SUPERVISOR’S REMARKS

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Hochiminh City, Aug 10th 2014

Supervisor

Phung Minh Duc

 TABLE OF CONTENT
PREFACE ........................................................................................................................ 1

Chapter 1 : INTRODUCTION TO HOANG HA INTERNATIONAL LOGISTICS

JOINT STOCK COMPANY............................................................................................ 3

1.1. The foundation and development of HIL JSC .................................................... 3

1.2. Main functions of HIL JSC ................................................................................ 4

1.4. Business outcomes of HIL JSC during 2011- 2013 ........................................... 6

1.5. ... The roles of air freight forwarding activities in the overall business of HIL JSC
...................................................................................................................................... 8

1.6. Competitiveness of HIL JSC in the market ........................................................ 8

Chapter 2 : THE SITUATION OF AIR FREIGHT FORWARDING ACTIVITIES IN

HOANG HA INTERNATIONAL LOGISTICS JSC DURING 2011-2013 ................. 10

2.1. Business outcomes from air freight forwarding activities during 2011-2013 .. 10

2.1.1. Revenues, expenses and profits of air freight forwarding activities .......... 10

2.1.2. Return On Sales of HIL JSC in AFF activities .......................................... 11

2.1.3. The structure of imported/ exported goods of air freight forwarding........ 13

2.1.4. The structure of goods of air freight forwarding activities ........................ 14

2.2. Comments on Air Freight Forwarding Activities in HIL JSC ......................... 16

2.2.1. Strengths .................................................................................................... 16

2.2.2. Weaknesses ................................................................................................ 17

2.3. Comparison with the theory ............................................................................. 18

2.3.1. Theory summarization ............................................................................... 18

2.3.2. Similarities ................................................................................................. 19

2.3.3. Differences ................................................................................................. 19

Chapter 3 : THE OUTLOOK, DEVELOPMENT ORIENTATION AND
RECOMMENDATIONS FOR PROMOTION OF AIR FREIGHT FORWARDING
ACTIVITIES IN HIL JSC ............................................................................................. 20

3.1. The outlook of the Air Freight Forwarding activities ...................................... 20

3.1.1. Opportunities ............................................................................................. 20

3.1.2. Threats ....................................................................................................... 21

3.2. The development orientation of HIL JSC of Air Freight Forwarding activities
.......................................................................................................................... 22

3.2.1. Short- term orientation ............................................................................... 22

3.2.2. Long- term orientation ............................................................................... 22

3.3. Recommendation for promoting Air Freight Forwarding activities ................ 22

CONCLUSION .............................................................................................................. 24
 ABBREVIATIONS
Abbreviation Explanation
AFF activities Air Freight Forwarding Activities
FIATA The International Federation of Freight Forwarders Associations
HIL JSC Hoang Ha International Logistics Joint Stock Company
IATA International Air Transport Association
VASEF Vietnam Association of Seafood Exporters and Producers
VIFFAS Vietnam Freight Forwarders Association
VND Vietnam Dong
WTO World Trade Organization
 TABLES AND FIGURES

Table 1.1: Business outcome of PTSC SB from 2009 -2012 ......................................... 6

Table 1.2: Revenue from AFF activities in the total revenues of HIL JSC ..................... 8
Table 1.3: Net profit from operating activities of HIL JSC and VINATRANS during
2011- 2013 ...................................................................................................................... 9
Table 2.1: Revenues, expenses and profits from air freight forwarding activities during
2011-2013 ..................................................................................................................... 10

Figure 1.1: Personnel structure of HIL JSC ..................................................................... 5

Figure 2.1: Return On Sales of HIL JSC in AFF activities ........................................... 12
Figure 2.2: The proportions of imported and exported goods by air freight forwarding
during 2011-2013 ........................................................................................................... 13
Figure 2.3: The structure of goods of air freight forwarding activities ........................ 14
 1

PREFACE
Since Vietnam has become an official member of WTO in 2006, there are tons of
chances for the domestic companies to operate and make profit outside the border. It is
the increasing development of the import and export sector that has generated lots of
opportunities for the transportation companies to develop. In the recent years, many
forwarding service providers have mushroomed and massively grown, vaulting
Vietnamese trade into a new page of development.

Fully aware of the magnitude of this sector in Vietnamese economic in general and at
Ho Chi Minh City in particular, in the past 3 weeks, I did choose Hoang Ha
International Joint Stock Company to do the internship. This is a company with more
than 20- year experience in Logistics and Transportation that is one of most important
subject in my major. Therefore through this internship I would like to review the
knowledge taught in the school, also have chance to practice and apply what I have
already learned into reality and experience the real working environment in the
company. My internship subject is: “AIR FREIGHT FORWARDING
ACTIVITIES IN HOANG HA INTERNATIONAL LOGISTICS JOINT STOCK
COMPANY”.

The report is inclusive of 3 parts

Chapter 1: Introduction of Hoang Ha International Logistics Joint Stock
Company
Chapter 2: Air freight forwarding activities in Hoang Ha International Logistics
Joint Stock Company during 2011-2013
Chapter 3: The outlook, developing orientation and recommendations promotion
of air freight forwarding activities in Hoang Ha International Logistics Joint
Stock Company

To finish my report, I would like to show my thanks to Hoang Ha International

Logistics Joint Stock Company, especially the Cargo Department, including Ms
Nguyen Thi Tu Uyen– Deputy Director of Forwarding and the whole staffs at the
 2

Cargo Department to lend me great support, to share with me deals of invaluable

experiences and cater me full relevant documents to this subject in my 3 weeks of
internship.

I would like to express my most heartfelt and deepest gratitude to my instructor – Ms

Phung Minh Duc for her enthusiasm in guiding along with giving me valuable
comments. Thank you so much.

I have worked truly hard to study the matter and write it in a succinct but informative
way fitting the limitation of around 25 pages, however, there cannot avoids lots of
shortcomings. Thus I really hope for Instructor’s sympathy and concessions in
consideration.

Ho Chi Minh, Jun 23 th, 2012

Student
Ha My
 3

Chapter 1 : INTRODUCTION TO HOANG HA INTERNATIONAL

LOGISTICS JOINT STOCK COMPANY
1.1. The foundation and development of HIL JSC
In December 4th, 1992, Hoang Ha International Logistics Co. Ltd was established-
Certification No 711/GP-UBTP. The company has been working as a forwarding and
transportation services supplier for over 20 years. In its over 20 past year track record
of foundation and development, HIL JSC worked so hard day by day to achieve
accomplishments every year.

General informations
Vietnamese name: Công ty cổ phần Quốc tế Logisctics Hoàng Hà
English name: Hoang Ha International Logistics Joint Stock Company
Abbreviation name: HIL JSC
Address: 87 Thang Long street, Ward 4, Tan Binh District, Ho Chi Minh city,
Vietnam
Tel: (84.8) 3 948 4696 Fax: (84.8) 3 948 4696
Email: info@hoangha.com
Website: http://www.hoangha.com/vi/
Slogan: Care your cargo with all our heart
Logo:

Achievements
In 1994, the company cooperated with many airlines: Viet Nam Airlines, Thai Airway
(TG), Cathay Pacific (CX), Singapore Airlines (SQ), Eva Airway (BR)…and became
an International Freight Forwarder. In 1995, HIL JSC was awarded the first-class merit
and Top Agent of Vietnam Airlines. In 1999, HIL JSC became a member of IATA,
FIATA, VIFFAS, VASEF. In 2004, HIL JSC became Top Agent of IATA members in
Vietnam, which improved HIL JSC’s brand name. In 2005, the company adopted the
 4

quality management system ISO 9001-2000. In 2008, Hoang Ha International Logistics

Co. Ltd became Hoang Ha International Logistics Joint Stock Company. In 2009, HIL
JSC was named “Strong Vietnam Brand”. HIL JSC has already received more than 20
certificates of IATA about dangerous goods transportation, international marketing,
customer services….until now.

1.2. Main functions of HIL JSC

For more than 20 years working as a forwarding and transportation services supplier,
with the slogan “Care your cargo with all our heart”, HIL JSC has been building up its
image as a competitive logistics company in Vietnam. The company has services in
many sectors: air freight, sea freight, land service, global multimodal transport. There
are some key services on which the company highly focuses: Customs clearance
service, ware housing – pick and pack, door to door service, oversized / offshore
removal, multimodal transshipments.

1.3. Organization structure

HIL JSC follows the functional organizational structure, which means the whole
organization personnel is divided into functional departments which brings in
advantages of greater expertise and specialization, high efficiency and productivity.
However, the company suffers from disadvantage of communication insufficiency
among the distinct departments.
 5

Figure 1.1: Personnel structure of HIL JSC

Board of Directors

Director

Deputy Deputy Deputy

Director Director of Director of
General Finance Forwarding

Business Administration Accounting Cargo Transportation

Department Department Department Department Team

Air Freight Sea Freight Custom Networks and

Document Team Document Team Declaration Booking Team
Team

(Source: Administration Department HIL JSC)

 6

Functions of main departments

Business Department implements commercial and marketing activities in the
company to meet the target of revenue, market share…of the company. Besides it finds
potential individual or organizational customers, promote HIL’s services
Administration Department is responsible for tasks concerning human resources:
managing human resources, scheduling working shifts at weekends. Other main
functions are processing documents, handling correspondences and screening phone
calls. In addition, this department also manages assets and equipment of the company.
Accounting Department‘s main functions are managing financial issues of the
company such as salary, wages; accounting and audit tasks.
Cargo Department is one of the most important departments in the company which
includes many teams with different tasks. First, Network and Booking Team work with
customers to receive information of the shipment. After that, Air/ Sea Freight
Documents Team prepare necessary documents such as: Air Way Bill, Sea Way Bill,
Invoice, CO, Health, Phytosanitary ….Then Custom Declaration Team declares
information of the goods online and make Custom Clearance for shipments.
Transportation Team is responsible for transporting the goods between places:
Warehouse, Storage, Factory, Airport, Sea port…..on time and safely.

1.4. Business outcomes of HIL JSC during 2011- 2013

Table 1.1: Business outcome of PTSC SB from 2009 -2012 (Unit: VND)

2011 2012 2013

% %
value value Value
changed changed
Revenues 333,369,042,906 367,120,739,614 10.12 293,792,664,534 -19.97
Expenses 332,892,097,541 365,781,650,308 9.88 291,382,012,947 -20.34
Profits 476,945,365 1,339,089,306 180.76 2,410,651,587 80.02
(Source: Accounting Department HIL JSCII)
 7

The revenues of HIL JSC witnessed a considerable decrease of nearly 40 billion VND,
accounting for nearly 12% of the revenues in 2011, after the period of 3 years. Even
though there was a significant rise of more than 30 billion VND in the revenues in
2012 thanks to the opening a new branch in Can Tho, the tremendous drop of nearly
20% of the revenue in 2013 created the overall downward trend of the revenue from
2011 to 2013. The main reason for the decrease in the revenue of HIL JSC was the
increasingly competitive market. In this period the number of Forwarding Companies
increased thanks to government policies encouraging Import/ Export, which led to HIL
JSC’s smaller market share.

The expenses of HIL JSC reduced significantly after 3 years from more than 332 to
291 billion VND, which can be seen as a considerable success of the company. In 2012
there was a great increase in the expense of the company of nearly 10%, which was the
result of a great amount of money spent on building a new factory for processing and
packaging fresh fruit and vegetables. However, in 2013 thanks to this new factory, the
company improved its efficiency in operation, reduced its expenses on processing and
packaging activities. As a result, there was a tremendous decrease in the total expenses
of HIL JSC in 2013.

The profits of HIL JSC increased amazingly during 2011- 2013 from nearly 500
million VND to nearly 2.5 billion VND, more than four times. After 3 years, the fall in
expenses (nearly 42 billion VND) was much higher than the decrease in revenues
(around 39 billion VND), which made the profits increase eventually. It can be said
that effective ways to reduce expenses was the main reason for the increase of the
profits in HIL JSC from 2011 to 2013.
 8

1.5. The roles of air freight forwarding activities in the overall business of HIL
JSC
Table 1.2: Revenue from AFF activities in the total revenues of HIL JSC
during 2011- 2013 (Unit: million VND)

2011 2012 2013

Total revenues 333,445 364,890 292,854

Revenue from AFF activities 139,836 157,887 130,759

Percentage of revenue from
41.94% 43.27% 44.65%
AFF activities
(Source: Accounting Department HIL JSC)

Air Freight Forwarding services were the earliest business activities of HIL LSC and
until now it has always been the main activities of the company. Through the ups and
downs during its 20 years track record, this type of service has brought back more than
40% revenue each year and much fame for the company. Even though HIL JSC has
expended its business to many other sectors (Sea Freight Forwarding, Warehousing…),
Air Freight Forwarding has always been received a lot of attention. Moreover it can be
seen that the percentage of revenue from AFF activities has increased gradually over
years (41.94% in 2011; 43.27% in 2012; 44.65% in 2013) which shows that Air Freight
Forwarding has been improving its importance in HIL JSC.

1.6. Competitiveness of HIL JSC in the market

Vietnam is becoming a highly competitive freight forwarding market. In 2013, IATA
expected that Vietnam will become the fastest growing country for air freight volumes
over the forecasting horizon with a CAGR of 6.6 % per annum. According to Vietnam
Logistics Association (VLA), there are 1,200 registered logistics companies in
Vietnam in 2013. Generally, freight forwarding services of HIL JSC are experiencing
tons of difficulties due to the fierce competition of the other professional services
providers both in domestic (Vinatrans, Vietrans, Konoike…..) and giant forwarding
 9

companies outside the border (Agility, Altus, Expeditors, Kuehn Nagel, Panalpina,
Brain Logistics, Damco).
Table 1.3: Net profit from operating activities of HIL JSC and VINATRANS
during 2011- 2013 (Unit: million VND)

Hoang Ha International Logistics JSC VINATRANS

2011 2012 2013 2011 2012 2013
296 1.650 3.189 21.678 26.135 29.907
Average= 1.712 million VND Average= 25.907 million VND
(Source: Accounting Department HIL JSC; VINATRANS Annual Report 2012, 2013)

It can be said that the market share of Hoang Ha in forwarding field is still modest.
Compared to VINATRANS (one of the biggest logistics companies in Vietnam) with
average profit of more than 25 billion VND per year, Hoang Ha just can be seen as a
small company with nearly 2 billion VND of profits per year. However, looking at the
speed of growth, HIL JSC’s profits developed tremendously after 3 years from 296
million in 2011 up to more than 3 billion VND in 2013. With the motto step-by-step
penetrating and dominating the freight forwarding market, forwarding services of HIL
JSC, today, have got certain success, especially in maintenance and expansion its client
network to expend its market share in a foreseeable future.
1.7. Tasks assigned during Internship period
During 3-week internship in Cargo Department, I had chance to observe most of
activities in this department, experience working environment in realities which are
very useful for me. After 1 week observing and doing basic tasks in the office like
photocopying, scanning…, I was assigned to declare Certificate of Origin form E on
website: ecsys.gov.vn. Moreover, I had valuable experiences in submitting C/O in
VCCI, MOIT- Ho Chi Minh, Vietnam; observing custom clearance progress in Cat Lai
port and taking Bill of Lading in Hanjin Shipping Line office with staffs of Cargo
Department.
 10

Chapter 2 : THE SITUATION OF AIR FREIGHT FORWARDING

ACTIVITIES IN HOANG HA INTERNATIONAL LOGISTICS JSC
DURING 2011-2013

2.1. Business outcomes from air freight forwarding activities during 2011-2013
2.1.1. Revenues, expenses and profits of air freight forwarding activities
Table 2.1: Revenues, expenses and profits from air freight forwarding activities
during 2011-2013 (Unit: million VND)

2011 2012 2013

value value % changed value % changed

Revenues 139,836 157,887 12.9% 130,759 -17.2%

Expenses 130,747 145,099 11% 117,807 -18.8%
Profits 9,089 12,788 40.7% 12,952 1.3%
(Source: Accounting Department HIL JSC)

Overall there was a decrease in the revenues of AFF activities despite fluctuation.
From 2011 to 2012, the revenue grew tremendously (12.9 % equivalent to more than
18,000 million VND). The opening of a new factory for processing and packaging
fresh fruit and vegetables increased the revenues for the company, also supported AFF
activities a lot because fresh fruits and vegetables are one of the most important
products of AFF activities in HIL JSC. In contrast, from 2012 to 2013, the revenue
decreased 17.2% equivalent to nearly 27,100 million VND. In 2012 Vietnam must
entirely open logistics market for foreign logistics companies following its conditions
to the World Trade Organization (WTO) which make the competitiveness of freight
forwarding market become extremely high in 2012, 2013. The appearance of new
foreign companies threatened the market share of HIL JSC caused the decrease in
revenues. Moreover, the situation of lacking of young employees with ability of
foreign languages and information technology created various difficulties for the
 11

company to adapt with changes in the modern business field and to compete with
foreign competitors.

There was also a fluctuation in the expenses of AFF activities, which is in the same
trend with the changes of the revenues in this period. From 2011 to 2012, together
with the increase in revenue, there was also a considerable rise of 11% equivalent to
approximately 14,000 million VND in expenses. Thanks to a new factory for
processing and packaging fresh fruit and vegetables, which are main goods of air
freight forwarding activities, built in 2012, the company improved its efficiency in
operation, reduced its expenses on processing and packaging activities. As a result,
there was a tremendous decrease in the expenses of HIL JSC in 2013 (18.8%
equivalent to around 27, 300 million VND).

The profits from AFF activities had an upward trend during the period from 9.089
million VND in 2011 to 12.952 million VND in 2013 despite of the instability in the
revenues. From 2011 to 2012, the profits achieved an amazing growth of 40.7% thank
to the growth in the revenue. The expense in 2012 increased but less than the revenue
(11% and 12.9% respectively). From 2012 to 2013, even though the revenues
decreased, it could just make the profits grow slower (increase 1.3% equivalent to more
than 150 million VND). While the revenue decreased 17.2%, the expense reduced
much greater- 18.8%, which helped the company still earn profits in this difficult
period. Overall, there was a huge rise of 42.5% in the profits of the company after 3
years- equivalent to nearly 4 billion VND.

HIL JSC had succeeded in decreasing costs in its operations to have such growth in
profits because of its modern infrastructure and a large network of branches not only in
Vietnam but also other countries.

2.1.2. Return On Sales of HIL JSC in AFF activities

Return on sales (ROS) is the percentage of revenue that gets returned to the company
as net profits after all the related costs of the activity are deducted. ROS is an indicator
 12

of profitability of a company. The higher the ROS is, the more efficient the company
works in Air Freight Forwarding.

Figure 2.1: Return On Sales of HIL JSC in AFF activities (Unit: %)

12,0

10,0
9,9%
8,0
8,1%
6,0
6,5 % Return On Sales
4,0

2,0

0,0
2011 2012 2013

(Source: self calculated)

There was a constant growth in the Return on Sales of the HIL JSC in AFF activities
during 3 years (6,5%, 8,8%, 9,9% in 2011, 2012, 2013 respectively). From these
figures we can see that HIL JSC had been increasing its efficiency in AFF activities.

There are specialized teams of booking, airfreight document and custom declaration in
Cargo Department dealing with specialized tasks. This functional organizational
structure brings in advantages of greater expertise and specialization, high efficiency
and productivity. The communication among teams within Cargo Department is quite
efficient. However, distinct departments suffer from disadvantage of communication
insufficiency (Cargo department; Business department; Transportation department;
Accounting department).

The advantage of experienced human resources in freight forwarding field helped the
company increase its efficiency of operation.
 13

2.1.3. The structure of imported/ exported goods of air freight forwarding

Figure 2.2: The proportions of imported and exported goods by
air freight forwarding during 2011-2013

100%
90% 1671 tons
1526 tons
80% 2440 tons
70%
60%
50% Imported Goods
40% 5649 tons
3611 tons Exported Goods
30% 4215 tons
20%
10%
0%
2011 2012 2013

(Source: Accounting Department HIL JSC)

There was an unbalanced scale of Imported and Exported Goods by Air Freight
Forwarding Activities in HIL JSC. It can be seen that exported goods plays a much
more important part in Air Freight Forwarding Activities compared to imported goods.
The figures of Exported goods was always more than 60% - two third of the total
goods while the proportions of Imported goods kept being lower than 40% despite of
some fluctuations. The next part of this report shows that two main goods of AFF
activities in HIL JSC which are seafood and fruits (account for more than 80% of
goods transported by air) are exported goods. While imported goods are mostly
materials and processes which just account for less than 10%. The structure of goods
of AFF activities leads to unbalanced scale of Imported and Exported Goods by Air
Freight Forwarding Activities in HIL JSC.

Overall, after 3 years goods exported by AFF activities decreased more than 900 tons
but increased its percentage compared to imported goods. The proportion of exported
 14

goods increased from 62% in 2011 to nearly 70% in 2013 and reached a peak of 75%
in 2012.

Imported goods experienced a gradual fall over the period (2440 tons, 1671 tons, 1526
tons in 2011, 2012, 2013 respectively). However, there were changes in the
percentages of imported goods. The proportion of imported goods decreased
considerably from 35% in 2011 to 23% in 2012 and recovered to around 30% in 2013.

Business department did a great job in keeping long- term business relationships with
familiar customers to serve traditional goods like seafood and fruits but did not really
pay much attention to finding new customers especially those who want to imported
goods to diversify its range of goods in general and imported goods in specific. That is
the reason why exported goods has always been accounting for higher proportion
compared to imported goods. Because Vietnam is a country that importation is much
greater than exportation, this is a good condition for HIL JSC to develop air
transportation for imported goods.

2.1.4. The structure of goods of air freight forwarding activities

Figure 2.3: The structure of goods of air freight forwarding activities (Unit: ton)

2011 2012 2013

Goods
Value % Value % value %
Seafood 3191,3 48,0 3403,8 46,5 2321,9 45,2
Fruit 2628,5 39,5 2942,6 40,2 1777,4 34,6
Materials & Processes 386,1 5,8 446,5 6,1 503,4 9,8
CO2 dry ice & Gel ice
266,2 4,0 314,8 4,3 405,9 7,9
pack
Others 179,9 2,7 212,3 2,9 128,4 2,5
Total 6655 100 7320 100 5137 100
(Source: Accounting Department HIL JSCII)

During 3 years, seafood and fruits were always two main products of AFF activities
with more than 45% and 35% respectively which brought huge revenues for the
company. Seafood is one of the most important exported goods in Vietnam (the value
 15

of exported seafood of Vietnam in 2012 is 6.09 billion USD_ Vietnam Custom

statistics). HIL JSC specializes in the provision of fresh and alive seafood shipping
services, most notably lobster, fresh tuna, grouper and crab Australia, Japan, South
Korea, China, the US and EU. This special feature required cargos to be transported by
air and high packaging techniques. “Take lobster as an example, we must apply the
“lull to sleep” technique by wrapping the moist paper around shrimp and putting them
into the foam box. When being released into the water at the destination, they will
“wake up” and swim normally,” Nguyen Quang Thanh, Deputy Director General of the
company said on an article of Vietnam Seafood Trade Magazine. In 1999, HIL JSC
became a member of Vietnam Association of Seafood Exporters and Producers_
VASEF.

Apart from seafood, fruit also plays an important role in the structure of goods of AFF
activities in HIL JSC. The company has been working with many suppliers of fruits in
Ho Chi Minh, Dong Nai…, especially Dalat Hasfarm company to export dragon fruit,
fresh vegetables, flowers… by air. With the use of CO2 ice and gel ice pack made by
HIL according to Northwest (the US)’s advanced technology, fruits and vegetables are
preserved well. Until now HIL JSC has built two separate seafood and fruit &
vegetable packaging workshops in Tan Binh Industrial Zone.

Playing a smaller part in total production of AFF activities but till very important,
materials & processes and CO2 dry ice & Gel ice are two new products of the
company. Each of them just accounted for less than 10%

Two groups of products have opposite trends of changes in their proportions. Two
leading products ( seafood and fruits ) had tendency to slightly reduce their proportions
after 3 years (seafood: from 48% to 45,2% and fruits: from 39,4% to 34,6%) while the
other two’s percentages nearly doubled after the period (materials & processes: from
5,8% to 9,8% and CO2 dry ice & Gel ice: from 4% to 7,9%). It can be seen that the
changes in the structure of products may not be great but it shows that HIL JSC are
trying to pay more attention to materials & processes and CO2 dry ice & Gel ice. It is
 16

necessary to make AFF activities of the company become favorable for more kinds of
products besides traditional products like seafood and fruits so that the company can
expand its network of customers.

According to Annual report of Transimexsaigon company in 2013, the total goods

transported by Air freight services in Viet Nam in 2103 ( domestic and international)
was recorded nearly 6,000,000 tons, growth rate was 5%. We can calculate that the
total goods of AFF activities in HIL JSC just accounted for around 0.1% the figure of
Vietnam. It can be seen that main goods transported in HIL JSC are seafood,
fruits….which cannot be in large scale as materials…. That is the reason why the total
goods transported by AFF activities in HIL JSC was not high. However, in such a
competitive market, HIL JSC has tried so hard to gain that 0,1% with these current
products, which is still highly appreciated.

2.2. Comments on Air Freight Forwarding Activities in HIL JSC

2.2.1. Strengths
Firstly, a wide network of agencies in the world has been set up after 20 years of
development. All of them have much experience in multi- transportation and also air
transportation for many kinds of cargoes under EX-WORK, DDP or DAU, which
support air freight forwarding activities in HIL JSC very much. Here is agencies of the
company in the world:
+ Asia: Cambodia, Sri Lanka, Pakistan, Myanmar, China, Taiwan, Thailand,
Malaysia, Hong Kong, Singapore, Indonesia, The Philippine, Korea, India,
Japan, Australia etc.
+ Middle East Area: Iran, Egypt, U.E.A
+ Europe: Spain, Italy, France, Germany, Switzerland, United Kingdom,
Belgium, Czech Republic, Denmark, The Netherland, Portugal.
+ America: Canada, USA.
Secondly, being a member of many freight forwarding associations like CGLN/WCA,
PLA/WCA, FIATA, IATA, Hoang Ha has become a trustful name to many customers.
 17

Moreover, the company have chance to attend many training seminars held by these
professional organizations to get workforce expertise.

Thirdly, great supports from branches in Ha Noi, Da Nang, Can Tho help the main
branch of HIL JSC in Ho Chi Minh expand network of customers. Moreover, it is also
much more convenient for the company to transport goods in domestic before or after
crossing the custom border.

Fourthly, modern infrastructure has always been built and improved during more than
20 years of operations. The company has invested in building export-import product
handling and storing facilities, factory for processing and packaging, cold storage….,
which increase the effectiveness of operation in the company.

Fifthly, experienced human resource is a big advantage of HIL JSC who can not only
increase the effectiveness of operation but also help to train and share their experiences
to new generations of the company. “More than 20 years of hands-on experiences are
our greatest treasure,” asserted Mr Thanh- Deputy Director General of HIL JSC.

Finally, a well- designed website is a very effective way for the company to advertise
its brand name to the customers. This website not only updates changes of business
operations (prices of services, new services, new products…) but also instructs
customers how to do business with the company….., which effectively make the
company known in much wider scale.

2.2.2. Weaknesses
2.2.2.1. Human resources
Firstly, there is a short of young employees in HIL JSC. Even though the labor force
HIL JSC includes many experienced employees, not many of them are of young
generations which makes the company’s operations is energetic. This problem can be
very dangerous for the company in the long- run because young people play a very
important role in every organization to catch up with changes of technology and to be
more active in problem solving. Moreover, dealing with a lot of foreign competitors,
 18

the company needs young employees with good foreign languages (English, Japanese,
Chinese…) and technology skills.

It is also found that Cargo Department is undertaking a huge quantity of work. Each
person in this department is responsible for a great amount of works, thus reduce their
efficiency in particular and capacity of the company in general as well.

Secondly, there is a short of employees with specialized knowledge in Air Freight

Forwarding field. The number of employees who are expertise in Air Freight
Forwarding field in the company is quite low. Most of the employees are not trained
officially in Logistics or Forwarding field in universities or Logistics Institutions but
come from other major and then learn from older employees in the company. Short of
employees with specialized knowledge make it difficult for the company to penetrate
deeply into this business and develop in the long run.

2.2.2.2. Limited collaboration between functional groups in the company

HIL company follows the functional organizational structure, which means the whole
organization personnel is divided into functional departments which brings in
advantages of greater expertise and specialization, however the company has to suffers
from disadvantage of communication insufficiency among the distinct departments.

2.3. Comparison with the theory

2.3.1. Theory summarization
One of advantages of Air freight forwarding is high speed and it has straight route.
That is the reason why Airway is the most favorable way of transportation of
perishable goods, urgent goods… Moreover, Air freight forwarding is secure and
accurate, suitable for important goods.

Disadvantage of air freight forwarding is high transportation costs therefore not

suitable for low-value goods for example rice, clothes or goods for charity. Besides, the
limited capacity of the aircraft cabin makes it unsuitable for large goods.
 19

2.3.2. Similarities
Because of the characteristics of high speed and secure, Air freight forwarding services
mostly serve perishable goods like fresh fruits, vegetables, live seafood…and some
precious goods or emergency goods.

2.3.3. Differences
In fact the advantage of high speed helps to reduce the cost of storage. Low risk and
high security of air freight make its insurance fee lower than other types of transport
even though the cost of air transportation is very high.
 20

Chapter 3 : THE OUTLOOK, DEVELOPMENT ORIENTATION AND

RECOMMENDATIONS FOR PROMOTION OF AIR FREIGHT
FORWARDING ACTIVITIES IN HIL JSC
3.1. The outlook of the Air Freight Forwarding activities
The fact that Vietnam has been one of the fastest-growing locations as well as average
export growth rate in the region during the last decade (Vietnam logistics submit.
2008), we could expect a bright prospect for the air freight forwarding activities. By
favorable conditions, there are opportunities as well as challenges for the transport
industry generally and air freight forwarding in particular.

3.1.1. Opportunities
Firstly, Asean market in general and Vietnam market in particular is expected to
become more active in the near future. Some important conventions about trade and tax
in Asean will become effective in 2014 together with the operation of Asean Economic
Community in 2015 will bring more opportunities to Import/ Export market and also
Freight Forwarding field.

Secondly, Vietnamese government is in the progresses to enhance transport

infrastructure to improve the logistics field in Vietnam of both quantity and quality.
Under the aviation sector’s planning by 2020, with a development vision towards 2030,
which was approved by the government in 2009, Vietnam will have 26 airports,
including 10 international airports. The Long Thanh International Airport project is
now a very important plan of the government which is intended to become operational
by 2020.

Thirdly, specialized human resources in freight forwarding field is being concerned.

There are more and more logistics institutions which can provide high- quality human
resources for logistics in general and air freight forwarding in particular.

Finally, administrative systems in government agencies used to be complex now have

been simplified by administrative computer systems and software. With the function of
 21

transportation of goods cross borders, air freight forwarding activities require a lot of
different documents which is issued by different government agencies. The more
effective the administrative system works, the more quickly air freight forwarding
activities can be done. Almost government agencies has now applying software to
administrate import/ export activities for example doing custom declaration online by
VNACCS/VCIS; declaring Certificate of Origin on website: ecsys.gov.vn…..

3.1.2. Threats
Firstly, air freight forwarding market is becoming extremely competitive. Threat of
new entry is becoming higher and higher because the fact that Vietnam must entirely
open logistics market for foreign logistics companies with 100% capital in 2014
following its conditions to the World Trade Organization (WTO). This is a big
difficulty for Vietnamese logistics sectors and HIL JSC in particular that have to
compete with foreign companies that have greater capital and better competitiveness.
According to “Research Report on Logistics for Viet Nam” in March 11, 2014 of
StoxPlus Corporation, Vietnam logistics is growing quickly at 20% per year, and is
expected to keep the high growth rate in the next 5 years. The increasingly competitive
market in Logistics section has brought a lot of difficulties for not only HIL JSC but
also many other competitors.

Secondly, freight forwarding activities depends on Import/ Export market. The fact that
the production of freight forwarding activities in HIL JSC always depends on import/
export volumes of products such as seafood, fruits, vegetables…..those are very
sensitive to natural (weather, disaster…) and economics conditions. The development
of import/ export market creates great opportunities for the development of freight
forwarding activities and vice versa.

Finally, International freight forwarding activities is not risk-free. The hazard occurs
within the country, it can be under control, but the situation will become much more
complicated if something happens overseas.
 22

3.2. The development orientation of HIL JSC of Air Freight Forwarding

activities
3.2.1. Short- term orientation
Firstly, HIL JSC will keep focusing on traditional services like air freight, sea freight
forwarding services, custom clearance services, together with develop 3PL sevices.

Secondly, HIL JSC plans to improve the company’s infrastructure by building more
warehouses and cold storages.

Finally, develop Air Freight Forwarding Services for Imported Goods

3.2.2. Long- term orientation

Firstly, HIL JSC would like expand the company’s network internationally, build up
business relationship with foreign companies by offering favorable conditions.

Secondly, the company will actively well- prepared to participate in more freight
forwarding associations to enhance the company's brand in the field of logistics and
transport: WORLD FREIGHT NETWORK, NETWORK PROJECT CARGO

3.3. Recommendation for promoting Air Freight Forwarding activities

Despite of many outstanding advantages, HIL JSC is still confronting tons of
difficulties In this part, I would like to present some of my recommendations to
improve the competency of the company in the field of air freight forwarding services.

3.3.1. Human resource

3.3.1.1. Increasing the number of young employees
Organize more internship programs together with engage in many activities of
universities to let the company be known by many students through that attract many
good students to apply to the company. Having young employees will help the old
employees to reduce their amount of tasks, thus everyone will have more time to
concentrate on their intensive work, since then, raise their efficiency in particular and
raise capacity of the company in general as well.
 23

3.3.1.2. Improving specialized knowledge for the employees

Firstly, the company should afford more opportunities for the staffs to be trained
intensively in the freight forwarding related institutions in Vietnam or even in the
world.

Secondly, there should be periodic seminars held to update changes in the current
situation nationwide and worldwide, like the modification in international commerce.

Thirdly, the company should appoint people to attend training seminars held by
professional organizations such as: Customs department, Transport Association
FIATA, or courses of VIBASA ... to get a workforce expertise. This is valuable
opportunities for employee to get knowledge, update changes in business situation in
the world, also enhance relationship with other members in these associations.

Finally, organize periodic examinations of the operation skill and foreign languages
need to be held to prompt employees aware of learning, honing and improving their
knowledge and skills by themselves. At the same time, the company should have
reward or gifts for employees who get good results in these exams to encourage all
employees.

3.3.2. Improving the cooperation between functional departments within the

company
To build up close relationships among departments, it is necessary for the company to
provide the employees with more chances and space together to understand more about
each other’s work. For example holding some events for the whole employees to join
like: team building days, seminars or holidays…
 24

CONCLUSION
Freight forwarding is one of the leading and fastest developing industries in the
recent years in Vietnam, particularly in Ho Chi Minh City. The fact that Vietnam is
becoming a fertile ground for the logistics industry to develop has been shown in
the massive rise in the numbers of logistic providers including both domestic and
international investors in the past 10 years. HIL JSC, though, has been confronting
much bigger numbers of competitors from both inside and outside Vietnam in the
past few years, thanks to its numbers of experienced employees, workers together
with modern facilities, machines, vehicles and the constant effort to innovate, the
company has acquired a significantly firm standing in the eyes of the customers.

In such a short period of internship, I did learn a lot and have time to review the
knowledge taught in the school, I was also given chance to practice and apply what
I have already learned into reality, from which I realized my loopholes and strived
for a better study in the next semester. Not only knowledge about the operation, but
also business professionalism, conversation skill at work have I achieved after the
internship.

Once again, I would like to show my sincere thanks to the school to give me such
valuable chance to expose to the real business environment, I also express my
deeply heartfelt thanks to Ms Phung Minh Duc and Hoang Ha International
Logistics JSC for giving me great support and mentoring during my internship
period.
 25

REFERENCES
Writing documents:
PGS.TS. Hoang Van Chau (2009), Logistics và Vận tải quốc tế, NXB Thông tin
và truyền thông
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0NIEN%202011.pdf> [Accessed 1 July 2014].
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30 Jun 2014].
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logistics-experiences-are-an-invaluable-asset.htm> [Accessed 22 Jun 2014].