Recommendations to improve the quality of port services to cargo at port of haiphong joint stock company tan vu port branch

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MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING
VIETNAM MARITIME UNIVERSITY
STUDENT NAME: TRẦN TRỌNG NGHĨA
DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS
RECOMMENDATIONS TO IMPROVE THE QUALITY OF PORT
SERVICES TO CARGO AT PORT OF HAIPHONG JOINT STOCK
COMPANY - TAN VU PORT BRANCH
HAIPHONG – 2015
MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING
VIETNAM MARITIME UNIVERSITY
STUDENT NAME: TRẦN TRỌNG NGHĨA
ID: 50085
CLASS: GMA 02
DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS
RECOMMENDATIONS TO IMPROVE THE QUALITY OF PORT
SERVICES TO CARGO AT PORT OF HAIPHONG JOINT STOCK
COMPANY - TAN VU PORT BRANCH
Supervisor: Hoàng Thị Lịch
Division: Global Studies and Maritime Affairs
Faculty: Economics
HAIPHONG – 2015
Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
Company - Tan Vu Port Branch
PREFACE
Vietnam is one of the countries in the world that has big potential on maritime with
the coastline of 3260 km. The trend of global commercialization has created a fiercely
competitive environment among countries which have coastline. The development of
port services directly contributes to economic and international integration. The role
of port services to the national economy is very huge.
Port of Haiphong belongs to maritime transport system in the North of Vietnam and
has crucial role in development of port system in Vietnam. However, the operation of
port services at Port of Haiphong, especially at Tan Vu Port Branch – a branch of Port
of Haiphong still remains limitations and challenges.
From this situation, I decided to choose the topic: “Recommendations to improve the
quality of port services to cargo at Tan Vu Port Branch” is my thesis topic.
I really appreciate the help from the International School of Education (ISE), ISE
students has been given chances to practice in many famous enterprises, ports. During
that time, I had a chance to practice at Tan Vu Port Branch – a branch of Port of
Haiphong.
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
TRẦN TRỌNG NGHĨA
TABLE OF CONTENTS
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
Company - Tan Vu Port Branch
Preface........................................................................................................................... i
Table of Contents.........................................................................................................ii
List of Symbols, Abbreviations...................................................................................iv
List of Tables................................................................................................................ v
List of Figures..............................................................................................................vi
INTRODUCTION .......................................................................................................1
CHAPTER 1: Literature review about port services and the quality of port
services......................................................................................................................... 3
1.1 Overview of port services.......................................................................................3
1.1.1 Concept of port services......................................................................................3
1.1.2 Classification of port services..............................................................................5
1.1.3 Roles of port services to national economy..........................................................6
1.2 Quality of port services...........................................................................................7
1.2.1 Concept of service quality and port service quality.............................................7
1.2.2 Services quality criteria.......................................................................................8
CHAPTER 2: Quality of port services at Tan Vu Port Branch............................11
2.1 Overview about Tan Vu Port Branch....................................................................11
2.1.1 Formation and development..............................................................................11
2.1.2 Roles and tasks..................................................................................................14
2.1.3 Functions...........................................................................................................14
2.1.4 Organizational structure...................................................................................16
2.1.5 Infrastructure.....................................................................................................20
2.1.6 Business results of Tan Vu Port Branch in Q2 and Q3 of 2015.........................21
2.1.7 Development plans in the future of Tan Vu Port Branch...................................23
2.2 Quality of port services to cargo at Tan Vu Port Branch.......................................24
2.2.1 Research method...............................................................................................24
2.2.2 Research findings..............................................................................................28
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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2.3 Evaluation on quality of port services to cargo at Tan Vu Port Branch................34
2.3.1 Advantages........................................................................................................34
2.3.2 Disadvantages...................................................................................................35
2.3.3 Real situation of the quality of port services to cargo at Tan Vu Port Branch. .35
CHAPTER 3: Recommendations to improve the quality of port services to cargo
at Tan Vu Port Branch.............................................................................................39
3.1 Recommendations on development direction of Tan Vu Port Branch in the future
.................................................................................................................................... 39
3.1.1 Professional business plan................................................................................39
3.1.2 Salary for staffs..................................................................................................39
3.1.3 Technique..........................................................................................................39
3.1.4 Occupational safety...........................................................................................40
3.2 Recommendations to improve the quality of port services at to cargo at Tan Vu
Port Branch.................................................................................................................40
3.2.1 Recommendations based on the results of survey questionnaire.......................40
3.2.2 Specific recommendations.................................................................................41
CONCLUSION........................................................................................................... 44
Reference / Bibliography................................................................................................
Appendix........................................................................................................................
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LIST OF ABBREVIATIONS
Q2 – Quarter two
Q3 – Quarter three
COR – Cargo Outturn Report
ROROC – Report on Receipt of Cargo
ETA – Expected Time of Arrival
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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LIST OF TABLES
TABLE 1.1: Five elements in SERVQUAL model......................................................9
TABLE 2.1: Flows guide to Tan Vu Port Branch.......................................................12
TABLE 2.2: Berth system at Tan Vu Port Branch......................................................20
TABLE 2.3: Business results of the port in Q2 and Q3 of 2015.................................21
TABLE 2.4: Survey questionnaire sample..................................................................24
TABLE 2.5: Gender distribution of respondents........................................................26
TABLE 2.6: Job distribution of respondents...............................................................27
TABLE 2.7: Service quality dimension groups in ROPMIS model............................27
TABLE 2.8: KMO and Bartlett’s Test........................................................................32
TABLE 2.9: Rotated Component Matrix....................................................................32
TABLE 2.10: Descriptive statistics.............................................................................33
TABLE 2.11: Implementation of output by types of goods from 2013 to 2015..........36
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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LIST OF FIGURES
FIGURE 2.1: Flow chart guide to Port of Haiphong...................................................13
FIGURE 2.2: Organizational structure of Tan Vu Port Branch..................................17
FIGURE 2.3: Terminal area of Tan Vu Port Branch...................................................21
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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INTRODUCTION
Necessity
Globalization trend, international economic integration and trade liberalization are
the striking issues of recent world’s economy. This feature has created the high
connection and high interdependence among nations and regions. In that context,
every nation has to struggle to integrate into the general trend, adjust policies to
create favorable conditions for the integration process.
Associating with the movement trends of the region and the world, Vietnam is also
implementing the adjustment of mechanisms and policies and open international
economic relationships. Maritime is one of the most important sectors contributed
positively to the overall development of the country’s economy.
Over 80% of imported and exported goods are transported by sea, commercial port
system plays a crucial role for commercial activities in Vietnam. Therefore, the
quality of port services are the top concerns for port managers in order to ensure the
operational capacity of port.
After practicing in Tan Vu Port Branch, I give some recommendations to improve
the quality of port services at Tan Vu Port Branch in order to not only enhance the
port’s reputation to customers, but also ensure the economic benefits of port.
Research object
This study is conducted to evaluate the quality of port services at Tan Vu Port
Branch through services quality scale of commercial ports.
To achieve the basic objective, the topic will focus on the specific study of the
following issues:
- Inspecting the components of services quality scale of commercial ports.
- Inspecting the relationship between the components of services quality scale
of commercial ports and customer’s satisfaction.
- Making recommendations to improve the quality of port services to increase
the level of customer’s satisfaction.
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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Research scope
The research is conducted basing on the quality of port services at Tan Vu Port
Branch in Haiphong City from 10th August 2015 to 20th September 2015.
Research findings
The topic is very practical on research and development of commercial ports in
Vietnam through the following points:
- The results help administrators see the current status of quality of
commercial port services at Tan Vu Port Branch and this is the basis for
innovation and enhancing the quality of port services.
- Contributing to provide the information on the factors to measure the quality
of port services that customers expect to receive from the Tan Vu Port
Branch.
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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CHAPTER 1: LITERATURE REVIEW ABOUT PORT
SERVICES AND THE QUALITY OF PORT SERVICES
1.1 Overview of port services
In the current perspective, shipping in general, maritime shipping in particular is a
type of services. Services here need to understand in the broadest sense, including
all maritime activities. The system of marine production process including:
transportation process, loading and unloading process. In recent years, due to the
high economic growth in the global, the amount of cargo through the port
constantly increase, so port services for ships and cargoes also sharply increase.
1.1.1 Concept of port services
In order to understand clearly about port services, let’s start learning the concept of
general services.
1.1.1.1 Concept of general services
According to Vietnamese encyclopedia, services is defined as: “Services are
activities that serve the satisfaction of the needs of production, business and living”.
Depending on particular circumstances, services includes: a specialized work; the
temporary or full use of an asset; the use of a durable asset… Production, business
and services closely interact. Services is a condition to develop production and
business. The development of high quality and appropriate services is a
manifestation of the developing economy and a civilized society.
Due to the economic and social significance, services becomes an important
economic sector, plays a crucial role in the economic structure of countries with
high growth rate. According to OECD, a developing economy has the share of
services about 70% of GPD and approximately 70% of employees work in services
sector. The proportion of services in the U.S economy account for 85% of GPD, and
it is 73.7% in Hong Kong [ CITATION LêĐ05 \l 1033 ].
Also in Vietnamese encyclopedia, we also encounter the concept of foreign
economic services. Foreign economic services is defined as activities that promote
and support the activities of foreign trade, production cooperation, technical and
economic cooperation with foreign countries, investment, credit, international
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travel, and serving clients in the scopes mentioned above. Foreign economic
services include insurance, shipping import and export of goods, international
payment, trade information, postal, telecommunication, maintenance, repair and
assembly of machine import, supply ship repair, maritime services, aviation
services, brokerage and consultancy in foreign economic field as well as invisible
import and export services such as labor export, transfer remittances…
1.1.1.2 Concept of port services
According the traditional aspect, the primary task of the port is cargo handling.
Currently, the business area of the port is expanded, apart from cargo handling, the
port is also on behalf of ship owner and shipper to do many other related services
such as distribution and monitoring the transport of goods to final customers and
becomes logistic centers.
Port services are defined by the World Trade Organization (WTO): “Port services
are the use of port resources including infrastructure and facilities, labor forces to
provide service toward vessel, cargo, and passenger for customers. Port plays a role
as a supplier and ship-owner, shipping agency, cargo owner and consignee trustee
are considered as a customer” [CITATION 91Se \l 1033 ]. Due to the common
features of this kind of services as well as the diversity and the complexity of
services in general and port services in particular, plus different interpretations
among nations, therefore making the most common definition for this kind of
services become more and more difficult. We consider the concept of port services
on the coverage of the World Trade Organization (WTO), the European Union (EU)
and narrower scope of some specific countries.
According to WTO, in the Uruguay Negotiation Round, the General Agreement on
Trade Related Services – GATS was launched for the first time. This agreement
introduced the concept of the services sectors by listing the sectors, subsectors,
headings and subheadings.
According to EU, in the route for implementing GATS, EU sent a request to
members, detailing the types of supports for maritime transport with the following
definitions:
- Cargo handling services means the services performed by handling
companies, including moderation warehousing company but excluding services
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provided by labor force in the port. This services consists of organizing and
monitoring processes: loading and unloading goods from ship; loading and
unloading goods from barge; and receiving, delivering and preserving goods before
the shipment or after discharging.
- Storing services means the rental of warehouse and yard in order to store
goods at the port’s area.
- Custom declaration services (or custom brokerage services) is a services in
which a party is on behalf of another party to do the custom formalities relating to
the export, import of goods.
- Maritime agency services means agents represent the business’s interests of
one or more carriers in the specified geographical area.
1.1.2 Classification of port services
1.1.2.1 Base on the targets
- The port services relating to ships:
+) Shipping agency services
+) Ship supplying services
+) Ship repairing services
+) Towage services
+) Ship cleaning services
- The port services relating to goods:
+) Cargo tallying services
+) Cargo handling services
+) Warehousing services
+) Cargo preserving services
+) Custom declaration services
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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- General services:
+) Agency services for sea transport
+) Maritime brokerage services
1.1.2.2 Base on the characteristic of services
- The port services that are direct:
+) Ship supplying services
+) Ship repairing services
+) Towage services
+) Ship cleaning services
+) Cargo tallying services
+) Cargo handling services
+) Warehousing services
- The port services that are neutral:
+) Shipping agency services
+) Maritime agency services
+) Maritime brokerage services
1.1.3 Roles of port services to national economy
Among any means of transport, sea transport plays a crucial role. Every year, over
90% of cargoes in the world are transported by sea route. Port and port services and
maritime transport contribute to the process of economic development. In fact, most
of the coastal countries in the region and around the world have become strong and
fast development in economy, especially in maritime affair. Because port is an
important national hub, connecting the regions of country, linking that country with
the outside world by traffic arteries such as waterways, roads, railways, airways in
order to transport cargoes and passengers.
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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Port is the clue of the circulation of goods, is the intermediary of the process from
production to consumption of most cargoes. In other words, port and port services
are a link of the external economic activities. Port not only plays an important role
in the production chain of national economy, but also relates to other sectors such as
sale, trading, agency, insurance, law, finance, bank, and travel… And these
activities have brought a significant benefit for the coastal nations. For instance, a
ship which want to berth will bring about many services such as towage services,
cargo handling services, storing services, preserving services… All these activities
bring a significant source of income for the national budget.
For the commercial functions and the international trade, port is the gate of external
economy. However, commercial activities here not only reflect the exchange of
goods import, the transport of domestic goods but also is the place where circulate
the sale in the form of transit trade. Especially during the international exchange,
the cooperation among nations on port services as the form of transit is growing.
Vietnam locates on the international sea route, where the density of ships are high,
connecting the regions in Eastern Hemisphere and Western Hemisphere. This is a
favorable condition for the development of the commercial port services.
Clearly, port has an extremely important significance in the national economy and
bring in a significant resource of benefits for the country. At the same time, if a
country want to operate the advantages of port, this port must be attractive through
its services. Therefore, the role of port to national economy of the country depends
on its services. Vietnam is a nation which has potential on the development of port,
so developing the port services is the important mission in this period.
1.2 Quality of port services
1.2.1 Concept of service quality and port service quality
The quality of goods is tangible and can be measured by objective criteria such as
functionality, feature and reliability. However, the quality of services is invisible.
The customer receives this kind of product through communication, information
and experience. The striking feature is that the customer can only assess the overall
quality of the services after “buying” and “using” it. Therefore, the document
determines the quality of services based on: subjective, attitude, and ability to
recognize.
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Lewis and Booms stated that: “Services quality is a measure of how well the
services level delivered matches customer expectations” [ CITATION Lew83 \l
1033 ].
Port services quality may also be considered:
- from the technical-technological aspect including: development level of the
infrastructure and superstructure, quality of access by sea, availability of port
equipment, development level and fitness of technological loading/discharging and
warehousing procedures, organization of transport within the terminal,
standardization of transport units and vehicles, implementation of information and
communication technologies, development level of the intermodal system, land
connections with the port hinterland.
- from the aspect of port organization and management, which is considered
most responsible for stakeholders’ coordination, port integration in the traffic of
goods flows, investments in the area of infrastructure and new technologies, and for
the quality management system and enhancement of the port services quality in
accordance with customer requirements.
- from the aspect of customers, referring to services reliability, time required,
frequency, flexibility, availability, competitiveness, safety, relations with port
management. [ CITATION IKo11 \l 1033 ]
1.2.2 Services quality criteria
Recently, there are many common criteria that are used to evaluate services quality,
however, the most popular model that are used is the model of Parasuraman
[ CITATION Par85 \l 1033 ]. According to Parasuraman, any services are
experienced by customers based on the 10 following components:
- Reliability: Being able to perform appropriate services and on time at first.
- Responsiveness: The willingness of staffs to help customers. Requiring the
enthusiastic and capable staffs.
- Competence: Requiring skill and knowledge to provide expected services at
all levels in the organization.
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- Access: Relating to the ease of communication, convenient hours, reduce
waiting time.
- Communication: Relating to the language that customers can understand and
listen sincerely to customers.
- Courtesy: Respecting, caring and being friendly with customers.
- Credibility: Creating confidence for customers that they can trust the
company.
- Security: The ability to ensure the safety of customers, expressing through
physical safety, finance and information security.
- Understanding: The ability to understand the demands of customers through
the understanding of customers’ requirements.
- Tangible: Including assets such as tangible and intangible asset, appearance,
attire of staffs.
This model had the advantages of covering almost every aspect of the services,
however, it was very difficult to assess and analyze. In 1988, Parasuraman corrected
it and formed and new model included 5 elements. That was SERVQUAL model
[ CITATION Par88 \l 1033 ].
Table 1.1 Five elements in SERVQUAL model
Elements Definition
1 Reliability Being able to perform the appropriate services and on time at
first.
2 Responsiveness Representing the desire and willingness of staffs to provide
timely services to customers.
3 Assurance Showing the specialized level and the way to serve
customers.
4 Empathy Demonstrating the care to each individual customers.
5 Tangible Including physical assets and equipment.
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Recommendations to improve the quality of port services to cargo at Port of Haiphong Joint Stock
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Vinh Van Thai based on the qualitative research, the theory of services, the quality
of services, and the SERVQUAL model to give specific scale of 6 components of
the quality of port services [CITATION Vin05 \l 1033 ] (ROPMIS):
- Resources-related quality dimension: The availability of equipment, the
condition of facilities, and the ability to track goods and infrastructure, financial
resources, etc.
- Outcome-related quality dimension: The performance speed of services, the
reliability of services (delivering and receiving time), providing consistent services,
ensuring the safety of goods and the accuracy of documents, the diversity and
availability of services.
- Process-related quality dimension: Interactions between staffs and
customers, for example, how customers perceive the behavior of staff in dealing
with customers’ requirements, staff’s knowledge of customers’ wants and needs, as
well as application of technology in better serving the customers.
- Management-related quality dimension: The application of information
technology in operation and monitoring. Understanding the needs of customers and
continuing improving towards customers’ demands.
- Image/reputation-related quality dimension: Being prestige and reliable port
in the market.
- Social responsibility-related quality dimension: Involving the ethical
perception and operations of an organization to behave in a socially responsible
manner
In this study, I choose to use the services quality criteria of Vinh Van Thai and
Devinder Grewal in order to assess the quality of port services at Tan Vu Port
Branch in Haiphong City because ROPMIS is more suitable than SERVQUAL to
the maritime industry since the model combines the image and social responsibility.
CHAPTER 2: QUALITY OF PORT SERVICES AT TAN VU
PORT BRANCH
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2.1 Overview about Tan Vu Port Branch
Name of company: Port of Haiphong Joint Stock Company – Tan Vu Port Branch
Telephone: +84.31.3262608
Address: Dinh Vu Industrial Zone
2.1.1 Formation and development
In order to meet the demand of the cargo output which is on the increase through
sea route and reduce the load for the inner-city port, Port of Haiphong JSC has
invested in constructing new berths in Dinh Vu Industrial Zone. These berths are
very large, modern and able to handle cargoes from high capacity vessels. In order
to directly operate the production at this area, in 28th November 2008 Port of
Haiphong decided to form Tan Vu Port based on the decision No.4271/QĐ-HĐTV.
Tan Vu Port Branch is belong to Port of Haiphong, with the responsibilities on
handling cargo, freight forwarding and transporting. The direct workforce of the
port consists of 1 motorized team, 1 handling team, 1 freight forwarding team. The
port has 5 berths with the total length of 980 m.
2.1.1.1 Geographical terrain
Tan Vu Port locates on Bach Dang flow, and the coordinate is 20 050N, 106041E.
The area of this port is about 61 hectares (including berth area and yard area). The
east of the port abuts on Vinalines Port, the west of the port abuts on Dinh Vu Joint
Stock Port, the south of the port abuts on highway and the north of the port abuts on
navigable flow.
Tan Vu Port locates in the Red River Delta triangle with favorable geographical
location on the river way, road and air route.
- About the river ways, from Haiphong to Ha Noi, vessels can go through Cam
River, Duong River, Kinh Thay River or Dao River, Lach Tray River, Van Uc
River, Thai Binh River. The final destination is Red River. From Haiphong to Mong
Cai, vessels can go through Bach Dang River, Cai Trap channel, Lach Huyen River
and the final destination is Ha Long Bay.
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- About the road, Highway 5 is primary highway linking Haiphong – Hai
Duong – Ha Noi. Highway 10 is the way linking Haiphong – Thai Binh – Nam
Dinh.
- The airline is very favorable. Recently, Cat Bi Airport is upgrading to a
international airport.
Those are favorable graphical condition for transporting goods to all cities of the
country.
2.1.1.2 Climate and weather condition
Tan Vu Port is affected by monsoon. Basing on Beaufort Wind Scale, if the level of
wind is 5 or lower, the port can operate normally. But if the wind level is from 5 to
7, the port will face some troubles when operate and the productivity decreases
sharply. When the wind level is 7 or higher, the port must stop operating.
In hurricane season, the port could be affected by storms formed in Philippine’s
archipelago. Storms cause heavy rains and have bad influence on the operation of
the port.
2.1.1.3 Hydrological conditions
- Water level
The water level in Cam water front is diurnal homogeneous mode. The tidal
amplitude in this area is about 3 to 4 m during the spring tide.
- Navigable flow
The navigable flow linking Tan Vu Port with Northern Gulf is about 32 km.
Table 2.1 Flows guide to Tan Vu Port Branch
Name of the flow Length (m) Width (m) Depth (m)
Lach Huyen 17.5 100 -6.7
Ha Nam 6.3 80 -6.3
Bach Dang 9.2 80 -6.3
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