CHAP 5: THIRD PARTY LOGISTICS The company outsources its transportation

Q1: List out at least 3 key criteria for evaluating potential 3PL Provider, and how many % of 2PL needs to a specialized transportation
(Second- provider (2PL), such as a trucking
each criteria or importance and rank the criteria Medium Transportation
Party company or airline. (Specific shipment with
• Reliability: 30% - This is crucial in logistics to ensure that shipments arrive on time and in good Logistics) specific period and provide separated
condition. Fundamental aspect of any logistics service. service: transportation, warehouse…)
The company outsources all or a significant Transportation,
• Quality: 25% -
3PL portion of its logistics operations to a third- warehousing,
• Price: 20% - While cost is important, it's not the sole determinant. Reflecting its significance in cost- (Third- party logistics provider (3PL). (long term inventory
Medium to High
effectiveness. Party contract with duration, provide multiple management,
Logistics) service, can redesign system to meet supply chain
• Responsiveness/ Time: 17% - Time is considered an important criterion. Timely delivery and efficient
customer’s requirements) management
transit times are crucial in logistics. Reflect its impact on overall supply chain efficiency. Supply chain
The 4PL acts as a single point of contact
• Exeperience: 3% - A logistics provider with extensive experience is likely to have a deep 4PL
for the company's entire supply chain,
strategy, network
(Fourth- design,
understanding of industry nuances and potential challenges. Its impact on overall reliability and managing and optimizing logistics High
Party technology, and
competence. operations on behalf of the company.
Logistics) process
(whole supply chain and reverse)
• Diversified service: 5% - Diversification indicates versatility in handling different aspects of logistics. optimization
Supply chain
Recognizing its contribution to a comprehensive logistics solution.
strategy, network
Key criteria for evaluating potential 3PL Providers The 5PL goes beyond 4PL by taking on
design,
even more responsibility for the company's
• Integrated services 5PL (Fifth- technology,
supply chain, acting as a true partner in the
Party Very High process
• Global coverage company's overall business strategy,
Logistics) optimization,
• Performance excellence helping to design and optimize its entire
innovation, and
supply chain.
• Expertise business
development
• Scalability: maximum volume to offer the customer
• Techological innovation Key Differences between 1PL, 2PL, 3PL, 4PL, and 5PL
• Level of involvement: 1PLs have the highest level of involvement in their own logistics operations,
• Financial stability (of LSP, to consider if LSP has us to pay in advance or not) while 5PLs have the highest level of involvement in their clients' logistics operations.
Bulk Shipment: Bulk shipments are nothing but cargo that is loaded directly into the holds of the • Key services: 1PLs typically provide transportation and warehousing services, while 3PLs provide a
shipping vessel, without being parceled. Unlike other items that are shipped in individual packages or broader range of services, including inventory management, supply chain management, and technology
solutions. 4PLs and 5PLs provide the most comprehensive services, including supply chain strategy,
containers, bulk shipments are shipped loosely and unpackaged.
network design, technology, and process optimization.
Cut-off time: Deadline for the container to come to the container yard if not, it fails to that vessel trip. • Cost: 1PLs are typically the most cost-effective option, while 5PLs are the most expensive. However,
(Ussually before 24-48 hours before vessel arrived) 5PLs can often help companies save money by optimizing their supply chains and reducing costs.
VMI (Vendor Managed Inventory): Source from 1 vendor, customer keep goods in their warehouse. When to choose each type of logistics provider: The best type of logistics provider for a company will
The vendor is responsible for managing the inventory levels of these goods at the customer's location, depend on its specific needs and resources.
• 1PL: A good choice for companies that have the resources and expertise to manage their own logistics
and the customer does not purchase these goods from any other sources.
operations.
Q2. Classified 1PL, 2PL, 3PL, 4PL, 5PL as a table to see how it different • 2PL: A good choice for companies that need to outsource their transportation needs but want to maintain
Logistics Level of control of other aspects of their logistics operations.
Description Key services
Provider involvement • 3PL: A good choice for companies that want to outsource all or a significant portion of their logistics
The company manages its own logistics Transportation, operations to a specialized provider.
PL (First-
assets, infrastructure & operations, warehousing, • 4PL: A good choice for companies that are looking for a strategic partner to help them optimize their
Party Highest
including transportation, warehousing, and inventory entire supply chain.
Logistics)
inventory management. management
 • 5PL: A good choice for companies that are looking for a true partner to help them transform their Example of establishing and managing 3PL relationships:
business through supply chain innovation.
Example: Streamlining International Cold Chain Shipments with DHL Global Forwarding
**Identify PL level for the following cases: Panasonic Vietnam
Scenario: Ocean Breeze Seafood, a premium seafood exporter in Nova Scotia, faces challenges with
1/ Own truck fleet to deliver goods to stores and supermarket in HCMC → 1PL
complex temperature-controlled international shipments. Inconsistent transit times and costly delays
2/ Import raw materials and electronic parts for manufacturing: use freight forwarding service to compromise product quality and customer satisfaction. They consider partnering with a 3PL
receive inbound materials of Panasonic → 2PL specializing in cold chain logistics.

3/ For the storage purpose of electronic products, Panasonic signs a 3-years warehouse logistics Step 1: Perform Strategic Assessment
contract of TTA logistics company as follows:
Ocean Breeze analyzes its cold chain needs:
• WHS management
• Packing - Types of seafood products with varying temperature requirements
• Marking and Labeling - Destination markets and desired delivery times
• Transport and Delivery - Regulatory compliance for food safety and cold chain standards
• Order processing - Cost optimization and risk mitigation strategies
➔ 3PL Goals are defined:
4/ Sign a contract with TNT for following logistics services:
• Sourcing raw materials - Reduce total transport cost by 5%
- Maintain product quality with a 99% on-time delivery rate for temperature-controlled
• Transport raw materials to VN, delivery to warehouse
shipments
• Import customs clearane service
- Enhance visibility and tracking throughout the supply chain
• Offer value-added services (marking, labeling, instruction, co-packing)
• Order processing and fulfillment Step 2: Decision to Form Relationship
• Delivery Ocean Breeze weighs the pros and cons of managing cold chain logistics in-house vs. outsourcing.
➔ 4PL
The expertise, global network, and specialized infrastructure of a 3PL make a partnership the preferred
Example of services and logistics service providers doing business in Vietnam market option.
Service Category Examples Major Providers Step 3: Evaluate Alternatives
Freight Forwarding Air, Sea, Land Transportation DHL, FedEx, Maersk, Ocean Breeze researches reputable cold chain 3PL providers, including DHL Global Forwarding,
Schenker known for its advanced tracking technology and dedicated cold chain solutions.
Warehousing & Storage Inventory Management, Geodis Logistics, CJ Logistics, Each provider is evaluated based on factors like:
Packaging, Labeling Yusen Logistics
- Cold chain expertise and temperature-controlled infrastructure
Customs Clearance Documentation, Import/Export DHL Global Forwarding, Pan - Global network coverage and customs clearance capabilities
Compliance Ocean Logistics, Vietranschart - Real-time shipment visibility and tracking tools
E-commerce Logistics Order Fulfillment, Delivery Lazada, Shopee, Sendo - Competitive pricing and service level agreements (SLAs)
Step 4: Select Partners
Supply Chain Management Planning, Procurement, Maersk, DSV Panalpina, APL
Delivery Logistics Global Forwarding emerges as the preferred partner due to its:
Domestic Logistics Transportation within Vietnam Gemadept, Hoa Phat Logistics, - Extensive network of refrigerated warehouses and dedicated shipping lanes
Tan Cang Logistics - Proactive monitoring and data-driven control of temperature fluctuations
- Web-based Track & Trace platform for complete shipment visibility
International Logistics Transportation between CMA CGM, COSCO
- Customized cold chain plans and competitive pricing based on volume
Vietnam & other countries Shipping, Evergreen Marine
Step 5: Structure Operating Model
Third-Party Logistics (3PL) Full range of Logistics DHL Supply Chain, Kuehne +
Services Nagel, Kerry Logistics Ocean Breeze and DHL collaborate to define the partnership structure:

- Services to be outsourced (pre-carriage, ocean/air freight, customs clearance, post-carriage)

- Roles and responsibilities of each party, including temperature control and contingency plans
 - Data sharing protocols and communication channels for real-time updates Insurance Requirements: Incoterms outline the specific insurance requirements for different trade
terms, ensuring that goods are adequately protected against potential risks during transit.
Step 6: Implementation & Continuous Improvement
Customs Clearance: Incoterms provide the necessary information for customs clearance procedures,
- A dedicated team from both companies oversees the onboarding and integration process. facilitating the smooth movement of goods across borders.
- Ocean Breeze staff receive training on DHL's online platform and shipment tracking Global Acceptance: Incoterms are widely accepted and recognized globally, ensuring that businesses
procedures. worldwide can conduct international trade using a common set of rules.
- Performance is monitored closely, and data is used to identify areas for improvement, such Risk Management: Incoterms help businesses manage risks associated with international trade by clearly
as route optimization and packaging materials. defining the responsibilities and obligations of each party involved.
- Regular reviews and communication ensure transparency and address any concerns. Dispute Resolution: Incoterms provide a framework for resolving disputes that may arise in international
trade transactions.
Outcomes:
Cost Predictability: Incoterms help businesses predict the costs associated with international trade,
- Ocean Breeze achieves a 6% reduction in total transport costs within the first year. enabling them to make informed decisions about pricing and logistics.
- On-time delivery rate for temperature-controlled shipments rises to 99.5%, exceeding initial International Trade Facilitation: Incoterms promote the smooth and efficient flow of goods across
goals. international borders, contributing to global trade facilitation.
- Real-time tracking and proactive alerts eliminate product losses due to temperature Legal Framework: Incoterms serve as a legal framework for international trade contracts, providing a
excursions. basis for resolving disputes and ensuring the enforceability of contractual terms.
- The strategic partnership with DHL Global Forwarding empowers Ocean Breeze to expand
2/ What is the difference of Incoterms 2010 and 2020?
its international reach and maintain its reputation for delivering exceptional seafood quality.
Incoterms, also known as International Commercial Terms, are a set of standardized rules that define the
Six Sigma (6 sigma, 6 σ): A set of management techniques intended to improve business processes by
responsibilities of buyers and sellers in international trade. They are published by the International
greatly reducing the probability that an error or defect will occur
Chamber of Commerce (ICC) and are widely used to clarify the division of costs and risks between parties
No. Levels Error/ 1 mil products % involved in international transactions.

1 1 sigma 690,000 69% Incoterms 2020 are the latest edition of these rules, and they replaced Incoterms 2010 on January 1, 2020.
The new edition introduces a number of changes, including:
2 2 sigma 308,000 30.8%
Renaming of DAT (Delivered at Terminal) to DPU (Delivered at Place Unloaded): This change was
3 3 sigma 66,800 6.68% made to avoid confusion with the term "terminal," which can refer to a variety of locations. Under DPU,
4 4 sigma 6,210 0.621% the seller is responsible for unloading the goods at the buyer's designated location.

5 5 sigma 230 0.023% Clarification of insurance requirements for CIP (Carriage and Insurance Paid To): Incoterms 2010,
CIP required the seller to obtain minimum insurance coverage for the goods. Incoterms 2020 specifies
6 6 sigma 3.4 0.0003% that the insurance must comply with the Institute Cargo Clause (A), which is a standard insurance policy
that provides coverage for loss or damage to the goods.
CHAP 6: GLOBAL TRANSPORTATION - INCOTERMS
1/ What is Incoterms? Introduction of a new FCA (Free Carrier) extra provision: This provision allows the buyer to instruct
Incoterms, short for "International Commercial Terms," are a set of predefined commercial terms the carrier to issue a bill of lading to the seller. This can be helpful for the seller in obtaining financing
published by the International Chamber of Commerce (ICC). They are widely used in international and for the goods.
domestic trade contracts to define key aspects of freight transportation. The main purpose of Incoterms Updated rules for security-related requirements: Incoterms 2020 reflect the increasing importance of
is to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of security in international trade. The rules now include specific provisions on security requirements, such
goods. as the seller's obligation to provide the buyer with information on security measures at the loading and
2/ Why is incoterms important in transportation? destination points.
Clarity of Roles and Responsibilities: Incoterms provide a standardized set of rules that clearly define
the roles and responsibilities of both buyers and sellers in international trade. This clarity helps to avoid In addition to these specific changes, Incoterms 2020 have been restructured to make them more user-
misunderstandings and disputes, ensuring a smooth and efficient flow of goods across international friendly and easier to understand. The rules are now divided into four groups based on the type of transport
borders. used (any mode, sea and inland waterway, sea only, or inland waterway only).
Cost Allocation: Incoterms specify when the risk of loss or damage to the goods transfers from the Overall, the changes in Incoterms 2020 are designed to make the rules more clear, consistent, and up-to-
seller to the buyer. This allocation of risk helps to determine who is responsible for the costs of date. They are intended to help businesses avoid disputes and ensure that their international transactions
insurance, transportation, and other logistical expenses. are conducted smoothly and efficiently.
 Slide 21

Slide 26

**Theo slide cô ghi:

Notes:
✓ To steer user towards the right incoterms rule for their sale contract ➔ smoother export and import
transactions
✓ VGM (since 1 Jul 2916): ICC has decided should not lead to a change in the Incoterms 2020 ➔
weighting operations incur expense and failure may lead to delay in loading, too specific and complex
to warrant
Changes:
✓ B/L with and in-board notation and the FCA Incoterms rule ➔ the buyer must instruct the carrier to
issue a B/L with an on-board notation to the seller, the seller must provide that document to the buyer
to order to obtain discharge of the goods to the carrier.
✓ Cost, where they are listed
✓ Different levels of insurance cover in CIF (ICC (C) and CIP (ICC (A))
✓ Arranging for carriage with seller’s or buyer’s own means of transport in FCA, DAP, DPU and DDP
“must contract or arrange at its own cost …”
✓ Change in DAT to DPU
✓ Inclusion of security – related requirements within carriage obligations and costs
✓ Explanatory notes for users (at the beginning of each term)
**Slide bị mờ:
Slide 17

3/ List out key services the LSP can offer to cargo owner?
• Seller
Term F Term C Term D
Term E (EXW)
(FCA, FAS, FOB) (CFR, CIF, CPT) (DAP, DPU, DDP)
- Warehousing FCA 1 (FCA Binh CFR: Domestic DAP: Domestic
Duong): ko offer được transport, exporting transport, exporting
gì vì buyer sẽ nominate custom clearance, custom clearance,
truck carrier, loading loading goods, O/F loading, O/F
goods. CIF: Domestic DPU: Domestic
FCA 2 (FCA Cat transport, exporting transport, exporting
Lai): Domestic custom clearance, custom clearance,
transport (vì sẽ vận loading goods, O/F, loading, O/F, unloading.
chuyển hàng từ BD lên Insurance. DDP: Domestic
tới Cát Lái), loading CPT: Domestic transport, exporting
goods. transport, exporting custom clearance,
 FAS: Domestic custom clearance, loading goods, O/F, • Should buy insurance:
transport, exporting loading goods, O/F importing custom ✓ Buyer: EXW, FCA, FOB, FAS, CPT, CFR
custom clearance, CIP: Domestic clearance.
✓ Seller: DAP, DDP, DPU, CPT, CFR
loading goods. transport, exporting
FOB: Domestic custom clearance, For cargo in the container, which terms are inappropriate for container gooods? Why?
transport, exporting loading, O/F, Insurance, - FAS, FOB, CIF & CIR is unsuitable for containerized goods alll of the activity in the port handled by
custom clearance, importing custom terminal operator who load and unload goods, but the risk tranffered point is depending on the part
loading at delivery port clearance operator, make it uncontrolled.
• Buyer Which terms are used for all modes of transport?
Term C
Term F Term D * Apply for all modes of transport: EXW, FCA, CPT, CIP, DAP, DDP, DPU.
Term E (EXW) (CFR, CIF,
(FCA, FAS, FOB) (DAP, DPU, DDP)
CPT,CIP) Which terms buyers/ sellers should buy insurance?
- Loading goods FCA 1: CFR: DAP:
- Domestic - Trucking service - Unloading goods - Importing cust clear ✓ Buyer: EXW, FCA, FOB, FAS
transport - loading goods - Import cust clear - Unloading goods ✓ Seller: DAP, DDP, DPU, CPT, CFR (These term suggest the seller to purchase insurance
- Exporting cust - O/F - Domestic transport - Domestic transport on the goods through at least the minimum coverage until the designed point of delivery)
clear - Exporting cust clear to buyer’s warehouse to buyer’s warehouse
- O/F - Importing cust clear CIF: DPU: Some questions for import and export a shipment:
- Importing cust - Unloading goods - Unloading goods - Importing cust clear 1. How are goods handed over to the carrier?
clear FCA 2: - Import Cust Clear - Domestic transport - Goods are handed over based on the contract terms, often defined by Incoterms, which specify the
- Unloading - Exporting cust clear - Domestic transport to buyer’s warehouse transfer point from seller to carrier
goods - O/F to buyer’s warehouse DDP: 2. When and how are goods made available to the consignee?
- Importing cust clear CPT: - Unloading goods - Availability is determined by the shipping contract terms, indicating when and where the consignee
- Unloading goods - Unloading goods - Domestic transport can collect the goods. For instance, in FOB (Free On Board) terms, goods are available to the consignee
FOB: - Import Cust Clear to buyer’s warehouse on board the vessel, whereas in DDP (Delivered Duty Paid), they're available at the consignee's place
- O/F - Domestic transport of business or another agreed location.
- Unloading goods to buyer’s warehouse 3. Is the seller or buyers responsible for customs clearance?
- importing cust clear - Insurance - The responsibility for customs clearance can fall on either the seller or the buyer, depending on the
- domestic transport to CIP: agreed Incoterms. For example, under DDP terms, the seller is responsible for clearing the goods
buyer’s warehouse - Unloading goods through customs in the buyer's country, including paying duties and taxes. In contrast, under EXW (Ex
FAS - Import Cust Clear Works) terms, the buyer takes on this responsibility.
- O/F - Domestic transport 4. Who shall pay the price of transport?
- Unloading goods to buyer’s warehouse - Who pays for transport depends on the agreed terms of sale. In CIF (Cost, Insurance, and Freight)
- Import cust clear - Insurance terms, the seller pays for transportation to the named port of destination. Conversely, in FOB terms,
- domestic transport to the buyer pays for transportation from the port of shipment
buyer’s warehouse 5. How are goods to be packaged?
The Incoterms rules describe: - The seller is typically responsible for ensuring that goods are adequately packaged for transport. This
• Obligations: Who does what as between seller and buyer, e.g. who organises carriage or insurance includes protection against damage, adherence to any regulatory requirements, and ensuring packaging
of the goods or who obtains shipping documents and export or import licences; is suitable for the chosen mode of transport.
• Risk: Where and when the seller “delivers” the goods, in other words where risk transfers from 6. When is the price of Transport payable?
seller to buyer; and - The timing of transport payment is typically negotiated between the buyer and seller and should be
outlined in the contract of sale. It may depend on the payment terms (such as advance payment, letter
• Costs: Which party is responsible for which costs, for example transport, packaging, loading or
of credit, or net 30 days) and the specific Incoterms used.
unloading costs, and checking or security-related costs.
7. What sort of Transport document is issued by the carrier?
FCL ➔ CY ➔ Received for shipment B/L - The type of transport document issued depends on the mode of transport. For sea freight, a Bill of
Lading is common. For air freight, an Air Waybill is used. These documents act as a receipt for goods
LCL ➔ CFS ➔ FCL ➔ Received for shipment B/L
and a contract for carriage, and in some cases, they can be used to transfer title of the goods.
• Obligation of insurance (must): CIF, CIP 8. Which modes of transport is relevant for?
- The relevant modes of transport depend on the nature of the goods, the origin and destination, cost a. DAP b. DPU c. FOB d. CFR
considerations, and time constraints. It could involve sea freight, air freight, rail, road, or a combination
Institute Cargo Clauses, which consists of:
of these (multimodal transport).
• Institute Cargo Clauses (A);
9. Where is the risk point between the seller and the buyer?
• Institute Cargo Clauses (B);
- The risk point, where responsibility and risk transfer from the seller to the buyer, is defined by the
agreed Incoterms. For example, in CIP (Carriage and Insurance Paid To) terms, the risk transfers to the • Institute Cargo Clauses (C);
buyer once the goods have been handed over to the first carrier. Risk (A) (B) (C) Remarks
10. Insurance obligation and right? Handling charge Yes No No Easily more
- Depends on who bears the risk during transport, with specific requirements outlined in the sale than 70% of
contract. For instance, under CIF terms, the seller must procure insurance for the goods during transit claims
Wet damage Yes Yes, if entry into No Common in the
Case 1: vessel/ tropics
Cost (USD/ Container, but
No. Types of cost Seller Buyer
TEU) not wet by rain
Loading the goods on the means of transport (at the Yes No No Common for
1 45
origin) expensive cargo
2 Local transport/ inland freight 115 Non-delivery/ Yes No No Common type
3 Discharging from local means of transport 56 missing of loss
4 Export customs clearance 10 Contamination/ Yes No No
5 Loading on ocean freight/ main transport 90 staining by other
6 Cargo insurance 48 cargo
7 Ocean/ Air freight charges 1470 Washing Yes Yes No Important for
Unloading from main mode of transport at named overboard dock cargo
8 89
destination Fire and Yes Yes Yes Major casually
Loading the goods on means of transport (at named explosion
9 35
destination) Overturning or Yes Yes Yes Major casually
10 Inland transport (at the destination) 67 derailment of
11 Import customs clearance 55 land conveyance
12 Unloading at the buyer’s place 67 Collision with Yes Yes Yes Major casually
external object
Assuming that, Incoterms 2020 may be applied for this shipment as follows: DAP, CPT, FCA,
other than water
CFR
Heavy weather, Yes No No
You are required to solve for each term:
causing stowage
1. Identify transport modes should be used for this shipment in each term
to collapse break
2. Calculate the total cost which are paid by the Seller and the Buyer in each term
loose in ship’s
3. Which terms should exporter (seller) buy cargo insurance? Explain
hold
4. Which terms should importer (buyer) buy cargo insurance? Explain
Discharge of Yes Yes Yes Major casually
5. Which terms are inappropriate for container goods? Explain
cargo at port of
6. According to the above cost table, Calculate the total cost which are paid by the Seller
distress
and the Buyer in each term? (Cargo insurance, you explain which term, seller and buyer
Earthquake, Yes Yes No Uncommon
must or should be in charge)
volcanic eruption casualty,
Case 2: The exporter wants you to make cross border transport from his factory to Phnom Penh or lightning tsunami also
as the Place of Destination, but you inform exporter that you can send the goods by your truck covered
up to the border only and it is required to make transloading to Cambodia truck at the border
of Exporter country, then Exporter asks you, which Incoterm should be used?
a. FCA b. CPT c. FOB d. DPU General average Yes Yes Yes Major casually
contribution
Case 3: CPT term has 2 conditions (transportation cost to place of destination and not necessary Salvage contribution Yes Yes Yes Major casually
to unload the goods) that are similar to which term?
 Piracy – both land and sea Yes No No Common in SEA, waters and certain parts of - Bill of Lading (B/L): Issued by the carrier (shipping line), this document serves as a receipt for the
Indo-China goods and a contract of carriage. In your case, since the goods are shipped from Shanghai Port, a sea
waybill or an ocean bill of lading would be appropriate.
Main items in one MT document
- Certificate of Origin: This document certifies the country where the goods were manufactured. It's
No. Main items essential for customs to determine import duties and for compliance with trade agreements.
1 Consignor (House B/L); Shipper (với Master B/L) - Insurance Certificate: Since DDP terms require the seller to insure the goods during transportation,
2 Consigned to order of (House B/L); Consignee (với Master B/L) this document proves that insurance coverage is in place.
3 Notify address - Export License and Import License: Depending on the nature of the electronic equipment and the
4 Ocean vessel regulations in China, Vietnam, and Laos, relevant export and import licenses might be needed.
5 Place of receipt - Customs Declaration: This is required by both the exporting and importing countries. It includes
6 Port of loading details about the goods, their value, and other relevant information for customs purposes.
7 Place of delivery - Fumigation Certificate: If the goods are packed in wooden material, a fumigation certificate might
8 Port or discharging be required to comply with international shipping regulations.
9 Marks and numbers - Inspection Certificate: Some buyers or importing countries require a pre-shipment inspection to
10 Number and kind of packages ensure that goods meet specified standards.
11 Description of goods - Letter of Credit or other Payment Documents: If the transaction is under a Letter of Credit,
12 Gross weight specific documents outlined in the LC must be presented for payment.
13 Measurement - Delivery Order: Issued by the carrier or its agent, this document authorizes the release of cargo to
14 Declared value for ad valorem rate the legitimate consignee.
15 Freight amount - Road Transport Document: Since the final leg of the journey is to the buyer’s warehouse in
16 Place and date of issue Vientiane, road transport documentation is also necessary.
✓ The fastest transport time? How to routing and scheduling?
Note: Said to contain, “Shipper’s count, load and seal”, package, unclean, LOI - Estimating Total Transit Time:
Textbook Page 365: + Shanghai to Transit Seaport: 2-7 days (depending on the chosen seaport).
➢ Landbridge: is the inland route in the third country or the third continent that reduce the cost + Port Handling: 2-4 days (total for both loading and unloading).
compared to normal searoute line. Ex: Kobe (Japan) - sea – Los (US) - rail – NY (US) + Trucking to Laos Border and Border Crossing: 1-3 days (including potential delays).
➢ Minibrigde: only between 2 country, the inland transport in the second country, small scope + Laos Border to Vientiane: 1-2 days.
(landbridge is go through the third country). Ex: Kobe - sea - Los - rail – Chicago (US) ➔ Total Estimated Transit Time: 6-16 days
➢ Microbrigde: go door to door to the consignee, reduce leadtime also. Ex: Kobe - sea - Los - rail - ✓ What is the estimated cost of DOOR to DOOR?
Chicago – consignee CHAP 7: TRANSPORTATION RISK MANAGEMENT
Case study: Cross-border transport: 1/ How sustainability impact on GSC (Global Suppy Chain)?
- Sustainability including these factors: environment, social, and economic. In GSC, manufaturers have
• Fast Solution Company, based in Hai Phong (Viet Nam), has received an order from Customer in
to determine how we decide to choose mode of transport that effective in cost, delivery time according
Laos with the following information:
to sustainability.
✓ A shipment of electronic equipment in sufficient quantities packed in 1x20Ddc, with delivery terms
2/ Case: Risk grading matrix. Please draw a matrix and assess the level of the following risks?
to DOOR (DDP Incoterms 2020) at buyer’s warehouse in Vientiane, Laos.
Based on the data given below.
✓ They will receive the shipment from a factory in China, then shipment will be loaded on vessel at
A. The vessel carrying Seafood Containers departed from Cat Lai Port (VN) Nov 15 to Sydney Port
Shang Hai Port, and need a shipping service consultant.
(Australia). It is expected to take 10 days. Today, November 18, there is information from the
• As a professional international transporter, please advise customer:
meteorological center announcing that on November 19, there is a tropical depression in the indonesian
✓ Choose the modes of transpot & describe the best transport route?
sea with the risk of becoming a storm where the Container vessel will pass through.
- Combination of road transport and marine transport.
- Risk categorization: Poor weather → Delivery delay → supply chain disruption → Security breach
+ Marine transport from Shanghai Port to Haiphong Port
- Likelihood: weather → frequency: possible (not likely because info from weather center can change)
+ Cross-border transport from Haiphong to Laos through Cau Treo border
→3
✓ Transport documents needed for this shipment?
- Consequence: Business Interruption (Moderate) → 3
- Commercial Invoice: This is a critical document provided by the seller to the buyer. It details the
➔ 3 x 3 = 9 → Orange → Moderate (Acceptable)
value of the goods, which is essential for customs clearance.
B. Due to the world economic situation, Sao Sang Garment Enterprise’s garment export sales to Europe
- Packing List: Accompanying the commercial invoice, this document lists all items included in the
decreased by 30% compared to the previous quarter. In the next quarter, according to forecasts, there
shipment. It's important for customs checks and verifying that the shipment contents match the
will be nothing positive.
invoice.
 - Risk categorization: Industry consolidation (external factor) → SC Interruption Step 2: Tìm dữ kiện liên quan đến frequency trong bài →xét “Table 2: Likelihood Score” → Quy chiếu
- Likelihood: 30% → 3 (monthly) ra số “cột”
- Consequence: Likely → 4 (impact by external → acceptable since others can suffer from the same Step 3: Tìm dữ kiện/nguyên nhân của risk → Xét “Table 1: Consequence Score” → Quy chiếu ra số
situation) “cột”
➔ R = L x C = 3 x 4 = 12 → Orange → Moderate (Acceptable) Step 4: Risk = L x C = ?
➔Action: Step 5: Action (nếu đề có hỏi)
• search new market, still keep current relationship List out some suggest for 5 trường hợp risk ở trên để vô thi đỡ mất th gian nghĩ (Nợ => chat gpt) :>
• find new kind of product (or use green materials to make the differences from other competitors) 3/ Risk grading matrix – A scored risk rating:
• head towards domestic market Low – Green → Acceptable
C. Anh Hung Logistic Company has 100 Container tractors, but due to the market decline, only 1/3 of Moderate – Orange (Amber?) → Acceptable with mitigation
the tractors are used. The remaining quantity has been left outside for 4 months now, some are protected High – Red → Unacceptable
from sun and rain and others are not. In addition, maintenance costs are expected to increase because Extremely high – Purple → Unacceptable
the vehicle is not in operation, so there is a risk of the battery being damaged, the vehicle’s oil having
to be replaced, the electrical system being bitten by rats, and the tires aging.
- Risk categorization: Product damage (Poor freight Handling/ Improper Equipment Loading)
- Likelihood: 4 or 5 → Likely to occur → 4
- Consequence: 4 (because 1/3 tractors still work)
➔ R = L x C = 4 x 4 = 16 → Red → High (Unacceptable)
➔ Action:
• if you foresee/ forecast the demand not increase, consider use trucks for resell/ rent with lower fee
• Consider to search for other with appropriate costs → do business not for profit, but to “exit” ~ survive
• Try to use trucks for operating
D. Star Company specializes in the business of warehouses for rent: frozen warehouses, dry
warehouses, container yards, iron and steel yards,… It is planned to expand the cold storage from
10,000 m2 to 20,000 m2 in 2024. Estimated investment capital of 500 billion VND will begin You are provided the following table from ABA logistics company which includes detail information
construction in the early third quarter of 2024 and be completed after 6 months. It is expected that after of 4 risk cases:
8 years the capital will be recovered (on the condition that the global economy has been completed
Risk case 1 Risk case 2 Risk case 3 Risk case 4
recovered)
Probability 15% 27% 69% 85%
- Risk categorization: Supply Chain Interruption (Capacity Storages)
Financial loss (USD) 2,000 3,850 40,250 117,000
- Likelihood: 1
Budget (USD) 250,000 350,000 1,150,000 2,250,000
- Consequence: 4 (cần 8 năm để recover -> 62tr5/năm ->12.5% so với investment cost)
Business interruption 1 hours 5 hours 24 hours 2 hours
➔ Risk = L x C = 1 x 4 = 4
➔ Action: Questions:
E. Nam Phuong Truck Company operates domestic goods transport by container trucks, trucks and a/ Identify location for the risk cases on risk grading matrix
refrigerated vehicles. Recently, they have had difficulties in business due to a new competitor in the b/ Assess risk rating according to 4 levels (Low, Moderate, High and Extremely High) and suggest
same industry appearing last month. Because it’s new to business, competitors attract customers by consideration level for reducing or mitigating risk.
lowering shipping rates by 15% compared to Nam Phuong. Meaanwhile, Nam Phuong’s profit is 20%
on freight. If they lower their price to compete with the competitors, their profit will only be 5%.
- Risk categorization;
- Likelihood:
- Consequence:
➔ Risk = L x C =
➔ Action:

Step 1: Risk Identification

Quy về 1 trong 5 trường hợp (nhớ in slide chap7 risk management nha): Product loss; product damage;
contamination; supply chain interruption; security breach. Also include the small specific case of the
big case
 - Offer a free inland waterway service (Ex: connect Cat Lai with Thi Vai)
→ Solution for attractiveness (maintain)
Investment in Infrastructure and Technology:
- Regularly upgrade and maintain terminal infrastructure to meet industry standards.
- Integrate advanced technologies for streamlined operations, digital communication, and
enhanced user experience.
Focus on Safety, Sustainability, and Community Relations:
- Prioritize safety and security measures to instill confidence in users.
- Adopt environmentally friendly practices, engage with the local community, and adhere to
regulatory standards.
Customer-Centric Approach and Competitive Strategies:
Suggestions for reducing risks: Derived demand  Supply chain, Order, Industry - Provide excellent customer service to enhance satisfaction.
Case 1: - Implement competitive pricing, incentives, and adaptability to meet changing market trends
- Prepare backup plans
and user preferences, ensuring long-term attractiveness.
- Monitor the risk periodically to ensure it remains at an acceptable level.
- Document the risk and its management in case it changes in the future. → Solution for emissiveness (improve): how cargo is transported from A to other terminals) – khả năng
- Consider allocating resources to address higher priority risks. vận chuyển hàng đi từ terminal:
Case 2:
Optimized Logistics Operations:
- Identify specific mitigation strategies to reduce the risk to an acceptable level.
- Implement the mitigation strategies and monitor their effectiveness. - Implement advanced Transportation Management Systems (TMS) for efficient route
- Communicate the risk and mitigation plan to relevant stakeholders. planning and load scheduling.
Case 3: - Utilize real-time tracking and analytics to identify and address bottlenecks, enhancing overall
- Set aside a contingency fund to cover potential financial loss
supply chain efficiency.
- Invest technology that can lower probability of occurrence
Intermodal Transportation and Last-Mile Innovations:
- Review and adjust the budget to account for risk mitigation risks
- Immediately develop and implement a comprehensive risk mitigation plan. - Combine multiple transportation modes for cost-effective and timely deliveries.
- Allocate necessary resources and personnel to address the risk. - Invest in last-mile delivery solutions, such as autonomous vehicles and drones, to improve
- Communicate the severity of the risk to all relevant stakeholders and seek their input on mitigation the final leg of the supply chain.
strategies.
Sustainability and Collaboration:
Case 4: to be shared with another party and both of us shall create provisions for mitigation
- Treat this as a critical risk that requires immediate and significant attention. - Integrate eco-friendly practices and technologies to reduce the environmental impact.
- Engage senior management and key stakeholders to develop a crisis management plan. - Collaborate with partners and utilize shared resources to optimize logistics, enhancing
- Implement all possible measures to reduce the risk to an acceptable level, including seeking external -
overall emissiveness and lowering costs.
expertise if necessary.
→ Solution for emissiveness (maintain): how cargo is transported from A to other terminals
CHAP 8: Transportation Planning – Supply and Demand
Optimized Transportation Network:
**Transport network and Accessibility:
- Maintain and enhance an efficient transportation network with advanced route planning to
**Improve low emissiveness and low attractiveness, Maintain high scores on emissiveness and
minimize transit times and reduce costs.
attractiveness
Intermodal Connectivity and Visibility:
→ Solution to attract cargo for terminal (improve) (attractiveness: the degree which A attracts cargo
- Strengthen intermodal connectivity and employ tracking technologies for real-time visibility,
from other places – mức độ hấp dẫn của terminal khi thu hút hàng tới):
improving overall efficiency and transparency.
- Offer lower cost
Sustainability and Collaboration:
- Offer transit services from customer site to terminal
 - Incorporate sustainable practices, foster collaboration with logistics partners, and Primary Services of 3PL Logistics include:
continuously innovate to maintain an effective and environmentally conscious cargo 1. Transportation: Managing the shipment of goods via road, rail, air, or sea. This can also
include freight brokerage and carrier management.
transportation system. • Example: A Vietnam-based company might use a 3PL like DHL or Maersk to
CHAP 9: Route choice and static assignment (đem slide Landlock trước mid nha) manage the international shipment of goods, leveraging their extensive global
transportation networks.
Choose route based on which criteria
2. Warehousing: Offering storage solutions for goods, which can include inventory
What information will you need form your customers to issue the transport documents for the management and distribution within the warehouse.
shipment? • Example: Gemadept, a Vietnamese logistics company, provides warehousing
services, including the management of storage conditions suitable for different
Hàng khô
Required information types of goods.
FCL LCL 3. Fulfillment Services: Handling order processing, picking, packing, and shipping orders to
Shipper ✓ ✓ end customers.
• Example: [Link], a Vietnam e-commerce platform, may partner with a 3PL to
Shipper’s address ✓ ✓ manage its order fulfillment operations to ensure timely deliveries to customers.
Pickup address ✓ ✓ 4. Distribution Management: Coordinating the movement of goods from the manufacturer to
the end customer, including all intermediary steps.
Consignee ✓ ✓
• Example: A company like Lazada operates in Vietnam, coordinating with various
Consignee’s address ✓ ✓ 3PL providers to manage the distribution of goods sold on its platform.
Incoterms ✓ ✓ 5. Customs Brokerage: Assisting with the clearance of goods through customs by handling
necessary documentation and compliance with relevant regulations.
Billing details ✓ ✓
• Example: A 3PL like Expeditors could help Vietnamese exporters navigate the
Port of Loading ✓ ✓ complexities of international trade laws and customs procedures.
Port of Discharge ✓ ✓ Analysis of Pros for Outsourcing Logistics:
Place of Delivery ✓ ✓
1. Opportunity for Cost Reductions: By utilizing a 3PL, a company may reduce costs
Purchase Order No. ✓ ✓ associated with maintaining a fleet of vehicles or operating a warehouse.
Shipment type ✓ ✓
• Example: A Vietnamese electronics company outsources its transportation
Quantity and Type of Cont. ✓ X logistics to Bollore Logistics, which consolidates shipments and optimizes routes,
Quantity and Type of Package ✓ ✓ resulting in lower transportation costs.

Commodity – HS Code ✓ ✓ 2. Ability to Focus on Core Competencies: A manufacturing firm might outsource logistics
to concentrate on its primary business of producing goods, leaving logistics to specialists like
Cargo ready date ✓ ✓
Agility Logistics.
Gross weight (GW) and Measurable ✓ ✓
• Example: VinFast, a Vietnamese automaker, outsources its non-core activities like
Shipping Marks X ✓
warehousing to concentrate on its core competency: manufacturing automobiles.
Mark “Dangerous Goods” X X
3. Opportunity to Improve Customer Service: A company partners with a 3PL that offers
HN Number (Holder Number) X X advanced tracking and customer service capabilities, thereby enhancing the end-customer's
experience.
The function and classification of B/L (Slide Chap 9 – Update)
Đề Final 2021 (Online) • Example: An online retailer in Vietnam partners with GHN (Giao Hàng Nhanh)
for last-mile delivery services, which improves delivery times and provides better
1/ What are the primary services of 3PL Logistics? Explain clearly and give example of of services tracking, enhancing customer satisfaction.
and logistics service provider doing business in Vietnam’s logistics market or global scale.
4. Increase in Inventory Turns: A 3PL may implement just-in-time delivery, which can
• In the role of a supply chain staff in one manufacturing company which is considering to decide reduce inventory levels and increase turnover rates for a business.
whether uses in-house logistics or outsourced logistics. You are required to analyse at least 5 pros
and 5 cons for outsourced logistics.
 • Example: A manufacturing firm uses Mapletree Logistics' warehousing solutions, • Example: A Vietnamese electronics firm, "VN Electronics," retains its competitive
thereby avoiding investment in its own warehouse facilities, which improves its edge by managing its highly efficient, proprietary distribution system rather than
return on assets. relying on a 3PL.

5. Access to Emerging Technology: A Vietnamese manufacturer might not afford cutting- 2. Control Over Outsourced Functions: Managing logistics in-house allows for greater
edge supply chain software, but a 3PL provider could offer such technology as part of their control over operations and decisions, potentially leading to more precise quality
services management.

• Example: A company uses a 3PL like C.H. Robinson, which provides it with access • Example: "FreshFoods VN," a national grocery chain, ensures produce quality by
to a sophisticated Transportation Management System (TMS), giving the company managing logistics in-house, closely monitoring temperature controls and handling
real-time visibility into its supply chain without the need for a large capital procedures
investment.
3. Service Level Commitments: By keeping logistics internal, a company can ensure that it
Analysis of Cons for Outsourcing Logistics: meets service level commitments through direct oversight.

1. Logistics as a Core Competency of the Company: A company that has developed a • Example: "FashionForward VN," a clothing retailer, guarantees next-day delivery
competitive advantage in logistics may lose this if they outsource to a 3PL within Vietnam by maintaining its fleet and delivery schedules, something a 3PL
struggled to consistently provide.
• Example: A well-established Vietnamese logistics firm like Viettel Post may
consider its in-house logistics operations a competitive advantage and resist 4. Expertise Over 3PL Providers: In-house operations may have more refined expertise in
outsourcing to maintain control. specific areas than generalist 3PL providers.

2. Cost Reductions Not Realized: If a 3PL's services are not efficiently managed, the expected • Example: "AutoParts VN," an automotive supplier, uses its specialized knowledge
cost savings may not materialize. of hazardous materials to safely transport goods, surpassing the general capabilities
of local 3PL services
• Example: A Vietnamese textile company outsources to a 3PL but realizes the costs
are higher due to the 3PL's general price structure, which doesn't cater to the 5. Outsourcing Not a Corporate Philosophy: If a company’s philosophy emphasizes self-
specific cost-saving measures the company had in place. reliance, not using 3PL services aligns with its values.

3. Control Over Outsourced Function Diminishes: A company might find that it has less • Example: "Handcrafts VN," a company producing artisanal goods, values direct
control over delivery times and handling of goods when these services are outsourced customer relationships and manages logistics in-house to uphold this principle

• Example: TechPhone VN, a Vietnamese smartphone company, experiences Analysis of Cons for In-House Logistics:
diminished control over inventory management with increased stock discrepancies
after outsourcing to a 3PL, leading to fulfillment delays and customer complaints. 1. Opportunity for Cost Reductions: Using 3PL services might miss out on potential cost
savings from specialized providers who have economies of scale.
4. Service Level Commitments Not Realized: The 3PL might not meet the performance
metrics agreed upon, affecting the company's service quality. • Example: By outsourcing, "PharmaCorp VN," misses out on the lower costs a
specialized 3PL could provide through bulk freight rates and network
• Example: A Vietnamese electronics retailer sees its customer satisfaction drop optimizations.
when the chosen 3PL consistently misses the next-day delivery guarantee
2. Focus on Core Competencies: By using 3PL services, a company may not be able to
5. Issues Related to the Security of Shipments: There might be concerns about the safety and concentrate solely on what it does best if logistics is not its core activity.
confidentiality of products, especially if the 3PL handles sensitive or high-value items.
• Example: "TechGadgets VN," a tech startup, finds itself distracted by logistics
• Example: A biotech firm in Hanoi encounters a breach in transport security with complexities instead of focusing on product development and market growth
their 3PL, resulting in lost proprietary prototypes during shipping.
3. Customer Service Improvement: Outsourcing could lead to a reliance on the 3PL's
In case, đề hỏi in-house: customer service policies and procedures, which may not align with the company's standards.

Analysis of Pros for In-House Logistics: • Example: "LuxHome VN," a luxury furniture store, faces customer complaints due
to a 3PL's one-size-fits-all delivery approach, which doesn't match the white-glove
1. Logistics as a Core Competency: If logistics is a core competency of the company, not service the store's customers expect.
using 3PL services means maintaining proprietary knowledge and specialized skills in-house.
 4. Return on Assets: Utilizing 3PL services could result in less efficient use of company assets - If it occurred during road transport from Los Angeles to Phoenix (handled by ABA Truck Company),
if the 3PL cannot manage them as effectively as in-house logistics. then ABA Truck Company would be responsible.
• Example: "BuildWorks VN," a construction company, experiences a drop in asset - If the goods are insured, the insurance provider should also be involved in the claims process. ESSON
utilization when their 3PL fails to efficiently use the provided fleet of specialized company can file a claim with the insurance company for reimbursement of the loss or damage.
vehicles.
Reason: Responsibility is generally assigned to the party that had custody of the goods when the
5. Expansion to Unfamiliar Markets: Relying on a 3PL may limit a company's understanding damage or loss occurred. The MTO, responsible for the entire multimodal transport, may be held
of new markets compared to if it conducted its logistics operations and learned through direct
experience. accountable, particularly under contracts where they agree to be liable for the entire journey. In such
cases, TMS Company would then internally seek recovery from the specific segment (THE
• Example: "SnackDelight VN," a snack manufacturer, struggles to understand the
nuances of Southeast Asian markets due to the lack of direct market engagement, ALLIANCE or ABA Truck Company) where the loss or damage occurred.
relying instead on a 3PL's generic market entry strategies.

2/ A shipment is exported by NUTI company from Ho Chi Minh City to ESSON company in
Phoenix (Arizona, USA) under DDP Phoenix Incoterms 2020.
- Multimodal transport is used for this shipment and TMS Company is MTO (multimodal
transport operator).
- Maritime transport for the route from TCIT seaport (Ba Ria Vung Tau, Vietnam) to Los
Angeles seaport (USA) by THE ALLIANCE Operator (Hapag Lloyd, Ocean Network Express
(ONE), Yang Ming and HMM).
- Road transport by ABA truck company from Los Angeles seaport to importer’s warehouse in
Phoenix (Arizona, USA)
Questions:
If there is any loss or damage occurring to the shipment during transportation:
A/ Who has the right to claim to transporter (between NUTI and ESSON)? Explain.
NUTI has the right to claim against the transporter for any loss or damage that occurs up to the point
of delivery. Since NUTI company is responsible for all risks until the goods are delivered to ESSON
company, as the buyer, would generally not directly claim against the transporter under this Incoterm.
B/ Who must be responsible for solving this claim with the customer (between TMS company,
The Alliance or ABA truck company)? Explain.
- TMS Company, as the Multimodal Transport Operator (MTO), acts as the principal in contracting
for the carriage of goods. Taking responsible for coordinating and organizing the entire multimodal
transport, including the maritime and road legs of the journey. The MTO may have arranged
insurance coverage for the shipment, and they should be involved in the claims process. ESSON
company can notify and discuss the claim with TMS Company, who will then coordinate with the
relevant [Link], they could also be held responsible, especially if the exact point of loss or
damage is unclear or if it occurred due to a failure in coordinating the multimodal transport
effectively.
- If the loss or damage occurred during maritime transport (handled by THE ALLIANCE), then THE
ALLIANCE would be responsible for resolving the claim.