Recommendations to improve import activity of fabric at dong tai global logistics and trading co.,ltd

  • 72 trang
  • file .docx
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
PREFACE
I declare that this report is my own unaided work. It has not been submitted
before.
If violated, I am solely responsible for and bear the punishments of the Institution and
University.
Student Name and Signature
Nguyễn Trần Nguyệt Minh
Nguyễn Trần Nguyệt Minh GMA 02 Page 1
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
TABLE OF CONTENTS
PREFACE........................................................................................................................1
LIST OF SYMBOLS, ABBREVIATIONS.....................................................................4
LIST OF TABLES...........................................................................................................6
INTRODUCTION...........................................................................................................7
CHAPTER 1: LITERATURE REVIEW.........................................................................9
1.1 Import definition and Types of import...................................................................9
1.1.1 Import definition..............................................................................................9
1.1.2 Types of import................................................................................................9
1.1.3 The importance of Import..............................................................................10
1.2 International sale contract.....................................................................................11
1.2.1 Definition.......................................................................................................11
1.2.2 Classification of International sale contract...................................................11
1.3 Documents procedure...........................................................................................12
1.3.1 Commercial invoice.......................................................................................12
1.3.2 Bill of Lading.................................................................................................13
1.3.3 Certificate of quality.......................................................................................13
1.3.4 Certificate of quantity/weight.........................................................................14
1.3.5 Certificate of origin........................................................................................14
1.3.6 Packaging list.................................................................................................14
1.4 International payment...........................................................................................15
1.4.1 Overview of international payment................................................................15
1.4.2 Current form of International payment..........................................................16
CHAPTER 2: THE ACTIVITY OF IMPORTING FABRIC........................................19
2.1 Introduction of Dong Tai Logistics And Trading Co., Ltd...................................19
2.1.1 The establishment of the company.................................................................19
2.1.2 Organization...................................................................................................21
Nguyễn Trần Nguyệt Minh GMA 02 Page 2
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
2.1.3 Personnel........................................................................................................22
2.2 The activity of import fabric.................................................................................23
2.2.1 Sending fixed order........................................................................................23
2.2.2 Evaluating:.....................................................................................................25
2.2.3 Choose partner and establish contract:...........................................................37
2.2.4 Open Letter of Credit (L/C):..........................................................................45
2.2.5 Receiving and delivering cargo......................................................................54
2.2.6 Contract liquidation........................................................................................66
CHAPTER 3: EVALUATION AND RECOMMENDATION.....................................67
3.1 Evaluation to improve import activity..................................................................67
3.1.1 Evaluation about analyzing market and choosing partner..............................67
3.1.2 Evaluation about receiving and delivering cargo...........................................67
3.1.3 Evaluation about payment activity.................................................................68
3.2 Recommendation to improve import activity.......................................................68
3.2.1 Recommendation about analyzing market and choosing partner...................68
3.2.2 Recommendation about receiving and delivering cargo................................69
3.2.3 Recommendation about payment activity......................................................69
CONCLUSION..............................................................................................................70
REFERENCES...............................................................................................................71
Nguyễn Trần Nguyệt Minh GMA 02 Page 3
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
LIST OF SYMBOLS, ABBREVIATIONS
YOY: Year over year
VINATEX: The Vietnam National Textile and Garment Group
CFS: Container Freight Station
CSF : Container-Freight Station
NVOCC: Non-Vessel Operating Common Carriers
LCL: Less-Than-Container Load
FCL: Full Container Load
GPS : Global Positioning System
UNSTAT: United Nations Statistics Division
FAOSTAT: Food And Agriculture Organization Of The United Nations
GDP: Gross Domestic Product
OECD: Organisation for Economic Co-operation and Development
IMD: Insurance Mediation Directive
FSA: Financial Services Authority
VAT : Value Added Tax
CIF: Cost, Insurance And Freight
WTO's: The World Trade Organization's
NBS: National Bureau of Statistics
ITMF: International Textile Manufacturers Federation
KOFOTI : Korea Federation of Textile Industries
TEXPROCIL: The Cotton Textiles Export Promotion Council of India
Nguyễn Trần Nguyệt Minh GMA 02 Page 4
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
SITP: The Scheme for Integrated Textile Parks
D/O: Delivery Order
THC: Terminal Handling Charge
CY: Container Yard
GSO: General Statistics Office
EEZ: Exclusive Economic Zone
FOB : Free On Board
L/C: Letter of Credit
B/L: Bill of lading
VCCI: Vietnam Chamber of Commerce and Industry
B/E: Bill of exchange
TTR: Telegraphic Transfer Reimbursement
FCR: Forwarder Cargo Received
SOA: Statement of Account
UPAS L/C: Usance LC payable at sight
Nguyễn Trần Nguyệt Minh GMA 02 Page 5
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
LIST OF TABLES
Table 1 Production cost (VND) 29
Table 2 Freight forwarder cost (VND) 29
Table 3 Payment cost (VND) 30
Table 4 Total payment (VND) 31
Nguyễn Trần Nguyệt Minh GMA 02 Page 6
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
INTRODUCTION
The textile and garment sector in Vietnam is one of the country’s largest industries and
a key contributor to its economic growth. In 2014, Vietnam’s textile and garment
exports increased 18 percent year over year (YOY) to total approximately US$20
billion, accounting for 15 percent of the country’s gross domestic product and 18
percent of its total exports, according to the Vietnam National Textile and Garment
Group (VINATEX). The textile and garment industry comprises some 4,000
enterprises and provides employment for more than 7.7 million people. In this study, I
will investigate and evaluate the importing procedure of fabric at Dong Tai Global
Logistics and Trading Co., LTD.
Dissertation Methodology
Method of analysis: the dissertation is composed based on the real process collected
information of handling paperwork for importing fabric being implemented by Dong
Tai staff. The dissertation also gives an analysis of pros and cons of the procedure and
gives some recommendations based on those points.
Statistical methods of data are also applied to given statistics in this dissertation. The
data is collected from the company accounting and operation departments of Dong Tai
Global Logistics and Trading Co., LTD.
Dissertation Scope
The dissertation is implemented in order to analysis and evaluate current situation of
importing at Dong Tai company. The dissertation focus on the detail steps of the
importing procedure of Dong Tai for understanding the real activities. In addition,
dissertation also gives some suggestions to improve the efficiency of import procedure.
Duration Time
The statistics and documents in dissertation are collected within the 2-month
internship. During this period, I had chance to get in import-forwarding job and gain
knowledge and experience to complete this dissertation.
Nguyễn Trần Nguyệt Minh GMA 02 Page 7
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
Research Result
By applying observation method, the implementation of the procedure shall be
evaluated and compared with the requirements of the company procedure. So that,
advantages and disadvantages of this procedure implementation are figured. Finally,
some recommendations are built based on the above analysis. The result of this study
will provide several recommendations that help the managers to further exploit current
logistics as well as investing on human resources to improve this process.
Nguyễn Trần Nguyệt Minh GMA 02 Page 8
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
CHAPTER 1: LITERATURE REVIEW
1.1 Import definition, types and the importance of import
1.1.1 Import definition
Imports are the goods and services that are bought by residents, governments or
businesses of a country, but made outside of the country. It doesn't matter what the
goods or services are, or how they are sent. They can be shipped, sent by email, or even
hand-carried in personal luggage on a plane. If they are produced in a foreign country
and sold to domestic residents, they are imports.
For example, tourism products and services are still imports, even though they are sold
to tourists outside of their country. In a way, when you travel outside the country, you
are technically importing those souvenirs.
1.1.2 Types of import
There are two basic types of import:
1. Industrial and consumer goods
2. Intermediate goods and services
Companies import goods and services to supply to the domestic market at a cheaper
price and better quality than competing goods manufactured in the domestic market.
Companies import products that are not available in the local market.
There are three broad types of importers:
1. Looking for any product around the world to import and sell.
2. Looking for foreign sourcing to get their products at the cheapest price.
3. Using foreign sourcing as part of their global supply chain.
Nguyễn Trần Nguyệt Minh GMA 02 Page 9
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
Direct-import refers to a type of business importation involving a major retailer (e.g.
Wal-Mart) and an overseas manufacturer. A retailer typically purchases products
designed by local companies that can be manufactured overseas. In a direct-import
program, the retailer bypasses the local supplier (colloquial middle-man) and buys the
final product directly from the manufacturer, possibly saving in added cost data on the
value of imports and their quantities often broken down by detailed lists of products are
available in statistical collections on international trade published by the statistical
services of intergovernmental organizations (e.g. UNSTAT, FAOSTAT, OECD),
supranational statistical institutes (e.g. Eurostat) and national statistical institutes.
Industrial and consumer goods.
1.1.3 The importance of Import
On a national level, in most countries international trade and importing goods
represents a significant share of the gross domestic product (GDP). International trade
has a significant economic, social, and political importance in many countries. Imports
provide countries with access to goods and services from other nations. Without
imports, a country would be limited to the goods and services within its own borders.
International trade is generally less expensive than domestic trade despite additionally
imposed costs, taxes, and tariffs. However, the factors of production are usually more
mobile domestically than internationally (capital and labor). It is common for countries
to import goods rather than a factor of production. For example, the U.S. imports labor-
intensive goods from China. Instead of importing Chinese labor, the U.S. imports
goods that were produced in China by Chinese labor.
On a business level, companies take part in direct-imports, which occur when a major
retailer imports goods that are designed locally from an overseas manufacturer. The
direct-import program allows the retailer to bypass the local supplier and purchase the
final product directly from the manufacturer. Direct imports save retailers money by
eliminating the local supplier
Nguyễn Trần Nguyệt Minh GMA 02 Page 10
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
1.2 International sale contract
1.2.1 Definition
International sale contract is an agreement between the buyer and seller in different
countries or between the same parties which have headquarters located on the territory
of Vietnam, but in the inland side and the other side in particular customs areas
according law provisions. In which, rights and obligations of the parties are defined,
the seller must deliver goods, transfer documents relating to cargo and the ownership
of cargo , the buyer must pay for goods and receive goods.
International sale contract has 3 characteristics:
- The subject of the contract (buyer and seller) has business establishments registered in
two different countries. Here it should be noted that nationality is not a factor to
distinguish, whether the buyer and seller have different nationalities but if the sale is
performed on the same country, the sales contract is not international in nature.
-The currency used to pay can be foreign currency of either country or of the 2
countries.
-The cargo - the object of the contract is transferred out of the country to suppliers
during the contract performance process.
1.2.2 Classification of International sale contract
1.2.2.1 In terms of implementation time
- Short-term contract
Short-term contract is concluded in a relatively short time, and after two parties have
fulfilled their obligations, the legal relations between the parties in that contract will
also end
- Long-term contract
Short-term contract is performed in a long time and during that time the delivery is
conducted several times
Nguyễn Trần Nguyệt Minh GMA 02 Page 11
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
1.2.2.2 In terms of contract form, have the following categories:
-Written contracts
Written contracts provide more certainty for both parties than verbal contracts. They
clearly set out the details of what was agreed. Matters such as materials, timeframes,
payments and a procedure to follow in the event of a dispute, can all be set out in a
contract.
-Verbal contracts
Many independent contracting arrangements use verbal contracts, which only work
well if there are no disputes. A handshake agreement may still be a contract and may
(though often with difficulty) be enforced by a court. However, verbal contracts can
lead to uncertainty about each party's rights and obligations. A dispute may arise if you
have nothing in writing explaining what you both agreed to do.
-Standard form contracts
A 'standard form' contract is a pre-prepared contract where most of the terms are set in
advance and little or no negotiation between the parties occurs. Often, these are printed
with only a few blank spaces for filling in information such as names, dates and
signatures.
1.3 Documents procedure
1.3.1 Commercial invoice
The commercial invoice is a legal document between the supplier and the customer that
clearly describes’ the sold goods, and the amount due on the customer. The commercial
invoice is one of the main documents used by customs in determining customs duties.
A commercial invoice must identify the buyer and seller, and clearly indicate the date
and terms of sale, quantity, weight and/or volume of the shipment, type of packaging,
complete description of goods, unit value and total value, and insurance, shipping and
other charges.
Nguyễn Trần Nguyệt Minh GMA 02 Page 12
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
The number of copies of the invoice (both original and copies) required for the delivery
of the goods, must be agreed with the importer. Usually, invoices are issued with the
original and two copies. Although normally the legislation in different countries does
not limit the number of originals, it is not advisable to make more than those strictly
necessary in order to accomplish with the customs needs required by the buyer. It is
advisable that the importer confirms with the exporter all data that the invoice must
provide before its issuing, as well as the particularities it must include in order to
accomplish with the regulation of the destination country.
1.3.2 Bill of Lading
Bill of Lading is a document signed by a carrier (a transporter of goods) or the carrier's
representative and issued to a consignor (the shipper of goods) that evidences the
receipt of goods for shipment to a specified designation and person.
The information in the bill of lading is critical as it directs the actions of personnel all
along the route of the shipment - where it's going, the piece count, how it's billed, and
how it's to be handled on the dock and trailers. It could be on a prepaid or collect basis.
The consignee has to check whether the shipment is collect on delivery which means
that the driver will collect the cost of the merchandise on delivery of the freight.
A bill of lading is generated by a shipping line or its agent, giving details of a shipment
of merchandise. Alongside this principal purpose, the bill of lading also certifies that
the goods have been shipped aboard a vessel (and in some cases certifies the condition
of the goods at the point of loading), assigns title to the goods, and requires the carrier
to release the merchandise to the holder of the title or a named party at the destination
port.
1.3.3 Certificate of quality
A document certified by a competent authority that the supplied good or service meets
the standards of producing countries or international standards. Certificate of quality
may be granted by the suppliers, can also by the assessment of goods, according to an
agreement between two parties
Nguyễn Trần Nguyệt Minh GMA 02 Page 13
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
1.3.4 Certificate of quantity/weight
Document issued commonly by customs authorities of the exporting country, certifying
the correct gross weight of the goods being shipped.
1.3.5 Certificate of origin
Certificate of origin is a document attesting to the country of origin of the goods. A
certificate of origin is often required by customs authorities of a country as part of the
entry process. Such certificates are usually through an official organization in the
country of origin such as the local chamber of commerce or a consular office. The
goods description must coincide with that provided in the commercial invoice and in
the packing list (number, goods description, name of the consignor and of the
consignee, trademarks, etc). If the certificate of origin is not shown, the import customs
may, if it deems it necessary, accept the dispatching of goods. In this case, the
corresponding tariff would be applied to third countries (non preferential origin),
without any tariff discount.
The content of C/O includes: name of and address of the buyer, name of and address of
the seller; name of goods; quantity; statements of shippers about the production site or
exploitation of the goods; certified by authorities.
1.3.6 Packaging list
Packing List is a document which details the contents, and often dimensions and
weight, of each package or container. It serves to inform all parties involved with
shipping, including transport agencies, government authorities, and customers, about
the contents of the package.
A packing list should be made for all shipments consisting of more than one shipping
piece for the following reasons:
They aid in identifying lost cargo, especially for carrier and insurance claims.
They permit selective inspection by customs authorities, and many government require
them for large shipments.
Nguyễn Trần Nguyệt Minh GMA 02 Page 14
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
They provide a “map” of the shipment, enabling the buyer to easily unpack and stock
the shipped goods.
A packing list is expresses the contents of a package, along with details about the
quantity, description, and weight of these contents. Content pricing is not included. A
packing list is created by the seller and sent to where the goods are located in order to
have an accurate tally of the sent goods. Once the goods have been tallied and packed,
the list is sent along with them to their destination.
1.4 International payment
1.4.1 Overview of international payment
International payment is one of the bank's operations in the payment for the value of
the shipment between the buyer and the seller in the foreign trade fields. The
international payment method is currently the most popular:
+ Transfer by TTR (Telegraph Transfer Remittance) or MTR (Mail Transfer
Remittance): forwarding documents and telegraphs between units incurring
international transactions and international settlement department of the payment
center are implemented on T24 Browser.
+ C.A.D: A payment arrangement in which an exporter instructs a bank to hand
over shipping and title documents (see document of title) to the importer when
the importer fully pays the accompanying bill of exchange or draft. Also called
documents against payment.
+ Collection: A payment method that after delivering or supplying services the
sellers (the exporter) entrust their serving bank to present the buyer (the importer)
documents by the agent bank in order to be paid, accept the draft or agree other
conditions or terms.
+ L/C: is an agreement, in which, as the request of the customer (who requests to
open L/C) a bank (Issuing Bank) will issue a certificate, called a letter of credit.
Accordingly, the issuing bank is committed to pay or accept the draft for the 3 rd
Nguyễn Trần Nguyệt Minh GMA 02 Page 15
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
party if they present issuing bank the payment documents matching with
conditions and provisions of the L/C.
1.4.2 Current form of International payment
1.4.2.1 Transfer by TTR or MTR
- Nowadays, the Bank in general and SeABank in particular rarely uses the transfer
form of TTR because of out-of-date and wasting of time receiving document;
therefore, MTR is popular to use in a fast and convenient manner. Telegraph
Transfer lies in the payment "By Remittance - By Transfer". The bank on behalf of
the buyer will compose the telegraph to its agent bank overseas paying to the seller.
MTR has two forms of payment namely prepaid and postpaid.
- In case of Prepaid MTR, it takes following steps:
+ Step 1: The Buyer goes to the Buyer's bank order money transfer to pay for the
Seller.
+ Step 2: The Buyer's bank send a debit notice to the Buyer
+ Step 3: The Buyer's bank remits to the Seller's bank
+ Step 4: The Seller's bank sends received notice to the Seller
+ Step 5: The Seller delivers good and set of documents to the Buyer
- In case of Postpaid, it is also implemented in 5 phases:
+ Step 1: The Seller delivers good and set of documents to the Buyer
+ Step 2: The Buyer requests their bank to transfer to the Seller
+ Step 3: The Buyer's bank send a debit notice to the Buyer
+ Step 4: The Buyer's bank remits to the Seller's bank
Nguyễn Trần Nguyệt Minh GMA 02 Page 16
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
+ Step 5: The Seller's bank sends received notice to the Seller
1.4.2.2 L/C - Letter of Credit
At the present, the payment method of L/C is a common tool in international
payment operation since it ensures maximum advantages for both sellers and buyers.
The overall process of this method can be presented in following diagram:
Step 1: Parties of Importer and Exporter enter into the commercial contract with
each other.
+ Step 2: The Importer implements procedure to request the Issuing Bank to open
L/C for the Beneficiary, known as the Exporter.
+ Step 3: The Issuing Bank opens L/C as required by the Importer and moves to
the Advising Bank.
+ Step 4: The Advising Bank notifies the Exporter that the L/C was opened.
+ Step 5: Based on the content of L/C, the Exporter delivers good to the Importer.
+ Step 6: After delivery the Exporter establishes a set of documents then send to
the Advising Bank to be paid afterwards.
Nguyễn Trần Nguyệt Minh GMA 02 Page 17
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
+ Step 7: The Advising Bank sends the documents to the Issuing Bank to consider
the payment.
+ Step 8: The Issuing Bank checks the validity of document sets; if valid, deducts
money to remit the Advising Bank and if invalid refuses paying.
+ Step 9: The Advising Bank notifies the exporter money received.
+ Step 10: The Importer remits to the Issuing Bank
+ Step 11: the Issuing Bank returns the set of documents to the Importer to be able
to receive good.
Nguyễn Trần Nguyệt Minh GMA 02 Page 18
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
CHAPTER 2: THE ACTIVITY OF IMPORT FABRIC
2.1 Introduction of Dong Tai Logistics And Trading Co., Ltd
Dong Tai Logistics And Trading Co., Ltd is a member of DONGSUE LOGISTICS
KOREA, founded in June 1987.
Head office: RM 302, DONGYANG BLDG, 89-20, SEOSOMUNRO, JUNG-GU
SEOUL, KOREA
Registered Multimodal Freight Forwarding Business (No.1725). Joined KIFFA (Korea
International Freight Forwarding Association) (No.1003). Registered International
Multimodal Freight Forwarding Business (IncheonCustoms: DSLG)
Website: www.dongsuero.com
Dong Tai Logistics's Offcies:
 Hai Phong Office: RM 202-204 TasacoBldg, KM 104+200 Nguyen BinhKhiem,
Hai An, Hai Phong
 Ha Noibranch: RM 1601 Thanh Cong Building, 57 Lang Ha, Ba Dinh, Ha Noi
 Noi Bai Office: RM314, NTSBuilding, Noi Bai InternationnalAirport, SocSon,
Ha Noi
 Hồ Chí Minh City Office: 5th floor, C2Thuy LoiApartment 301, D1Str., Ward
25, BinhThanh Dist., HCMC
2.1.1 The establishment of the company
Dong Tai Global Logistics and Trading Co., LTD established on December 21, 2009.
Business Registration No. 0201019508 in the Department of Planning and Investment
of Hai Phong city, the tax code 0201019508, chartered capital of VND 1.5 billion
initially, the one is representatived is Mr. Do Viet Thanh Vietnam.
English Name: Dong Tai Global Logistics and Trading Co., Ltd., referred to as the
Global Dong Tai.
Nguyễn Trần Nguyệt Minh GMA 02 Page 19
Recommendations to improve import activity of fabric at Dong Tai Global Logistics
and Trading Co.,LTD
Before 2009, the precursor Dong Tai Global is a representative office of Dongsuero in
Haiphong, at the same time set up offices in the city. Ho Chi Minh City.
In 2009, Dong Tai Global company officially established, and become an agent of
Dongsuero.
In 2009, at established date, headoffice of Dong Tai Global is at Rm 202-204, Tasaco
Building, Km104 + 200 Nguyen Binh Khiem Street, Hai An District, Hai Phong City.
In 2010, Dong Tai Global became a member of Vietnam Chamber of Commerce and
Industry of Vietnam (VCCI)
In 2012, Dong Tai Global registered and become a member of the Vietnam Freight
Forwarders Association (VIFFAS)
2013, after 03 years of operation, Dong Tai Global has opened an office in Hanoi in
room 1601, Building Success, 57 Lang Ha Street, Ba Dinh District, Hanoi. With the
functions of the business office and handle cargo air transport through airports Noi Bai
International.
In late 2013, early 2014, the official Dong Tai Global become a member of many
associations Forwarder and Logistics domestic and international.
In early 2014, Dong Tai Global continues to participate in associations such as
Vietnamese Logistics Association (VLA), the Association of Enterprise Logistics India
(GWHAR), such as WCA Forwarder Association Inter Global , Freight Net, ...
2014, with the development of a Forwarder, Dong Tai Global oriented markets of
Asean and international , with world trends, and future vision correctness, Dong Tai
Global was extended to most of the warehouses, port and depot at the the Dinh Vu, Hai
Phong, international gateway of Vietnam, coordinate partners around the world.
Dong Tai Logistics And Trading CO.,LTD
Address: Room 202-204, Tasaco Building, Km 104+200 Nguyen Binh Khiem, Hai An,
Hai Phong, Viet Nam
Nguyễn Trần Nguyệt Minh GMA 02 Page 20