Suggestions to enhance the quality of transportation agency service at vosa hai phong

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SUGGESTIONS TO ENHANCE THE QUALITY OF TRANSPORTATION AGENCY SERVICE
AT VOSA HAI PHONG
PREFACE
During my internship in VOSA Haiphong, I had a chance to investigate
about transportation agency service. This is currently one of the main business of
agency. Under determination of managers of VOSA, this service will play very
important role in transportation field in the near future. Therefore, I decided to
choose the topic: “Suggestions to enhance the quality of transportation agency
service at VOSA” which the aim to understand the current status of implementing
this service in this agency.
This dissertation consists
 Chapter 1: Literature
 Chapter 2: Current Status Of Implementing Cargo Transportation Agency
Service At VOSA
 Chapter 3: Suggestions To Enhance The Quality Of Transportation Agency
Service At VOSA 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
NGUYEN DANG LUAN
NGUYEN DANG LUAN
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ACKNOWLEDGEMENT
Firstly, I would like to sincerely thank the guide of my advisor: Prof: Vuong Thu
Giang and all employees and staff of Vietnam Ocean Shipping Agency in Haiphong
who created conditions for me to complete this topic. Due to limitation of time and
knowledge, the dissertation inevitably has mistaken. I look forward to the
instructions of lecturers and teacher in board of appraisal.
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TABLE OF CONTENTS
PREFACE....................................................................................................................i
ACKNOWLEDGEMENT..........................................................................................ii
TABLE OF CONTENTS..........................................................................................iii
LIST OF ABBREVIATIONS.....................................................................................v
LIST OF TABLES.....................................................................................................vi
LIST OF FIGURES..................................................................................................vii
INTRODUCTION......................................................................................................1
1. Necessitation....................................................................................................1
2. Dissertation Purpose........................................................................................1
3. Dissertation Object and Scope.........................................................................2
4. Dissertation Methodology................................................................................2
5. Scientific and real significance of dissertation................................................2
CHAPTER 1: LITERATURE REVIEW....................................................................3
1.1. Quality of transportation agency service.........................................................3
1.1.1. Service and Features of Service.......................................................................3
1.1.2. Service quality and the features of service quality..........................................4
1.1.3. Characteristics of transportation service sector...............................................5
1.1.4. The factors constituting the quality of transport agency service.....................6
1.1.5. Other factors affecting to the quality of transportation agency service...........8
1.2. The role of quality improvement of transport agency service for improving
business efficiency......................................................................................................9
1.2.1. The concept, content and the necessity of improving business efficiency......9
1.2.2. The role of enhancing the quality of transportation agency service to business
performance in VOSA..............................................................................................10
CHAPTER 2: CURRENT STATUS OF IMPLEMENTING CARGO
TRANSPORTATION AGENCY SERVICE AT VOSA.........................................12
2.1. Introduction about VOSA Haiphong.............................................................12
2.1.1. General description about VOSA Haiphong..................................................12
2.1.2. History and development...............................................................................12
2.1.3. Main business and mission of VOSA Haiphong...........................................13
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2.1.4. The organizational structure and functions and responsibilities of each
department.................................................................................................................15
2.1.5. Activities in term of transportation agency service of VOSA Haiphong......17
2.1.6. Business performance of VOSA Haiphong...................................................17
2.2. The quality of transportation agency service at VOSA Haiphong................20
2.2.1. Safety (Avoidance of cargo loss and damage)...............................................20
2.2.2. Time (Speed)..................................................................................................23
2.2.3. Cost................................................................................................................25
2.3. Advantages and disadvantages of implementation of transportation agency
service at VOSA Haiphong.......................................................................................28
2.3.1. Advantages.....................................................................................................28
2.3.2. Disadvantages................................................................................................29
CHAPTER 3: SUGGESTIONS TO ENHANCE THE QUALITY OF
TRANSPORTATION AGENCY SERVICE AT VOSA HAIPHONG...................32
3.1. Development objectives of VOSA................................................................32
3.1.1. Main objectives of company..........................................................................32
3.1.2. Strategies for the medium and long-term development.................................32
3.2. Suggestions to improve the quality of transportation agency service............33
3.2.1. Improve the quality of human resources........................................................33
3.2.2. Improve the ability of staff in the preparation of contracts and administrative
procedures.................................................................................................................34
3.2.3. Investing in modernization of equipment in service as well as freight vehicles
.......................................................................................................................35
3.2.4. Having indicator systems to monitor service quality affects customers........36
3.2.5. Have a system to collect the feedback from customers as the basis for quality
management..............................................................................................................37
3.2.6. Developing policies to encourage customers.................................................39
3.2.7. Improve the service quality by reducing the time of transport......................40
CONCLUSION.........................................................................................................44
REFERENCES.........................................................................................................45
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LIST OF ABBREVIATIONS
WTO World Trade Organization
VOSA Vietnam Ocean Shipping Agency
BL Bill of Lading
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LIST OF TABLES
Table 1: Summary of indicators..................................................................................8
Table 2: Revenue and profit Of VOSA Haiphong from 2011 to 2014.....................18
Table 3: Number of ships served by VOSA Haiphong.............................................20
Table 4: Summary of damage cargo in the progress of implementation of
transportation agency service....................................................................................22
Table 5: Summarize of plan for cargo transportation...............................................24
Table 6: Cost for business activities of VOSA Haiphong in from 2011 to 2014.....26
Table 7: Suggested questionnaire for customer’s opinion about service..................38
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LIST OF FIGURES
Figure 1: VOSA Haiphong.......................................................................................12
Figure 2: Organizational Structure of VOSA Haiphong...........................................15
Figure 3: Progress of examining the reasons for late delivery..................................39
Figure 4: Selection of mean of transportation...........................................................42
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INTRODUCTION
1. Necessitation
International Trade of Vietnam has grown rapidly over the past 15 years
since integrating into the world economy, especially after Vietnam became a
member of the World Trade Organization (WTO). In addition, the significant
growth of Logistics has promoted people use the resources in an optimal way to
deliver products and services with the highest quality and lowest costs to the last
users. Therein, cargo transportation is also one of the important contents of logistics
and currently become an indispensable activity in the international merchandise
trade. However, the progress of commercialization also means that there are more
competitions in cargo transportation in particular and freight forwarding in general.
For the transport sector, a sector with the increasingly fierce competition, in order to
survive, each transport company and agency have to create its own way so as to
have the best competitiveness. Vietnam Ocean Shipping Agency (VOSA) is a
company operating effectively in the freight industry in Vietnam today. Over long
time of development, branch Haiphong of VOSA has grown steadily with various
types of business and cargo transportation agency service was one of the most
important services contributing primarily to revenue of agency. Therefore,
investigating and studying the business operations of VOSA Haiphong in general
and cargo transportation agency activities in particular will help us have a more
complete view of the development of agency and the quality of cargo transportation
agency services.
2. Dissertation Purpose
Investigating the quality of cargo transportation agency service at VOSA
Haiphong is very necessary in order to carry out accurate assessment about pros and
cons in the implementation of this service at VOSA Haiphong. From there, we can
suggest some effective resolutions to contribute to enhance the quality of service
that VOSA Haiphong is applying. The improvement in service quality can help to
promote cargo transportation activity and stabilize the steady development of
business at VOSA Haiphong. This is very important issues for manager and the
main purpose of dissertation.
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3. Dissertation Object and Scope
3.1. Dissertation Object
Examining the literature about cargo transportation agency service,
investigating the situation about providing cargo transportation agency service at
Vietnam Ocean Shipping Agency and offering some basic suggestions to enhance
the service quality of cargo transportation agency service at Vietnam Ocean
Shipping Agency Service (VOSA).
3.2. Dissertation Scope
Cargo transportation agency service has been being applied by the company
in the period from 2011 to 2014.
4. Dissertation Methodology
During the progress of investigating and researching topic, the dissertation
has used the following methods:
 Data collecting and summarizing
 Data processing
 Data analyzing
 Systemize the investigated indicators
5. Scientific and real significance of dissertation
Dissertation will systemize some general issues about cargo transportation
field and basis to assess the quality of service as well. In addition, the dissertation
also generalizes the foundation and development of VOSA and assesses the quality
of offering the current cargo transportation agency service of company. This will
focus on finding some problems when providing service, the reason of these issues
to suggest the appropriate solutions in order to enhance the quality of cargo
transportation agency service at VOSA.
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CHAPTER 1: LITERATURE REVIEW
1.1. Quality of transportation agency service
1.1.1. Service and Features of Service
The term “service” is used to define as “any act or performance, one party
can offer to another that is essentially intangible and does not result in the
ownership of anything its production may or may not be tied to a physical product.
Service includes all economic activities whose output is not a physical product or
construction, consumed at the time it is produced and provides added value in
forms (such as convenience, amusement, timeliness, comfort and health) that are
essentially intangible and it concerns of its first purchaser” (Dabhade, 2013)
In other words, service is the result of at least one activity to be conducted at
relationships between suppliers and customers and often not visible. Which
customers are organizations or individuals receiving product, consumer, service
beneficiaries, final users, retailers, beneficiaries?
The supplier is an organization or individual providing products, the
manufacturer, distributor, retailer or wholesaler, service providers. Suppliers may be
internal or outside the organization. If there is a contract for the use of service,
supplier may appoint a representative or use other mean of transactions. Customer
activity upon contact with suppliers is also important for the provision of services.
The provision or use of tangible products may be part of the service provider.
Service may be associated with the production and the supply, manufacture tangible
products.
Nowadays, all manufacturing activities are included small services: supply
service, distribution service, warranty service, installation service. It can be seen as
special type of commodities. However, service includes several following features:
 Intangibility: the main characteristic of services is that they have no
particular tangibility or physicality. This feature makes the quality of service largely
depends on customer perceptions but not always customers have the same feeling.
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 Heterogeneity: this trait suggests the possibility for high variability in
delivering service (Zeithaml V.A., 1985) because the service contains the primary
contribution from people and it’s very hard to standardize the outcome of service.
 Inseparability: this feature is taken into consideration to reflect the
simultaneity of delivery and using service (W.J, 1963). Specifically, the progress of
providing service happens in a period of time with the direct involvement of users
or customers.
 Perishability: generally, services cannot be stored, reserved or carried
forward to future (J.M, 1966). They operated as an open system and the unfinished
services provided are not accepted.
On the other hand, the existence of services depends on cooperation between
providers and customers and the quality of offering service based on customer’s
judgments. Therefore, service providers need to have strategies so as to provide the
best service to their customers.
1.1.2. Service quality and the features of service quality
What is service quality and features of service quality?
The term “service quality” can be define as a comparison between customer
expectations with real company performance (Ms.U.Dhanalakshmi). Through
improving the service quality and collecting the demand of market, companies can
gain competitive advantage over other competitors. Although can be assessed from
service provider’s attributes, the concept of service quality should be approached
from customer’s perspectives because of the variety in standard of assessment
(Chang, 2008).
Due to the difference in characteristics of service with other particular
products, the quality of service has its own different feature in comparison with
common product’s quality. According to (A. Parasuraman, 1985), writings other
literature on services proposes main themes of the characteristics of service
qualities:
 The quality of service is more difficult to assess than goods quality
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 The quality of service awareness usually depends on a comparison between
customer’s expectation and service performance.
 Quality assessments are not only on the outcome of service provided but also
the process of delivering service.
In addition, the stability of service needs to be taken into consideration. The
stability determines the repeatability of providing service and there are several types
of stability:
 Stability of place: it requires the provision of service at the same quality in
various subsidiaries of business.
 Stability of the products and services: the possibility of changes in the
quality of service lying in the product itself. Therefore, to improve service quality,
businesses need to take measures to minimize and control possibility for quality
changes of products.
 Stability of the service provider: the volatility of service quality is
determined primarily by the service provider and customers. So, with various
customers (the existing customers or the new ones), businesses have to provide the
service with the same standard to enhance the reputation.
1.1.3. Characteristics of transportation service sector
Transportation service is a technical process to move the location of people
and objects in space. Under an economic standpoint, transportation service is
moving the location of passengers and goods in space while simultaneously satisfy
two properties: a material production activity and is an independent economic
activity. Transportation activities influence manufacturing and business processes
through the transport costs (freight). In case the freight increases, cargo
transportation services will increase production costs and affect the price of cargoes
as well. Therefore, in transportation services, freight (transport cost) is an important
indicator because it allows us to compare the comparative advantages among
businesses. Additionally, quality of transport service are assesses by the amount of
cargoes flows and flow speed. So, the characteristic of the transport operation is
transportation speed must be guaranteed for businesses using service. It creates
some requirements for transportation service providers to ensures service quality
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and schedule time. In general, the business sector of transportation has several basic
characteristics:
 Transportation speed depends largely on infrastructure and weather
condition: roads system directly affect the speed and quality of transportation on the
ground. On the other hand, weather conditions also significantly influence cargoes
transportation by air, sea or train.
 The cost of transportation is considerably related to external factors: fuel
costs, the price of spare parts and this can affects demand for a particular
transportation service from customers.
 Transportation services do not manufacture a new product but constitute the
value of the product through the movement of cargoes.
 Transport operations take place on a large scale because it associated with
any business production. Transportation delivers material to plants and transfers
outputs to the place of consumption.
1.1.4. The factors constituting the quality of transport agency service
Measuring the quality of service as has great significance to business. In
freght transportation field, providing high quality service can help companies or
agency retain existing customers and attract the new ones. Evaluating and
measuring the quality of transportation agency service represents a tool for
objectification quality level of provided services. However, a tool that compares and
evaluates the freight performance in such a way is missing in context of Vietnam in
general. Currently, it even does not exist, an agreement among foreign companies
for freight transport quality. Each shipper, operator, consignee has its own standards
and quality measures, usually referred to different indicators and values (Albert
Mancera). Several authors have taken into account the question of quality of freight
transportation and most of them had agreement in the primary aspects which
involved in quality of service (Gray, 1982). Eight indicators were investigated to
define the quality of transportation agency service: freight rates, speed, reliability,
damage, inventories, company policy, shipper market conditions and influence of
the shipper’s costumers (McGinnis, 1978). Besides, four most crucial factors were
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found out to associated with the quality of transportation agency service including:
freight rates, speed, reliability and damage.
To have competitive advantage in cargo transport market, providers of
freight transportation agency services focused on finding out the noticeable
transportation selection factors of consignees. “Reliability”, “equipment
availability”, and “service frequency” were found as the most significant attributes
which attract the export and import shippers within selecting the container line
(Kent, 1999). Nonetheless, the indicator “reliability” can vary based on different
transportation agency selection criteria literature.
Four factors (equipment availability, transit time and reliability, loss and
damage, transport charges associated with shipment size) were predicted to measure
the quality of cargo transportation agency service in the context of US market. A
difference of requirements is stated depending on the commodity (type of the
cargoes). The results are based on real data. However, no further work is found in
this direction. (Roberts, 1979). Since then, several other author continued using
quite similar indicators in tranportation field. According to Danielis, the
shippers/consignees are willing to pay for a better quality in freight transport
services, especially for reliability and safety (Danielis, 2005). Daniels claimed that
the shippers are willing to pay for a good quality in freight transport services,
especially for 2 main attributes: reliability and safety. Although it should be taken
into consideration that the concept of quality of transport service could change
depending on the type and volume of cargoes and the scope of the company,
because they have strong connection with certain transport or economic needs. On
the other hand, to assess the relative importance of Ro/Ro Ferry selection factors in
freight transportation, “Rapid and reliable cargo movement”, “price”, and “fast
response to problems” were discovered as the most important attributes (Meyrick,
1992)
The transport research on selection of shippers/consignees was either
concentrated on the time aspect or the value of time saving for cargo transportation.
However, along with time, other quality indicators of freight transportation agency
service, such as punctuality and avoidance of damages, become increasingly vital in
the environment of present logistics services.
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Basing on basis of researches, shippers usually consider some attributes
“Cost”, “Time (Speed)”, “Loss and damage of cargoes (Safety)”, “Reliabilty” to
select the appropriate freight transportation agency. Therefore, 4 factors (Loss and
damage of cargoes , Time, Cost, Reliability) can be used as indicators to measure
the quality of freight trasportation agency services.
Table 1: Summary of indicators
No. Name of indicators
1 Avoidance of loss and damage (Safety)
2 Time
3 Cost
4 Reliability
1.1.5. Other factors affecting to the quality of transportation agency service
a) External factors
 Market demand: As the starting point of the process of managing service
quality. The characteristics and trends of market demand for freight transportation
directly affect to the service provided. With the high demand for commodities
exchange in globe, the demand for good cargo transportation service is also high as
well. Therefore, it requires providers or agencies investigating the market, analyzing
the socio-economic environment, determining customer’s needs. The fierce
competition in cargo transportation field forces transportation enterprises to
determine the appropriate market segment and have solutions in order to fulfill the
quality criteria.
 The development of engineering and technology: the innovations of
engineering field through researching, discovering, inventing and applying
scientific progress into manufacturing help enterprises offer service with high
reliability, minimizing costs in accordance with the customer’s requirements. On
the other hand, technology is general technical modes, skills, methods used to
transform resources into service. Technology includes:
 Facilities and equipment used to provide cargoes transportation service
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 Ensuring the necessary information.
 Preparing the facilities, organizing and coordinating in management
 Appropriate and efficient processes for various requirement of customers
 Government policies: The ability to improve and enhance product quality,
facilities for the services sector depends largely on the management mechanisms of
the state. Government policies as a priority service sectors can create competition
and promote the innovations and quality improvement for transportation enterprises
and agencies.
b) Internal factors
 Labor force: Labor forces have a decisive role to the quality, especially the
quality of service because employees directly involved in the service-providing
process. Therefore, enterprises must have specifically plans to recruit the new labor
force and retrain the existing workforce to meet missions of enterprises and market
demand as well.
 Management level in general and management level in progress of providing
high service quality in particular is one of the basic factors accelerating the
improvement of service quality. In cargo transportation field, the ability to
accurately identify the objectives through professional management can help to
reduce the time of transport.
 Technological capabilities and equipment of the enterprises or agencies: The
quality of service was also influenced by the modernity of facilities and equipment.
So, transportation enterprises and agencies need the ability to maintain machine to
fulfill the requirements of service.
1.2. The role of quality improvement of transport agency service for
improving business efficiency
1.2.1. The concept, content and the necessity of improving business efficiency
a) Concept: The term “efficiency” describes a level of performance that
illustrates a progress that uses the lowest amount of inputs (material and resources)
to manufacture the highest amount of outputs (products or services). In other words,
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efficiency in business relates to the use of all inputs in creating required output
which saves personal time and energy.
b) Content: Applying new advanced technology to primary business activities
and main service of business has the possibility to approach the new way in which a
company carries out main areas of the business, such as customer service or supply
chains. Through renovating current business activities into more streamlined
progresses, enterprises can minimize costs, increase productivity and efficiency,
meet the market requirements, reduce risk, become more responsive to continually
changing business environment and create comparative advantage over other
competitors.
c) The necessity of improving business efficiency: The diverse and complex
movement of the market mechanism led to fierce competition among enterprises,
contributing to the advancement of businesses. However, in order to maintain the
existence and development of enterprises, it requires businesses to differentiate
modes of operation, develop strategies and business plans appropriately to achieve
positive results. In addition, In order to improve the efficiency of production and
business operations, enterprises must always improve the quality of goods and
service offered, reduce production costs so they can achieve profitability goals.
Therefore, improving business efficiency in market mechanism is extremely
important, it is expressed through:
Firstly, business efficiency improvement is fundamental basis to ensure the
survival and development of enterprises.
Secondly, business efficiency improvement is a factor promoting the
competitiveness and progress in business.
Finally, business efficiency improvement can help enterprise reach the long-
term objective which is maximizing profit.
1.2.2. The role of enhancing the quality of transportation agency service to
business performance in VOSA
Transportation agency of VOSA was established in 1996 after the foundation
of the International transport agents in the North of Vietnam. Nowadays,
transportation agency service becomes the primary business of VOSA as the main
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source of revenue along with other main business such as shipping agency service,
warehousing service, vehicles renting, counting and forwarding service. As mention
above, the increase in flows of cargo transportation led to the demand of
transportation service as well. In addition, cargoes owners, ship-owners now have
more strict and detailed requirements for transportation agency service and the
strong competition of transportation field requires Vietnam Ocean Shipping Agency
to have particular objectives and carry out necessary resolutions in order to compete
in this market. The transportation agency service as the main business plays very
important role in encouraging the business performance of company and providing
high standard of service quality can help VOSA attract ship-owners, cargoes
owners, which is the basis for increasing company’s profit and company long-term
development as well.
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CHAPTER 2: CURRENT STATUS OF
IMPLEMENTING CARGO TRANSPORTATION
AGENCY SERVICE AT VOSA
1.1. Introduction about VOSA Haiphong
1.2.3. General description about VOSA Haiphong
Figure 1: VOSA Haiphong
 Company name : Vietnam Ocean Shipping Agency Corporation
 Transaction name : VOSA Group of Co.
 Address : 25 Dien Bien Phu Str., Hai Phong City, Viet Nam
 Telephone : 84.313.551408/ 3551032/ 3551321/ 3855846/ 3551319
 Fax : 84.313.859915/ 3859842/ 3550864/ 3551131
 Email : [email protected]
 Website : http://www.vosa.com.vn/
 Director : Mr. Le Thanh Hai
1.2.4. History and development
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VOSA Haiphong is the branch of Vietnam Ocean Shipping Agency
Corporation which was recognized as government-owned corporation on May 12th
1993 with many functions such as shipping agent, cargo transportation agent, cargo
exporting and importing, ship broker and shipping transactions, agents for foreign
shipping lines, warehousing... On August 2nd 1993, Vietnam Maritime
Administration has issued Decision No. 439 / QD-TCCB-LD which regulated about
the operation of VOSA Haiphong under Vietnam Ocean Shipping Agency as a
division with legal personality. VOSA Haiphong has right to sign contracts with
international organizations within and outside the country and to use the material
resources and foreign technology to serve business production.
With the nature of the industry deeply affected by the development of the
economy, the development of import and export goods and the development of the
dock port, Haiphong VOSA has made certain changes in the development process
to fit the market economy of our country. Thanks to capture early market shifts,
VOSA Haiphong has maintained the traditional agency and gradually works into
other business areas to increase incomes for businesses.
As a company with traditional partners, VOSA Haiphong has made efforts to
maintain and ensure its credibility. In general, infrastructure and geographic
location of the business is relatively favorable for production and business
activities, particularly for the traditional shipping agency.
Operational range of maritime services sectors at VOSA has widespread
network at the local and important port in the country, creating competitive strength
in maritime services, especially for shipping agency services.
1.2.5. Main business and mission of VOSA Haiphong
 Main business
In general, VOSA Haiphong has service provided as follow:
 Shipping Agent Service
Ship chandler service
Brokerage and maritime services
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