling from the office to the warehouse or to customariness 3. 4. Proposals 3. 4. 1. To the Company Conduct financial stability, balance the costs reasonably and pa y attention to the currency market for the price adjustment in providing services to customers Improve